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Cell Therapeutics (NASDAQ:CTIC) is a micro-cap cancer biotech which is down substantially in the past year in terms of stock price and market value, but not out after recently establishing a joint venture with Spectrum Pharma (NASDAQ:SPPI) to market Zevalin, the potential for two FDA approvals this year (one new product, one label expansion), the potential for EMEA approval of Opaxio in the E.U., and a goal to become cash flow break-even by year-end.

A World Health Organization report released late last year estimates that cancer will overtake heart disease as the top cause of death in the world by 2010, which is part of an overall trend that predicts global cancer cases and deaths will more than double by 2030. The report predicts 27 million new cases of cancer will occur in 2030, which is a sharp increase from the 12 million cases of cancer in 2007.

Near-term events for CTIC include a special meeting for shareholders scheduled for 2/6/09 to obtain approval to increase the number of authorized shares of common stock (from 400M to 800M), conduct a reverse split (between 1:2-1:20), and increase the number of shares authorized for equity incentive and employee stock purchase plans – with the first two proposals aimed at regaining compliance for continued listing on the Nasdaq Capital Market by a deadline of 2/12/09.

CTIC will also be presenting at the 11th Annual BIO CEO & Investor Conference on Tuesday, February 10th at 9:30 AM in the Jade Room of the Waldorf-Astoria Hotel in New York City – click here for a link to the webcast for this event.

CTIC and SPPI have an upcoming PDUFA decision date (one of 14 extreme FDA trades, including companies with market caps below $100M with pending regulatory decisions) of 4/2/09 with a priority review designation for their sBLA to expand the label of Zevalin (Ibritumomab Tiuxetan) as consolidation therapy after remission induction in previously untreated patients with follicular non-Hodgkin's lymphoma (NHL). Zevalin is currently approved for the treatment of relapsed or refractory low-grade or follicular B-cell NHL, which is now being marketed by the 50/50 joint venture between CTIC and SPPI called RIT Oncology.

CTIC received $15M in cash along with a 50% interest as part of the agreement with SPPI to form the joint venture to further develop and market Zevalin. CTIC is also eligible to receive an additional $15M in milestone payments based on achieving sales targets for the drug while doubling the size of the sales and marketing team behind the drug. There is also an option for CTIC to sell its 50% interest in RIT Oncology to SPPI for $18M at any time from 1/15/09 to 7/15/09, which is an important feature of the deal since CTIC has indicated that it will require additional financing during 2009 and the low stock price precludes equity-based financings.

In late January, CTIC announced that its plans to begin submission of a rolling NDA for pixantrone (BBR-2778) during 1Q09 for the treatment of relapsed, aggressive NHL – with FDA approval possible before year-end if a priority review is granted by the agency. There is a high likelihood of a priority review for this indication since it represents an unmet medical need with no currently approved drugs on the market. Last November, CTIC reported Phase 3 clinical trial results for pixantrone, which achieved its primary and secondary efficacy endpoints under a Special Protocol Assessment (SPA) approval by the FDA for the study.

Patients randomized to receive pixantrone in the study achieved an 11% (8 of 70) rate of confirmed complete remissions, as compared to no patients (out of 70) who were randomized to receive standard chemotherapy. Pixantrone also achieved a higher overall response rate of 37.1% (26 of 70) compared to patients received standard chemo at 14.3% (10 of 70). Patients receiving pixantrone also demonstrated a statistically significant improvement in progression-free survival compared to standard chemo (4.7 months versus 2.6 months). The FDA approval and launch of pixantrone could result in upfront + milestone payments from Novartis (NYSE:NVS) if NVS chooses to exercise its exclusive, worldwide license to commercialize pixantrone.

Pixantrone is less damaging to the heart compared to the widely used and effective class of chemo drugs called anthracyclines and has demonstrated synergistic activity when combined with Rituxan and other treatments. Pixantrone also offers advantages in the way it is delivered (via regular IV infusion), compared to other agents which require pre-medication and central lines to administer.

Opaxio (paclitaxel poliglumex, CT-2103, formerly Xyotax) has a pending marketing authorization application (MAA) to the European Medicines Agency (EMEA) which was filed in March 2008 for the first-line treatment of patients with non-small cell lung cancer (NSCLC) (with performance status 2) as part of an exclusive licensing deal with NVS. Opaxio is designed to reduce the side effects of paclitaxel by linking it to a biodegradable polymer to create a new chemical entity which results in targeted delivery to solid tumors such as breast, ovarian, and lung cancers.

Clinical studies suggest that the metabolism of Opaxio by lung cancer cells may be influenced by estrogen, resulting in higher levels of the drug in women with lung cancer and the potential for increased efficacy. The MAA was filed based on non-inferiority or equivalent effectiveness and an improved safety profile for the treatment of NSCLC while the U.S. regulatory strategy will seek approval for maintenance treatment of ovarian cancer following complete remission after first-line treatment.

Brostallicin is currently in Phase 2 clinical development as a new type of synthetic cancer drug (a DNA minor groove binding agent) which has the potential to be a highly selective cancer treatment which is synergistic with standard chemo drugs and newer targeted therapies. CTIC owns the exclusive, worldwide rights to brostallicin and has completed six clinical trials for the drug, with results for three of the trials still pending.

While shares of CTIC have declined sharply in the past year, 2009 holds the promise for better days with the potential for three regulatory approvals (Zevalin sBLA, Pixantrone NDA, and Opaxio MAA), the potential for increased Zevalin sales from the RTI Oncology joint venture, the option to sell its stake in the joint venture to SPPI for $18M through mid-July, and the goal of becoming cash flow break-even by year-end.

EXACT Sciences (NASDAQ:EXAS) provides a useful comparison of a micro-cap cancer diagnostics company which traded as low as 22 cents late last year and now trades around $1.50 thanks to a hostile takeover bid by Sequenom (NASDAQ:SQNM) and a subsequent licensing deal with Genzyme (GENZ) which included a $24.5M cash infusion and an extensive collaboration for product development and marketing.

Source: Cell Therapeutics Is down but Not Out