CytRx Corporation (CYTR) Stock: Headed Up On Short Sale Restriction

CytRx Corporation (NASDAQ: CYTR) is having an incredible time in the pre-market hours this morning, and for good reason. Late yesterday, a short sale circuit breaker hit on the stock, causing a restriction of short sales today. Of course, this is great news for those looking to push the value of the stock upward, and that’s exactly what they’re doing today. Our partners at Trade Ideas were the first to alert us to the gains. At the moment (6:02), CYTR is trading at $0.70 per share after a gain of $0.10 per share or 15.98% thus far today.

CYTR Enjoys Short Sale Restriction Under The Alternative Uptick Rule

As mentioned above, CytRx is having an incredibly strong start to the trading session in the pre-market hours this morning, and for good reason. Late yesterday, a short sale circuit breaker was triggered under the relatively new Rule 201, or the Alternative Uptick Rule. As a result, CYTR will not be able to be sold short today, making it difficult for the bears to push the value of the stock downward throughout the session. So, chances are that the stock will have an incredible day in the market today.

This Is A Stock To Watch

While CYTR is likely to have a strong day in the market today thanks to the short sale restriction, this is not the only reason to think about getting involved here. Ultimately, the company’s claim to fame is aldoxorubicin, and if you’ve been following the news, you’re likely excited for what may come in the near future.

Aldoxorubicin is currently being studied as a treatment for various different types of cancer. In fact, the company completed the Phase 3 trial in 2nd Line Soft Tissue Sarcoma back in November. Not to mention 2 other completed Phase 2 trials, one ongoing Phase 2b trial, and others. Just take a look at the CYTR pipeline to see why there are so many investors excited about the company’s work with regard to aldoxorubicin.

This Creates An Interesting Scenario For The Company

Ultimately, aldoxorubicin and the work CytRx has done with regard to the treatment create a bit of an interesting scenario. For the soft tissue sarcoma indication, the company may soon be hearing of FDA approval. On top of that, the treatment is proving to be a positive option in various other forms of cancer. As a result, I see this going one of three ways…

First and foremost, there’s a good chance that others in the oncology space are currently eyeing aldoxorubicin for their portfolio. As a result, I wouldn’t be surprised if we started hearing some takeover chatter some time soon. After all, at a relatively low market cap, a big player in the game could easily afford to purchase the company outright, and all the assets that it comes with.

Another option here would be that CYTR isn’t acquired. Instead, over the coming months and years, the company works to achieve FDA approval for aldoxorubicin under several different indications. Considering the clinical results that have been published, this is a real possibility.

Finally, we have to take the good with the bad. While it’s unlikely in my opinion, it is possible that the FDA makes the decision to deny the aldoxorubicin applications. If this is the case, we would see some major declines. However, considering the data the company has released surrounding the treatment, I do believe that this is a highly unlikely scenario.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on CYTR. In particular, we’re interested in following the ongoing work surrounding aldoxorubicin. We’ll continue to follow the story closely and bring the news to you as it breaks!

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