Cell Therapeutics, Inc. (NASDAQ: CTIC) is a controversial stock in the field of cancer and the company is still aiming for a 2012 debut market launch for its pixantrone drug candidate. In the last couple of weeks it had reported more positive data and the FDA had earlier this year noted that pixantrone would need a review using a new panel of independent radiologists. Pixantrone is to be a new treatment for non-Hodgkin Lymphoma.
This morning we saw a very unlikely and very unusual support or endorsement of Cell Therapeutics. This came from Zacks Investment Research where the outfit was called The Bull of The Day. That is generally considered a stock that has strong winds behind it and Zacks raised the rating to Outperform.
Zacks noted, “we believe pixantrone is getting closer to approval… We are encouraged by the FDA’s decision to allow Cell Therapeutics to re-submit the NDA for pixantrone for review without the need for an additional trial.” The report also noted that Opaxio is its second most advanced pipeline candidate as a potential maintenance therapy for women with advanced ovarian cancer who achieve complete remission following first-line therapy with paclitaxel and carboplatin.
The full Zacks report is available here. Shares are at $1.19 and the adjusted 52-week trading range is $0.95 to $3.30.
JON C. OGG
Cell Therapeutics, Inc. (NASDAQ: CTIC) is one that many will have forgotten about or one that many wish they had forgotten about. Now the company is in the news after announcing a securities purchase agreement to sell securities in a registered offering to a single life sciences institutional investor.
The company said that it may use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, technologies or products. Cell Therapeutics noted here that it has recently engaged in limited discussions with third parties regarding such investments or acquisitions, but has no current agreements or commitments with respect to any investment or acquisition. It may also use the proceeds for general corporate purposes, such as paying interest on and/or retiring portions of its outstanding debt, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications and general working capital.
This sale is listed as being for “up to approximately $25.0 million of shares of its Series 10 Non-Convertible Preferred Stock,” warrants to purchase up to approximately 25.9 million shares of common stock and an additional investment right to purchase up to approximately $25 million of shares of its Series 11 Convertible Preferred Stock. Details are as follows:
- The shares of Series 10 Preferred Stock will accrue annual dividends at the rate of 10% from the date of issuance, payable in the form of additional shares of Series 10 Preferred Stock. The shares of Series 10 Preferred Stock are redeemable at the option of the Company at any time after issuance, in whole or in part, either in cash or by offset against recourse notes fully secured with marketable securities, which may be issued by the Investor to the Company (the “Notes”) in connection with the exercise of the Warrants and the Additional Investment Right.
- The Warrants have an exercise price of $0.337 per share of common stock. The Warrants are exercisable immediately and expire two years from the date of the Purchase Agreement. The exercise price of the Warrants may be paid in cash or by the issuance of Notes. The Warrants are subject to cancellation and mandatory exercise under certain conditions, in whole or in part. The total potential additional proceeds to the Company upon exercise of the Warrants for cash are approximately $8.7 million.
- The Additional Investment Right has an exercise price of $1,000 per share of Series 11 Preferred Stock. The Additional Investment Right is exercisable immediately and must be exercised no later than March 19, 2011. The exercise price of the Additional Investment Right may be paid in cash or through the issuance of Notes. The Additional Investment Right is subject to cancellation under certain conditions, in whole or in part. The total potential additional proceeds to the Company upon exercise of the Additional Investment Right for cash are approximately $25.0 million.
- Each share of Series 11 Preferred Stock is convertible at the option of the holder, at any time during its existence, into approximately 2,967 shares of common stock at a conversion price of $0.337 per share of common stock, for a total of approximately 74.1 million shares of common stock.
- The closing of the issuance and sale of the Series 10 Preferred Stock is expected to occur on the 10th trading day following the date of the Purchase Agreement, subject to certain closing conditions. Additional details regarding the offering can be found in the prospectus supplement relating to the offering to be filed with the Securities and Exchange Commission (the “SEC”) on February 18, 2011.
JON C. OGG
Cell Therapeutics, Inc.(NASDAQ: CTIC) intends to appeal an FDA’s previously disclosed decision regarding the pixantrone New Drug Application to treat patients with relapsed/refractory aggressive non-Hodgkin’s lymphoma. CTI expects the FDA decision on the appeal in the fourth quarter of 2010.
The company said in a release that it had requested accelerated approval of its new drug application for this patient group for which there are no currently approved drugs. The FDA issued a Complete Response Letter to CTI related to this NDA stating, in part, that CTI should conduct an additional clinical trial prior to approval.
CTI is preparing to file an appeal under the FDA’s Formal Dispute Resolution process and it reached this decision by taking into account that CTI believes there are no approved or effective therapies for patients with relapsed or refractory aggressive NHL beyond second relapse. The company also noted that PIX 301 was the first and only randomized trial in this patient group to demonstrate significant improvement in clinically relevant endpoints including complete response rate, overall response rate, and progression free survival while being safe and effective in this indication.
As part of this, Pixantrone’s new drug application is being transferred to newly created division of Hematologic products. The company’s chief medical officer noted, “…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.”
With shares at $0.385 as of Monday’s close, CTIC’s 52-week trading range is $0.12 to $1.57.
JON C. OGG
Cell Therapeutics, Inc. (NASDAQ: CTIC) recently decided to exchange up to 60 million shares of its common stock for $30 million of notes. Liquidity crisis at the company continues to remain a major concern for us. Earlier, in April 2010, the company raised $18.5 million through preferred stock and warrants.
Although Cell Therapeutics has taken several steps to reduce the burn rate, its cash crunch will continue for the time being. During 2009, Cell Therapeutics reduced its debt burden considerably. However, the company’s policy to reduce debt level by converting into common stock dilutes shareholder value.
The liquidity crisis at Cell Therapeutics has become more prominent since its New Drug Application for lead candidate, Pixuvri was denied. The company has been seeking approval for the drug to treat relapsed or refractory aggressive non-Hodgkin’s lymphoma (NHL) in patients who have not responded to other treatment options.
In April 2010, the company received a complete response letter for Pixuvri from the US Food and Drug Administration. The company will be required to conduct additional trials, the roadmap for which will be decided in consultation with the FDA.
Following the setback for Pixuvri, Cell Therapeutics reduced its workforce by 36 employees. The reduction in staff strength along with the elimination of other planned expenses is likely to result in savings of about $16 million in 2010. The company expects operating expenses for 2010 to be approximately $60 million, a 21% reduction from its earlier projection.
Apart from Pixuvri, the company has other pipeline candidates as well. With the advancement of the pipeline, additional funds are required to support the various programs.
Current investor focus is primarily on the future course of action that Cell Therapeutics takes for Pixuvri. We are Neutral on the stock.
Close: CTIC closed up 0.5% at $0.4625 today, but shares were up over $0.50 early this morning.
Cell Therapeutics, Inc. (NASDAQ: CTIC) is in the news again, and not just over its special meeting of shareholders. In the middle of the night, Cell Therapeutics announced that the company has received a Complete Response Letter from the FDA over its new drug application for Pixuvri (pixantrone dimaleate) for relapsed or refractory aggressive non-Hodgkin’s lymphoma. This is a battle in a war that looks far from being over.
The FDA cited as its primary reason for the action its concerns previously raised at the Oncologic Drugs Advisory Committee meeting on March 22, 2010 and recommended the company conduct an additional trial to demonstrate the safety and effectiveness of its product.
The company said further that, based on the FDA’s ODAC presentation, it has decided to pursue expanded access program for pixantrone while it conducts an additional study in aggressive non-Hodgkin’s lymphoma.
It now expects enrollment in a follow-up combination therapy study in a similar population could be rapid and occur predominantly within the U.S. and it has had preliminary discussions on the subsequent trial design with a leading statistician, and potential lead investigators who believe the study will be positively received by the lymphoma treatment community. That was noted as being “on the basis of the PIX 301 clinical trial results and the lack of satisfactory alternative therapies for their patients with multiple relapsed aggressive non-Hodgkin’s lymphoma.”
The company further noted that this is a sad outcome for its patients with relapsed/refractory aggressive NHL and it noted disappointment that the FDA “would ignore clinically meaningful improvements in overall response rate and progression-free survival, let alone complete responses….”
Cell Therapeutics plans to request a meeting with the FDA on both the design of the follow-on study as well as expanded access program for patients who are not participating in the company’s clinical trial. Later this month, it plans to meet with its clinical expert and the co-rapporteurs as it prepares to submit its Marketing Authorization Application to the European Medicines Agency for review. Based on their feedback and guidance, the Company expects to submit the application in the third quarter of 2010.
What is interesting here is that this is another true fight. The company’s version of statistically significant is different than the FDA’s version. This is also for relapsed or refractory aggressive non-Hodgkin’s lymphoma, which is far from the company trying to get a “first line of defense” or primary treatment status.
This stock battle of bulls and bears appears to be far from over. The company recently raised capital and is set for its special meeting of shareholders. The market is far from open, but the initial indications show the stock trading up at $0.66 versus a $0.637 close on Thursday.
JON C. OGG
Cell Therapeutics Inc. (NASDAQ: CTIC) is still in trouble after its recent implosion. But traders have still been swinging this stock around each day on one report or another, and we are finally starting to see a break or compression in the intra-day volatility in this biotech stock.
Last week the company agreed to sell $20 million in preferred stock and warrants to several institutional investors, and it noted that it could raise up to $32 million in total if those investors exercise their warrants. The company has also been hit by lawsuits of the class action nature and has a key upcoming meeting that will be a make or break decision time for shareholders.
Class action suits have come from The Law Firm of Barroway Topaz Kessler Meltzer & Check, LLP… A separate announcement by Brower Piven also asked those with losses of $50,000 or more contact to contact it regarding a lead plaintiff status. Hagens Berman Sobol Shapiro also has a class action against Cell Therapeutics.
Cell Therapeutics is hosting its Special Meeting of Shareholders in Seattle at 10:00 AM Pacific Time on April 9, 2010. The company has two key issues for vote listed from the February proxy:
- (1) to approve an amendment to the Company’s amended and restated articles of incorporation to increase the total number of authorized shares from 810,000,000 to 1,210,000,000 and to increase the total number of authorized shares of common stock from 800,000,000 to 1,200,000,000; and
- (2) to approve an amendment to the Company’s 2007 Equity Incentive Plan, as amended (the “2007 Equity Plan”), to increase the number of shares available for issuance under the 2007 Equity Plan by40,000,000 shares.
The other notion to consider is that this Special Meeting is only for holders of record at the close of business on February 19, 2010 as far as those who are entitled to vote.
We have seen a volatility compression take hold, so it will be interesting to see what (if anything) comes from the meet8ing this Friday. Either way, it may have some heated words thrown in that meeting.
At 10:38 AM EST Cell Therapeutics is up almost 1% at $0.536 on 2.65 million shares.
JON C. OGG
We have now seen the changes in short selling in biotech stocks via the Mid-March short interest report from NASDAQ. This marks the changes seen at the March 15, 2010 settlement date versus a prior February 26 settlement date. We took a look at Amgen Inc. (NASDAQ: AMGN), Biogen Idec Inc. (NASDAQ: BIIB), Gilead Sciences Inc. (NASDAQ: GILD), Celgene Corporation (NASDAQ: CELG), Genzyme Corp. (NASDAQ: GENZ), Geron Corporation (NASDAQ: GERN), Dendreon Corp. (NASDAQ: DNDN), Human Genome Sciences Inc. (NASDAQ: HGSI), and Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN). We even included the wild Cell Therapeutics, Inc. (NASDAQ: CTIC) to see what the shorts were betting on there.
There were some rather large changes both up and down. Again, the change reflects the March 15 settlement date versus a prior date of February 26:
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.
Cell Therapeutics, Inc. (NASDAQ: CTIC) is getting clipped on Pixantrone this morning. The company was told by the FDA that there is limited clinical data on its proposed cancer drug, and that there were higher side effects and higher death incidents. Unfortunately, this comes ahead of a panel review date that is set for Wednesday, February 10, 2010. We have late April, on or about April 23, 2010, as the final decision date from the FDA for Pixantrone.
Pixantrone is the company’s pending treatment of relapsed and refractory non-Hodgkin’s lymphoma, although this is indicated for those who have seen their disease progress after having received treatment with at least two other therapies.
Cell Therapeutics had raised about $30 million in January via securities sales. Pixantrone was under FDA Fast Track and it has an Orphan Drug designation under EMEA in Europe.
The FDA noted that the main trial arm ended early due to a smaller number of enrollment, which is always a concern. This may not be a dead outcome yet, but this sets a bias of extreme caution going into Wednesday’s event.
At 9:45 AM EST we have shares down 29.4% at $0.743 on 23 million shares. Average volume is 12 million shares and the 52-week trading range is $0.05 to $2.23.
JON C. OGG
Quest For 10-Baggers in BioHealth in 2010 (JAZZ, TRGT, VNDA, DNDN, HGSI, CGEN, BNVI, QCOR, ACHN, PSDV, ATHX, SNSS, AVNR, BIOD, ALXA, CTIC)
If one thing was noticed in biotech stocks, or BioHealth stocks as we often say, it was that investors, traders, and speculators all piled into the chase for the next ten-bagger late in the year. When you have as many biotech and BioHealth stocks that ran over 1,000% in 2009 that is only to be expected…. hence the 10-bagger comments. We had many biotech and biohealth shares rally from their lows significantly this year, with companies such as Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ), Targacept, Inc. (NASDAQ: TRGT), Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA), Dendreon Corp. (NASDAQ: DNDN), and Human Genome Sciences, Inc. (NASDAQ: HGSI) all being in or having been in the 10-bagger club this year.
But late in 2009 we started seeing an onslaught of low-priced stocks with small cap or micro-cap values running rapidly higher on news. In some cases these faded, and in some not. We saw the traders run up shares of Compugen Ltd. (NASDAQ: CGEN), Bionovo, Inc. (NASDAQ: BNVI), Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR), Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN), pSivida Corp. (NASDAQ: PSDV), Athersys, Inc. (NASDAQ: ATHX), Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS), and AVANIR Pharmaceuticals, Inc. (NASDAQ: AVNR) on news late in 2009. Also covered as potentials for this are Biodel Inc. (NASDAQ: BIOD), Alexza Pharmaceuticals, Inc. (NASDAQ: ALXA), and Cell Therapeutics, Inc. (NASDAQ: CTIC).
We have reviewed each of these and given a synopsis for each to see if these could be the 10-baggers for 2010.