Cell Therapeutics Announces Lisofylline Collaboration.

SEATTLE--(BUSINESS WIRE)--Nov. 11, 1996--Cell Therapeutics, Inc. (cti) today announced a collaboration agreement with R.W. Johnson Pharmaceuticals Research Institute (RWJPRI) and Ortho Biotech Inc., both Johnson & Johnson subsidiaries (NYSE:JNJ).

The collaboration focuses on the further development and commercialization of one of cti's leading compounds, lisofylline. Cti discovered and developed lisofylline, which is in Phase III clinical trials to examine its ability to reduce side effects in cancer patients undergoing high-dose radiation and/or chemotherapy followed by bone marrow or stem cell support.

Additionally, the compound is in Phase II trials to determine its effectiveness in reducing the incidence of serious infections and treatment-related mortality among patients receiving high-dose chemotherapy and/or radiation therapy.

In the U.S., RWJPRI will fund 60 percent of future development costs, while cti will fund the remaining part. Cti and Ortho Biotech will co-promote lisofylline in the U.S. and share equally in profits and losses. Ortho Biotech and its affiliates will exclusively commercialize lisofylline in the rest of the world excluding Canada and will pay cti an unspecified royalty on sales. Cti has a pre-existing license agreement with respect to Canadian rights to lisofylline.

Cti has received an up front payment of $5 million, as well as $5 million in connection with the sale of a new series of cti convertible preferred stock. Ortho and its affiliates have also agreed to make additional equity, milestone and similar payments upon cti's achievement of certain development and regulatory events. The agreement has customary representations, warranties, indemnities and termination provisions.

Cti President and Chief Executive Officer James A. Bianco, MD, stated "We are very pleased with this partnership for the late-stage clinical development and commercialization of lisofylline. We believe the partnership validates both our technology and our long-term strategy of furthering the interests of all shareholders by pursuing, where appropriate, late-stage collaborative relationships. Our agreement should ensure that cti has the financial resources to develop and commercialize lisofylline and provide the flexibility to further enrich our product pipeline."

This news release 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 lisofylline and related compounds includes risks associated with preclinical and clinical development in the biotechnology industry in general and of lisofylline and related compounds in particular (including, without limitation, the potential failure of lisofylline 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 lisofylline and related compounds, 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 Registration Statement on Form 10A, and the Company's report on Form 10-Q for quarter ended September 30, 1996.

Cti is a Seattle-based biopharmaceutical company focusing on the development of a new class of drugs that seeks to selectively regulate the metabolism of phospholipids in intracellular signaling pathways relevant to cancer and immune diseases and other life-threatening conditions.

CONTACT: Cell Therapeutics Inc.

Lee M. Parker, 206/282-7100

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