CytRx strategy now will be put to test

Many a biotech company has been undone when its lead compound failed, particularly when there were no other late-stage products to fill the gap between the first product and early research. CytRx Corp. has tried to set up a corporate structure that insulates the various pieces of its business from each other, and the fate of the company will depend in part on how successful that strategy proves to be.

Disappointing results from an international Phase II/III trial of CYTR's lead compound, RheothRx, last week prompted partner Glaxo Wellcome to discontinue the drug's development. Burroughs Wellcome committed - and spent - $70 million on the Atlanta company under a 1990 agreement to develop the cardiovascular compound. ...