CTI second-quarter total net operating expenses decrease to $20.0 million

Cell Therapeutics, Inc.Aug 5 2010

Cell Therapeutics, Inc. ("CTI" or the "Company") (Nasdaq and MTA: CTIC) today reported recent accomplishments and financial results for the second quarter ended June 30, 2010.

"We continue to make progress on moving the pixantrone Marketing Authorization Application ("MAA") forward in Europe with the submission of a revised and expanded Pediatric Investigation Plan ("PIP") as part of the application filing for an MAA in Europe. In the U.S., we look forward to meeting with the U.S. Food and Drug Administration (the "FDA") in August to discuss our proposed new combination trial for pixantrone in aggressive non-Hodgkin's lymphoma ("NHL")," said James A. Bianco, M.D., Chief Executive Officer of the Company. "On the financial front, we have retired all of our convertible debt due in 2010 and removed that obligation from our balance sheet leaving only two convertible debt maturities remaining in April and December of next year for a total of $21 million."

Recent Highlights

• Submitted revised and expanded PIP for pixantrone as part of the MAA submission process. The company plans to submit an MAA for pixantrone in the second half 2010.
• Signed a long-term manufacturing agreement with NerPharMa S.r.l (a pharmaceutical manufacturing company belonging to Nerviano Medical Sciences S.r.l. in Nerviano, Italy) for pixantrone.
• Submitted a proposal for a new clinical trial for pixantrone in aggressive NHL under the FDA's Special Protocol Assessment process.
• Retired all convertible debt due in 2010 including principal and interest with a payment of $39.3 million.
• Reported exploratory analyses from pivotal trial presented at an advisory panel during the 15th Congress of the European Hematology Association Reported demonstrated that complete responses to pixantrone are correlated with prolonged survival in patients with relapsed or refractory aggressive NHL.
• Initiated two phase II programs with the Mayo Clinic's clinical trial network, North Central Cancer Treatment Group: one program with pixantrone in metastatic breast cancer and one trial using brostallicin in triple negative metastatic breast cancer.
• At the American Society of Clinical Oncology Annual Meeting in June, the Company reported on the positive results of a phase II study using OPAXIO as a radiosensitizer in the treatment of esophageal cancer.

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.  

CTI 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.