Yes, it's absolutely true.
From
http://www.2ndchance.info/cryptorchid.htm
Cryptorchid dogs and cats have a higher rate of developing a certain cancer call a Sertoli cell tumor. The Sertoli cells, which are located in the testicles, provide nourishment to the sperm cells. They also produce feminizing hormones (estrogens). These tumors often cause thin skin, sparse hair coat, aplastic anemia, enlarged breasts and attractiveness to other male dogs. The hair loss in these cases is very specific in that it is identical on both sides of the trunk (bilaterally symmetrical). We diagnose this tumor by this distinctive pattern of hair loss that occurs in a cryptorchid dog or cat. Occasionally we may need to do ultrasound examination of the retained testicle as well as a plasma estrogen level to confirm the diagnosis. Ten to twenty percent of these tumors are malignant and can metastasize (move) to other parts of the body.. If the tumor has spread it can be treated successfully with chemotherapy consisting of vinblastine, cyclophosphamide, and methotrexate. To avoid this debilitating treatment, we veterinarians suggest that the cryptorchid testicle be located and removed before it has the opportunity to becoming cancerous. Another problem that occurs in rare instances in cryptorchid pets is torsion of the spermatic cord , the sperm duct attached to the testicle.
