Biotech Mailbag: Cell Thera-Pew-Tics

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Welcome back to the Biotech Mailbag.

Ken P. asks:

"Can you give a little insight on Cell Therapeutics(CTIC Quote)? I have invested my life saving on this company. I know it's a gamble, is this a buy?"

Wow. That's a scary email. I can only hope, Ken, that you're being a bit hyperbolic about risking your life savings in a company like Cell Therapeutics.

Issue No. 1: CEO Jim Bianco. There are a few ironclad rules in biotech investing, one of which says to stay far, far away from any company associated with Bianco. The only exemplary thing I can say about his tenure as CEO of Cell Therapeutics is that he has managed to remain in control of the company while consistently losing money for his shareholders. That's quite a feat, but not one I want any part of as an investor.

Issue No. 2: Zevalin. Cell Therapeutics is trying to sell the radio-immunotherapy drug where other companies, including Biogen Idec(BIIB Quote), have failed. It's an effective drug for non-Hodgkin lypmphoma, but not one that's been commercially successful.

Cell Therapeutics couldn't sell Zevalin on its own, so now the company has partnered with Spectrum Pharmaceuticals(SPPI Quote). Spectrum isn't exactly a cancer drug-marketing powerhouse. Color me highly skeptical that this joint venture will be any more successful than previous attempts.

Issue No. 3: The comedy factor. As in Bianco flying around in private jets, Cell Therapeutics' purchase of an obscure Italian biotech company, the failed lung cancer drug that apparently only works in women, or the glossing over of patient deaths in a Cell Therapeutics study by referring to their demise as "grade 5 toxicities."

I think I'm getting my point across, right? Steer clear of Cell Therapeutics.

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Brendan B. writes:

"I was wondering if you have any thoughts on Somaxon Pharmaceuticals(SOMX Quote) and their insomnia drug called Silenor that has a PDUFA [FDA approval decision date] date of Feb. 28, 2009? Any feedback would be appreciated."

The FDA was supposed to issue its approval decision on Silenor on Dec. 1 but delayed the review by three months. I don't have any guess on how the FDA will ultimately rule on Silenor, but I don't think an approval will help Somaxon substantially because the company lacks the resources to launch the drug.