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Cell Therapeutics' Last Hope for Survival, Dashed

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Shares plunge on news that its only promising drug could get rejected.

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Cell Therapeutics (CTIC) took a dive into the penny-stock territory on Monday after documents were released by the FDA about the company's non-Hodgkin's lymphoma drug.

The documents are a preview of what's to come on Wednesday when the Oncologic Drugs Advisory Committee, a panel of experts that advises the FDA, meets to decide whether they should recommend the investigational therapy to the FDA for approval -- the outcome doesn't look good.

The Cell Therapeutics story isn't a pretty one. The approval of pixantrone, to be called Pixuvri if approved, is the company's last hope for survival. The drug is meant to treat lymphoma patients who haven't had success with prior treatments. The cornerstones of the therapy are anthracyclines, which are potent cancer-cell-killing agents that are often used in first-line treatment, but can cause heart damage when used repeatedly. Pixantrone looks to capitalize on the benefits of the anthracyclines without the drawbacks. The company said at the JPMorgan Healthcare Conference in San Francisco earlier this year that it expects to reach about 10,000 patients with the drug and compared its price point to that of Cephalon's (CEPH) Treanda, which garners $40,000 per patient annually. The company is expected to face an FDA decision on approval on April 23.

"The upcoming ODAC meeting is a very important milestone in the NDA review process and we look forward to discussing the efficacy and safety data for pixantrone with the members of the panel and the FDA review team," said James Bianco, chief executive of Cell Therapeutics. "As there are no other drugs currently approved in this setting, we believe that pixantrone would fulfill a significant unmet medical need for patients with relapsed/refractory aggressive NHL."

The stock has been all over the place during the course of the last 52 weeks with a range of $0.05 to $2.23 (it's been trading at a range between 0.9298 and 0.5299 today). The company's finances have also been all over the place, as its cash levels dwindled to just weeks' worth at one point last year. Its biggest problem is that it doesn't have any products on the market generating revenues and doesn't have anything (other than pixantrone) that's even within throwing distance of the FDA approval process.

Yet, the death knell has all but tolled for this little company, which has been basing its livelihood on a late-stage study of only 140 patients. The study violates the Special Protocol Assessment, an agreement made with the FDA that defines the parameters of the clinical trial, because the company ceased enrollment of the study early -- not sticking to the 320 patients that were supposed to be enrolled -- and decided to analyze trial data sooner than expected.

The advisory panel questioned the "the level of evidence necessary to draw conclusions from this Phase III study and the reliability of these conclusions," and whether "substantial hematologic and cardiac toxicity" were safety factors that the agency should be concerned about when considering this drug for approval.

The data from Cell Therapeutics shows that almost twice as many patients had serious cardiac events while on pixantrone than those on other chemotherapy drugs, 9% to 4.5%, respectively. The data presented in June also showed that pixantrone had some other severe side effects including the depletion of white blood cells.

Meanwhile, documents provided by the company to the FDA panel state that the drug is both safe and effective based on the trials that have been done thus far.
No positions in stocks mentioned.

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