5. Cell Therapeutics, Have You No Shame?
Cell Therapeutics (CTIC - Get Report) CEO Jim Bianco has managed to bring together the dumb and the despicable in truly spectacular fashion this week.
With his company on the brink of bankruptcy, Bianco set out to beg from the group of people he has hurt the most over his career -- his own company's shareholders -- and ask them to approve a plan to increase the number of company shares to 1.2 billion from its present level of 800 million. To get this approval, Bianco borrowed a page from the Jerry Lewis telethon playbook.
"We all have family or friends who have been struck down by cancer. At CTI, we believe we can make cancer more treatable for many cancer patients by advancing the products in our development pipeline; that is our mission," read a letter signed by Cell Therapeutics' CFO Louis Bianco, the brother of the CEO, and sent to shareholders recently.
>>Cell Therapeutics Begs for Survival
"We are committed to bringing our drugs to cancer patients, but CTI needs your support," the letter continues. "Your vote can help us make a difference in the potential success of these drugs and in the lives of the patients who could someday benefit from them. Without your voting support, CTI may not be able to continue this research."
At the top of the letter is a new company logo with a slogan that reads, "Please Vote. Help Make Cancer More Treatable."
It's a noble cause, for sure, but Cell Therapeutics isn't a charity -- and Bianco's management has been anything but charitable to shareholders. Since 2005, shares of Cell Therapeutics have plunged more than 99.9%, hit again and again by clinical trial blowups and drug approval rejections. The only biotech firms that have caused greater shareholder losses over this time period are no longer in business.
And as far as the company's mission of making cancer more treatable goes, one could argue they're farther away from achieving that than ever. The U.S. Food and Drug Administration savaged the company's lead lymphoma drug pixantrone in its review in March, which was followed by a unanimous 9-0 vote against the drug by the FDA's outside advisory panel and then a formal rejection of the drug by the agency. As a result, the company will be forced to conduct a new study here while it tries in vain to get the drug approved in Europe. Cell Therapeutics' other main cancer drug, Opaxio, has failed repeated phase III studies.
Bianco and his management team seem to be in no danger of sharing in their company's misfortune. Bianco's total compensation spiked to $12.6 million in 2009, up from $1.5 million in 2008 and $2.2 million in 2007. Brother Louis was awarded $5 million in total compensation last year, while two executive VPs and the company president received between $3.9 million and $7.4 million.
TheStreet Says: You play the "C" card, and we'll play the "D" card.