Zacks_Analysts' Blog : CTIC Upped to Outperform - Analyst Blog

We recently upgraded  Cell Therapeutics (CTIC) to Outperform from Neutral due to improved visibility on the approval of lead pipeline candidate pixantrone.

Pixantrone is being developed for the treatment of hematologic malignancies and solid tumors. Cell Therapeutics had studied pixantrone in relapsed, aggressive non-hodgkin's lymphoma (NHL), in patients who have not responded to other treatment options, in a late stage trial, PIX301.

The FDA had issued a complete response letter (CRL) in April 2010 to the original new drug application (NDA) for pixantrone based on concerns that PIX301 has not proved sufficiently the effectiveness of the drug. In December 2010, Cell Therapeutics filed an appeal against the decision of the FDA to deny approval to pixantrone. Cell Therapeutics met with the FDA’s Office of New Drugs (OND) in May 2011 which allowed it to re-submit the NDA for pixantrone without the need for an additional trial.

The OND recommended that Cell Therapeutics will have to conduct an additional independent radiologic review utilizing a new independent panel of radiologists of the PIX301 trial to determine the soundness of the primary endpoint. In late September 2011, the additional independent radiologic review of data from PIX301 by an independent panel of three radiologists confirmed the statistical significance of response and progression endpoints of the study.

The decision from OND has removed a major overhang for the company and revived the prospects of pixantrone. The company has been saved 2-3 years time by getting the opportunity to file on the basis of the original trial, PIX301, instead of the new trial PIX306.

With the positive developments following the second independent radiologic review of the original PIX301 trial, the company has moved closer to getting pixantrone approved. Cell Therapeutics is hoping to re-submit the NDA on the basis of results of the radiologic review in October 2011 and anticipates receiving approval in April 2012.

Moreover, pixantrone is also under review in Europe and is expected to be launched in the first half of 2012. Cell Therapeutics’ other pipeline drugs, Opaxio and tosedostat also focus on oncology.