Small-Cap Stock on Watch: Cell Therapeutics Inc. (CTIC)
  • Stock Alert for Cell Therapeutics Inc. (CTIC)
  • Stock Alert for Cell Therapeutics Inc. (CTIC)(D*)
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    Stock Alert for Cell Therapeutics Inc. (NASDAQ: CTIC) (D*)

    *Financial status indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements.

    Cell Therapeutics Inc. (CTIC) engages in the development, acquisition and commercialization of novel treatments for cancer.  It focuses on building a biopharmaceutical company with a diversified portfolio of oncology drugs. Its research, development, acquisition and in-licensing activities concentrate on identifying and developing less toxic ways to treat cancer. The Company is focused on developing pixantrone, OPAXIO, brostallicin and bisplantinates. Pixantrone is an anthracycline derivative, for the treatment of non-Hodgkin’s lymphoma (NHL), and various other hematologic malignancies, solid tumors and immunological disorders. The Company is developing OPAXIO (paclitaxel poliglumex), a maintenance therapy for women with advanced stage ovarian cancer. Brostallicin is a synthetic Deoxyribonucleic Acid (DNA) minor groove binding agent that has demonstrated anti-tumor activity. In March 2009, the Company sold its 50% interest in RIT Oncology.

    Cell Therapeutics Inc. was founded in 1991 and is headquartered in Seattle, Washington.

    Share Statistics (18-Oct-10) FY

    2008

    FY

    2009

    %

    Chg

    Q2

    2009

    Q2

    2010

    %

    Chg

    Symbol CTIC Revenue, $Mn 11.43 0.08 -99.3% 0.02 0.30 1,400%
    Current price $0.41 Gross marg. 71.6% 100.0% 28.4% 100.0% 100.0% 0.0%
    52wk Range: $0.12-$1.40 Oper. margin -730.6% -107.9K% 14.6K% -124.5K% -6,650% 94.7%
    Avg Vol (3m): 2,257,330 Net margin -1,575% -119.3K% 7,471% -90,150% -7,826% 91.3%
    Market Cap. 311.05M
    Shares Outstanding 758.48M EPS, $ -7.00 -0.25 -96.4% -0.06 -0.08 33.3%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    For the quarter ended June 30, 2010, total net operating expenses were $20.0 million compared to $21.7 million for the same period in 2009.  Net loss attributable to common shareholders was $53.6 million ($0.08 per share) for the quarter ended June 30, 2010, compared to a net loss attributable to common shareholders of $27.4 million ($0.06 per share) for the same period in 2009. The increase in net loss is mainly due to non-cash expenses. These non-cash expenses included $30.2 million in deemed dividends on preferred stock and $7.6 million in equity based compensation for the quarter ended June 30, 2010.

    For the six months ended June 30, 2010, total net operating expenses were $45.8 million, compared to $28.3 million for the same period in 2009. The increase in net operating expenses is mainly a result of a $15.3 million non-cash equity based compensation expense in the first half of 2010 and a $10.2 million gain on the sale of the Company’s investment in the Zevalin joint venture in the first quarter of 2009. Net loss attributable to common shareholders was $97.8 million ($0.15 per share), compared to a net loss attributable to common shareholders of $40.6 million ($0.11 per share) for the same period in 2009. For the six-month period, the increase in net loss is mainly due to non-cash expenses including $47.4 million in deemed dividends on preferred stock and $15.3 million in equity based compensation for the first half of 2010.

    CTIC had approximately $64.5 million in cash and cash equivalents as of June 30, 2010.  This amount was before the payment of $39.3 million for retirement of the convertible debt due in 2010, which was paid off in early July 2010, and the receipt of $4.1 million in gross proceeds received from the Company’s equity financing in July 2010.

    CTIC’s next earnings announcement is expected on November 01, 2010.

    Financial Strength (18-Oct-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 1.05 2.94 1.84 0.83
    Current Ratio (MRQ) 1.05 3.19 2.22 1.00
    LT Debt to Equity (MRQ) 265.21 11.11 17.42 125.26
    Total Debt to Equity (MRQ) 1,269.64 14.84 22.76 177.90
    Interest Coverage (TTM) -1.13 5.12 1.43 32.01

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among two polled investment analysts. Against the Cell Therapeutics Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 0 1 1 0 0 1
    4 weeks ago 0 1 1 0 0 1
    2 months ago 0 1 1 0 0 1
    3 months ago 0 1 1 0 0 1
    Last year 0 2 0 0 0 1

    Source: markets.ft.com

    Consensus Estimates Analysis


    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Dec-10 1 0.02 0.02 0.02
    Year Ending Dec-10 1 0.36 0.36 0.36
    Year Ending Dec-11 1 11.49 11.49 11.49
    EARNINGS (per share)
    Quarter Ending Dec-10 1 -0.03 -0.03 -0.03
    Year Ending Dec-10 1 -0.24 -0.24 -0.24
    Year Ending Dec-11 1 -0.12 -0.12 -0.12

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=CTIC.PH


    Investment Highlights

    CTIC is developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company stated that it is focused on gaining approvals for its two phase III product candidates, pixantrone in relapsed or refractory aggressive non-Hodgkin’s lymphoma, and OPAXIO in maintenance of ovarian cancer following complete remission after first-line treatment. It has one product in phase II clinical development, and other candidates in preclinical research. CTIC believes these products may address the therapeutic limitations of conventional cancer therapies.

    Citing uncertainty surrounding the approval of pixantrone in the United States, Zacks downgraded CTIC to Underperform from Neutral earlier this month.  Pixantrone suffered a setback in April when the FDA declined its approval, citing concerns previously raised at the Oncologic Drugs Advisory Committee meeting and recommended the Company to conduct an additional trial to demonstrate the safety and effectiveness of its product.

    In August, the Company said it has filed for Special Protocol Assessment (SPA) for pixantrone in relapsed or refractory aggressive B-Cell non-Hodgkin’s lymphoma (NHL).  CTIC plans to initiate the study later in 2010 following the health regulators’ feedback on the trial design and the endpoints.

    The following month, CTIC announced that it intends to appeal the FDA’s previously disclosed decision regarding the pixantrone New Drug Application (NDA) to treat patients with relapsed/refractory aggressive NHL.

    “After discussions with a number of leading U.S. and international lymphoma experts and leading biostatisticians, all of whom have reviewed the PIX 301 protocol, statistical plan and trial results, we felt encouraged to appeal the initial decision and have our data reviewed in the context of a trial that achieved statistically and clinically meaningful primary and secondary endpoints in this end stage patient population for whom there are no approved or effective agents,” noted Jack Singer. M.D., chief medical officer at CTIC. “We are committed to conducting a confirmatory trial in this patient population but continue to strongly believe that the PIX 301 data met the requirements for accelerated approval with sufficient scientific rigor.”

    The Company expects the FDA decision on the appeal in the fourth quarter of 2010.

    Zacks, however, is not so bullish on pixantrone’s prospects.  Even if the drug gets approved, Zacks expects tough competition from several established products in the market. Also, Zacks is concerned about the Company’s liquidity position.

    Technical Analysis

    Source: http://stockcharts.com

    CTIC is trading above its 13-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock

    CTIC’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility.

    The MACD for CTIC currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above zero, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Oct18-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    Bristol Myers Squibb Co. BMY 27.33 46,870 12.83 11.88 2.39 2.28
    Celgene Corp. CELG 59.70 27,430 21.87 18.15 7.90 6.35
    Eli Lilly & Co. LLY 38.06 42,010 8.26 8.59 1.83 1.85
    Sanofi-Aventis SNY 35.25 91,980 7.85 8.16 2.16 2.20
    Biotechnology Median 19.08 7.59
    Cell Therapeutics Inc. CTIC 0.41 311.05 n/a n/a n/a 27.07

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases n/a 0
    0Sales 1,165,820 9
    Net Shares Purchased (Sold) (1,165,820) 9
    Total Insider Shares Held 15.97M n/a
    % Net Shares Purchased (Sold) (6.8%) n/a
    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (53,145,100)
    % Change in Institutional Shares Held (292.78%)

    Source: Yahoo Finance

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