Cell Therapeutics Reports Third Quarter 2013 Financial Results - Conference call scheduled today at 4:30 p.m. Eastern time -

SEATTLE, Oct. 30, 2013 /PRNewswire/ -- Cell Therapeutics, Inc. (CTI) (NASDAQ and MTA: CTIC) today reported financial results for the third quarter and nine months ended September 30, 2013.

"We recently achieved an important clinical milestone in our pacritinib development program, having reached agreement with the FDA on a Special Protocol Assessment (SPA) for the planned pivotal Phase 3 PERSIST-2 clinical trial of pacritinib for patients with myelofibrosis who have low platelet counts," said James Bianco, M.D., President and CEO of CTI. "With the SPA in place, we expect to initiate this trial in the fourth quarter of 2013 and anticipate completing enrollment in approximately 12 months.  We continue to make progress with the reimbursement process for PIXVURI in the European Union and are focused on educating physicians on the unmet medical need and building brand awareness for PIXUVRI as a third- and fourth-line treatment option among physicians in countries where PIXUVRI is currently available." 

Third Quarter 2013 and Recent Highlights

PIXUVRI® (pixantrone) Commercial:  Market Access Granted in France and Italy

  • Reported that the Company was granted market access by the Transparency Commission of the French National Health Authority in France and by the Italian Medicines Agency (AIFA) in Italy for PIXUVRI as a monotherapy for the treatment of adult patients with multiply relapsed or refractory aggressive B-cell NHL (patients with aggressive B-cell NHL who failed 2 or 3 prior lines of therapy). 

Research and Development:  Reached SPA Agreement with FDA for PERSIST-2 Clinical Trial

  • Reached agreement with the U.S. Food and Drug Administration (FDA) on a SPA for the planned pivotal Phase 3 clinical trial, known as PERSIST-2,  evaluating pacritinib compared to best available therapy, including approved JAK2 inhibitors such as ruxolitinib, in patients with myelofibrosis whose platelet counts are <100,000/uL.  The PERSIST-2 trial is the second of two planned Phase 3 clinical trials of pacritinib in patients with myelofibrosis.  CTI expects to initiate PERSIST-2 in the fourth quarter of 2013.

Corporate:  Expanded CTI's Scientific Advisory Board and Raised Approximately $15 million in Financing.

  • Added three leaders in the research and development of new treatments for blood-related cancers to CTI's recently formed Scientific Advisory Board (SAB):  Alan List, M.D., President and CEO of Moffitt Cancer Center; Ross Levine, M.D., Associate Attending Physician at Memorial Sloan-Kettering Cancer Center; and Brian Druker, M.D., Director of the Knight Cancer Institute at Oregon Health & Science University.  CTI's SAB is chaired by Daniel Von Hoff, M.D., F.A.C.P.
  • Completed registered direct offering without an underwriter or placement agent for net proceeds of approximately $14.8 million.

Third Quarter 2013 Financial Results  

Total revenues for the third quarter and the nine months ended September 30, 2013 were $0.4 million and $1.8 million, respectively.  The revenues were solely attributable to net product sales of PIXUVRI.  CTI sells PIXUVRI directly to health care providers and through a limited number of wholesale distributors in the E.U.  CTI generally records product sales upon receipt of the product by the health care provider or distributor, net of distributor discounts, estimated government-mandated discounts and rebates, and estimated product returns.  Any future revenues are dependent on market acceptance of PIXUVRI, the reimbursement decisions made by governmental authorities in each country where PIXUVRI is available for sale and other factors. 

Loss from operations for the third quarter of 2013 was $15.6 million, compared to $15.1 million for the same period in 2012.  For the first nine months of 2013, loss from operations was $51.9 million compared to $82.6 million for the same period in 2012.  The amount recorded for the nine months ended September 30, 2012 included a $29.1 million expense for acquired in-process research and development related to the acquisition of pacritinib from S*BIO Pte Ltd.  Non-cash, share-based compensation expense for the third quarter and first nine months of 2013 was $1.9 million and $6.3 million, respectively, compared to $1.0 million and $6.1 million for the same periods in 2012.

The net loss for the third quarter of 2013 was $22.4 million, or ($0.20) per share, compared to $20.2 million, or ($0.38) per share, for the same period in 2012.  For the first nine months of 2013, net loss was $59.8 million, or ($0.55) per share, compared to $96.2 million, or ($2.12), per share for the same period in 2012.

As of September 30, 2013, CTI's cash and cash equivalents totaled $27.2 million.

Financial Guidance for 2013

CTI reaffirms prior financial guidance that, for 2013, loss from operations excluding non-cash, share-based compensation expense, which is a non-GAAP measure, is expected to be approximately $60 to $65 million.  Year-to-date for the nine month period ended September 30, 2013, loss from operations, excluding non-cash share-based compensation expense, which is a non-GAAP measure, was $45.5 million.  For more information regarding CTI's use of these non-GAAP measures and a reconciliation of non-GAAP loss from operations excluding non-cash share-based compensation expense to loss from operations for the nine months ended September 30, 2013, please refer to the section below entitled "Non-GAAP Financial Measures".

Actual financial results for 2013 will vary based upon many factors, including the degree of market acceptance and determination of reimbursement rates for PIXUVRI in the E.U., the rate of patient enrollment in pacritinib clinical trials that are ongoing and planned for initiation in 2013 and other factors described in our filings with the Securities and Exchange Commission.

Conference Call Information

CTI management will host a conference call to review its third quarter 2013 financial results and provide an update on business activities.  The event will be held today at 1:30 p.m. PDT / 4:30 p.m. EDT/ 9:30 p.m. CET.  Participants can access the call at 1-866-225-8754 (domestic) or +1 480-629-9819 (international).  To access the live audio webcast or the subsequent archived recording, visit CTI's website, www.celltherapeutics.com.  Webcast and telephone replays of the conference call will be available at approximately two hours after completion of the call.  Callers can access the replay by dialing 1-800-406-7325 (domestic) or +1 303-590-3030 (international).  The access code for the replay is 4647208#.  The telephone replay will be available until Wednesday, November 6, 2013.

About Cell Therapeutics, Inc.

Cell Therapeutics (NASDAQ and MTA: CTIC) is a biopharmaceutical company focused on the acquisition, development, and commercialization of less toxic and more effective ways to treat cancer.  CTI is headquartered in Seattle, WA.  For additional information and to sign up for email alerts and get RSS feeds, please visit www.CellTherapeutics.com.

Non-GAAP Financial Measures

CTI has provided in this press release the historical financial measure of loss from operations, excluding share-based compensation expense, which is a non-GAAP measure, for the nine months ended September 30, 2013, and the financial projection of loss from operations, excluding share-based compensation expense, which is a non-GAAP measure, for the 2013 fiscal year.  Due to varying available valuation methodologies, subjective assumptions and the different GAAP accounting treatment of different award types that companies can use under ASC Topic 718, CTI's management believes that providing a non-GAAP financial measure that excludes share-based compensation can enhance management's and investors' comparison of CTI's operating results over different periods of time as compared to the operating results of other companies.

Our use of a non-GAAP financial measure has limitations and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.  Our reported non-GAAP loss from operations results in the exclusion of a recurring expense, since share-based compensation will continue to be a significant recurring expense in CTI's business.  Second, our methodology for calculating non-GAAP loss from operations, which only excludes the component of share-based compensation, may differ from the methodology our peer companies utilize to the extent they report non-GAAP loss from operations or similarly titled measures and accordingly may not necessarily be comparable to similarly titled measures of other companies.  Investors are urged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of CTI's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

CTI has not included a reconciliation of our projected non-GAAP loss from operations to a projected GAAP loss from operations because the calculation of the excluded share-based compensation would require information that is presently uncertain, such as the future level of additional equity awards that will be granted to meet CTI's compensation philosophy and objectives after taking into account the economic climate at the time of grant.  In addition, the calculation is largely based on the price of CTI's stock at the time of the specific grants (as required under ASC Topic 718), which price is variable and therefore unknowable until the grant is made.  Because of the contingent nature of such factors, CTI believes that the specific adjustment for future share-based compensation cannot be forecast with accuracy.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such statements are subject to a number of risks and uncertainties, the outcome of which could materially and/or adversely affect actual future results and the trading price of CTI's securities.  Such statements include, but are not limited to, statements regarding CTI's expectations with respect to the development of CTI and its product and product candidate portfolio,  the enrollment for and timing of the PERSIST-2 trial of pacritinib, and CTI's financial guidance for 2013.  Risks that contribute to the uncertain nature of the forward-looking statements include, among others, risks associated with the biopharmaceutical industry in general and with CTI and its product and product candidate portfolio in particular including, among others, risks associated with the following: that CTI cannot predict or guarantee the pace or geography of enrollment of its clinical trials; that CTI cannot predict or guarantee the outcome of preclinical and clinical studies; that CTI may not obtain reimbursement for PIXUVRI in certain markets in the E.U. as planned or at all; that the conditional marketing authorization for PIXUVRI may not be renewed or may be subject to additional conditions; that the PERSIST-2 trial of pacritinib will not occur as planned or at all; that CTI may not obtain favorable determinations by other regulatory, patent and administrative governmental authorities; that CTI may experience delays in the commencement of preclinical and clinical studies; risks related to the costs of developing, producing and selling PIXUVRI, pacritinib, and CTI's other product candidates; and other risks, including, without limitation, competitive factors, technological developments,  that CTI's operating expenses continue to exceed its net revenues, that CTI may not be able to sustain its current cost controls or further reduce its operating expenses, that CTI may not achieve previously announced goals and objectives as or when projected, that CTI's average net operating burn rate may increase, that CTI will continue to need to raise capital to fund its operating expenses, but may not be able to raise sufficient amounts to fund its continued operation, as well as other risks listed or described from time to time in CTI's most recent filings with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K.  Except as required by law, CTI does not intend to update any of the statements in this press release upon further developments.

PIXUVRI is a registered trademark of Cell Therapeutics, Inc.

Contacts:

Monique Greer
+1 206-272-4343
mgreer@ctiseattle.com

Ed Bell
+1 206-282-7100
ebell@ctiseattle.com

In Europe:

CTI Life Sciences Limited, Milan Branch
Laura Villa
+39 02 89659706
lvilla@cti-lifesciences.com
CTI_EUInvestors@CTI-Lifesciences.com

 

Cell Therapeutics, Inc.













Condensed Consolidated Statements of Operations

(In thousands, except for per share amounts)

(unaudited)

















Three Months Ended



Nine Months Ended





September 30,



September 30,





2013


2012



2013


2012

Revenues:











Product sales, net


$        362


$            -



$            1,794


$                   -



Total revenues


362


-



1,794


-

Operating costs and expenses:











Cost of product sold


13


-



104


-


Research and development


7,245


6,951



23,620


24,080


Selling, general and administrative


8,529


7,763



29,774


29,024


Acquired in-process research and development


-


-



-


29,108


Settlement expense


155


435



155


435



Total operating costs and expenses


15,942


15,149



53,653


82,647

Loss from operations


(15,580)


(15,149)



(51,859)


(82,647)

Other income (expense):











Investment and other income (expense), net


(173)


(270)



(433)


(179)


Interest expense


(316)


(43)



(680)


(51)


Amortization of debt discount and issuance costs


(162)


-



(349)


-


Foreign exchange gain (loss)


547


216



(199)


(96)

Net loss before noncontrolling interest


(15,684)


(15,246)



(53,520)


(82,973)


Noncontrolling interest


140


57



581


200

Net loss attributable to CTI


(15,544)


(15,189)



(52,939)


(82,773)


Deemed dividends on preferred stock


(6,900)


(5,014)



(6,900)


(13,472)

Net loss attributable to CTI common shareholders


$ (22,444)


$ (20,203)



$        (59,839)


$        (96,245)

Basic and diluted net loss per common share 


$     (0.20)


$     (0.38)



$            (0.55)


$            (2.12)

Shares used in calculation of basic and diluted net loss per common share


110,996


52,921



108,489


45,442













Balance Sheet Data (unaudited):







(amounts in thousands)






















September 30,


December 31,










2013


2012













Cash and cash equivalents 







$         27,176


$         50,436

Working capital







13,217


37,644

Total assets







47,239


73,713

Current portion of long-term debt







1,216


-

Long-term debt, less current portion







7,126


-

Total shareholders' equity







387


32,944

 

Non-GAAP Reconciliation

(In thousands)

(unaudited)




Nine Months Ended September 30,


2013

As reported - loss from operations (GAAP)

$                                               (51,859)

As reported - share-based compensation expense (GAAP)

$                                                   6,324

As adjusted - loss from operations (Non-GAAP)

$                                               (45,535)

SOURCE Cell Therapeutics, Inc.



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