Recently, Cell Therapeutics, Inc. (CTIC) announced the submission of an expanded Pediatric Investigation Plan (PIP) to the European Medicines Agency (EMEA). The submission was for its lead candidate pixantrone, which is being developed for the treatment of relapsed or refractory aggressive non-Hodgkin’s lymphoma (NHL) in patients who have not responded to other treatment options. The PIP provides the outline of the process the company intends to follow to study the drug in children.

The company intends to submit a Marketing Authorization Application (MAA) seeking marketing approval for pixantrone in the EU later in the year. The pediatric program intends to evaluate the safety and efficacy of pixantrone compared to chemotherapy drug doxorubicin in children (aged between 6 months and 18 years).

We remind investors that Cell Therapeutics originally submitted the PIP in September 2009. However, pixantrone’s potential but unconfirmed benefit to children in reducing long-term cardiotoxicity in combination with current medications prompted the pediatric committee of the EMEA to ask for an expanded PIP in April 2010. The recommendation followed discussions regarding the data pertaining to pixantrone and the desire to explore the potential benefits of pixantrone in children suffering from hematologic cancer.

Earlier in the year, pixantrone was denied approval by the US Food and Drug Administration (FDA), due to lack of sufficient clinical data.

CTIC Pays Off Debt

Cell Therapeutics also has recently deposited $39.3 million in cash with U.S. Bank National Association to allow it to pay off all its convertible debt due in 2010, including accrued and unpaid interest on convertible senior notes. In May 2010, the company had exchanged up to 60 million shares of its common stock for $30 million of notes thus diluting shareholder value.

Our Recommendation

Cell Therapeutics is a Zacks #3 Rank (Hold) company, which indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1-3 months. Our long-term Neutral stance on the company indicates that the stock is expected to replicate its short-term performance, but over 6-12 months. Consequently, we advise the investors to retain the stock over the time-period.
Read the full analyst report on “CTIC”
Zacks Investment Research