By Randall Osborne
To move ahead with Flocor, its lead product for vascular occlusive crisis in sickle cell disease, CytRx Inc. sold all assets of its VetLife subsidiary in a deal worth up to $13 million.
"We're in the process of streamlining our operation and raising cash," said Joe Medlin, director of investor relations for Norcross, Ga.-based CytRx.
VetLife markets and distributes products to enhance food animal growth. The buyer, Ivy Laboratories Inc., of Overland, Kan., is the manufacturer of VetLife's product line.
"It's not coming all at once," Medlin said. Under terms of the deal, CytRx gets $7.5 million upfront, and up to $5.5 million contingent on future product sales by Ivy.
The divestiture is expected to free up $12.8 million by the end of this year, including the $7.5 million portion of the purchase price and $5.3 million CytRx previously had pledged to secure a VetLife letter of credit.
Real-estate assets also are being sold, Medlin told BioWorld Today. "That will bring in about $5 million when it's completed in the next few weeks," he said.
Last month, CytRx began a Phase III trial of Flocor (purified poloxamer 188) for vascular occlusive crisis in sickle cell disease. Made by polymerizing propylene oxide with propylene glycol, Flocor works by altering the way cells and molecules interact with water. (See BioWorld Today, March 19, 1998, p. 1.)
CytRx will keep only a small part of VetLife, consisting of copolymer technologies.
"Some of them are similar to Vaxcel's," Medlin said. "We're going to be taking that technology back and doing some things with it."
Vaxcel, an Atlanta-based subsidiary of CytRx, is developing Optivax, a vaccine adjuvant. CytRx has other drugs in preclinical trials, including an anti-infective compound.
As of Dec. 31, 1997, CytRx had $11.2 million cash. The company's stock (NASDAQ:CYTR) closed Monday at $3.25, unchanged. *