Cell Therapeutics running out of cash

Cell Therapeutics said Monday it will need to raise money soon because its available cash won't last beyond September.

The Seattle biotech company had some $12.4 million in cash and easily accessible equivalents at the end of the last quarter.

But despite a $12 million equity credit line and an upcoming $22.5 million infusion from an institutional investor — part of a deal struck in July — "we obviously will need to raise additional capital in the near future," said Chief Executive James Bianco in a conference call.

The company, which had a net loss of $59 million in the second quarter, said in the filing that its financial situation "raises substantial doubt about our ability to continue as a going concern."

Cell Therapeutics, one of Seattle's oldest biotechnology companies, has burned through $1.2 billion in its pursuit of a blockbuster cancer drug. It is counting on expanding the market for Zevalin, a radio-immunotherapy drug it recently bought from Biogen Idec, to increase its sales revenue from $2.9 million last quarter.

It also has one drug awaiting approval in Europe and late-stage clinical results on another due later this year.

The company said it also aims to cut costs by spinning off some operations.

But the capital markets have been hard on Cell Therapeutics during the last year.

Its stock is worth 33 cents a share, down from a 52-week high of $4, and in April it received a warning letter from Nasdaq that it will be delisted unless its shares trade above a dollar again.

The company has said it plans to execute a reverse stock split in the near future.

"We've been trying to limit dilution by raising enough cash to get us through each quarter to allow us to get closer to some key pivotal regulatory and clinical milestones, where we anticipate the stock price will be more favorable than at present," said Bianco.

Cell Therapeutics also has some $240 million in obligations. The company has pushed back most of its debt, which is convertible into common stock, to 2010-2011, when it hopes to be in a "different situation," said spokesman Dan Eramian.

Over the next year, about $20 million in interest and lease payments are due, for which the company said it has already set aside $6.3 million in cash.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com