Zacks_Analysts' Blog : CTIC Initiates Opaxio Trial - Analyst Blog

Cell Therapeutics Inc. (CTIC) recently announced initiation of a mid-stage study (n=60) comparing Cell Therapeutics’ pipeline candidate Opaxio and radiotherapy (RT) to temozolomide (standard of care) and RT in patients with newly diagnosed glioblastoma, a high-grade malignant brain tumor.

The study aims to show if the combination of Opaxio and RT can improve progression free survival and overall survival in these patients as compared to temozolomide and RT. If successful, results from the study are expected to be used to plan a late-stage study of Opaxio in combination with standard radiation therapy for the approval of the candidate for the said indication.

The trial was initiated on the basis of positive data reported from another trial in June 2011 at the American Society of Clinical Oncology (ASCO) meeting. The company presented data from a mid-stage trial in patients with glioblastoma which showed that Opaxio in combination with temozolomide (standard of care) and RT resulted in encouraging progression free survival.

Opaxio is Cell Therapeutics’ second most advanced pipeline candidate after pixantrone. Opaxio is also under late-stage development for the treatment of ovarian cancer and in mid-stage trials for esophageal cancer. The company entered into a global licensing deal with Novartis (NVS) in September 2006 for Opaxio. The company will receive substantial milestone and royalty payments from Novartis once the drug is approved.

Our Recommendation

We currently have a Neutral recommendation on Cell Therapeutics. The stock carries a Zacks #4 Rank (short-term “Sell” rating).

We believe the uncertainty surrounding the approval of Cell Therapeutics’ lead pipeline candidate pixantrone for aggressive non-Hodgkin's lymphoma (NHL) in the US has eased following the opportunity given by the FDA to resubmit the new drug application. However, we prefer to remain on the sidelines given that Cell Therapeutics is overly dependent on the approval of pixantrone. Therefore, any delay in gaining approval would be a major blow for the company.