Cell Therapeutics Cash To Last Into August

5/8/09Follow @xconomy

Cell Therapeutics has really been living life on the edge. The Seattle biotech company (NASDAQ: CTIC) had just $700,000 in cash left at the end of March, before it got another $6.5 million last month to keep paying the bills. Even after an investor put in another $15 million last month, it’s only enough to keep operating through August, the company said today in its quarterly filing with the Securites and Exchange Commission.

It didn’t help the company last month when Spectrum Pharmaceuticals refused to pay $3.5 million that Cell Therapeutics was expecting in connection with the sale of ibritumomab tiuxetan (Zevalin), a drug for non-Hodgkin’s lymphoma. That money-more than a month’s worth of operating capital for Cell Therapeutics—is being held in escrow while the two companies dispute the amount of an adjustment, according to the filing.

All of this financial scrambling “raises substantial doubt about our ability to continue as a going concern,” the company said in its quarterly filing, employing the usual accounting language. Its hope for a turnaround will come in the coming weeks to show full data from a pivotal trial of pixantrone for non-Hodgkin’s lymphoma. The company plans to present the data at the American Society of Clinical Oncology meeting, held in Orlando, FL from May 29 to June 2. Since Cell Therapeutics no longer has any marketed products, it is pinning its future largely on the prospects of this drug. The treatment showed an ability to completely shrink tumors for 20 percent of patients in a clinical trial, compared with 5.7 percent who did that well on a placebo. (However, five of the 70 patients on the drug reported “severe cardiac events” compared with two of 70 in the control group. Cell Therapeutics argues that the heart effects aren’t drug-related.)

If doctors at the conference consider this data convincing that pixantrone represents a positive advance for patients, then Cell Therapeutics will hope to translate that into new investment or generate cash from partnerships.

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