Here’s an iron law of biotech: Never doubt Cell Therapeutics’ ability to raise money, in good times or in bad. The Seattle-based biotech company, which has raised more than $1.3 billion from investors in its 18-year history without turning a consistent profit, said today it is hitting up investors for what should amount to another $40 million or more to help get its latest cancer drug approved for the U.S. market.
The company (NASDAQ: CTIC) said today that it has started a stock offering in which it hopes to sell as many as 29.3 million shares of common stock, warrants to buy another 7.3 million shares, plus options for another 5.5 million shares and warrants to its underwriter, Rodman & Renshaw. The company didn’t say how much it plans to sell the shares and warrants for, but the company’s stock price closed a $1.63 before the offering was announced, meaning that even by offering the usual discounts, this deal could bring in $40 million or more.
Cell Therapeutics plans to use the money to pay down some of its roughly $66 million in debt. The company has been operating this year on what CEO James Bianco has called a “tight-wire act,” in which it has slashed jobs, sold off its lone marketed cancer drug, closed an Italian research center, unloaded some debt, and raised more equity capital. It’s all part of an effort to preserve its remaining cash long enough to win FDA approval of its lead drug candidate—pixantrone for non-Hodgkin’s lymphoma.
The drug, a modified form of anthracycline chemotherapy made to be less toxic to the heart, has shown promise in a 140-patient clinical trial presented earlier this year at the American Society of Clinical Oncology. The treatment boosted complete remission rates, had a greater ability to shrink tumors, and stopped tumors from spreading for a longer period of time. The drug, however, hasn’t shown an ability yet to prolong lives—the gold standard for success among cancer drugs. And like all cancer drugs, patients reported some significant side effects, including white blood cell depletion, and a higher incidence of severe cardiac disorders.
Cell Therapeutics is hopeful that the FDA will give the treatment a faster-than-usual six-month review, which it sometimes does for potentially lifesaving therapies, meaning it could get the green light from the agency by the end of this year. The company will need money to go that far. According to the latest stock prospectus filed today Cell Therapeutics says it only has enough money left to operate into September.
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