CytRx Corporation (NASDAQ:CYTR) Is A Good Risk/Reward Exposure

Last month, CytRx Corporation (NASDAQ:CYTR), the biotech firm, surprised the market by putting out a global strategic license with NantCell. The new deal will permit the company to develop Aldoxorubicin; an Albumin Mediated Chemotherapeutic drug. The announcement was made on July 28, 2017, which made the share price jump from $0.60 to touch the level of $0.90. Most importantly, the amount of shares that changed hands that day was astonishing; more than 40 million. The upward trend did not end there. It almost hit $1.00 the following day. After this crazy movement, the share price declines as traders booked profits. Have a look at the recent share price action.Recent DevelopmentsIn our previous article "CytRx Corporation (NASDAQ:CYTR) Is A Strong Buy", we noted the next upcoming 2017 American Society of Clinical Oncology (ASCO) Annual Meeting.

"CytRx Corporation (NASDAQ:CYTR) ran up just shy of 20% on Friday, bringing its weekly gain last week to more than 40%. The run comes subsequent to the company’s announcing that it is set to present phase 3 data from its lead development program at the upcoming 2017 American Society of Clinical Oncology (ASCO) Annual Meeting and a subsequent spate of media outlets picking up on the abstract for the presentation of being one of the most eagerly anticipated in the event." Source: CytRx Corporation (NASDAQ:CYTR) Is A Strong Buy

On June 5, 2017, CytRx presented its front-line sarcoma patients with aldoxorubicin on 30, May 2017. The company had previously acknowledged aldoxorubicin's failure to significantly prolong progression-free survival as the study's primary endpoint. But, above all the major significant issue is, ‘Is aldoxorubicin helping sarcoma patients live?’. From the results published by the study, it is apparent that it does not prolong the life of the patients. More developed research may be needed. The news was not good for the company, thus it rapidly reacted with corporate changes and new hires. On June 13, 2017, a press release announced that Mr. Shanta Chawla would be promoted from Company's Vice President of Clinical Development to Senior Vice President of Drug Development. Mr. Shanta Chawla will also assume the leadership of CytRx's ongoing clinical drug development and regulatory functions. The CEO of the firm quoted; "Dr. Shanta Chawla who is a Board certified physician has played a key role in the late-stage development and NDA submissions of several oncology drugs and has been involved in the day-to-day clinical development of aldoxorubicin for more than three years". Daniel Levitt, CytRx's Chief Medical Officer, stepped down on July 7, 2017. Scott Wieland, Ph.D., the Company's SVP of Drug Development, also stepped down effective June 30, 2017. CytRx Corp. published its 8-K report on August 1, 2017. It read that “the Stock is listed on NASDAQ. The Company has received notification from NASDAQ that it is not in compliance with the minimum bid price requirement for continued inclusion on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). If compliance cannot be demonstrated by August 21, 2017, NASDAQ will provide written notification that our common stock will be delisted”. We expect the company to communicate something soon regarding this matter. We should be alert on the decision as it may move the share price quite a bit.On August 4, 2017, the company reported a loss of $14.4 million in its second quarter, a loss of 10 cent per share. Its results were not good for the share price, which declined by 15%. Steven A. Kriegsman, CytRx's Chairman and CEO, said the following on the day of announcement:

"We are very proud of the tireless work undertaken over the past several months to secure a high-value, strategic partnership with NantCell Inc. which charts the best path forward for aldoxorubicin, through both expansion into multiple tumor types beyond soft tissue sarcomas (STS) and innovative combinations with immuno-oncology and cell-based therapies," Source

The news that moved the share priceOn July 28, 2017, it was announced that CytRx Corporation entered into a global strategic license with NantCell. The following deal will allow CytRx Corporation to manufacture and commercialize Aldoxorubicin; an Albumin Mediated Chemotherapeutic drug. Steven A. Kriegsman, the CEO, quoted: "This license and strategic investment will put aldoxorubicin in the hands of a committed partner who pioneered the development of albumin based chemotherapeutics, and will allow CytRx to continue to create new ultra-high potency drug candidates based on our LADR™ technology platform.” As per the following licensing agreement, Nantcell will purchase $13 million of CytRx common stock at the price of $1.10 per share. After this, CytRx will receive up to an additional $343 million in milestone payments. CytRx also issued NantCell a warrant to purchase up to 3 million shares of common stock at $1.10 over the next 18 months. Kriegsman also quoted: "We are excited to forge this new relationship with NantCell. They are committed not just to bringing aldoxorubicin to the market for patients with soft tissue sarcomas, but to expand aldoxorubicin's potential use in combination with both immuno-oncology and cell based therapies to better serve patients suffering from cancer."HoldersThe following market participants acquired large stakes in the company long time ago. Have a look:HolderSharesDate Reported% OutValueBlackrock Inc.5,866,696Mar 30, 20173.86%2,464,012Vanguard Group, Inc. (The)3,133,249Mar 30, 20172.06%1,315,964Sabby Management, LLC989,600Mar 30, 20170.65%415,631State Street Corporation973,853Mar 30, 20170.64%409,018Millennium Management LLC857,801Mar 30, 20170.56%360,276SourceThe following also own shares:HolderSharesDate Reported% OutValueiShares Russell 2000 ETF2,176,295May 30, 20171.43%1,936,902Vanguard Extended Market Index Fund1,177,731Dec 30, 20160.77%447,537Vanguard Total Stock Market Index Fund1,128,662Dec 30, 20160.74%428,891iShares Russell 2000 Growth ETF922,237May 30, 20170.61%820,790SourceFinally, these directors showed their commitment to the firm by acquiring shares as well:InsiderTransactionTypeValueDateShares

CHAWLA SHANTA M.D.Officer

Statement of OwnershipDirectJun 12, 20172,100

BRIEN EARL WDirector

Statement of OwnershipDirectDec 1, 201660,000SourceFinancials - Last three yearsWe had a look at the balance sheet of the term. We were interested in the amount of cash owned. It will be necessary to finance the future R&D expenses. We appreciated what we found:Cash And Cash Equivalents (In Thousands)56,959.48522,261.37232,218.905Short Term Investments-35,035.4245,621.593Net Receivables183.7034,621.6052,123.92Inventory---Other Current Assets3,434.2382,373.7083,250.355Total Current Assets60,577.42664,292.10583,214.773Long Term Investments---Property Plant and Equipment1,959.6671,467.681970.873Goodwill183.78183.78183.78Intangible Assets---Accumulated Amortization---Other Assets48.9111,080.8721,323.156Deferred Long Term Asset Charges---Total Assets62,769.78467,024.43885,692.582SourceAdditionally, we appreciated that the book value of the firm is positive and the long term debt is small. It seems that the company still has a lot of gas to function:Accounts Payable10,236.94317,751.98312,650.034Short/Current Long Term Debt5,481.656--Other Current Liabilities3,789.3915,193.4575,131.085Total Current Liabilities19,507.9922,945.4417,781.119Long Term Debt18,484.51--Other Liabilities---Deferred Long Term Liability Charges---Minority Interest---Negative Goodwill---Total Liabilities37,992.522,945.4417,781.119SourceConclusionWe found significant share price volatility created by CytRx's announcements. The election of the new Senior Vice President of Drug Development and most importantly the agreement with NantCell moved the share price in July. In August, the stock price declined due to profit taking and the release of earnings. Regarding the notification from NASDAQ, we need to be alert on the company's decision regarding its bid price. Overall, we're maintaining our bullish call on CYTR. The upside is much greater than the downside, making CYTR an excellent risk/reward play.Be sure to check out our coverage on CYTR.We will be updating our subscribers as soon as we know more. For the latest updates on CYTR, sign up below!Image courtesy of HCC Public Information Office via FlickrDisclosure: We have no position in CYTR and have not been compensated for this article.