Robbins Arroyo LLP: CytRx Corporation (CYTR) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against CytRx Corporation (NASDAQCM: CYTR) in the U.S. District Court for the Central District of California. The complaint is brought on behalf of all purchasers of CytRx securities between November 18, 2014 and July 11, 2016, for alleged violations of the Securities Exchange Act of 1934 by CytRx’s officers and directors. CytRx is a biopharmaceutical research and development company specializing in oncology. One of the company’s primary trial drugs is known as aldoxorubicin.
CytRx Accused of Misleading Investors About Its Clinical Trial
According to the complaint, on November 18, 2014, CytRx announced that the U.S. Food and Drug Administration (“FDA”) placed the company’s clinical trials for aldoxorubicin on a partial hold in response to a patient death. On December 3, 2014, CytRx issued a press release assuring investors that it believed the partial hold would be expeditiously resolved and that enrollment rates and timelines for its trials would remain materially unchanged. Then, on January 20, 2015, CytRx announced that the FDA removed the partial clinical hold for aldoxorubicin and that it expected enrollment and dosing in the congoing trials to be back underway soon. On May 1, 2015, CytRx announced positive financial results and touted encouraging data from the aldoxorubicin trial, including a 27% reduction in the risk of death compared to patients treated with doxorubicin, the current standard-of-care in this indication.
However, the complaint alleges that CytRx officials failed to disclose that: (1) the clinical hold placed on the Phase 3 trial of aldoxorubicin would prevent sufficient follow-up for patients involved in the study; (2) that, as a result, several patients would be excluded from the progression free survival evaluation; (3) that, in response, CytRx would likely conduct a second analysis; and (4) that the results of the trial could be materially affected and/or approval of aldoxorubicin could be delayed. On July 11, 2016, CytRx announced disappointing results for its Phase 3 clinical trial of aldoxorubicin, disclosing that “the study did not show a significant difference between aldoxorubicin and investigator’s choice therapy for [progression free survival].” CytRx further disclosed that the partial clinical hold in November 2014 led to insufficient follow-up for nearly two-thirds of patients who entered the Phase 3 study after the hold was resolved and enrollment resumed. As a result, nearly half of all patients were excluded from the progression free survival evaluation. On this news, CytRx stock fell $1.61 per share, or over 64%, to close at $0.90 per share on July 14, 2016.
CytRx Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.