Cyclophosphamide is an anti-cancer medication. It is an alkylating agent which works by damaging the genetic material (DNA and RNA) of the cancer cells, thereby stopping their growth and multiplication. This is how it works against cancer.
Common side effects of Cyclophosphamide

Fever, Blood in urine, Hair loss, Decreased white blood cell count (neutrophils), Vomiting, Nausea, Diarrhea