CTIC - Cell Therapeutics Inc. (NASDAQ)

[Spot]

FDA advisory panel will review the NDA submission on 2/10/10

[Spot]

Cell Therapeutics Share Price Estimates Based on Different FDA Outcomes
January 19th, 2010

Alright Cell Therapeutics investors, today I am going to run through a couple of hypothetical Share Price estimates for Cell Therapeutics based on the outcome of the FDA�s Advisory Panel Meeting on February 10, 2010. Prior to that date there will be a couple of key events that could also drastically move the share price. The first being the release of the FDA�s briefing documents, these documents will outline questions the FDA wants to ask the company at the advisory hearing.

Depending on how the press reacts to the documents then the share price could move up or down. I would like to note that when the briefing documents are released the major news organizations (Usually Reuters) will usually write stories that focus on the most negative aspects of the FDA�s review, Reuters is especially predictable in doing this. I know many of you will want some examples of this, so I have provided a one below.

The following example is from a Reuters hatchet job of Acorda Therapeutics� Fampridine:

Recently, Acorda therapeutics got the FDA�s advisory board vote for approval by a 12-1 vote for its MS related walking drug Fampridine. Right after the FDA released their brieifing documents, several reporters from several news agencies misreported that the FDA advisory board was possibly not going to vote for approval of the drug. But the consensus with Wall Street analysts and physicians was that the drug was going to get approved.

It has always been my belief that most of the reporters that write articles about drug approvals have absolutely no clue what they are talking about when it comes to the approval process or what the briefing documents true purposes are. Here is one of those articles written by the �Faceless Reuters reporter�, the titled �Acorda Shares Fall Over FDA Concern� (article here). Just read the first few lines of that article and you�ll see what I am talking about.

Here is the problem with the reporter�s article, 5 days later there was no skepticism from the FDA in the vote, it was an overwhelming 12-1. But no reporter from Reuters retracted their articles, even though it was proven afterwards that they had lied. I emailed the writer several times, but she refused to reply, the same day that she wrote the negative article I called her out on the piece, telling her that the consensus was actually for approval and she was completely off base. What most of these reporters do is write the most eye popping headline they can think of to get readers, not to deliver true news. Anyway, patient investors were rewarded with a huge 50% share increase in Acorda shares after the 12-1 vote.

Now on to the Share Price estimate:

As I have said time and time again, I am 50/50 for the approval on Pixantrone. I am not sure how the FDA�s ODAC is going to decide on this one. I have outlined my reasoning in an article here. Unlike, most reporters I give a factual basis and reasoning behind my beliefs as to which way the panel will vote. id on�t just write garbage headline catching pieces.

As for the Share Price, we have three hypothetical out comes here. I will list them below with a share price estimate next to them.

1. The vote by the FDA�s ODAC is strongly in favor of approval: In this scenario I believe the share price will rocket up to $5.00 initially and then gently pull back to a $3.00 to $4.00 trading range over the next several months. At which point the company will be able to raise some additional equity and fund further drug development. I know $3.00 sounds low, but in reality the company has many shares outstanding.

There are several comparator companies out there that have a lot less shares outstanding and similar products with share prices that are only just a hair above the $3-4 price (I am referring to Spectrum Pharma, which trades at $5.17, they also have two approved cancer products, ironically one of them used to be owned by Cell Therapeutics). Maybe Cell is the next Dendreon, but I think they need to drastically reduce the amount of shares they have out either by a reverse split or by buybacks to get to that share price range.

2. If the vote by the panel is for another clinical trial or for more patient data: This can happen, at a recent meeting the FDA asked Genzyme to run a Phase III clinical trial for Clolar in AML patients. In fact, the panel actually voted on whether the company should or should not run another clinical trial and also voted not to approve the drug until that trial is completed. If this happens to Cell Therapeutics then a Complete Response Letter would be most likely sent to the company on the PDUFA date. In this scenario, I would see the shares falling to the $.50-.60 trading range. It would not be a death knell for the company, but it would seriously strain the share price and shareholders patience because a follow up trial could take years.

3. If the panel simply votes no and says the drug is not approvable: This rarely happens at a public meeting. In most cases the panel simply votes no and then the company discusses in private with the FDA whether the drug can ever be approved or not. But investors can gauge the panels sentiment by the vote count, for example if it is 13-0 for non-approval and no mention is made from the panel that they would need to see more data in the future for approval, then that might mean the drug is not approvable. If this happens then the FDA will most likely send the company a Complete Response Letter and it would be up to the company to disclose the contents to the shareholders. If this happens, then I see the share price heading down to $.20-.35 range.

Wait, what happens if the vote is a tie or no determined outcome can be gauged because the vote is close?
In this case it is this simple, look at which way Dr. Pazdur voted (he chairs the FDA�s ODAC and will run the entire meeting). If he votes no, then the company will more than likely receive a Complete Response Letter. Dr. Pazdur is the man who single handedly got Dendreon�s drug delayed for years even though the panel voted in favor of approving the drug. In fact, an even wiser strategy would be to listen to this guys� tone and demeanor during the meeting, because I have seen him stop drugs flat out in their tracks. So a good strategy could be to trade on his vote alone.

[mesmail]

Cell Therapeutics, Inc. (CTI) (Nasdaq and MTA: CTIC) announced that on February 10, 2010 the U.S. Food and Drug Administration's Oncologic Drugs Advisory Committee (ODAC) will review the New Drug Application (NDA) for pixantrone for the treatment of relapsed/refractory aggressive non-Hodgkin's lymphoma (NHL

[shamlet76]

i'm in but it's scary. looking at the option chain, a lot of investors are buying puts. but a lot of investors are buying calls.
i looked at the options all through the fall, was thinking of doing options rather than buying stock. but the breakeven point for options was so high that i decided to buy the stock and be done with it.
while i was looking at the feb puts, i also noticed that there were a lot of calls for $1.50/$2 range too.
for every buyer, there is a seller.
so i hope the people who wrote puts make $ because i'm long. the puts appear to make the price of CTIC around .60. well, ok. it's not a nickel, lol.

[Nebaf]

i'm in but it's scary. looking at the option chain, a lot of investors are buying puts. but a lot of investors are buying calls.
i looked at the options all through the fall, was thinking of doing options rather than buying stock. but the breakeven point for options was so high that i decided to buy the stock and be done with it.
while i was looking at the feb puts, i also noticed that there were a lot of calls for $1.50/$2 range too.
for every buyer, there is a seller.
so i hope the people who wrote puts make $ because i'm long. the puts appear to make the price of CTIC around .60. well, ok. it's not a nickel, lol.

It's definitely going to be scary for both the longs and the shorts. I wouldn't be surprised if it exceeds $2 if it gets a favorable review, but on the flipside if it doesn't I wouldn't be surprised if drops 80%+.

Keep in mind that a lot of the investors buying calls might not necessarily be bullish, but instead buying both calls and puts for a long straddle, which seems like the safest way to trade this stock going into next week.

Personally I closed my long position last week as I don't think it's worth the risk and I was only looking to profit from the potential runup prior to the 10th.

Hope all works out well for you this week.

[Lucifer]

It's definitely going to be scary for both the longs and the shorts. I wouldn't be surprised if it exceeds $2 if it gets a favorable review, but on the flipside if it doesn't I wouldn't be surprised if drops 80%+.

Keep in mind that a lot of the investors buying calls might not necessarily be bullish, but instead buying both calls and puts for a long straddle, which seems like the safest way to trade this stock going into next week.

Personally I closed my long position last week as I don't think it's worth the risk and I was only looking to profit from the potential runup prior to the 10th.

Hope all works out well for you this week.

I like your discipline. It sure is risky out there.

Looks like CTIC has bottomed this morning and people who trade with the market makers are laughing all the way from 70cents to 80cents for a quick profit.

[globalequitygroup]

Beware of a possible delay in the FDA Panel due to the major snow storm in DC this weekend. Will cause another pullback.

The FDA is already behind.

FYI...This mornings pullback was due to the briefing docs released this morning in pre-market.

The traders of this stock are mostly retail investors with limited information.

News spooks them, or excites them big time.

[DogDayTrader]

FDA staff questions Cell Therapeutics drug data | Reuters

http://www.reuters.com/article/idUSN0515749720100208

Although, this could also be a great opportunity to pick up some shares on sale. However, it is the following quote from FDA in the second article linked to above that has me skeptical.

In the company study, deaths and serious complications from heart damage and bone marrow suppression "were all more common" in patients treated with pixantrone versus other cancer drugs, FDA staff said.

And in the same article Cell Therapeutics claims that:

Twenty percent of patients treated with pixantrone met the study's main goal of having a major decrease in their disease, compared with about 6 percent with a different medicine.

So my question is, what good is a decrease in the disease if the treatment that led to the decrease kills you?

Looks like we will find out Wednesday, as CTIC has a meeting with an FDA review panel. With the finial decision from the FDA on CTIC's pixantrone due by April 23rd.

[globalequitygroup]

I think it may be curtains for Pixantrone and CTIC.

I hope it isn't, but I do not feel good about the comments.

The head of the FDA Panel meeting is the same guy that sent Dendreon back to the slaughter house and made them perform another set of Phase III trials, thus setting the approval date for this "wonder drug" back 2+ years.

Apparently his father was killed by a pharmaceutical drug, so he is a real ball-breaker on these potentially toxic treatments. Excuse my francais.

All this did was delay the inevitable and make the FDA look like fools when the Phase III results came back even better than the 1st time.

Even worse...

How much better of a drug profile in treating a cancer target is Provenge vs. Pixantrone? Doesn't even compare.

We'll see.

The FDA has been on a Cancer Drug TKO run lately.

I'll be waiting on the sidelines.

[rhedayi]

GEG
when the FDA meets with CTIC in mid March, will there be some announcement or some transcript that we can review prior to the april 23rd decision date. I guess better way to ask is can the stock price be affected negatively as a result of the mid march meeting (delayed from feb meeting).