Cell Therapeutics, Inc. Acquires New Form of Taxol.

SEATTLE--(BUSINESS WIRE)--July 17, 1998--

New Water Soluble Compound Shown to Have Fewer Side Effects,

Markedly Improve Anti-Tumor Activity, and Allow Significantly

Increased Maximum Tolerated Dosages (MTD) in Animal Models

Cell Therapeutics, Inc. (cti) (Nasdaq: CTIC) today announced that it has licensed the rights to polyglutamic acid paclitaxel (PG-TXL), a water soluble form of Bristol-Myers Squibb's well known cancer drug, Taxol(R) (paclitaxel).

Designed by a team of scientists at The University of Texas M.D. Anderson Cancer Center, the new compound chemically binds native paclitaxel to a polymer of glutamic acid. In a recent paper published in Cancer Research, the journal of the American Association for Cancer Research, PG-TXL significantly delayed tumor growth in ovarian and breast cancer animal models, when compared with similar doses of Taxol, the only currently available form of paclitaxel. When PG-TXL was administered at higher doses, complete tumor regressions and cures were observed in both ovarian and breast cancer models. In preclinical animal testing, the new compound, PG-TXL, allowed a 100-percent increase in the MTD of paclitaxel.

James A. Bianco, M.D., president and chief executive officer of cti, said "We are very excited by the preclinical data on this new compound. PG-TXL could be one of the most promising new drug developments for cancer patients in recent years. It is a unique opportunity to take a proven-effective cancer product like paclitaxel and make major improvements in effectiveness and safety."

The effort to develop water soluble paclitaxel was led by Dr. Sidney Wallace, professor emeritus and former deputy division head for research, Division of Diagnostic Imaging, and Dr. Chun Li, polymer chemist and assistant professor, M. D. Anderson Cancer Center. Dr. Wallace's research grew out of personal experience when a close relative with cancer was unable to tolerate her infused Taxol regimen.

"PG-TXL may help cancer patients in a number of promising ways," Dr. Wallace noted. "Unlike Taxol, it may be administered in minutes rather than hours, has significantly enhanced tumor-fighting capabilities, and can be tolerated at twice current Taxol dosage levels. This should afford cancer patients more of a fighting chance to overcome their illness with a treatment regimen that is more comfortable to administer and can be more easily tolerated."

"Notably, our polymer technology may be applicable to other cancer fighting drugs and may serve as a platform for making other chemotherapy agents less toxic and more effective," Dr. Wallace added.

"This acquisition is part of cti's ongoing strategy to have an integrated oncology portfolio with products under development designed to meet the unmet needs of patients being treated for cancer. We have been seeking a novel, value-added product to round out our oncology drug portfolio," Dr. Bianco noted. "Our lead Phase III drug candidate, lisofylline, addresses the serious side effects associated with high dose radiation and chemotherapy, while CT-2584 - now progressing to Phase II trials -- is targeted at cancers resistant to conventional forms of chemotherapy, and we are adding PG-TXL as a potential first-line therapy for breast, colon, lung, and other forms of cancer. We intend to bring PG-TXL into the clinic as quickly as possible."

Cell Therapeutics, Inc. focuses on the discovery, development, and commercialization of small molecule drugs that selectively regulate the metabolism of oxidized lipids and phospholipids relevant to the treatment of cancer and inflammatory and immune diseases.

This announcement includes forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially adversely affect actual future results. Specifically, the risks and uncertainties that could affect the development of cti's products under development includes risks associated with preclinical and clinical development in the biotechnology industry in general and of cti's products under development in particular (including, without limitation, the potential failure of CT-2584, lisofylline, PG-TXL and related compounds to prove safe or effective for treatment of disease), determinations by regulatory, patent, and administrative governmental authorities, competitive factors, technological developments, costs of developing, producing, and selling cti's products under development, and the risk factors listed or described from time to time in the Company's filings with the Securities and Exchange Commission including, without limitation, the Company's most recent Registrations on Forms 10-K, 8-K, and 10-Q.

CONTACT: Cell Therapeutics, Inc

Lee M. Parker, 206/282-7100, 800/664-CTIC

[e-mail]

URL: www.cticseattle.com