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Commitments and contingencies
3 Months Ended
Mar. 31, 2014
Commitments and contingencies [Abstract]  
Commitments and contingencies
12.    Commitments and contingencies
 
Commitments
 
We have an agreement with KTB, for the license of patent rights held by KTB for the worldwide development and commercialization of aldoxorubicin. Under the agreement, we must make payments to KTB in the aggregate of $7.5 million upon meeting clinical and regulatory milestones up to and including the product’s second final marketing approval. In the first quarter of 2014, we met two clinical milestones, resulting in a requirement to pay $2.0 million to KTB, of which $1.0 million was paid in March 2014, and the remainder owas included in accounts payable, and subsequently paid on April 1st, 2014. We also agreed to pay:
 
·commercially reasonable royalties based on a percentage of net sales (as defined in the agreement);
 
·a percentage of non-royalty sub-licensing income (as defined in the agreement); and
 
·milestones of $1 million for each additional final marketing approval that we obtain.
 
In the event that we must pay a third party in order to exercise our rights to the intellectual property under the agreement, we will deduct a percentage of those payments from the royalties due KTB, up to an agreed upon cap.
 
Contingencies
 
We are occasionally involved in legal proceedings and other matters arising from the normal course of business. There are currently three purported federal shareholder class action securities litigations against the Company and an Officer, in the United States District Court for the Central District of California. These actions state substantially the same causes of action, and allegedly arise from the same events.
 
Chen v. CytRx Corporation, et al.
On March 14, 2014, a purported class action lawsuit was filed against the Company and an officer, DreamTeamGroup and MissionIR in the United States District Court for the Central District of California, captioned Chen vs. CytRx Corporation, et al., No. CV-14-1956-GHK-(RTWx). The complaint purports to be brought on behalf of all shareholders who purchased the Company's common stock between November 22, 2013 and March 13, 2014. The complaint alleges that defendants violated the federal securities laws in connection with various public statements purportedly issued by us or on our behalf. The complaint seeks compensatory damages in an unspecified amount and attorney's fees and costs.
Perri v. CytRx Corporation, et al.
On March 18, 2014, a purported class action lawsuit was filed against the Company and an officer, in the United States District Court for the Central District of California, captioned Perri v. CytRx Corporation, et al., No. 2:14-cv-02052-DDP-(JCGx). The complaint, which purports to be brought on behalf of all shareholders who purchased the Company's common stock between November 20, 2013 and March 13, 2014, asserts claims substantially identical to those asserted in Chen v. CytRx Corporation, et al., No. CV-14-1956-GHK-(RTWx), described above. The complaint seeks compensatory damages in an unspecified amount and attorney's fees and costs.
Kim v. CytRx Corporation, et al.
On April 9, 2014, a purported class action lawsuit was filed against the Company and an officer, in the United States District Court for the Central District of California, captioned Kim v. CytRx Corporation, et al., No. 2:14-cv-02689-DMG-(AJWx). The complaint, which purports to be brought on behalf of all shareholders who purchased the Company's common stock between November 22, 2013 and March 13, 2014, asserts claims substantially identical to those asserted in Chen v. CytRx Corporation, et al., No. CV-14-1956-GHK-(RTWx), and Perri v. CytRx Corporation, et al., No. 2:14-cv-02052-DDP-(JCGx), described above. The complaint seeks compensatory damages in an unspecified amount and attorney's fees and costs.
There is also a purported state shareholder class action securities litigation.
Rajasekaran v. CytRx Corporation, et al.
On April 3, 2014, a purported class action lawsuit was filed against the Company and certain officers and each director, as well as certain underwriters, in the Superior Court of California, County of Los Angeles, captioned Rajasekaran v. CytRx Corporation, et al., BC541426. The complaint purports to be brought on behalf of all shareholders who purchased or otherwise acquired the Company's common stock pursuant and/or traceable to the Company's secondary common stock offering, which closed on February 5, 2014. The complaint alleges that defendant violated the federal securities laws by making materially false and misleading statements in filings with the SEC. The complaint seeks compensatory damages in an unspecified amount, rescission, and attorney's fees and costs.
We intend to vigorously defend against the foregoing complaints. Based on the very early stage of litigation, it is not possible to estimate the amount or range of possible loss, if any, that might result from an adverse judgment or a settlement of these matters.