FDA Likely to Deliver Blow to Cell Therapeutics

| About: CTI BioPharma (CTIC)

Cell Therapeutics' (NASDAQ:CTIC) lymphoma therapy, pixantrone, has failed to impress a U.S. Food and Drug Administration advisory panel, which unanimously agreed that clinical trial data was not adequate to support approval of the drug. Though not bound by its advisory panels, the FDA usually follows its lead. That makes it unlikely pixantrone will be approved without additional data.
Investors, which first savaged the company's shares after the release of an FDA brief questioning pixantrone's efficacy February 8, went back to finish the job following news of the panel's vote. Shares in Cell Therapeutics that had closed at 91 cents apiece before the meeting closed at just 47 cents following the vote.
The Oncologic Drugs Advisory Committee, convening March 22 following a snow delay, was considering whether a single incomplete trial offered enough evidence to prove pixantrone's effectiveness in treating refractory aggressive non-Hodgkin's lymphoma.
Even before the panel found the trial wanting, hope for pixantrone's eventual approval was in short supply after Cell Therapeutics managed to enroll just 140 of the 320 patients it had expected to enroll in its pivotal study. Cell Therapeutics' CEO James Bianco says his company is "committed to working closely with the FDA to address the committee's comments as quickly as we can."
Generating new data to get FDA reviewers to change their minds is likely to cost millions and take a substantial amount of time. Meanwhile, the company is sitting on an accumulated deficit of $1.4 billion (as of December 31, 2009) and its partner on the drug, Novartis (NYSE:NVS), is unlikely to act on its option to license the drug, an event that would have delivered as much as $104 million in registration and sales milestones.
The FDA is due to share its approval decision for pixantrone on April 23.