Shares
of biotech company CytRx saw gains of 150 percent from December 9-December 13,
fueled by positive results from the company’s phase 2b first-line soft tissue
sarcoma trial. After closing the week of gains at $5.72, shares tumbled 10
percent in trading on Monday, December 16. According to Wall Street Cheat Sheet
contributor Tom Meyer, the sell-off stems from an allegedly inaccurate article
published by The Street’s Adam Feuerstein.
Meyer
points to three items of inaccuracy that he sees in Feuerstein’s article:
option grants before aldoxorubicin press release, compared CytRx data to that
of Ziopharm Oncology (ZIOP), and geographic distribution.
To
read the full article visit
http://wallstcheatsheet.com/stocks/inaccurate-article-sends-cytrx-shares-lower.html
Addressing
the option grants, Meyer writes, “The Street’s article seemed to imply that
CytRx management purposely issued option grants to insiders knowing that a
press release would cause the shares to spike shortly after. That is
inaccurate. The CytRx board meets at least once per quarter. Additionally, the
company has demonstrated a history of conducting board meetings in December and
issuing option grants during those same December meetings.”
In
regards to Feuerstein’s written issues concerning accuracy of the data in
CytRx’s phase 2b trial, Meyer points to an article in 2012 in which Feuerstein
calls comparable investigation “re-assuring.”
“Mr.
Feuerstein also had a problem with some of the data reported in the trial. He
believes that the 2.8 month median PFS for those on doxorubicin was abnormally
low. CytRx reported PFS data from both a blinded, independent central lab and
from the investigator or clinical site. The 2.8 month median PFS came from the
central lab while the median PFS from the investigator assessment was 4.7
months. If you want to compare apples to apples, let’s look at the Ziopharm
Phase 2 trial. Ziopharm only used investigator assessments. In fact, in 2012,
Mr. Feuerstein even commented, “In planning the PICASSO 3 trial, Ziopharm
assumed doxorubicin PFS of 4.3 months, so the 4.6 month PFS observed in the dox
arm of the ifo/dox study is re-assuring.” The Ziopharm Phase 2 trial showed a
4.6 month PFS in the doxorubicin treated arm and the CytRx Phase 2 showed a 4.7
month PFS in the doxorubicin treated arm. These are virtually identical, even
‘re-assuring,’ when you use the same type of assessment,” writes Meyer.
Meyer
also highlights a trial by European cancer group, the EORTC, comparing
doxorubicin to a liposomal form of doxorubicin, in which results were in line
with data from CytRx’s central lab.
Lastly,
Meyer corrects Feurestein’s assertion that 60 percent of patients enrolled in
CytRx’s aldoxorubicin study were from India, Russia, Romania, and the Ukraine.
“This
distribution indicates that only 38 percent of those enrolled in the trial are
from India, Romania, Russia, and the Ukraine. The other 62 percent are from the
USA, Hungary, and Australia (extremely reliable geographies for reporting
credible and reproducible clinical trial data since Mr. Feuerstein considers
the other countries to be less trustworthy),” writes Meyer.
In
conclusion, Meyer reaffirms his bullish take on CytRx.
“Hopefully
this article clears up the inaccuracies reported in The Street’s article that
was published on Tuesday. … CytRx remains an extremely promising biotechnology
company with a great deal of potential to revolutionize the future of cancer
treatment,” he writes.
For
more information, visit www.cytrx.com
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