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The 5 Dumbest Things on Wall Street: Oct. 22


3. Cell Therapeutics: More Talk, No Walk

Cell Therapeutics (CTIC) is doing what it does best: talking the talk. Walking the walk? Not so much.

On Tuesday, the questionably managed company announced that it was on track to file its experimental lymphoma drug, pixantrone, with European regulators later this quarter. Not that it had filed, just that it was on its way to filing.

It's not that Cell Therapeutics is a little behind, it's that it's not even remotely close to living up to its stated goals. Management told investors in July 2009 that they could expect pixantrone to win U.S. approval in the fourth quarter of that year, followed by approval in Europe in the third quarter of 2010. Pixantrone's U.S. approval? Not yet. European approval? Still not even filed. A Novartis (NVS) partnership? Nowhere in sight. A break-even quarter in December 2009 followed by a quarterly profit sometime in 2010? Don't hold your breath.

>>Cell Therapeutics: Empty Promises

Tuesday's press release is a great example of what seems to be the Cell Therapeutics way. Rather than, say, explain or apologize for its inability to deliver results, management opts to change the subject. Apparently it's far easier to count on the laziness of potential investors and the short-term memory of its current and much maligned shareholders than to actually fulfill its mission of developing potentially lifesaving drugs.

In Tuesday's announcement, Cell announced with some level of glee that European regulators had approved the company's plan to study pixantrone in kids diagnosed with lymphoma and solid tumors. Getting regulatory sign-off on this so-called Pediatric Investigation Plan, or PIP, "clears the way" for the company to submit pixantrone for regulatory approval in Europe, the company said. Sadly, PIPs are a routine part of European regulatory filings -- something done by just about every company seeking to market a drug in Europe.

Cell Therapeutics doesn't even know if pixantrone will help kids with cancer because the company has never run a pediatric clinical trial. In Tuesday's press release, Cell Therapeutics says pixantrone studies in kids won't likely be conducted until after the drug is approved in Europe.

How likely is European approval? Well, given that the company is trying to get pixantrone approved in Europe on the exact same data that it was rejected by U.S. regulators, we'd rank its chances right up there with a snowball in hell. And the FDA didn't just reject pixantrone, the agency and its outside panel of cancer experts practically laughed the drug right out of Washington D.C.

TheStreet Says: Hey Cell Therapeutics, while all this yapping might be therapeutic for you, it ain't doing much for the rest of us.

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