Cell Therapeutics FDA Panel Primer: Take Two

3/19/10Follow @xconomy

Seattle-based Cell Therapeutics (NASDAQ: CTIC) is getting ready, one more time, for its make-or-break moment. The big East Coast snowstorm of mid-February postponed this day of reckoning a few weeks, so the company is now getting ready to make its case in front of a committee of cancer drug experts on Monday, March 22.

For those of you just tuning in to the latest chapter in the 19-year drama known as Cell Therapeutics, this panel will be a big milestone in the company’s history. Cell Therapeutics has burned through more than $1.4 billion of investors’ money since inception, and at this point, has no products currently generating cash flow. Its application to market pixantrone in the U.S. for non-Hodgkin’s lymphoma patients is vital, since it represents Cell Therapeutics’ only serious chance at generating some sales, pronto.

I wrote an in-depth preview story on February 3 about the history of this drug, and the clinical trial data underpinning it, which is still a good guide for what to expect on Monday. Since that story, the FDA staff also published their own critical take on the Cell Therapeutics drug. The staff review noted that the treatment has “substantial” side effects, and wasn’t tested in nearly as many patients as the company had originally planned.

On Monday morning, I’ll be listening to the webcast and covering it here live at Xconomy. Important as this FDA panel will be, people should keep in mind this isn’t going to be the last word on Cell Therapeutics or pixantrone. The FDA has the authority to decide whether to approve the drug for sale in the U.S., and while it usually follows the advice of its panels, it doesn’t have to. The agency’s deadline to complete its review is April 23.

What will happen to Cell Therapeutics if the committee says the drug isn’t ready for the marketplace? The stock will surely crash, in a heartbeat. But the company might be able to keep on going, at least for a while. Cell Therapeutics had $54.9 million in cash and investments on its balance sheet on September 30, and burned through about $17 million of that stash in the fourth quarter, leaving it with $37.8 million in cash and investments heading into this year. That’s not enough to run the business through the end of this September, the company said in its annual report.

So the pressure will be on, but that’s really nothing new. If history is any guide, CEO James Bianco will just find some more investors who are willing to give him some more money. To borrow a cliché from baseball, hope springs eternal in biotech.

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  • Dan Eramian

    If this was a more balanced story (comment??) a reader might well ask: “You said what would happen if the company doesn’t get approval, but you don’t comment on what would happen if it does win approval?”

  • dad

    Here we are…we got a new Adam Feuerstein, after the first one got investigated by the SEC…soon will be your turn…

  • john winsor

    where are some facts, has this company been successful in developing drugs in the past?
    what is the aproval rate for drugs that have made it this far in a NDA? what are the issues with this drug, does it have a higher survival rate compared to other treatments, what are the side affects? what will sales on approval be, or if not approved what else is in the pipeline?
    cmon man you have to work if you want to be taken seriously.
    apologies for spelling

  • Luke Timmerman

    Dan and John–the previous story on Feb 3 talked about market potential for pixantrone and had a much more detailed take on its risk/benefit ratio. Today’s story was just a reminder that the panel is coming Monday.

  • brian

    Is this really Adam writing under a Pseudonym until the heat lets up over at the Street? Sure sounds like Him.

  • Mike Young

    A Rose by any other name, still smells like Adam F.

  • mike

    What time will this meeting occur. Will they announce after market monday?

  • Alex M.

    Dear Mr Timmerman,

    I do not understand why you do not come out with an explicit opinion that Pixantrone will not get a favorable recommendation, since you are clearly implying it. If you have made an informed decision as to the outcome, you should have the courage to state it, also stating the necessary caveats for the possibility of being wrong. We (longs) may bash you like Adam F, but that should not hold you back from standing up for your opinion. Granted, if you are wrong, it will go on your record, but this is the risk which you should be prepared to take, should you want your readers to take you seriously.

    “…If history is any guide, CEO James Bianco will just find some more investors who are willing to give him some more money…” is not a conditional statement, and clearly implies your opinion about the outcome.

    Sincerely,
    Alex M.

  • Keith

    Mr. Timmerman

    You’ve omitted any of the positives in your article, such as the outcome of the FDA’s recent inspection of CTI’s production facility, any comparison with other NHL treatment regimens, etc. On the negative side, you fail to mention the recent litigation against CTI.

    I must agree with the other comments above that you are presenting a very negatively-biased perspective. And, even with that bias, you are thin on supporting facts. If you want your analysis to be taken seriously, suggest you include some verifiable facts.

    And, what “full disclosure” statement would be appropriate for your article?

    Keith L.

  • Joe

    David Miller of Biotech Stock Research has a great article about Pixantrone (and its prospects) here (http://www.minyanville.com/businessmarkets/articles/CTIC-FDA-ODAC-drug-approval-pixantrone/2/8/2010/id/26767).

    Choice excerpt:

    “Cell Therapeutics bamboozled investors by implying the FDA was fine with the early termination. In fact, the FDA said the early termination voided the Special Protocol Assessment and invalidated the statistical significance of the results. I also believe there’s a significant chance a “surprise” analysis of the response rate will be presented by the FDA during the panel meeting, which won’t be positive for Cell Therapeutics.”

    What will happen to Cell Therapeutics if the committee says the drug isn’t ready for the marketplace?

    Well, Mr. Eramian (who might be the most highly paid PR man at any biotech in the nation) and his colleagues will all likely get $500,000 cash bonuses simply for bringing the drug in front of the committee.

  • Benve

    I am going to go broke if the drug does’nt have any positive outcome. I will probably have a heart attack as I have invested all my life savings in it.
    GOD HELP ME !!

  • FUKK ADAM F.

    HEy BENVE, just pray to Jesus. It will probably work out man. God is faithful and true. Hey, this guy has no facts. He is a queer, he should at least provide some facts. The greatest thing about money is, even if you lose it all. You can make some more and get right back to where you started.

  • http://hardoakpress.wordpress.com Jeffrey

    Let Benve be a lesson to you all. Don’t invest your life savings into one thing. Best of luck to you Benve.

  • riley4090

    I got out of CTIC, I am going to let someone else lead the way. I invested in THRR its at .0012 they are being bought out at .01. I plan on getting out and play CTIC on monday if news are good. Good Luck I will be posting on twitter riley4090.
    P.S. This guy can write. Good job Luke alot of info.

  • James

    Can you share the webcast information for Monday’s meeting?

  • xalisco

    is a coin toss, by the time they announce the outcome the big players would be out on bad news and the stock will be woth pennies or already in the game making it worth your while…good luck to all who are staying put ..

  • riley4090

    Does anybody know what time they are meeting on monday.