This Day On The Street
Continue to site right-arrow
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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

The End Is Near for Cell Therapeutics

SEATTLE ( TheStreet) -- How much trouble does Cell Therapeutics (CTIC - Get Report) find itself in? Even Rodman & Renshaw downgraded the stock this week.

Rodman is the healthcare investment banker of last resort, the go-to financier for the bottom of biotech's barrel. And yes, Rodman has raised money for Cell Therapeutics in the past, most recently in January. So when Rodman's biotech analyst gives up on Cell Therapeutics, you can be darn sure the future of the company is in very dire straits.

Monday's decision by a U.S. Food and Drug Administration advisory panel to recommend unanimously against approval of Cell Therapeutics' lymphoma drug pixantrone has ignited a serious fiscal crisis at the company.

Cell Therapeutics' shares are hanging stubbornly around the 70 cents level, remarkable given the gravity of the company's situation. That's not likely to last long, however. At this point, Cell Therapeutics isn't worth any more than 10 cents a share, and that's being generous with valuation.

The FDA is expected to announce its approval decision for pixantrone on April 23. The drug has essentially zero chance of being approved at this time, given the FDA's vociferous criticism of the pixantrone clinical data in non-Hodgkin's lymphoma (NHL) coupled with the 9-0 negative vote by the advisory panel.

Cell Therapeutics needed to raise more money with or without pixantrone's approval. The latter scenario makes the job all that much tougher. Bankruptcy is a real possibility if Cell Therapeutics doesn't find a way to raise more cash and pay down its debt. Even if the company manages to complete a financing, pixantrone's commercial potential is forever stunted, if not altogether dead.

At the end of February, Cell Therapeutics reported a cash position of $51 million. The company is burning approximately $7-8 million per month, which means the current cash on hand runs out in August.

Cell Therapeutics' cash crunch is exacerbated by the $40 million in convertible debt that the company must figure out a way to repay before July 1.

All in, Cell Therapeutics needs to raise about $70 million just to remain in business through the end of the year. At the current stock price of around 70 cents, this would require Cell Therapeutics to sell 100 million shares of common stock, bringing the company's total share count to almost 720 million.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
CTIC $2.46 1.65%
NVS $99.04 -0.02%
AAPL $128.54 -0.63%
FB $80.90 1.63%
GOOG $573.37 -0.05%


DOW 18,096.90 -106.47 -0.58%
S&P 500 2,098.53 -9.25 -0.44%
NASDAQ 4,967.1410 -12.76 -0.26%

Partners Compare Online Brokers

Free Reports

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