Cell Therapeutics Looking More Like Sell Therapeutics (CTIC)
Cell Therapeutics, Inc. (NASDAQ: CTIC) is about to get to show traders and speculative investors the pleasure and pain in the world of chasing ten-baggers in speculative biotech stocks. The stock has developed a cult following, as you would expect in a company with a share price under $1.00 and a market cap of $560 million. Shares were halted at 7:00 AM EST this morning and it seems that we are finding out why the sudden drop came late Friday afternoon.
We noted last month how the company was facing a much tougher FDA and that appears to have been the case. The FDA has just rejected its NDA…. saying there was not enough clinical evidence to show whether the drug worked. There has yet to be an official press release from the company at noon, although it is spreading around the web. The vote was 9 to 0 against the drug.
It is developing pixantrone, its Phase III single-agent clinical trial product as a treatment for non-Hodgkins lymphoma and various other hematologic malignancies, solid tumors, and immunological disorders. It was just on March 8 when the company announced that the FDA approved NerPharMa to manufacture Cell Therapeutics’ drug Pixantrone.
What is interesting is that this was indicated to treat non-Hodgkin’s lymphoma patients whose disease has progressed after treatment with at least two other therapies. This is not an outright death of the drug. But this throws a long delay and a long fight ahead for Cell Therapeutics. There have been troubles in recruiting new patients and that caused the main study to be dropped. The original goal was 320 patients, but only 140 enrolled.
On March 1 the company issued news that the FDA had set March 22 for the ODAC Meeting to review CTI’s New Drug Application for Pixantrone. That may have been one of the culprits in the trading and investing community believing that an ultimate FDA approval would come its way. On March 1 it was a $0.70 stock, and it was at $1.03 Friday before a late-day selling round took shares down to $0.91.
On March 8 it hit an intra-day high of $1.25 before selling off, and the trading volume has been quite elevated. To show how volatile this one is, the 52-week trading range is $0.12 to $2.23.
There has also been a discrepancy over what the company says is statically significant versus what the FDA measures.
This stock is no stranger to class action lawsuits. We saw a class action filing on Friday from Glancy Binkow & Goldberg LLP… and investigation announcement by Robbins Umeda LLP last Tuesday…. a class action from Dyer & Berens LLP last Monday… and a class action from Izard Nobel LLP also last Monday.
The company has set a special meeting of shareholders for Friday, April 9, 2010. It is going to be a special meeting, that much is for sure.
News came out on Dow Jones in a headline at 11:25 AM EST that the FDA panel rejected Pixantrone, and the chat rooms and message boards have been active since 11 AM. No resumption time has yet been set by NASDAQ. The Street.com also has been live-blogging the event and that is worth a read if you want to smooth out the pros and cons and the bulls and bears who have bet for or against the stock.
This has been asked before and as always the answer is the same… “No, I hold no long or short position in this stock.”
UPDATE II: At 1:40 PM EST this resumed and shares were down 67% at $0.30 on over 14 million shares by 1:41 PM EST.
UPDATE: SHARES WILL RESUME TRADING PER NASDAQ DATA AT 1:40 PM EST.
JON C. OGG
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