Cell Therapeutics Has Strange Timing

SEATTLE (TheStreet) --Cell Therapeutics(CTIC) picked a very strange time to raise more money and further dilute its shareholders.

Just one month ahead of a critically important Food and Drug Administration meeting on its lymphoma drug pixantrone, Cell Therapeutics raised $30 million through the sale of preferred stock and warrants, the company announced late Wednesday.

Cell Therapeutics shares fell nearly 12% to $1.17 in midday trading Thursday. Prior to the disclosure of the stock deal, Cell Therapeutics shares closed up 14% on heavy volume during the regular trading session.

The financing raises all kinds of questions -- none of which should be comforting to Cell Therapeutics' largely retail investor shareholder base.

If Cell Therapeutics CEO Jim Bianco was confident about a positive recommendation for approval of pixantrone from the experts at the Feb. 10 meeting of the FDA's advisory committee, why would he raise money now?

Presumably, Bianco could raise even more money and with less dilution at a higher stock price following a positive pixantrone meeting.

Or this: Is Cell Therapeutics aware that FDA has significant problems with the pixantrone data, enough for the agency to be leaning towards rejecting the drug's approval?

Between 14 and 21 business days before an advisory committee meeting, the FDA provides the agency's drug review to the drug sponsor, according to FDA spokeswoman Karen Riley.

In other words, Cell Therapeutics will know what the FDA reviewers think about pixantrone in advance of the Feb. 10 advisory panel. If you take a look at a calendar, Cell Therapeutics could have been in possession of the FDA's pixantrone briefing documents as early as Tuesday.