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CytRx is a biopharmaceutical research and development company specializing in oncology. One of the Company's primary trial drugs is aldoxorubicin.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose: (1) that the clinical hold placed on the Phase 3 trial of aldoxorubicin for soft tissue sarcomas ("STS") would prevent sufficient follow-up for patients involved in the study; (2) that, as a result, nearly half of all patients would be censored (excluded) from the progression free survival evaluation; (3) that, in response, CytRx would likely conduct a second analysis; (4) that, as such, the results of the trial could be materially affected and/or approval of aldoxorubicin for STS could be delayed; and (5) that, as a result of the foregoing, Defendants' statements about CytRx's business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
On July 11, 2016, CytRx issued a press release announcing the results of the Company's Phase 3 clinical trial of aldoxorubicin compared to investigator's choice therapy in patients with relapsed or refractory STS. Therein, the Company disclosed that "the study did not show a significant difference between aldoxorubicin and investigator's choice therapy for [progression free survival] . . . ." Moreover, CytRx disclosed that a 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 censored (excluded) from the progression free survival evaluation. Finally, CytRx announced that it "expects to conduct a second analysis, which will include longer patient follow-up and allow for greater maturation of all endpoints."
On this news, CytRx's stock price fell $1.50 per share, or 59.7%, to close at $1.01 per share on July 12, 2016, on unusually heavy trading volume. The Company's stock price continued to decline over the next two trading days, falling 10%, to close at $0.90 per share on July 14, 2016.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
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SOURCE Pomerantz LLP