Don't let it get away!
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There are Hail Mary passes thrown from midfield, and ones from deep in your own end. And then there's the one that Cell Therapeutics (Nasdaq: CTIC ) launched yesterday from the parking lot outside the stadium.
The biotech company announced yesterday that it's appealing the Food and Drug Administration's ruling that it needs to run an additional clinical trial before it can get its cancer drug, pixantrone, approved. The company expects a decision on the appeal in the fourth quarter.
To whom does Cell Therapeutics get to appeal? Some court? No. The president? Nope. The appeal goes directly back to the FDA. Essentially, the company needs to get the agency to do a 180 and decide it made a mistake in asking for more data. Good luck with that.
Like any desperate move, there's always a chance of it working. But I only know of one company that managed to get the FDA to reverse its decision: Gilead Sciences (Nasdaq: GILD ) convinced the agency to approve Cayston, an inhaled drug to treat lung infections in cystic fibrosis patients, after it had initially rejected the drug.
The difference is that Cayston received a positive recommendation from an FDA advisory committee. Here, an advisory panel voted 9-0 recommending that the agency not approve pixantrone. Clearing those stadium walls will be difficult.
In some ways, Cell Therapeutics has nothing to lose, especially if it's running the clinical trial concurrently with the appeal review. But it does run the danger of upsetting the FDA staffers, who probably don't appreciate having their scientific aptitude questioned.
Wyeth, just before Pfizer (NYSE: PFE ) bought it, and sanofi-aventis (NYSE: SNY ) both ran into similarly awkward situations when they sued the FDA to get the agency to reverse its decisions to approve generic versions of their drugs. The loss of sales because of competition from generics developed by Orchid Chemicals & Pharmaceuticals, Momenta Pharmaceuticals (Nasdaq: MNTA ) , and Novartis (NYSE: NVS ) forced the lawsuits, but one wonders what kind of long-term consequences they'll have for the pharma giants.
After accounting for recent debt repayments and equity financing, Cell Therapeutics has about $29.3 million in the bank, minus whatever money it has used since the end of the second quarter and $21 million in debt due next year. If Cell Therapeutics can't get new funding soon, long-term consequences may be the least of its worries; time on the clock looks to be running out.
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