SEATTLE ( TheStreet) -- Cell Therapeutics' ( CTIC) CEO Jim Bianco continues to blow smoke up the derrieres of investors.

Thursday, Bianco put this admirable talent to work during a conference call in which he bragged about retiring Cell Therapeutics' 2010 debt, waxed enthusiastically about the company's current and future financial position and assured investors that new U.S. studies and a European regulatory filing for the lymphoma drug pixantrone were speeding ahead.

And in the two days prior to this show of bravado, Bianco sold 500,000 shares of his Cell Therapeutics stock holdings at prices ranging from 36 cents to 39 cents a share.

Heckuva job, Bianco!
Cell Therapeutics
Cell Therapeutics CEO Jim Bianco

Indeed, Cell Therapeutics repaid $40 million in debt Thursday. On his call, Bianco said the payment "cleared a major financial hurdle" for the company, adding that the Cell Therapeutics' board authorized the repayment of the notes using company cash after reviewing "interest expressed by institutional funds to make additional investments in the Company, as well as access to other non-equity-based sources of operating capital..."

Bianco left out a couple of inconvenient facts, of course. The $40 million in debt came due Thursday, which means the company had no choice but to repay the notes. Now, I guess Cell Therapeutics could have refused to pay its obligations, but then, that would have resulted in the company being in default to its bondholders. Much shouting and messy lawsuits would have ensued.

Bianco also forgot to mention that repaying the $40 million in notes in full using company cash was not his first choice. An effort hatched by Cell Therapeutics in May to convince note holders to accept 60 million shares of company stock in exchange for $30 million of the $40 million in debt failed miserably. The fact that debt holders refused to accept Cell Therapeutics stock in exchange for their notes forced the company to repay the debt at full value, in cash.

Cash is something of a precious, dwindling commodity at Cell Therapeutics, although not in Bianco-land.

"Now based on our current cash, our authorized shares and capital that may become accessible, coupled with our reduced operating expenses, we have adequate funds to meet key milestones, such as filing the MAA for pixantrone in Europe and initiating the additional Phase III pixantrone trial," said Bianco on Thursday's conference call.

He added, "This action today leaves only $21 million of bonds remaining on the balance sheet, which do not mature until 2011. Certainly a dramatic improvement from the $160 million of debt we had on our balance sheet two years ago."

That's a carefully parsed accounting of Cell Therapeutics' financial health. The company's most recent filing with the Securities and Exchange Commission paints a more sober and realistic picture.

Cell Therapeutics had $70 million in cash on its books at the end of May, according to the company's SEC filing. Subtract $40 million for the debt repayment and that leaves the company with $30 million. Cell Therapeutics says it's burning $5 million per month to run the company, so subtract $5 million for June expenses and Cell Therapeutics' current cash account is down to $25 million.

By December, Cell Therapeutics will be bankrupt unless it raises more money.

How much money does Bianco need to keep the lights on? In its SEC filing, Cell Therapeutics says $70 million will be necessary to fund operations for the next 12 months and repay $10 million in debt due April 2011.

Cell Therapeutics has a bit fewer than 12 million shares in its corporate treasury available for financings. If Bianco can convince investors to buy all those shares today at the company's current market price, he could raise about $5 million.

Where is the other $65 million going to come from?

Bianco is hazy with the details. On Thursday's call, he acknowledged that Cell Therapeutics will need to raise more money, which could be accomplished by being "opportunistic" and on "less dilutive terms."

These encouraging words about minimizing shareholder dilution come from a guy who runs a company with a whopping 713 million outstanding shares. Even at Thursday's close of 42 cents, Cell Therapeutics -- no approved drugs, no meaningful revenue, years of annual losses -- sports a market value of more than $300 million.

If Cell Therapeutics wants to raise more money through stock sales, the company will need shareholder approval to expand the number of shares in its corporate treasury. Bianco's Thursday update failed to mention that the company tried and failed four times to convene a special meeting of shareholders to vote on a proposal to boost the number of Cell Therapeutics treasury shares to 1.2 billion from 800 million.

That effort has now been tabled, which means Cell Therapeutics will have to try again to obtain shareholder approval when it convenes its annual shareholder meeting in September.

As for Cell Therapeutic's long-delayed lymphoma drug pixantrone, Bianco's update was just a rehash of warmed-over assurances and half-baked milestones about a new U.S. phase III study and efforts to get the drug approved in Europe. Investors heard all this last April, soon after the U.S. Food and Drug Administration rejected pixantrone as a treatment for patients with advanced non-Hodgkin's lymphoma.

To this day, Bianco still hasn't apologized or taken responsibility for the pixantrone-FDA disaster. Instead, he used a portion of his Thursday call to criticize and second-guess the judgment of the FDA officials who rejected pixantrone. That's a sure-fire way to get on the FDA's good side, and will be especially helpful the next time Cell Therapeutics tries to get pixantrone approved here.

Of course, that next time, if it ever happens, will require Cell Therapeutics to actually complete another pivotal phase III study of pixantrone -- a feat the company has never before been able to accomplish. Thursday's call didn't offer any encouraging signs that this most recent effort will end differently.

Bianco now says the company will try to enroll the first patient in the new pixantrone study in November. Last April, however, his guidance was for patient enrollment to begin in September.

It's hard to see the truth from all the smoke.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.