Cell Therapeutics’ (CTIC) third quarter loss per share came in at 8 cents compared to a loss of $1.14 reported in the year ago period. The company does not have any marketed product at present; it derives revenues primarily in the form of license and contract revenues. Cell Therapeutics recorded revenues of $0.02 million compared to $2.6 million in the third quarter of 2009. 

Revenues in the year ago period consisted of product sales of Zevalin, which the company sold to Spectrum Pharmaceuticals earlier in 2009. Operating expenses during the quarter increased 32.5% to $27 million primarily on account of more than 150% increase in SG&A expenses. Cell Therapeutics has started preparing for the launch of pixantrone in 2010 by recruiting key persons and conducting market research; which has pushed SG&A expenses higher. 

As a reminder, in August, the US Food and Drug Administration (FDA) had accepted for review the New Drug Application (NDA) filed by Cell Therapeutics. The company is seeking FDA approval (NDA filed in June 2009) for pixantrone for the treatment of relapsed and refractory non-Hodgkin’s lymphoma (NHL). We believe current investor focus is more on the outcome of the US Food and Drug Administration’s (FDA) decision regarding its lead candidate pixantrone, which is Cell Therapeutics’ lead pipeline candidate. The company was granted a ten month standard review and has been assigned a Prescription Drug User Fee Act (PDUFA) date of April 23, 2010. 

Additionally, in July 2009, Cell Therapeutics initiated the process of obtaining marketing approval for pixantrone in Europe for the treatment of relapsed or refractory aggressive NHL. 

Although the picture is not so gloomy on the product development front, we remain concerned about Cell Therapeutics’ liquidity position. Cash and cash equivalents including securities available for sale were $54.9 million. The company is under great pressure to raise additional cash to fund its operations, especially at a time when the company is preparing for the potential launch of pixantrone in 2010. 

During the quarter, Cell Therapeutics reduced debt through the exchange of $4.5 million principal in debt for common stock resulting in a total of $57.4 million principal reduction in debt through exchanges so far in 2009. Although the company has brought down its debt burden by exchanging it against common stock, we remain concerned about significant dilution in shareholder value.
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