It has been an interesting couple of years for $CYTR. Their lead asset heading into 2008 was arimoclomol, a small molecule thought to activate Hsp70, which was placed on clinical hold (January 2008) over potential toxicology concerns in rats. While the clinical hold was subsequently lifted in December 2009, the high bar for success in neurodegenerative diseases, such as in ALS, as well as unproven MoAs for their pipeline assets, likely encouraged a strategic rethink in priorities.

At the same time, $CYTR was in the process of spinning-out $RXII, their RNAi-based therapeutics subsidiary, which suggested that they did not want to rally around RNAi as their value proposition. I don’t know the exact reason, but in March 2008, $RXII was off and running in the public markets, with $CYTR decreasing its ownership stake from from 85% to less than 50%. They have now exited their entire position – their decision to not focus around RNAi path, was in hindsight, probably not such a bad idea.

In September 2008, we learned what they had in mind. Old neurodegenerative $CYTR was no more. New, $CYTR was to be an oncology company and it only cost them 2.6M in equity. Before the announcement was made, they had been trading at $0.45/share, so it cost a whopping $1.7M in stock (plus future earn-outs, of course, to be paid in equity or cash) to acquire four clinical stage assets – just like that.

The bride was Innovive ($INNO), a struggling clinical-stage oncology company, which had started off with some excitement and then whimpered away. I’m not sure what what caused all their problems – poor execution? poor decision making?  In any case, investors appear to have thought similarly, with minimal impact on share price.

With today’s news of the licensing of arimoclomol and their molecular chaperone program, their transformation is complete – $INNO assets has $CYTR’s full attention and  and the old $CYTR has completely vanished.

So, what’s up next for $CYTR? For the most part, the stock reached current levels in early June 2009 (some excitement at ASCO?) and hasn’t created any sustained value since. They have a ~$90M market cap, $30M cash 1Q11, and at least three shots on goal.  Could they be a jewel in the rough? Time to check under the hood to see how these assets stack up and what might be in store for 2011.

No position.