Filed pursuant to Rule 425
Filed by Cell Therapeutics, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
And deemed filed pursuant Rule 14a-12
Of the Securities Exchange Act of 1934
Subject Company: Cell Therapeutics, Inc.
Commission File No.: 001-12465
 

 

 

 

 

CTI-Novuspharma Merger

 

 

 

June 17, 2003

 

 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

 

This presentation contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this presentation include statements about future financial and operating results and the proposed CTI/Novuspharma merger. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. For example, if either of the companies do not receive required stockholder approvals or fail to satisfy other conditions to closing, the transaction will not be consummated. In any forward-looking statement in which CTI expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the risk that the CTI and Novuspharma businesses will not be integrated successfully; costs related to the proposed merger, failure of the CTI or Novuspharma stockholders to approve the proposed merger; and other economic, business, competitive, and/or regulatory factors affecting CTI’s and Novuspharma’s businesses generally, including those set forth in CTI’s filings with the SEC, including its Annual Report on Form 10-K for its most recent fiscal year and its most recent Quarterly Report on Form 10-Q, especially in the “Factors Affecting Our Operating Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections, and its Current Reports on Form 8-K. CTI is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

 

 

WHERE YOU CAN FIND ADDITIONAL INFORMATION:

 

Cell Therapeutics, Inc. (CTI) will file a proxy statement/prospectus and other documents concerning the proposed merger transaction with the Securities and Exchange Commission (SEC). Investors and security holders are urged to read the proxy statement/prospectus when it becomes available and other relevant documents filed with the SEC because they will contain important information. Security holders may obtain a free copy of the proxy statement/prospects (when it is available) and other documents filed by CTI with the SEC at the SEC’s website at http://www.sec.gov. The proxy statement/prospectus and these other documents may also be obtained for free from CTI, Investor Relations: 501 Elliott Avenue West, Suite 400 Seattle, WA 98119, www.cticseattle.com.

CTI and Novuspharma S.p.A. and their respective directors and executive officers and other members of their management and their employees may be deemed to be participants in the solicitation of proxies from the shareholders of CTI and Novuspharma with respect to the transactions contemplated by the merger agreement. Information about the directors and officers of CTI is included in CTI’s Proxy Statement for its 2003 Annual Meeting of Stockholders filed with the SEC on May 14, 2003.

This document is available free of charge at the SEC’s website at http://www.sec.gov and from CTI.

 

 

Strategic Rationale
Immediate Realizable Synergies

 
  Greater revenue growth potential    
    TRISENOX® gaining hematology market share MARKETED  
    XYOTAX™ in pivotal trials for lung cancer LAUNCH 2005  
    Pixantrone in pivotal trials for NHL LAUNCH 2006  
    Targeting profitability in 2005    
           
  Strong combined balance sheet    
    $230 million proforma end Q1, 2003    
           
  Significant cost savings    
    $18-$20 million annual operating synergies    
           
  Strengthened oncology drug development expertise    
           
  Global access to patients, physicians and capital markets  
           
           
           
           

 

Overview of CTI

 
  TRISENOX®: approved in US and EU for APL  
    100%CAGR expected through 2004  
    Potential to capture significant share of hematologic malignancy market (MDS, MM)  
    $150 million US sales potential  
         
  XYOTAX™: safer, potentially more effective paclitaxel in pivotal trials for non-small cell lung and ovarian cancers  
         
  CT-2106 (PG-CPT): safer, potentially more effective camptothecin in phase I  
         
  Balance sheet: ~$111 million cash as of 3/31/03  
         
  Research coverage  
    CIBC World Markets, Lehman Bros., Piper Jaffray, Wells Fargo, Punk Ziegel, Delafield Hambrecht  
         
         
         

 

Overview of
Novuspharma S.p.A.

 
  Pixantrone potential “best in class” safer, more effective anthracycline in pivotal trials for NHL  
         
  Strong balance sheet: ~$120 million cash as of 3/31/03  
         
  Former oncology drug development arm of Boehringer Mannheim, part of Hoffman La Roche  
    Expertise in pre-development, pharmacology, CMC, Phase I-II  
         
  Research coverage: Lehman Bros., SG Cowen, Banca IMI, Caboto  
         
         
         
         

 

Timing

 
  Unanimous approval of both Boards  
         
  Subject to Novuspharma and CTI shareholder approval  
         
  Subject to approval of CTI’s application to list its shares on the Nuovo Mercato  
         
  Merger expected to close Q4  
         
  Integration plan & team established  
    $18-20 million full year of cost savings expected in 2004  
         
  Year end combined cash position forecasted at $160M  
         
         
         
         

 

Specifics of Agreement

 
  CTI to issue 16 million shares of CTIC to Novuspharma shareholders  
    Fixed exchange ratio 2.45  
    Transaction value ~$235 million  
    Dual listing on NASDAQ and Nuovo Mercato  
         
  Novuspharma to have two seats on board with a third independent director to be nominated prior to closing  
         
  Silvano Spinelli, CEO of Novuspharma to join CTI’s management team in following roles  
    EVP, Development at CTI  
    Managing Director, CTI’s European subsidiary in Bresso  
         
         
         
         

 

Company Profiles

 
   

CTI

Novuspharma

 

Therapeutic focus

Cancer

Cancer

Key Products

Marketed

TRISENOX®

--

Phase III

XYOTAX™

Pixantrone

Phase I/II

CT-2106 (polyglutamate camptothecin)

MT-201, BBR3576

Core competencies

Sales & Marketing, Phase II/III, Target discovery & validation

Preclinical (in vivo, PK/PD), CMC (analytical), Phase I-II

Head count

288

85

Facilities

170,000 sq ft (Seattle)

75,000 sq ft (Milan)

Balance sheet 3/31/03

$111 million

$120 million*

     
  *Converted to US dollars; exchange rate 1.18  
     
     

 

Merged Company

 
   

Therapeutic focus

Cancer

Key Products

Marketed

TRISENOX®

Phase III

XYOTAX™, Pixantrone

Phase I/II

CT-2106, MT-201, BBR3576

Core competencies

Fully integrated capabilities from target discovery through commercialization

Head count

~320

Facilities

250,000 sq ft (Seattle-Milan)

Balance sheet (3/31/03)

~$230 million*
     
  *Converted to US dollars; exchange rate 1.18  
     
     

 

Operating Synergies

 
  Center of excellence – Milan  
         
    Medicinal chemistry, lead optimization  
    Preclinical models, toxicology-ADME, analytical development, pharmacology  
    Clinical trials material production  
    PK/PD testing in Phase I  
    EU pharmacovigilance, QA/QC  
    European clinical development  
         
         

 

Operating Synergies

 
  Corporate Headquarters – Seattle  
         
    Target discovery/validation  
         
    Clinical Development  
      Phase I-III  
      Drug Regulatory Affairs  
      Drug Safety & Surveillance  
         
    Sales & Marketing  
           
           

 

Portfolio Synergies

 
   

Key Products

Hematology

Solid Tumors

TRISENOX®

Leukemia, CML MDS,
Multiple myeloma

Pixantrone

Aggressive NHL
Indolent NHL

Breast cancer
Prostate cancer

XYOTAX™

 

NSC Lung cancer
Ovarian cancer

CT-2106

 

Colorectal cancer
Small cell lung cancer

     
     
     

 

Pixantrone
Product Summary

 
  Long lasting complete/partial responses in heavily treated NHL patients as single agent  
    Synergistic with combination therapy (Rituxan®)  
         
  Cardiac toxicity profile superior to existing agents  
         
  Convenience of eliminating central line  
         
  Reduces need for expensive anti-emetics  
         
  Initial market entry into area of high unmet need  
         
         

 

Pixantrone
Clinical Summary

 
  Extensive experience in >170 patients  
    7 phase I, II trials  
       
  Highly active in combination regimens for relapsed/refractory NHL replacing doxorubicin  
    CHOP n=17  
    13 patients evaluable; 6CRs/1PR  
    ESHAP n=21  
    19 pts evaluable; 7CRs/4PRs  
       
  Highly active in relapsed/refractory indolent NHL  
    FND-R n=9  
    6 patients evaluable; 5CRs/1PR  
           
           

 

Pixantrone
Impressive Single Agent Activity in
Relapsed/Resistant Aggressive NHL

 
   

Patient

NHL

Status

Prior Rx
mg/m2

Resistant
Prior RX

Respnse
(Pix dose)

Duration
(mos)

M-80

DLC

1st Rel

Dx380

Yes

uPR(650)

NA

F-79

DLC

2nd Rel

Dx400

Yes

CR(1530)

17

F-65

DLC

2nd Rel

Dx400

Yes

CR(1530)

4

M-65

DLC

3rd Rel

Dx250

No

uPR(1190)

NA

M-72

DLC

3rd Rel

Dx400

No

PR(1530)

6.5

M-66

tFoll

5th Rel

Dx240/
Mtx50

No

PR(1360)

17+

F-65

Mant

2nd Rel

Dx300

Yes

CR(1060)

 12.5

M-65

DLC

2nd Rel

Dx300

No

uPR(1020)

NA
     
     
     

 

Pixantrone
Impressive Single Agent Activity in
Relapsed/Resistant Aggressive NHL

 
   

Patient

NHL

Status

Prior Rx
mg/m2

Resistant
Prior RX

Response
(Pix dose)

Duration
(mos)

F-72

DLC

4th Rel

Dx300

Yes

PR(1020)

5

F-41

Mcy

3rd Rel

Dx300

No

CR(1241)

7

F-60

DLC

3rd Rel

Dx400

Yes

PR(1020)

NA

M-78

Mant

2nd Rel

None

Yes

uPR(1020)

NA

F-55

DLC

1st Rel

Dx300

No

CR(1326)

12

M-66

DLC

2nd Rel

Dx

Yes

uPR(425)

1

     
     
     

 

Pixantrone
Impressive Single Agent Activity in
Relapsed/Resistant Aggressive NHL

 
  High response rates in relapsed/resistant aggressive NHL  
    ORR= >30% (7CRs/5PRs + 5uPR’s)  
    Durable responses: TTP >8 months for responders  
     
  Well tolerated  
    Grade 4 neutropenia 13/33 (40%)  
    Grade 4 anemia/thrombocytopenia 0-1/33 (<3%)  
     
  28/33 (85%) had maximum prior anthracycline exposure  
     
  14/33 (42%) received >1,000-1500mg/m2 Pixantrone  
     
  Encouraging low incidence of cardiac events despite prior anthracycline exposure  
         
         

 

Pixantrone
U.S. Registration Strategy

 
  New strategy for registration in U.S.  
  Pivotal trial in 3rd line aggressive NHL  
    Compelling phase II clinical data  
    High unmet need—qualifies for fast track  
    No approved agents—non-randomized single open
label trial ~120 pts		  
    Enrollment completion late 2004  
    NDA target Q4 2005  
    Potential launch 2006  
         
  Phase III in relapsed indolent NHL ± rituximab
to provide market penetration support 		 
         
         

 

Pixantrone
U.S. Market Potential

 
  Anthracyclines  
    Standard of care  
      Front line and relapsed aggressive NHL (CHOP)  
      Front line for acute myeloid leukemias  
      Front line breast cancer, relapsed HR prostate cancer  
           
    $500+ million in annual sales  
    Market leaders  
      Doxorubicin (US)  
      Epirubicin (EU)  
           
    Major limitation—life time cardiac toxicity threshold
 
           
           

 

Pixantrone
U.S. Market Potential Survey

 
  If approved in 3rd line aggressive NHL  
    100% would use it in 2nd & 3rd line  
    50% would replace doxorubicin in 1st line for aggressive especially high cardiac risk patients  
    >50% would use it in 2nd and 3rd line indolent  
    Zevalin™ and Bexxar® would be used after Pixantrone due to difficulty with nuclear medicine scheduling issues  
    With supportive data in clinical trials could move into breast and prostate cancers  
       
  Base case forecast $150 million peak U.S. sales  
         
         
         
         

 

TRISENOX®

 
  Product approved U.S. and EU  
         
  100% CAGR forecasted through 2003  
         
  $150+ million peak U.S. sales potential  
         
  Compelling efficacy in hematologic cancers (APL, MM, MDS)  
         
  Gaining US market share  
         
  EU penetration limited to initial label (APL)  
         
  Potential for MDS filing in 2004 allows for re-evaluation of
EU commercial potential and strategy 		 
         
         
         
         
         

 

TRISENOX®
Impressive efficacy data in hematologic cancers

 
  Myelodysplasia (120 patients)  
         
  Decreases or eliminates RBC and platelet transfusion independence  
    80% of responding patients became transfusion independent lasting up to 2 yrs  
         
  32% objective responses including high risk patients  
         
  Well tolerated, no dose reductions required  
         
  Projected sNDA and sMAA filing in both EU and US in 2004  
         
  Multiple myeloma (86 patients)  
         
  High response rates in combination with vitamin C  
    40% objective responses  
    100% improvement in kidney function  
         
  Well tolerated, manageable side effects  
         
  Reported at conferences in May, 2003  
         

 

TRISENOX®
Sales revenues & forecasts

 
 
 
     
 
Source for 2003, 2004 estimates: CIBC World Markets
 
     

 

XYOTAX™
Safer, potentially more effective taxane

 
  Novel, patented polyglutamate polymer technology links
paclitaxel to a “digestible” polymer		  
         
  Polymer bound paclitaxel accumulates preferentially in
tumor blood vessels 		 
         
  Allows the chemotherapy to enter cancer cells through a
different mechanism than standard paclitaxel		  
         
  Selectively releases chemotherapy in tumor  
         
  A new chemical entity; not a reformulation  
         
  Patent protection through 2017  
         
         
         

 

XYOTAX™
Target Product Profile

 
 
XYOTAX™
Paclitaxel
Docetaxel
 
  Premedications
No
Yes
Yes
 
  Special Infusion kits
No
Yes
Yes
 
  Infusion time
10 mins
3 hrs
1 hr
 
  Hair Loss
No
Yes
Yes
 
  Lung Toxicity
No
No
Yes
 
  Neuropathy
Infrequent
Frequent
Infrequent
 
  Tolerability
Excellent
Fair
Fair
 
  Efficacy Superior — —  
           

 

XYOTAX™

 
  Designated fast track by FDA  
    “PS2 NSC lung cancer is incurable and current treatments offer modest benefit”  
    “XYOTAX has the potential to demonstrate improvement over available therapy in these patients based on anti-tumor activity reported in phase I and phase II clinical trials”  
         
  FDA approved Phase III program in NSC lung cancer to demonstrate superior survival  
    Front line therapy in PS2  
    Second line treatment  
       
  Gynecologic Oncology Group to run phase III in
ovarian cancer		  
    Front line therapy  
         
         

 

Phase II XYOTAX™
Front Line PS2 NSC Lung Cancer

 
  PS2 accounts for 25% of 170,000 patients with NSC lung
cancer (most are elderly)		  
         
  Current treatments are poorly tolerated (median 2 doses)  
         
  Disease progresses rapidly  
    Median 6 weeks  
    Median survival poor (2.4 – 3.9 months)*  
         
  High unmet need—potential accelerated regulatory review  
         
  Phase II XYOTAX™ clinical data supports phase III investigation  
         
  Principle investigators on Phase III program are key opinion leaders of major cooperative groups (CALGB, ECOG, SWOG)  
         
         
    *Single agent v. combination therapy respectively  
       
       

 

Phase II XYOTAX™
NSC Lung Cancer

 


Efficacy (PS2)
Objective
Response
Rate

Median # of
Doses
Time to
Progression
(months)

Survival
(months)
 

XYOTAX™
(175 mg/m2)*

~10%

4

2.6

³5.4

  
    Toxicities (Grade 3 / 4)      
    Highest (Grade 4) 10%    
    Neutropenia   4%    
    Neuropathy/Fatigue   7%    
             
 
Efficacy (PS2)
         
 

Paclitaxel
(225 mg/m2)**

~10%

2

1.5

2.4

  
    Toxicities (Grade 3 / 4)***      
    Highest (Grade 4)   53%    
    Neutropenia   63%    
    Neuropathy/Fatigue >10%    
             
  *ASCO 2003 poster
** ASCO 2002 presentation, R.C. Lilenbaum
*** Paclitaxel/carboplatin regimen, NEJM Vol 346, No. 2, June 10, 2002		    
             
             

XYOTAX Phase III NSC Lung Cancer
STELLAR 2-3-4 trials

 
    STELLAR 2   STELLAR 4  
      Second line therapy     Front line PS2 XYOTAX™ v.  
    XYOTAX™ v. docetaxel     gemcitabine or vinorelbine  
    840 patients   370 patients  
    Target enrollment-
end Q2-2004		   Target enrollment-
end Q1-2004		  
                   
  STELLAR 3        
    Front line PS2
XYOTAX™/platinum v.
paclitaxel/platinum 		ENDPOINTS on all trials–
      Superior Survival		  
    370 patients    
    Target enrollment-
end Q4-2003		      
                   
                   

 

XYOTAX™ for Ovarian Cancer
Phase I-II Summary Efficacy

 
  XYOTAX™ (175mg/m2) (n=91, Salvage^)  
   
Platinum Sensitive
Platinum Resistant
 
 
 
  CR/PR
5/18 (28%)
3/20 (15%)
 
  SD
5/18 (28%)
4/20 (20%)
 
         
  XYOTAX™* + cisplatin (75mg/m2) (n=12) *175,210,225,250 mg/m2
^ patients with 2 prior regimens
Results reported at 2002 EORTC Meeting
 
   

Platinum Sensitive/ Resistant
 
 
 
  PR
5 (42%)
 
  SD
5 (42%)
 
       
     
         
         

 

Phase II XYOTAX™
Salvage Ovarian Cancer

 
 
XYOTAX™***
Taxol®*
Doxil®**
Topotecan**
 
 
 
  Efficacy
28%
15%
28%
28%
 
  Response rate
 
             
  Side Effects
 
  Neutropenia
2%
65%
12%
77%
 
  Neuropathy
10%
21%
N/A
N/A
 
  Skin toxicity
0%
0%
23%
0%
 
  Hair loss
0%
87%
16%
49%
 
  Dose reduction
1%
N/A
57%
78%
 
             
  * Taxol® package insert, 2nd line data ovarian cancer, 3hr infusion
** J Clin Oncology 2001, Randomized trial Doxil® v. Topotecan in 2nd line ovarian cancer
*** Third-line treatment 		 

 

XYOTAX Phase III Ovarian Cancer
Gynecologic Oncology Group Trial

 
  Front Line Ovarian Cancer  
    XYOTAX™/platinum v. paclitaxel/platinum  
    Conducted by 200+ GOG centers in US  
    1200 patients (12 months enrollment)  
    Start late 2004  
    Endpoint: non inferior PFS, Superior side effect profile  
         
         
         
         

XYOTAX™
Why Novuspharma?

 
  Economically superior  
    $120M in cash  
    $18M-$20M in cost savings  
    Contributes additional phase III $150M+ product  
    Critical mass in “global” oncology drug development  
    Increases commercial capabilities in EU for expanded TRISENOX® label and sales potential  
         
  FDA’s XYOTAX™ fast track designation significant validating value driver  
       
  Retention of WW (excluding Asia) rights critical among the potential multi-national pharma companies  
       
  Allows the Company to re-evaluate prior interest in focusing solely on ex-US partner for XYOTAX™ and turn attention to more global strategic relationship  
         
         

 

Portfolio Synergies
Summary

 
  TRISENOX®  
    EU sales driven by product label indications  
      Potential MDS label expansion makes ex-US commercial prospect attractive  
      Expanded label has attracted interest among several pharma companies for co-promotional relationship  
      Investment in EU commercial presence would maximize WW revenue potential  
           
  XYOTAX™  
    Stronger EU presence to allow more efficient pivotal trial management  
      35-40% of phase III enrollment in the EU  
      Transaction allows CTI to retain WW rights and explore growing interest for potential “global” partnership  
           
           
           

 

Portfolio Synergies
Summary

 
  Pixantrone  
    Strong US hematology presence will facilitate clinical and regulatory development  
    Same customer base as TRISENOX® provides sales and marketing efficiencies  
         
  CT-2106  
    Enhances access to clinical sites in EU to expedite phase II trials  
    Provides cost synergies for required preclinical, manufacturing activites  
         
  Preclinical targets  
    HIF-1a and LPAAT promising novel targets  
         
  Remaining product programs with greatest commercial potential will be reviewed and prioritized