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Cell Therapeutics Pulls Cancer Drug After CEO Boasted About Approval Chances

Stocks in this article: CTIC

SEATTLE ( TheStreet) -- Cell Therapeutics (CTIC) withdrew its U.S. approval application for the experimental lymphoma pixantrone due to unresolved and undisclosed "communications" with the U.S. Food and Drug Administration, the company said.

The surprise announcement from Cell Therapeutics means next Thursday's advisory committee, which was scheduled to review pixantrone, has been cancelled. The FDA will also no longer make a decision on the approvability of pixantrone on April 24, although it's relatively easy to surmise that the agency wasn't leaning towards approval given the company's decision to pull the drug's application.

Shares of Cell Therapeutics are down 17% to $1.10 in pre-market trading Monday.

Cell Therapeutics says it plans to resubmit pixantrone to FDA later this year after it has time to prepare new information. Pixantrone, if ever approved, would be used as last-line treatment for patients with aggressive non-Hodgkin's lymphoma that no longer responds to other therapies.

In March 2010, an FDA advisory panel voted 12-0 to recommend pixantrone's rejection, which the FDA later did. Cell Therapeutics appealed that rejection and resubmitted the drug last year, setting up what was supposed to be a second shot at approval this spring.

This most recent pixantrone setback is yet one more example of how Cell Therapeutics' CEO Jim Bianco fails habitually to deliver on his promises, hurting shareholders in the process. Eight years after acquiring pixantrone and promising a speedy approval, Cell Therapeutics still hasn't delivered. The same can be said for the company's other long-delayed cancer drug, Opaxio (born Xyotax).

Since late November, Bianco has been awarded with nearly $800,000 in cash bonuses by Cell Therapeutics' board, including a $150,000 bonus for 20 years service to the company.

In private conversations with Wall Street investors recently, Bianco had been predicting a positive vote from the pixantrone advisory committee meeting scheduled for Feb. 9.

The reason for Bianco's confidence: He claimed that FDA's cancer-drug review chief Dr. Richard Pazdur was dressed down by his agency superiors for an unfairly negative review of pixantrone which led to the drug's rejection in 2010.

If Pazdur had been muzzled, as Bianco boasts, the FDA's second clinical review of pixantrone could be more lenient and the panel of outside experts more likely to recommend the drug's approval, according to investors who have met with the Cell Therapeutics CEO recently.

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