Cell Therapeutics Gets New Day in Front of FDA

Xconomy Seattle — 

Cell Therapeutics has been walking a “tight-wire act” for more than a year, and now we’ll see if the company keeps its balance or crashes to the ground on March 22. That’s the date FDA has now set for a re-scheduled a meeting of cancer drug experts who will recommend whether the Seattle-based company ought to win clearance for pixantrone, its lead drug candidate for non-Hodgkin’s lymphoma.

Cell Therapeutics (NASDAQ: CTIC) had been planning to make its case in front of the FDA’s Oncologic Drugs Advisory Committee on February 10, but that meeting was cancelled because of the big snowstorm in the Washington, DC area. The panel will make its recommendation, but the FDA has the final word on whether pixantrone should be cleared for sale. The FDA’s deadline to complete its review is April 23.

Shares of Cell Therapeutics fell 10 percent to 59 cents this morning, and Reuters surmised this was because the company’s auditor said there was “substantial doubt” that it could continue as a going concern because it only had $37.8 million in cash and investments heading into 2010, about enough to operate through the end of September. The notice that Cell Therapeutics is in financial jeopardy isn’t new to people who have followed the company for any period of time. At this time last year, the company had only a few weeks of cash left, but it found a way to cut costs, sell off one marketed drug, and raise enough capital to support the pixantrone new drug application.

Everything now is riding on whether the FDA panel says on March  22 the benefits of pixantrone outweigh the risks. The FDA staff already issued a critical analysis of the application, noting that pixantrone carries “substantial” side effects, and that its pivotal trial ended up enrolling fewer patients than it was originally designed to accommodate. Quite a few investors are betting this drug will fail, as 81 million shares were held in a short position as of February 12, according to data compiled by NASDAQ. The company has 615 million shares outstanding, according to NASDAQ.

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