Cell Therapeutics Offers Preferred Stock

Biotechnology company Cell Therapeutics Inc. said Friday it will offer $6.5 million of its preferred stock and warrants to several institutional investors and will use the proceeds to close the buyout of Zevalin from Biogen Idec Inc.

The company announced its buyout of U.S. marketing, sales and development rights for the cancer therapy in August. It will pay Biogen $10 million up front and as much as $20 million more in milestone payments.

Specifically, Cell Therapeutics is offering its 7 percent convertible preferred stock and warrants. It will sell Series D convertible preferred stock at the price of $1,000 per share. The preferred stock will be convertible to common stock at a conversion price of $2.6125 per share on Monday.

The buyers will also receive warrants to purchase common stock in an amount equal to 50 percent of their total investment dividend, divided by $2.6125. The warrants will have an exercise price of $2.55 per share, equal to Cell Therapeutics' closing stock price on Thursday. The warrants will not be exercisable until six months after the offering closes.

The stock offering is expected to close Monday. Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group Inc., is the placement agent for the offering.