Cell Therapeutics (CTIC) suffered a net loss of $34.1 million (4 cents per share) in the fourth quarter of 2010, compared with a net loss of $27.4 million (5 cents per share) suffered in the year-ago quarter. The lower loss per share in the reported quarter was due to a higher share count (760 million versus 570.6 million). The Zacks Consensus Estimate for the reported quarter was a loss of 2 cents per share. Cell Therapeutics did not generate any revenue during the reported quarter versus $0.020 million in the fourth quarter of 2009.
For full year 2010, Cell Therapeutics reported a net loss of $147.6 million (22 cents per share), as opposed to a net loss of $119.4 million (26 cents per share) suffered in the previous year. The Zacks Consensus Estimate was a loss of 19 cents for the full year 2010. Revenues were $0.319 million in the full year 2010 versus $0.080 million in the previous year.
Net operating expenses during the reported quarter declined 38% to $16.3 million, driven by a 54% reduction in selling, general and administrative (SG&A) expenses.
Pipeline Update
The company’s lead pipeline candidate, Pixuvri (pixantrone dimaleate), 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 US Food and Drug Administration (FDA) refused to approve Pixuvri in April 2010 based on concerns that the clinical trials have not proved sufficiently the effectiveness of the drug. The FDA asked Cell Therapeutics to conduct an additional trial to determine the safety and efficacy of Pixuvri. The company plans to start a new study (PIX306) soon, to compare the efficacy of Pixuvri in combination with rituximab against the current standard of care in aggressive NHL.
Cell Therapeutics has submitted the proposed study design to the FDA’s Division of Hematology Products for review. Although Cell Therapeutics is looking to conduct an additional trial for Pixuvri, the company, with full faith in the drug, appealed to the Office of New Drugs in December to reverse the FDA’s decision to deny approval of Pixuvri. Cell Therapeutics plans to meet with the FDA Office of New Drugs to discuss the appeal.
In Europe, Cell Therapeutics has filed a Marketing Application Authorization (MAA) seeking approval for the drug as a monotherapy treatment of adult patients with multiple relapsed or refractory, aggressive non-Hodgkin’s lymphoma. The MAA has been accepted by the European Medicines Agency (EMEA) for review. In November, the EMEA approved the Pediatric Investigation Plan (PIP) for Pixuvri. The PIP provides the outline of the process that the company intends to follow to study the drug in children.
Cell Therapeutics announced that Mayo Clinic’s North Central Cancer Treatment Group (NCCTG) is conducting phase II trials with Pixuvri in metastatic breast cancer and with brostallicin (a synthetic DNA minor groove binding agent that has demonstrated anti−tumor activity) in triple negative metastatic breast cancer.
Our Recommendation
We currently have a Neutral recommendation on Cell Therapeutics, which is supported by a Zacks #3 Rank tantamount to a short-term Neutral rating. We believe the uncertainty surrounding the approval of Pixuvri for aggressive NHL in the US has slightly eased following the appeal against the FDA’s decision to deny approval of the drug. Moreover, the filing of a marketing application for the candidate with the European authorities is also encouraging. We prefer to remain on the sidelines until the FDA’s response to the company’s appeal to the CRL becomes clear.
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