Speculation on the upcoming pixantrone decision Print E-mail
By Vinny Cassano   
Tuesday, 26 January 2010 08:07

BiomedReports contributor Vinny Cassano is asked about Cell Therapeutics, Inc. (NasdaqCM: CTIC) and the recent dta they released on pixantrone.

 


Letter: Though I might not completely agree with all of the points, I respect that you have an independent opinion - which is more than I can say of 90% of the population around me.

I'd like to know your thoughts on CTIC. They obviously have a wealth of info in the form of posters and other material from their trials of pixantrone here:
http://www.celltherapeutics.com/investor_updates

The stock has dropped a bit and is in the buy range right now, in my honest opinion. What is your commentary and objective analysis of the data presented? Do you believe that the data is compelling enough for the FDA to give a positive review come the April 23 PDUFA date?

BTW, I have followed your posts on CVM and BIEL. I made some money on CVM and lost some on BIEL. Now, I am out of these two stocks completely as I felt like I was getting into a case of investor bias with these two. Besides, I had a bad experience with CVM's investor relations not so much as acknowledging my query to them. Granted I'm no Warren Buffett plonking a million bucks down, but that's just unprofessional. Then again, some will argue that they are very busy and don't have time to reply to individual investors. At the very least they could have an auto-reply with some generic text!

Anyway, back to the topic of the email - what is your analysis of the data presented on pixantrone?




Vinny's Take: Thanks for reading and thanks for the email.

I agree that CTIC has dipped down into the buy range for those that are willing to speculate on the upcoming pixantrone decision, but with a market cap already of over six hundred million, I'm wondering how much further the stock price could rise in anticipation of the April 23rd date - although we may have a better idea of what the stock will do after an FDA advisory committee reviews the pixantrone application on February 10th.

In my opinion, pixantrone has a decent shot of approval based on the trial results (keep in mind that I'm no Doctor) and the fact that the drug would treat an unmet need, but the FDA is a bureaucratic bunch and it's just as likely that the agency could ask for more information - in my opinion.

If I were to invest in the stock now, I'd try and sell some shares into any spike leading into the advisory meeting - and then again leading into the April 23rd date - in order to reduce the overall risk of the investment because if an 'approvable' or 'non-approvable' letter were to be the FDA's response, then I think that a drop to fifty cents would be likely. That said, I think that it's highly unlikely that CTIC will receive a response of 'non-approvable'.

Additionally, the timing of the company's recent fund-raising would not indicate that the head brass is wholly confident in approval, although that deal could have already been in the works for some time and the timing could be a non-factor. It does raise some eyebrows, however.

I like the speculative aspect of a CTIC buy at this price, but I would definitely try and take advantage of any volatility and attempt to end up at least close to house money by April.

As for your investments in CVM and BIEL, I respect that you jumped out when you thought you were looking at the company through biased-glasses, I don't support anyone staying in an investment where they lose track of the entry/exit strategy.

I wouldn't put too much credence in the lack of a response from investor relations, however. I know that some people do, but in my experience it's been more the norm to not here back from IR departments - especially when dealing with highly speculative biotech companies - and I consider it a non-factor to not hear back from small investor inquiries, but I will consider a plus for the company if they do respond.

I think that if that is a criteria for investing in a company then some money-making opportunities will be missed. For instance, I attempted to contact Titan Pharmaceuticals (TTNP) on numerous occasions early last year when the stock was dropping to around a penny, but when I never heard back I just relied on my own DD. I ended up riding that one to its current levels of about $2.25.

In the case of CVM, the Cel Sci IR department has also had to deal with a plethora of calls regarding false innuendos that have been thrown out there by certain entities which takes away from the small investor looking to get a valid question answered.

I feel your concerns, but I wouldn't necessarily jump ship just for not hearing back from IR. To be honest, you'll never hear anything from IR that is not already public information, so for that reason I rarely work contacting IR into my strategy for conducting DD.

Disclosure: No Positions




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