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CytRx Q4 Revenues Up 11 Percent As Losses Swell 87 Percent

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CytRx last week reported its financial results for the fourth quarter, posting revenues of $100,000, up slightly from $90,000 in the year-ago quarter. CytRx derives its revenues from licensing its Tranzfect DNA vaccine delivery technology, which it is no longer developing in-house.

The company's net loss in the period swelled 87 percent to $5.8 million, or $0.15 per share, from $3.1 million, or $0.09 per share, in the fourth quarter of 2003.

Contributing to the higher losses was a sharp increase in research and development spending during the fourth quarter, which grew to $4 million from $700,000 in the same period a year earlier. Driving the higher R&D costs, said CytRx, was a jump in activities at its CytRx Laboratories subsidiary and a $3 million write-off of certain costs associated with the company's October acquisition of small molecule drug developer Biorex Research and Development.

General and administrative expenses in the quarter fell to $1.8 million from $2.6 million the previous year.

For the full year 2004, CytRx reported increased revenues of $428,000, up from $94,000 in 2003, which were derived from Tranzfect licenses. Meanwhile, the company's net loss fell to $16.4 million, or $0.48 per share, from $17.8 million, or $0.65 per share, the year before.

R&D costs for 2004 climbed to $9 million from $4.4 million in 2003, again in part because increased spending at CytRx Labs and the company's Biorex purchase.

For the full year, CytRx's general and administrative costs were $8 million, an increase of $1 million over 2003. The company attributed the increase to higher audit fees due to its change in auditors, severance paid to certain members of its management, including former CFO Kirk Peacock, and the hiring of additional executive officers.

As of Dec. 31, CytRx had cash, cash equivalents, and short-term investments totaling $3 million. This compares with $11.6 million at the end of 2003.

In a filing with the US Securities and Exchange Commission dated March 31, CytRx stated that it does not expect to receive significant revenues from its Tranzfect licensing activities in 2005. The company noted, however, that it grossed $21.3 million through a private stock placement at the end of January, and that it believes it currently has resources enough to fund operations into the second quarter of 2006.

CytRx, however, will still need to pursue additional funding before that time, it indicated in the SEC filing.

The company said that it is required to fund its partnership with the University of Massachusetts Medical School to develop RNAi-based drugs, and that it expects the cost of doing so to rise $400,000 to $2.4 million, under certain circumstances, in 2005.

Additionally, CytRx said in the SEC filing that it anticipates that a phase II trial of a small-molecule treatment for amyotrophic lateral sclerosis, acquired from Biorex, will cost about $5.5 million over a 12 to 18 month period. The company expects to begin that trial in the second half of this year.

In another SEC filing, dated March 14, CytRx stated that the compensation committee of its board of directors approved a $40,000 increase in CEO Steven Kriegsman's annual compensation to $400,000.

— DM