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Cell Therapeutics to Buy Italian Cancer Drug Developer

The company will acquire Novuspharma for about $236 million in stock.

Updated from 12:48 p.m. EDT

Cell Therapeutics

(CTIC) - Get CTI BioPharma Corp. Report

said it plans to acquire


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, an Italian biopharmaceutical company developing a lymphoma treatment, in an all-stock deal.

In a press release Tuesday, Cell Therapeutics said the acquisition will mark its third cancer-related product addition since 1998.

Cell Therapeutics, a biopharma based in Seattle, will offer 2.45 shares for each Novuspharma share, or about 16 million overall. Based on Cell's Monday closing price, the deal is valued at $236 million.

Novuspharma, located in Milan, is developing Pixantrone, a drug currently in Phase III clinical trials for treating lymphoma. The boards of both companies have approved the acquisition, which is expected to close in the fourth quarter.

After the close of regular trading Cell Therapeutics said it plans to offer around $100 million of convertible senior subordinated notes due 2010 to qualified institutional buyers. The company said it will use the proceeds of the offering for clinical trials, the expansion of sales and marketing, potential acquisitions and general corporate purposes.

Shares of Cell Therapeutics ended the regular session down $2.29, or 15.5%, to $12.46. In extended-hours Instinet trading, the stock fell another $1.06, or 8.5%, to $11.40.