Small-Cap Stock on Watch: Cell Therapeutics Inc. (CTIC)
  • Biotech on Watch; Cell Terapeutics plunges on another Dilutive Offering
  • FDA News; Cell Terapeutics stumbles on Delay in Pixantrone Approval
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    Biotech Stock Talk; Cell Therapeutics Earnings Review

    Cell Therapeutics Inc. (Nasdaq: CTIC) this morning reported its first-quarter results and accomplishments, reviewing the status of its cancer drug candidate pixantrone and maintaining the target to get the medicine’s regulatory approval by the end of 2011.

    The company had no revenue in Q1 2011 and reported that it lost $51.0 million, compared to 44.2 million in the Q1 2010. Because of dilution, CTIC’s per-share loss decreased to $0.06 from $0.07. The company had about 1,000 million shares outstanding as of April 22, up from 813 million at December 31, 2010.

    Shares of the company have rallied significantly over the last year, driven by three big events. CTIC plunged 37% in March 2010 after the company announced that the U.S. Food and Drug Administration (FDA) refused to approve pixantrone for the treatment of non-Hodgkin’s lymphoma. Subsequently, the company issued a large, dilutive share offering that further sank its shares. However, CTIC recovered during the second half of March, after securing a deal with Chroma Therapeutics to develop and license its cancer therapy tosedostat.

    The agreement with Chroma Therapeutics enhances the company’s late stage pipeline and provides it with exclusive marketing and co-development rights to Chroma’s drug candidate tosedostat in North, Central and South America. The company reported that it would spend $10 million to buy the rights and be responsible for 75% of tosedostat’s development costs.

    CTIC filed an appeal with the FDA last December for pixantrone approval and scheduled additional clinical trials for 2011 and 2012. Considering the previous records, the chances that the FDA would revisit the decision on pixantrone and approve the drug in Q2 2011 are not significant. Therefore, additional clinical trials are most likely inevitable.

    CTIC has already announced a new clinical trial, referred to as the PIX-R or PIX 306 trial, to compare a combination of pixantrone plus rituximab to a combination of gemcitabine plus rituximab, in patients with relapsed or refractory diffuse large B-cell lymphoma, who have received one to three prior lines of therapy, utilizing progression free survival and Overall Survival as co-primary endpoints of the study. The trial is targeting to enroll approximately 350 patients over a period of 18 months.

    If the FDA rejects the company’s appeal, the approval of pixantrone could not likely occur earlier than 2013. The delay would result in additional research and development expenditures and dilution to existing shareholders.

    Meanwhile, the company plans to promote pixantrone in Europe, where the Marketing Authorization Application for the drug as monotherapy for patients with relapsed or refractory aggressive non-Hodgkin’s lymphoma was validated and is currently under review by the European Medicines Agency based on the pixantrone phase III study results.

    Besides pixantrone, CTIC’s other late-stage drug candidate, Opaxio is being studied, as a potential maintenance therapy for women with advanced stage ovarian cancer who achieve a complete remission following first-line therapy with paclitaxel and carboplatin. The phase III study on the drug is under the control of the Gynecologic Oncology Group, and is expected to enroll 1,100 patients with 765 patients enrolled as of December 31, 2010. Opaxio is also being studied in phase II trials for the treatment of metastatic esophageal cancer and brain cancer. These trials were completed in 2010 and demonstrated encouraging responses to therapy.

    The company’s current capitalization of nearly $355 million leaves significant room for growth and appreciation, given the blockbuster potential of pixantrone. Analysts following CTIC expect the drug to peak at annual sales in the range of $1 billion, in less than three years after the launch.

     

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