<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
------------------
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
--------------- --------------
Commission file number 0-15327
-------
CYTRX CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 58-1642740
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
154 Technology Parkway, Norcross, Georgia 30092
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 368-9500
- --------------------------------------------------------------------------------
(Registrant's telephone number)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Number of shares of CytRx Corporation Common Stock, $.001 par value, issued and
outstanding as of November 12, 1999: 7,740,037.
<PAGE> 2
CYTRX CORPORATION
Form 10-Q
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets as of
September 30, 1999 (unaudited) and December 31, 1998 3
Condensed Consolidated Statements of Operations (unaudited) for the
Three Month and Nine Month Periods Ended September 30, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows (unaudited) for the
Nine Month Periods Ended September 30, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3 Quantitative and Qualitative Disclosures About Market Risk 11
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 11
SIGNATURES 12
</TABLE>
2
<PAGE> 3
Part I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CYTRX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,357,375 $ 8,855,375
Short-term investments -- 6,417,066
Accounts receivable 236,439 83,249
Note receivable -- 300,000
Inventories 6,476 10,935
Other current assets 97,021 10,377
------------- ------------
Total current assets 5,697,311 15,677,002
Property and equipment, net 998,033 195,030
Other assets:
Acquired developed technology, net -- 600,000
Other assets 70,978 169,536
------------- ------------
Total other assets 70,978 769,536
------------- ------------
Total assets $ 6,766,322 $ 16,641,568
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 239,953 $ 540,089
Accrued liabilities 1,551,243 1,409,034
------------- ------------
Total current liabilities 1,791,196 1,949,123
Minority interest in Vaxcel, Inc. -- 3,897
Commitments
Stockholders' equity:
Preferred Stock, $.01 par value, 1,000 shares authorized, including 1,000
shares of Series A Junior Participating Preferred
Stock; no shares issued and outstanding -- --
Common stock, $.001 par value, 18,750,000 shares authorized;
8,269,857 and 8,236,926 shares issued at September 30, 1999
and December 31, 1998, respectively 8,270 8,237
Additional paid-in capital 67,546,098 66,423,577
Treasury stock, at cost (633,816 and 625,816 shares held at
September 30, 1999 and December 31, 1998, respectively) (2,279,238) (2,270,238)
Accumulated deficit (60,300,004) (49,473,028)
------------- ------------
Total stockholders' equity 4,975,126 14,688,548
------------- ------------
Total liabilities and stockholders' equity $ 6,766,322 $ 16,641,568
============= ============
</TABLE>
See accompanying notes.
3
<PAGE> 4
CYTRX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
1999 1998 1999 1998
----------- ------------ ------------ -----------
(restated) (restated)
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 173,737 $ 221,337 $ 602,616 $ 694,053
Interest income 95,505 322,259 406,837 745,383
Grant income 150,077 54,826 404,367 406,908
Other 29,958 125,768 118,356 268,584
----------- ------------ ------------ -----------
449,277 724,190 1,532,176 2,114,928
Expenses:
Cost of sales 68,317 71,509 197,291 183,394
Research and development 4,541,104 1,763,110 9,334,165 4,999,638
Selling, general and administrative 935,536 653,484 2,792,058 1,931,351
----------- ------------ ------------ -----------
5,544,957 2,488,103 12,323,514 7,114,383
----------- ------------ ------------ -----------
Loss from continuing operations before
extraordinary item (5,095,680) (1,763,913) (10,791,338) (4,999,455)
Income (loss) from discontinued operations 209,867 (246,114) (39,535) 5,872,295
Minority interest -- (31,910) (3,897) (147,846)
----------- ------------ ------------ -----------
Income (loss) before extraordinary item (4,885,813) (1,978,117) (10,826,976) 1,020,686
Extraordinary item:
Loss on early extinguishment of debt -- -- -- (325,120)
----------- ------------ ------------ -----------
Net income (loss) $(4,885,813) $ (1,978,117) $(10,826,976) $ 695,566
=========== ============ ============ ===========
Basic and diluted income (loss) per common share:
Continuing operations $ (0.67) $ (0.23) $ (1.41) $ (0.66)
Discontinued operations 0.03 (0.03) (0.01) 0.79
Extraordinary item -- -- -- (0.04)
----------- ------------ ------------ -----------
Net income (loss) $ (0.64) $ (0.26) $ (1.42) $ 0.09
=========== ============ ============ ===========
Basic and diluted
weighted average shares outstanding 7,635,625 7,669,440 7,627,983 7,617,673
</TABLE>
4
<PAGE> 5
CYTRX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Month Periods Ended
September 30,
-------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(10,826,976) $ 695,566
Adjustments to reconcile net loss to net cash used by operating
activities:
Depreciation and amortization 83,097 401,769
Stock option and warrant expense 1,067,766 --
Gain on sales of subsidiaries (240,196) (7,009,305)
Gain on sale of real estate -- (434,454)
Extraordinary loss on early extinguishment of debt -- 325,120
Minority interest in net loss of subsidiary (3,897) (147,846)
Net change in assets and liabilities 605,256 1,283,758
------------ ------------
Total adjustments 1,512,026 (5,580,958)
------------ ------------
Net cash used by operating activities (9,314,950) (4,885,392)
Cash flows from investing activities:
Decrease in short-term investments 6,417,066 --
Decrease in long-term investments -- 5,326,647
Capital expenditures, net (886,100) (29,071)
Net proceeds from sale of subsidiaries 240,196 4,358,985
Net proceeds from sale of real estate -- 4,258,747
------------ ------------
Net cash provided by investing activities 5,771,162 13,915,308
Cash flows from financing activities:
Net proceeds from issuance of common stock 54,788 96,917
Purchase of treasury stock (9,000) --
Redemption of convertible debt -- (1,650,000)
------------ ------------
Net cash provided (used) by financing activities 45,788 (1,553,083)
------------ ------------
Net increase (decrease) in cash and cash equivalents (3,498,000) 7,476,833
Cash and cash equivalents at beginning of period 8,855,375 5,895,008
------------ ------------
Cash and cash equivalents at end of period $ 5,357,375 $ 13,371,841
============ ============
</TABLE>
See accompanying notes.
5
<PAGE> 6
CYTRX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
1. Description of Company and Basis of Presentation
CytRx Corporation ("CytRx" or "the Company") is a biopharmaceutical
company focused on the development and commercialization of high-value human
therapeutics. The Company's lead product is FLOCOR(TM), now in pivotal Phase III
clinical trials for the treatment of acute sickle cell crisis. CytRx also plans
to expand development of FLOCOR(TM) for acute respiratory disorders and for
other vascular disorders such as shock and stroke. CytRx is also currently
engaged in research in the areas of infectious disease, gene and drug delivery,
and animal feed additives.
The accompanying condensed consolidated financial statements at
September 30, 1999 and for the three month and nine month periods ended
September 30, 1999 and 1998 include the accounts of CytRx together with those of
its subsidiaries and are unaudited, but include all adjustments, consisting of
normal recurring entries, which the Company's management believes to be
necessary for a fair presentation of the periods presented. Interim results are
not necessarily indicative of results for a full year. The financial statements
should be read in conjunction with the Company's audited financial statements in
its Form 10-K for the year ended December 31, 1998.
Certain prior year amounts have been reclassified to conform to the
1999 financial statement presentation. The operations of Proceutics, Inc.
("Proceutics"), CytRx Animal Health, Inc. ("CytRx Animal Health") (formerly
VetLife, Inc.), and Vaxcel, Inc. ("Vaxcel") are presented as discontinued
operations for all periods presented.
2. Sale of Vaxcel
On June 2, 1999, CytRx entered into a Stock Acquisition Agreement with
A-Z Professional Consultants, Inc. ("A-Z") for the sale of CytRx's equity
interest in Vaxcel. The sale was consummated on September 9, 1999. Pursuant to
the agreement, A-Z purchased 9,625,000 shares of common stock of Vaxcel from
CytRx for a cash purchase price of $318,626. After consummation of this
transaction, CytRx has no further equity interest in Vaxcel.
Net income (loss) associated with Vaxcel included in income (loss) from
discontinued operations was $210,000 and $(36,000) for the three month and nine
month periods ended September 30, 1998, as compared to $(223,000) and
$(1,035,000) for 1998. A gain related to the sale of $240,000 is included in
income (loss) from discontinued operations for the three month period ended
September 30, 1999. A
6
<PAGE> 7
summary of the assets and liabilities of Vaxcel which are included in the
consolidated balance sheet at December 31, 1998 are as follows (in thousands):
<TABLE>
<S> <C>
Current assets $ 14
Property and equipment, net 6
Other assets 956
------
Total assets $ 976
Total liabilities $ 618
</TABLE>
Termination of Optivax(R) License by CytRx -- In July 1999, CytRx
terminated its license of Optivax(R) to Vaxcel due to Vaxcel's cessation of
operations within the meaning of the license agreement. Concurrently with the
termination of the Optivax(R) license, all of Vaxcel's rights and obligations
pursuant to its license of the Optivax(R) technology to Corixa Corporation were
assigned to CytRx.
Sale of Technology by Vaxcel -- In January 1999, Vaxcel entered into an
agreement with Innovax Corporation ("Innovax") giving Innovax the option to
purchase the rights to Vaxcel's PLG microencapsulation technology for an
aggregate purchase price of $600,000. Innovax paid a nonrefundable option fee of
$200,000, with an additional $400,000 due upon the exercise of the option.
Innovax also paid a total of $20,000 for extensions of the option period. On
April 1, 1999 Innovax exercised its option and the rights to such technology
were assigned by Vaxcel to Innovax.
The Company recorded this transaction in the second quarter of 1999 as
a sale of its Acquired Developed Technology, valued at $600,000, and therefore
did not record a gain or loss on the transaction. The $20,000 in option
extension fees paid by Innovax is included in the discontinued operations of
Vaxcel in the accompanying Statement of Operations. The $400,000 due upon
exercise of the option was paid on April 1, 1999.
3. Segment Reporting
<TABLE>
<CAPTION>
Continuing Operations Discontinued Operations
------------------------------------------------ --------------------------------------------------
Total Cattle Total
Research Recruiting Product Continuing Marketing Pharmaceutical Vaccine Discontinued
(in thousands) Products Services Development Operations Operations Services Development Operations
- -------------------------------------------------------------------------------- --------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Three Months Ended
September 30, 1999:
Sales to external customers $ 98 $ 76 $ -- $ 174 $ -- $ -- $ -- $ --
Segment profit (loss) 43 7 (5,146) (5,096) -- -- 210 210
Total assets -- -- 6,616 6,616 -- -- -- --
Three Months Ended
September 30, 1998:
Sales to external customers 129 92 -- 221 -- -- -- --
Segment profit (loss) 55 35 (1,854) (1,764) (15) 24 (223) (214)
Total assets -- -- 17,848 17,848 -- -- 4,320 4,320
Nine Months Ended
September 30, 1999:
Sales to external customers 363 240 -- 603 -- -- -- --
Segment profit (loss) 201 52 (11,044) (10,791) -- -- (36) (36)
Total assets -- -- 6,616 6,616 -- -- -- --
Nine Months Ended
September 30, 1998:
Sales to external customers 373 321 -- 694 4,383 407 -- 4,790
Intersegment sales -- -- -- -- -- 143 -- 143
Segment profit (loss) 190 126 (5,315) (4,999) 5,668 1,387 (1,035) 6,020
Total assets -- -- 17,848 17,848 -- -- 4,320 4,320
</TABLE>
7
<PAGE> 8
4. Purchase Commitments
At September 30, 1999, the Company had outstanding firm purchase
commitments of approximately $650,000 related to the design and construction of
manufacturing equipment for commercial production of FLOCOR(TM).
Item 2. -- Management's Discussion and Analysis of Financial Condition
And Results of Operations
This Quarterly Report on Form 10-Q includes forward-looking statements that are
subject to risks and uncertainties. Actual results may differ materially from
those discussed herein due to a number of factors, including, among other
things, the research, development, and market risks which could adversely affect
the Company's timeline for clinical trials, regulatory approval, and time to
market thereafter. The Company undertakes no obligation to revise any
forward-looking statements in order to reflect events or circumstances that may
arise after the date of this report.
Liquidity and Capital Resources
At September 30, 1999 the Company had cash and cash equivalents and
short-term investments of $5.4 million and net assets of $5.0 million, compared
to $15.3 million and $14.7 million, respectively, at December 31, 1998. Working
capital totaled $3.9 million at September 30, 1999, compared to $13.7 million at
December 31, 1998.
The Company's operations have and will continue to use substantial
amounts of cash. The Company's future expenditures and capital requirements
depend on numerous factors including the progress and focus of its research and
development programs, the progress and results of pre-clinical and clinical
testing, the time and costs involved in obtaining regulatory approvals, the
costs of filing, prosecuting, defending and enforcing any patent claims and
other intellectual property rights, competing technological and market
developments, the ability of the Company to establish collaborative
arrangements, the initiation of commercialization activities, the purchase of
capital equipment and the availability of other financing.
The Company will require additional funds to finance operations and is
currently seeking private or public equity investments and future collaborative
arrangements with third parties to meet such needs. The Company's ability to
obtain future financings through joint ventures, product licensing arrangements,
equity financings or otherwise is subject to market conditions and the Company's
ability to identify parties that are willing and able to enter into such
arrangements on terms that are satisfactory to the Company. There is no
assurance that such funding will be available for the Company to finance its
operations on acceptable terms, if at all. Insufficient funding may require the
Company to delay, reduce or eliminate some or all of its research and
development activities, planned clinical trials and
8
<PAGE> 9
administrative programs. The Company believes that cash and cash equivalents on
hand, combined with interest income, operating revenues and proceeds from
government-supported research activities, will be sufficient to satisfy the
Company's projected liquidity and working capital needs into the first quarter
of 2000.
Results of Operations
The Company recorded net losses of $4,886,000 and $1,978,000 for the
three month periods ended September 31, 1999 and 1998, respectively. For the
nine month periods ended September 30, 1999 and 1998, the Company recorded a net
loss of $10,827,000 and net income of $696,000, respectively. Losses from
continuing operations before extraordinary item were $5,096,000 and $10,791,000
for the three and nine month periods ended September 30, 1999 as compared to
losses of $1,764,000 and $4,999,000 in 1998.
Net sales from continuing operations, which consist primarily of sales
of TiterMax(R) research adjuvant and service revenues from Spectrum Recruitment
Research, were $174,000 and $603,000 during the three and nine month periods
ended September 30, 1999, as compared to $221,000 and $694,000 in 1998,
respectively. Cost of product sales and service revenues was $68,000 and
$197,000 during the three month and nine month periods of 1999, versus $72,000
and $183,000 during 1998.
Interest income from continuing operations was $96,000 and $322,000
during the three months ended September 30, 1999 and 1998, respectively, and
$407,000 and $745,000 during the nine month periods then ended. The variance
between years generally corresponds to fluctuating cash and investment balances.
Grant income from continuing operations was $150,000 and $55,000 during
the three months ended September 30, 1999 and 1998, respectively, and $404,000
and $407,000 during the nine month periods then ended. During 1998 and 1999, the
Company received federal government funding for certain research and development
activities via Small Business Innovative Research (SBIR) grants. Additionally,
in 1998 the Company received a grant from the U.S. Food and Drug
Administration's Division of Orphan Drug Development to support CytRx's Phase
III clinical trial of FLOCOR(TM). This grant provided approximately $445,000
over two years to help defray the overall costs of the study, all of which has
been received. The Company currently has two active SBIR grants in support of
other research activities, with funding commitments totalling $612,000, of which
$158,000 has been received as of September 30, 1999.
Other income from continuing operations was $30,000 and $126,000 during
the three months ended September 30, 1999 and 1998, respectively, and $118,000
and $269,000 during the nine month periods then ended. Other income includes
administrative and facilities costs allocated by CytRx to its discontinued
subsidiaries. The related costs are included in selling, general and
administrative expenses. The decrease from 1998 to 1999 is primarily reflective
of the discontinuance of the Proceutics and CytRx Animal Health operations.
Research and development expenditures from continuing operations were
$4,541,000 and $1,763,000 during the three months ended September 30, 1999 and
1998, and $9,334,000 and $5,000,000
9
<PAGE> 10
for the nine month periods then ended. Research and development expenditures
have increased primarily as a result of the Company's clinical development
activities for FLOCOR(TM). The Company's pivotal Phase III trial of FLOCOR for
treatment of acute sickle cell crisis, which was initiated in March 1998,
completed patient enrollment in October 1999. During 1999 the Company also
continued its Phase I trial of FLOCOR for treatment of Acute Chest Syndrome in
sickle cell patients and initiated two additional clinical trials of FLOCOR - a
Phase III study investigated repeat use of FLOCOR in patients with acute sickle
cell crisis and a Phase I/II study for treatment of Acute Lung Injury.
Selling, general and administrative expense from continuing operations
were $936,000 and $653,000 during the three months ended September 30, 1999 and
1998, and $2,792,000 and $1,931,000 for the nine month periods then ended.
Overall selling, general and administrative expenses have decreased as a result
of the Company's divestiture of its subsidiary operations. During 1998, the
Company granted options and warrants to certain employees which contain vesting
criteria based on stock price performance. The Company has also granted options
and warrants to purchase its common stock to certain consultants in exchange for
consulting services. During 1999, certain vesting criteria of these options and
warrants were achieved, resulting in aggregate non-cash charges to selling,
general and administrative expense of $307,000 and $1,068,000 for the three
month and nine month periods, respectively.
Net income (loss) from discontinued operations, net of minority
interest, was $210,000 and $(214,000) during the three months ended September
30, 1999 and 1998, and $(36,000) and $6,020,000 for the nine month periods then
ended. The operations of Proceutics and CytRx Animal Health were sold during
1998 and Vaxcel was sold during the quarter ended September 30, 1999 (see Note 2
to Financial Statements), thus the results of their operations have been
presented as discontinued operations. The following table presents the breakdown
of income (loss) from discontinued operations (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
1999 1998 1999 1998
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Vaxcel, net of minority interest $ 210 $ (223) $ (36) $(1,035)
Proceutics -- 24 -- 1,387
CytRx Animal Health -- (15) -- 5,668
-------- ------- ------- -------
Income (loss) from discontinued operations $ 210 $ (214) $ (36) $ 6,020
======== ======= ======= =======
</TABLE>
Year 2000 Issue
The term "Year 2000 issue" is a general term used to describe the
various problems that may result from the improper processing of dates and
date-sensitive calculations by computers and other machinery as the year 2000 is
approached and reached. These problems generally arise from the fact that most
of the world's computer hardware and software have historically used only two
digits to identify the year in a date, often meaning that the computer will fail
to distinguish dates in the "2000's" from dates in the "1900's." These problems
may also arise from other sources as well, such as the use of special codes and
conventions in software that make use of the date field.
10
<PAGE> 11
During 1999, the Company completed the remediation phase of its Year
2000 Plan with respect to its mission critical internal computer systems. Total
costs incurred to date are less than $10,000. There have been no other
significant changes in the Company's state of readiness or contingency plans
from that disclosed in its Annual Report on Form 10-K for the year ended
December 31, 1998.
Item 3. -- Quantitative and Qualitative Disclosures About Market Risk
There have been no changes in the Company's assessment of its market
risk from that disclosed in its Form 10-K for the year ended December 31, 1998.
PART II -- OTHER INFORMATION
Item 6. -- Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
27.1 Financial Data Schedule (for SEC use only)
27.2 Financial Data Schedule (Restated 1998) (for SEC use only)
</TABLE>
(b) Reports on Form 8-K
None.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CYTRX CORPORATION
(Registrant)
Date: November 12, 1999 By: /s/ Mark W. Reynolds
-------------------------------- --------------------------------
Mark W. Reynolds
Chief Financial Officer
(Chief Accounting Officer
and a duly authorized officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FORM 10-Q OF CYTRX CORPORATION FOR THE PERIOD ENDED SEPTEMBER 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 5,357,375
<SECURITIES> 0
<RECEIVABLES> 236,439
<ALLOWANCES> 0
<INVENTORY> 6,476
<CURRENT-ASSETS> 5,697,311
<PP&E> 1,540,275
<DEPRECIATION> 542,242
<TOTAL-ASSETS> 6,766,322
<CURRENT-LIABILITIES> 1,791,196
<BONDS> 0
0
0
<COMMON> 8,270
<OTHER-SE> 4,966,856
<TOTAL-LIABILITY-AND-EQUITY> 6,766,322
<SALES> 602,616
<TOTAL-REVENUES> 1,532,176
<CGS> 197,291
<TOTAL-COSTS> 197,291
<OTHER-EXPENSES> 12,126,223
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (10,791,338)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,791,338)
<DISCONTINUED> (35,638)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,826,976)
<EPS-BASIC> (1.42)
<EPS-DILUTED> (1.42)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q OF CYTRX CORPORATION FOR THE PERIOD ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 13,371,841
<SECURITIES> 0
<RECEIVABLES> 4,469,589
<ALLOWANCES> 0
<INVENTORY> 8,973
<CURRENT-ASSETS> 17,877,912
<PP&E> 905,304
<DEPRECIATION> 664,761
<TOTAL-ASSETS> 22,168,404
<CURRENT-LIABILITIES> 1,152,433
<BONDS> 0
0
0
<COMMON> 8,226
<OTHER-SE> 20,537,109
<TOTAL-LIABILITY-AND-EQUITY> 22,168,404
<SALES> 694,053
<TOTAL-REVENUES> 2,114,928
<CGS> 183,394
<TOTAL-COSTS> 183,394
<OTHER-EXPENSES> 6,930,989
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4,999,455)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,999,455)
<DISCONTINUED> 6,020,141
<EXTRAORDINARY> (325,120)
<CHANGES> 0
<NET-INCOME> 695,566
<EPS-BASIC> .09
<EPS-DILUTED> .09
</TABLE>
