CytRx Corporation (NASDAQ: CYTR) didn’t have the best start early on in today’s trading session. However, that’s to be expected after the recent strong gains we’ve seen on the stock. After all, those who aren’t in it for the long haul are going to take their profits at some point and double digit gains. Well, that sounds great. Nonetheless, there’s a strong argument that they are taking profits to early. And that argument was only exacerbated when the opening bell rang and the stock started to make it’s way to the top. Before we get into that argument, we’d like to give our partners at Trade Ideas a special thanks, yet again, for putting the stock on our radar.
If You Take Profits Now, Chances Are That You’ll Be Sorry!
As mentioned above, following yesterday’s gain of nearly 22%, CytRx is trading down in the market this morning as traders take their profits. Sure, 22% is great, and its hard to blame the traders that are taking their change for doing so. Well, that is, until you look at what’s coming soon.
Recently, CYTR announced that it would be demonstrating data from its global Phase 3 clinical trial that evaluated aldoxorubicin relatively soon. In fact, the company intends to present that data at the 2017 American Society of Clinical Oncology Annual Meeting. The thing is that this meeting starts in two days. In fact, it starts on June 2nd and ends on June 6th. During this time period, the company will be offering two presentations surrounding aldoxorubicin as a treatment for relapsed and refractory soft tissue sarcomas (STS). That means that in just 2 days, a catalyst could make this stock fly! Considering that ASCO needed to review the data before accepting the presentation, it only makes sense that the coming data is overwhelmingly positive. In a statement, Sant Chawla, M.D., F.R.A.C.P., Director of the Sarcoma Oncology Center in Santa Monica, California and Principal Investigator for the Phase 3 aldoxorubicin trial, had the following to offer:
“In addition to the significantly prolonged progression-free survival achieved by both North America and L-sarcoma patients, the data presented at ASCO this year demonstrate that, unlike any other drugs in this class, aldoxorubicin can be dosed continuously with minimal to no cardiotoxicity…”
The Coming Data Could Lead To A Buyout
Instead of selling CYTR, it’s time to start thinking about where the company is, what it has accomplished, and what this could mean for investors. At the moment, CytRx has a market capitalization of $166.86 million. This relatively small company has recently completed Phase 3 studies, which ended with strong enough results for them to be presented at ASCO.
At ASCO, CYTR will not be the only biotechnology company. Think about it, we’re talking about the American Society of Clinical Oncology. Just about every large company that’s focused on finding treatments for cancer will be there, and they will see two demonstrations surrounding strong aldoxorubicin data during this meeting.
If this data is what it is expected to be, there’s a strong argument that CYTR is a buyout candidate. At the end of the day, positive clinical data showing that aldoxorubicin is a realistic and meaningful drug candidate will open the eyes of executives in massive companies that are working to come up with a cure for STS… Can you say CHA CHING?
What If A Buyout Doesn’t Happen
At the end of the day, I’m not an insider. I have no relationship whatsoever with CytRx. I’m just calling them as I see them. So, while the company may be a great buyout candidate, there’s no solid information saying that a buyout is coming. So, what happens if a buyout doesn’t take place? Well, the answer is simple.
If a buyout doesn’t take place, CYTR will continue on the plan that it has outlined for its investors. That means that towards the end of this year, the company will submit a New Drug Application with the FDA, proving to be yet another catalyst. At the end of the day, aldoxorubicin creates two compelling opportunities here – one being a buyout and the other being a treatment that will potentially be overwhelmingly profitable down the road.
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The bottom line here is that aldoxorubicin may be the goose that lays the golden egg, not only for CYTR, but for its investors as well. While the stock may be teetering between the red and green so far in the market today, chances are that strong profitable opportunities are coming and soon.
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