Jefferies analyst Chris Howerton weighs in on CytRx Corporation (NASDAQ:CYTR) after the company failed to impress investors with its unsuccessful phase 3 Aldoxorubicin (Aldox) trial in second-line Soft Tissue Sarcoma cancer (STS).
The analyst does not hold out a great deal of hope for change with additional analysis, providing two key reasons:
1) a marked improvement in PFS would be required — to reach Votrient’s reported PFS of 4.6 months (which we see as necessary for success), and the ‘second-half’ of aldox pts would need to have a PFS of ~5.0mths (or a ~20% improvement);
2) we do not expect “doubling” of ORR/DCR to be meaningful in this pop’n, as the reported ORR of Votrient was 4%. Based upon the results reported today & at ASCO, we do not think there is sufficient evidence to support the continued development of aldox. Consequently, we have made the following changes to our model, which result in our new PT of $0.75 (vs $2.50 prev.): removal of aldox rev’s, meaningful lowering of OPEX & assignment of $100M in value for the LADR platform, which includes any pot’l residual value for aldox.
The analyst slashed the price target to $0.75 price target from $2.50, while reiterating a Hold rating on the stock, marking a nearly 16% downside from where the stock is currently trading.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. Howerton is ranked #1,078 out of 4,055 analysts on TipRanks, with a 61% success rate and an average return of 4.9%.
According to TipRanks, 2 analysts rate the stock a Buy while 2 rate the stock a Hold. The average price target for the stock is $4.58 with a 420% upside from where shares last closed.