This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Biotech Stock Mailbag: Cell Therapeutics

Cell Therapeutics' (CTIC) latest fund-raising Wednesday night brought in a few emails, including Tanya D., who wrote to say, "I guess you were right about Cell Therapeutics needing to raise more money. But I don't understand why they would do it now with fast-track status for pixantrone coming so soon."

Cell Therapeutics sold 29.3 million shares in an overnight deal priced at $1.30, or a 20% discount to the Wednesday close. The deal included 25% warrant coverage, which means buyers got one warrant (priced at $1.70) for every four shares of stock they bought. The warrants are a common sweetener used by underwriters (in this case Rodman & Renshaw) to induce clients to participate in the deal.

Total gross proceeds from this follow-on offering: $38.1 million.

That's money badly needed by Cell Therapeutics, which is apparent to any investor who can even skim a balance sheet. I realize that most retail investors owning or interested in Cell Therapeutics focus on the cancer drug pixantrone, but you cannot ignore the perils of the company's balance sheet.

The recent debt tender offer improved Cell Therapeutics' financial health somewhat (and so does this latest financing) but the company is still burning cash, still has debt on the books, and will probably need to raise even more money in the future.

Tanya raises a good point about the timing of this recent fund-raising. The Food and Drug Administration will inform Cell Therapeutics next month whether the agency will grant pixantrone a six-month review. Pixantrone is a cancer drug. Almost all cancer drugs get a six-month review, so I'd only be surprised if the FDA decides to take more time.

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs