Cell Therapeutics Shareholder Meeting Postponed, After FDA Rejection

Xconomy Seattle — 

Cell Therapeutics (NASDAQ: CTIC) apparently has had enough humiliation for one day. The Seattle-based biotech company postponed a special shareholder meeting this morning at its headquarters along Elliott Bay, after announcing that the FDA rejected the application for its only cancer drug with a shot at reaching the U.S. market anytime soon.

About a dozen shareholders showed up at 10 am Seattle time on the third floor of Cell Therapeutics’ stylish headquarters, which features track lighting, pastel wall colors, and sweeping views of Elliott Bay. The meeting, in which shareholders will be asked to authorize the company to sell as many as 1.2 billion shares, has been rescheduled for the same time on May 14. Cell Therapeutics usually has trouble getting a quorum of shareholders to vote on matters like these, because it has a lot of shareholders in Italy who don’t turn in their ballots. So it wouldn’t surprise me if the company failed to get a quorum to vote on that question.

Cell Therapeutics founder and CEO James Bianco didn’t show up to face the shareholders this morning, although company spokesman Dan Eramian told me in the hallway that the company is planning a conference call for 4:30 pm Eastern/1:30 pm Pacific today. We had to chat in the hallway because the company barred me from attending this meeting as a member of the press, saying it was open only to shareholders of record. As many of you who follow me on Twitter know, I offered some pocket change to buy a share so I could attend, but they could not accommodate me on the spot. (TheStreet.com’s columnist Adam Feuerstein cheekily offered to start a pledge drive to help me get in the door, but alas, the meeting adjourned in a just a few minutes.)

Seriously, though, I have a few questions that I couldn’t get answered. Like why shareholders would allow the company to issue as many as 1.2 billion shares, further diluting their existing stakes in a stock that’s already worth less than a buck? Who are the people who invested $20 million in Cell Therapeutics after it was shot down 9-0 by a panel of FDA cancer drug experts last month? Did those people listen to the same brutal critique that I heard? In what way do they think Cell Therapeutics can generate positive returns? Do they think the company can afford the time and expense of another clinical trial to support approval of pixantrone for non-Hodgkin’s lymphoma? Or do they think that paclitaxel poliglumex (Opaxio), a drug that already failed three pivotal clinical trials in 2005, will rise from the dead?

I will listen in to today’s conference call (dial-in number is here), but I’m not holding my breath for any substantive answers.