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Cell Therapeutics Second Quarter Net Loss Decreases 54%; Pixantrone NDA Submitted to the FDA for Approval

SEATTLE, Aug. 6 /PRNewswire-FirstCall/ -- Cell Therapeutics, Inc. (CTI) (Nasdaq and MTA: CTIC) today reported recent achievements and financial results for the second quarter and six months ended June 30, 2009.

"The second quarter of 2009 was a transforming quarter for the Company as we reported, in a peer reviewed setting, pixantrone phase III data at the American Society of Clinical Oncology Annual Meeting and completed the submission of the pixantrone New Drug Application (NDA) to the U.S. Food & Drug Administration (FDA)," said James A. Bianco, M.D., CEO of Cell Therapeutics. "On the financial front, we continue to reduce and control our operating expenses, eliminated 44.5% of our outstanding debt through exchange offers completed in June 2009, and raised significant capital to continue to advance pixantrone to market."

Recent Highlights

  • Completed the submission of the pixantrone NDA to the FDA to treat relapsed or refractory aggressive non-Hodgkin's lymphoma (NHL). CTI requested priority review of the pixantrone NDA which, if granted, could lead to an approval decision from the FDA in the fourth quarter of 2009.
  • Reduced outstanding debt by $52.9 million, representing 44.5% of outstanding debt, through exchange offers completed in June 2009, resulting in an estimated savings in future annual interest expense of approximately $3.3 million.
  • Added to the Russell 3000(R), Russell 2000(R) and Russell Global(R) Indexes.
  • Raised $43.8 million in gross proceeds in connection with financing transactions in the second quarter of 2009, and an additional $41.7 million in proceeds, net of underwriting discount, in connection with an underwritten offering of common stock and warrants in July 2009.

For the quarter ended June 30, 2009, total net operating expenses decreased approximately 24% to $21.7 million, compared to $28.7 million for the same period in 2008. The decrease is mainly a result of a 54% reduction in research and development expenses for the quarter ended June 30, 2009, compared to the same period in 2008. Total operating expenses included restructuring charges of $3.8 million related to the closing of CTI's Bresso, Italy research facility. Net loss attributable to common shareholders decreased by 54% to $27.4 million ($0.06 per share), compared to a net loss attributable to common shareholders of $59.3 million ($5.18 per share) for the same period in 2008. The reduction in net loss per share is due to an increase in the number of shares outstanding and a reduction in research and development and financing expenses as described above.

For the six months ended June, 30 2009, total operating expenses decreased approximately 50% to $28.3 million, compared to $57.0 million for the same period in 2008. The decrease is mainly a result of a 52% decrease in research and development expenses and a $10.2 million gain on the sale of CTI's remaining interest in a 50/50-owned joint venture with Spectrum Pharmaceuticals, Inc. in 2009. Net loss attributable to common shareholders decreased 64% to $40.6 million ($0.11 per share), compared to a net loss attributable to common shareholders of $113.9 million ($12.28 per share) for the same period in 2008. The reduction in net loss per share is due to an increase in the number of shares outstanding and a reduction in research and development and financing as described above.

CTI had approximately $12.0 million in cash and cash equivalents, securities available-for-sale, and interest receivable as of June 30, 2009. This does not include approximately $41.7 million, net of underwriting discount, the Company received in July 2009 in connection with an underwritten offering of common stock and warrants.

Conference Call Information

On Thursday, August 6, 2009, at 8:30 a.m. Eastern/2:30 p.m. Central European/5:30 a.m. Pacific, members of CTI's management team will host a quarterly conference call to discuss CTI's 2009 second quarter achievements and financial results.

    Conference Call Numbers
    Thursday, August 6
    8:30 a.m. Eastern/2:30 p.m. Central European/5:30 a.m. Pacific Time
    1-877-941-9205 (US Participants)
    1-480-629-9835 (International)

    Call-back numbers for post-listening available at 11:30 a.m. Eastern:
    1-800-406-7325 (US Participants)
    1-303-590-3030  (International)
    Passcode: 4130004#

Live audio webcast at will be archived for post-call listening approximately two hours after call ends.

About Cell Therapeutics, Inc.

Headquartered in Seattle, CTI is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. For additional information, please visit

This press release includes forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect actual future results and the market price of our securities. Specifically, the risks and uncertainties include statements about our ability to continue to reduce our operating expenses, our ability to continue to raise capital as needed to fund our operations, the development of OPAXIO, pixantrone, and brostallicin, which include risks associated with preclinical and clinical developments in the biopharmaceutical industry, in general, and with OPAXIO, pixantrone, and brostallicin, in particular, including, without limitation, the potential failure of these product candidates to prove safe and effective for treatment of non-small cell lung cancer, ovarian cancer, non-Hodgkin's lymphoma, and sarcoma or to achieve market acceptance for such treatments, the possibility that priority review will not be granted by the FDA for the pixantrone NDA and that a decision by the FDA is not rendered in late 2009, determinations by regulatory, patent and administrative governmental authorities, competitive factors, technological developments, costs of developing, producing and selling OPAXIO, pixantrone, and brostallicin, and the risk factors listed or described from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our most recent filings on Forms 10-K, 10-Q and 8-K. Except as may be required by law, we do not intend to update or alter our forward-looking statements whether as a result of new information, future events, or otherwise.

    Media Contact:
    Dan Eramian
    T: 206.272.4343
    C: 206.854.1200
    F: 206.272.4434

    Investors Contact:
    Ed Bell
    T: 206.282.7100
    Lindsey Jesch Logan
    T: 206.272.4347
    F: 206.272.4434

                              Cell Therapeutics, Inc.

                  Condensed Consolidated Statements of Operations
                   (In thousands, except for per share amounts)

                              Three Months Ended       Six Months Ended
                                    June 30,                June 30,
                                    --------                --------
                                2009          2008      2009       2008
                                ----          ----      ----       ----
      Product sales               $-        $2,870        $-     $6,244
      License and contract
       revenue                    20            20        40         40
                                 ---           ---       ---        ---
        Total revenues            20         2,890        40      6,284
                                 ---         -----       ---      -----
    Operating expenses, net:
      Cost of product sold         -           767         -      1,657
      Research and
       development             7,320        15,857    15,276     31,712
      Selling, general and
       administrative         10,580        11,518    19,330     22,728
      Amortization of
       intangibles                 -           537         -        934
       charges                 3,820             -     3,944          -
      Gain on sale of
       investment in
       joint venture               -             -   (10,244)         -
                                 ---           ---   -------        ---
        Total operating
         expenses, net        21,720        28,679    28,306     57,031
                              ------        ------    ------     ------
    Loss from operations     (21,700)      (25,789)  (28,266)   (50,747)
    Other income (expense):
      Investment and
       other income, net          37            93        71        353
      Interest expense        (1,583)       (2,395)   (3,200)    (4,380)
      Amortization of
       debt discount and
       issuance costs           (497)      (30,202)   (5,348)   (41,146)
      Foreign exchange
       gain (loss)                54            76        95     (2,161)
      Make-whole interest
       expense                     -       (25,596)   (6,345)   (33,377)
      Gain on derivative
       liabilities, net        1,596        31,433     7,218     43,177
      Gain (loss) on
       exchange of
       convertible notes       7,201        (3,313)    7,201     (5,608)
      Equity loss from
       investment in
       joint venture               -             -    (1,204)         -
      Settlement expense      (3,198)            -    (3,368)         -
      Write-off of
       arrangement costs           -        (2,361)        -     (2,361)
                                 ---        ------       ---     ------
    Net loss before
     interest                (18,090)      (58,054)  (33,146)   (96,250)
       interest                   63            31       152         63
                                 ---           ---       ---        ---
    Net loss attributable
     to CTI                  (18,027)      (58,023)  (32,994)   (96,187)
      Gain on restructuring
       of preferred stock          -             -     2,116          -
      Preferred stock
       dividends                  (1)         (226)      (24)      (468)
      Deemed dividends
       on preferred
       stock                  (9,398)       (1,067)   (9,648)   (17,265)
                              ------        ------    ------    -------
    Net loss attributable
     to CTI common
     shareholders           $(27,426)     $(59,316) $(40,550) $(113,920)
                            ========      ========  ========  =========
    Basic and diluted
     net loss per common
     share                    $(0.06)       $(5.18)   $(0.11)   $(12.28)
                              ======        ======    ======    =======
    Shares used in calculation
     of basic and diluted
     net loss per
     common share (1)        446,174        11,447   366,293      9,277
                             =======        ======   =======      =====

    Balance Sheet Data:    (amounts in thousands)

                            June 30,    December 31,
                              2009          2008
                              ----          ----
    Cash and cash
     equivalents and
     available-for-sale      $11,980       $10,671
    Restricted cash                -         6,640
    Working capital          (15,134)      (14,141)
    Total assets              43,230        64,243
    Convertible debt          66,391       142,373
    Accumulated deficit   (1,352,870)   (1,312,320)
    Total deficit            (57,630)     (132,061)

    (1) Amounts reflect a one-for-ten reverse stock split of our common stock
        effective August 31, 2008.

SOURCE Cell Therapeutics, Inc.
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