CytRx Corporation (NASDAQ:CYTR), a biopharmaceutical research and development company specializing in oncology, announced that it has reached an agreement to settle the stockholder derivative action pending in the Delaware Court of Chancery, which names as defendants a number of the Company’s current and former directors and officers, and names the Company as a nominal defendant.
The lawsuit, captioned In re CytRx Corp. Stockholder Derivative Litigation, C.A. No. 9864-VCL, relates to the Company’s issuance and pricing of stock options to its directors and officers in December 2013. Although the individual defendants have denied any liability or wrongdoing in connection with the allegations contained in the lawsuit, they believe that it is in the best interests of the Company and its stockholders to settle the matter on reasonable terms to avoid potentially protracted and expensive litigation.
The settlement provides that the Company will re-price 2,095,000 stock options that were collectively granted on December 10, 2013 to Louis Ignarro, Joseph Rubinfeld, Marvin L. Selter, Richard L. Wennekamp, Steven A. Kriegsman, John Y. Caloz and Benjamin S. Levin, from the original exercise price of $2.39 to an exercise price of $4.66 (the share price at market closing on December 20, 2013). The settlement also provides that the Company will implement certain corporate governance changes and modify certain governance practices regarding the granting of stock option grants. Under the settlement, it is not expected that the Company will incur any out-of-pocket expenses.
“We believe that settling this case is in the best interest of all parties and will help avoid further risk to our business,” said Steven A. Kriegsman, Chairman and CEO of CytRx. “Our main focus continues to be the successful execution of our clinical programs, including our global Phase 3 pivotal clinical trial of aldoxorubicin for the treatment of second-line soft tissue sarcoma and our global Phase 2b clinical trial of aldoxorubicin for the treatment of second-line small cell lung cancer. We remain committed to our primary corporate objective of leveraging our albumin-binding anti-cancer drug platform to advance new treatments in cancer care.”
The parties have not yet reached an agreement on an amount of any award of fees and expenses to plaintiffs’ attorneys. The settlement is subject to approval by the Delaware Court of Chancery and certain other conditions, including notice to the Company’s stockholders. (Original Source)
Shares of CytRx Corporation closed yesterday at $3.93. CYTR has a 1-year high of $5.46 and a 1-year low of $2.08. The stock’s 50-day moving average is $4.40 and its 200-day moving average is $3.33.
On the ratings front, Cytrx has been the subject of a number of recent research reports. In a report issued on May 5, Oppenheimer analyst Christopher Marai reiterated a Buy rating on CYTR, with a price target of $10, which represents a potential upside of 154.5% from where the stock is currently trading. Separately, on May 4, FBR’s Christopher James reiterated a Buy rating on the stock and has a price target of $8.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Christopher Marai and Christopher James have a total average return of 43.6% and -13.8% respectively. Marai has a success rate of 79.5% and is ranked #9 out of 3610 analysts, while James has a success rate of 42.9% and is ranked #3446.
CytRx Corp is a biopharmaceutical research and development company specializing in oncology. Its oncology pipeline includes three clinical-stage drug candidates in various stages of development: Aldoxorubicin, Tamibarotene, and Bafetinib.