Cell Therapeutics’ (CTIC) second quarter 2010 net loss increased to $53.6 million or 8 cents per share from a loss of $27.4 million or 6 cents per share for the corresponding period in 2009. The wider loss in the reported quarter was primarily attributable to the presence of non-cash expenses, which included $30.2 million in deemed dividends on preferred stock and $7.6 million in stock-based compensation.
Excluding deemed dividends on preferred stock but including stock based compensation, loss at Cell Therapeutics came in at $23.5 million or approximately 4 cents per share as against $18.02 million or 4 cents per share in the year ago quarter. The Zacks Consensus Estimate was a loss of 2 cents for the quarter.
Net operating expenses during the reported quarter declined 8% year over year to approximately $20 million, driven by a 19% reduction in selling, general and administrative expenses and a 5.5% decline in research and development expenses.
Cell Therapeutics, which paid off all its convertible debt due in 2010 including accrued and unpaid interest on convertible senior notes, has only two convertible debt maturities pending in April and December 2011.
In another major development, the company submitted an expanded Pediatric Investigation Plan (PIP) to the European Medicines Agency (EMEA) earlier in the year for its lead candidate pixantrone. Pixantrone is being developed for the treatment of relapsed or refractory aggressive non-Hodgkin’s lymphoma (NHL) in patients who have not responded to other treatment options. The PIP provides the outline of the process the company intends to follow to study the drug in children.
The company intends to submit a Marketing Authorization Application (MAA) seeking marketing approval for pixantrone in the European Union in the second half of the year. Earlier in the year, pixantrone was denied approval by the US Food and Drug Administration (FDA), due to lack of sufficient clinical data. Following the denial, the company submitted a proposal for a new study for the candidate in aggressive NHL to the US agency earlier in the month. Furthermore, Cell Therapeutics recently inked a five-year manufacturing deal with Italian pharmaceutical manufacturing company NerPharMa, S.r.l. for pixantrone.
Cell Therapeutics is a Zacks #3 Rank (Hold) company, which indicates that the stock is expected to perform in line with the overall US equity market for the next 1–3 months. Our long-term Neutral stance on the company indicates that the stock is expected to replicate its short-term performance, but over 6+ months. Consequently, we advise the investors to retain the stock for the period.