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Cell Therapeutics, Inc. to Offer to Repurchase up to $124 Million of Its Notes
Date:12/4/2008

SEATTLE, Dec. 5 /PRNewswire-FirstCall/ -- Cell Therapeutics, Inc. ("CTI" or the "Company") (Nasdaq and MTA: CTIC) today announced that that its Board of Directors has authorized a "Modified Dutch Auction" tender offer to purchase a portion or all of five series of Convertible Notes (the "Notes") as follows:

    -- 4% Convertible Senior Subordinated Notes due 2010
    -- 5.75% Convertible Senior Notes due 2011
    -- 6.75% Convertible Senior Notes due 2010
    -- 7.5% Convertible Senior Notes due 2011
    -- 9% Convertible Senior Notes due 2012

The Company currently expects to utilize up to $10 million for the tender, from cash currently on hand, cash expected to be received in connection with the closing of the recent collaboration with Spectrum Pharmaceuticals, and/or cash to be received in connection with a second closing of a sale of notes to a single institutional investor. Currently, there is an aggregate of $124 million of Notes outstanding. The tender offer is expected to commence in the near future.

Under the "Modified Dutch Auction" procedure, CTI would offer to purchase a portion or all of the outstanding principal amount of the Notes at a price currently expected to be no greater than $80 or less than $50 per $1,000 principal amount of Notes, plus accrued and unpaid interest. A "Modified Dutch Auction" tender offer allows holders of Notes to indicate the principal amount of Notes that such holders desire to tender and the price within the specified price range at which they are prepared to tender such Notes.

CTI intends to conduct the tender offer in order to reduce the principal amount of its outstanding indebtedness and to provide an opportunity to holders of the Notes to gain liquidity with respect to the Notes that they may not otherwise have. CTI believes that reducing its outstanding indebtedness will be in the best interests of its stockholders as it will reduce the substantial interest payments required on the Notes and may help to provide the company with additional flexibility to raise additional capital in 2009.

This announcement is for informational purposes only and is not an offer to buy, or the solicitation of an offer to sell, any Notes. The Company expects to announce further information on the details of the proposed tender offer in the near future. The tender offer, if commenced, will be made solely by and subject to the terms and conditions set forth in a Schedule TO (including the Offer to Purchase and related Letter of Transmittal) that will be filed by CTI with the Securities and Exchange Commission ("SEC"). The Schedule TO and related materials will contain important information, including complete instructions on how to tender Notes, and should be read carefully and in their entirety before any decision is made with respect to the Offer. The Offer to Purchase and Letter of Transmittal will be delivered to all holders of Notes. Once the Schedule TO and offer documents are filed with the SEC, they will be available free of charge on the SEC's website at http://www.sec.gov.

This press release contains forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect future results. The risks and uncertainties include whether the closing conditions, including the consent of Biogen Idec Inc., will be satisfied in order to consummate the collaboration with Spectrum Pharmaceuticals, Inc.; whether the second closing of the sale of notes to an institutional investor will occur if the Company elects to sell such additional notes to them; that the Company may be unable to commence the contemplated tender offer or complete the contemplated tender offer as it continues to have a substantial amount of debt outstanding and the quarterly interest expense associated with the debt is significant; the Company's operating expenses continue to exceed its net revenues and the Company will continue to need to raise capital to fund its operating expenses; as well as other risks listed or described from time to time in the Company's most recent filings with the SEC on Forms 10-K, 8-K and 10-Q. Except as required by law, the Company does not intend to update any of the statements in this press release upon further developments.

     Media Contact:
     Dan Eramian
     T: 206.272.4343
     C: 206.854.1200
     E: media@ctiseattle.com
     www.CellTherapeutics.com/press_room

     Investors Contact:
     Ed Bell
     T: 206.272.4345
     Lindsey Jesch Logan
     T: 206.272.4347
     F: 206.272.4434
     E: invest@ctiseattle.com
     www.CellTherapeutics.com/investors

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SOURCE Cell Therapeutics, Inc.
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