I just don't get Cell Therapeutics
But then Cell Therapeutics issues a press release yesterday saying the company has "identified a potential acquisition opportunity that is a phase II drug candidate." Really? Does the company need a backup for pixantrone that badly?
And what's the point of spouting off that you've identified a potential acquisition target. Cell Therapeutics mentions that the target is in the field of cancer immunotherapy, seemingly trying to play off the success of Dendreon
How the heck is Cell Therapeutics going to pay for this drug? It's not as if the company is flush with cash. By my calculations, Cell Therapeutics has less than $50 million in its coffers right now. The company had $43.8 million at the end of last quarter, raised $16 million by selling stocks and warrants, and paid off $10.6 million of debt since then.
There's a possibility Cell Therapeutics might try to raise additional cash to pay for a drug, but I certainly hope not. The company recently performed a reverse stock split in order to get the share price above $1 -- thus the temporary ticker change from CTIC to CTICD -- but shares aren't that far from hitting that level again. Further dilution isn't advisable.
Cell Therapeutics could be the next Human Genome Sciences
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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Pfizer and Elan. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.