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Cell Therapeutics (CTIC) -- Jury's In and Now Risks Are Too Great To Warrant Holding

|Includes:ARCA biopharma, Inc. (ABIO), ARIA, ARYX, DNDN, GNVC, GSK, IBPI, PDLI, PFE, PGNX, SOMX

Cell Therapeutics-- Risks too Great To Warrant Holding

When a company's investment banker which has raised capital in the past for a company decides to downgrade the stock, you know there are deep seated problems. After all, if an investment banker thinks there is more opportunity to bill fees on the next raise of financing, there would be no reason to downgrade the stock. With CTIC's investment banker, Rodman and Renshaw, abandoning CTIC after the recent FDA review panel's ruling of 9 against and 0 for the drug, Pixantrone., the prospects for raising the required capital has been severely effected.

After the verdict from the FDA review panel on March 22, there was the expected rush to the exits by many biotech investors and the rush in by the speculators for a bounce from the bottom. We took advantage of this sellloff to make a nice trade and held a small position of CTIC in case there was some unexpected positive news forthcoming.

That possibility has dimmed to the point that closing out the CTIC position seemed prudent to us.  There are other biotech plays out there that have more cash on hand and more potential products in the pipeline. GNVC is an example-- another calculated risk.

Bottom line-these small biotechs give the active trader great opportunities during their inevitable volatile trading sessions. CTIC made money for those traders who were quick after the trading halt was lifted. But the time has passed for CTIC, in our opinion.



Disclosure: No position

Stocks: ABIO, IBPI, DNDN, GNVC, ARIA, PGNX, GSK, ARYX, SOMX, PDLI, PFE