Cell Therapeutics, Inc. (CTI) Spin-off to Use Proprietary Recombinant Genetic Technology to Develop Novel Biopharmaceuticals, Follow-on Biologics and to Deliver siRNA

SEATTLE, Feb. 12: Cell Therapeutics, Inc. (CTI) (Nasdaq and MTAX: CTIC) today announced that it plans to form a new spin-off company, Aequus BioPharma, Inc. to develop a Genetic Polymer(TM) technology that was created at CTI to speed the manufacture, development and commercialization of novel biopharmaceuticals including follow-on biologics or so-called biosimilars.

"Pharmaceutical companies and regulatory agencies need to bring the cutting-edge benefits of biotech drugs to patients as quickly, safely and at the lowest cost possible," said CTI's President and CEO, James A. Bianco, M.D. "A key pitfall of protein therapeutics has been the relatively short plasma life of these types of drugs, which leads to the need for frequent injections and higher associated costs for therapies. Aequus BioPharma will utilize the Genetic Polymer technology, discovered at CTI, which we expect to extend the plasma half-life of therapeutic proteins and provide a potentially less expensive, streamlined development pathway for next generation biologics like Neulasta(R) or Aranesp(R)."

"In addition to its application in producing lower cost follow-on biologics, we believe this recombinant technology might be utilized to develop novel biologics and also deliver small inhibitors of RNA (siRNA), to their cellular targets in a wide array of malignant, inflammatory, or infectious diseases. We have begun recruiting a scientific and management team, including former members of the Immunex-Enbrel management team, that will have the requisite experience in protein therapeutic development and will take the lead on this new venture to speed follow-on biologics to market and patients," noted Bianco.

The Genetic Polymer technology can be used with multiple molecules, which may eliminate the need to develop individualized technology for extending the plasma half-life of each biopharmaceutical.

The Genetic Polymer technology is a recombinant DNA process that ligates a secretion sequence with a biologically active protein sequence and a poly-amino acid sequence resulting in a novel, unique and patentable gene. CTI believes that expression in traditional mammalian cell systems will allow for the production of a biologic protein with prolonged plasma half-life, but without the requirement for further chemical modifications subsequent to protein expression, thus potentially speeding the manufacturing process and lowering the cost of goods.

The Company believes this proprietary recombinant Genetic Polymer technology creates novel compositions of matter and will allow for the manufacture and sale of protein biologics like G-CSF or EPO without infringing on the patents of other companies with competing technologies as well as allowing for more convenient dosing. CTI believes it has demonstrated a preliminary proof of principle of the Genetic Polymer technology and Aequus BioPharma is anticipated to generate additional experimental data to validate the technology. The first biologics the Company plans to move into preclinical study include a novel, long-acting G-CSF and EPO biosimilar.

Bianco will discuss in further detail during a presentation at the BIO CEO & Investor conference on Tuesday, February 13 at 10:30 a.m. EST. The live webcast of the presentation can be accessed on the CTI web site at www.cticseattle.com/ and will also be available for replay.

About Biologics

Biologics, especially recombinant DNA (rDNA) derived protein biopharmaceuticals, represent the fastest growing segment of pharmaceutical sales, currently at $51 billion worldwide and expected to hit $87 billion by 2010. Industrial scale protein production technologies are currently being applied to the development of a wide variety of protein-based therapeutics, including hormones, growth factors, antibodies and cytokine modulators, to treat a vast range of human diseases. But these drugs have a relatively short plasma half-life. As a result, several physical, genetic and chemical approaches have been developed to extend the plasma half life of the therapeutic proteins while not compromising efficacy or introducing safety issues (immunogenicity and other off-mechanism toxicities). The most successful of these approaches has been chemical conjugation with monomethoxypolyethylene glycol (PEG), amino acid engineering leading to altered protein glycosylation and the addition of non-biologically active "carrier" domains.

About Cell Therapeutics, Inc.

Headquartered in Seattle, CTI is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. For additional information, please visit www.cticseattle.com/.

Source: Cell Therapeutics, Inc.

CONTACT: Media: Dan Eramian, +1-206-272-4343, Cell: +1-206-854-1200, deramian@ctiseattle.com, or Susan Callahan, +1-206-272-4472,
Fax: +1-206-272-4434, media@ctiseattle.com, www.cticseattle.com/media.htm, or
Investors: Leah Grant, +1-206-282-7100, Fax: +1-206-272-4434, invest@ctiseattle.com, cticseattle.com/investors.htm, all of Cell Therapeutics, Inc.

Web site: www.cticseattle.com/

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