In a recent article entitled
“Spotlight 2014-Biotech CytRx Corporation,” Seeking Alpha contributing writer
The Focused Stock Trader wastes no time getting to the point.
“While the recent Phase IIb
clinical trial results are driving the current move, we believe there is still
a lot of room for the company to grow,” he writes before naming six primary
reasons for his opine.
To read the full article
visit: http://seekingalpha.com/article/1951691
CytRx is a biopharmaceutical
R&D company specializing in the field of oncology, particularly focusing on
the clinical development of aldoxorubicin, the company’s improved version of
widely used chemotherapeutic agent aldoxorubicin. In regard to his bullish
stance on the company, the Focused Stock Trader notes:
1. First, CytRx had low institutional ownership of 11%,
primarily by index funds.
2. Second, aldoxorubicin is moving into a pivotal Phase III
trial.
3. Third, aldoxorubicin has broad potential.
4. The company is talking with potential pharmaceutical and big
biotech companies about a partnership to develop and commercialize
aldoxorubicin on a global basis.
5. Fifth, the platform and next drug candidates will soon
emerge as a value center.
6. Lastly, CytRx is gaining more notoriety.
The article takes an
in-depth look at aldoxorubicin’s superiority over doxorubicin in the recent
phase 2b trial, and why the results are a game changer for the company as well
as patients suffering from soft tissue sarcoma.
Also noted is the incredible
trading activity that followed CytRx’s release of the study results:
“However, the biggest part
of the story, which is different for CytRx, is the trading volume. CytRx used
to trade a few hundred thousand shares daily. Since the news, the stock is
trading like a monster. Over 82 million shares traded in the three days
following the announcement, and more than 132 million shares traded from the
news through the end of December. Keep in mind the company has about 42 million
shares outstanding. That is over three times the number of outstanding shares.”
As well as the potential
market for aldoxorubicin:
“This pegs a potential
revenue stream of $638 million annually. Keep in mind this is only the US and
Europe. If you added Asia, South America and the rest of the world this could
be a much bigger number. Biotech companies traditionally have traded at a
multiple of 8x revenue. That means CytRx’s valuation would be in excess of $5.1
billion just on sales for soft tissue sarcoma, a relatively rare form of
cancer. Based on the current 42 million shares outstanding, that would equate
to a price of approximately $121 a share. CytRx notes in their corporate
presentation the number of other indications where aldoxorubicin could be used.
Combined these are markets worth more than $21 Billion. If CytRx garnered a
portion of it, that would be a substantial.”
The Focused Stock Trader
gives a brief oversight of CytRx’s financial position before offering his final
conclusion that:
“We believe that CytRx has
been an underappreciated story although that sentiment is starting to change.
Aldoxorubicin has blockbuster potential in multiple indications, but this may
just be the beginning of the story for CytRx’s technology platform. The current
valuation provides ample room for upswing and a broad-acting, established drug
de-risks the clinical development while providing for multiple shots on goal.
We think institutions are just waking up to this story and you should too.”
For more information visit
www.cytrx.com
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