Encouraging Survival Estimates in Non-Small Cell Lung Cancer Push XYOTAX™ Pivotal Trial Data Release to End of First Quarter 2005

XYOTAX trial updates presented at Wachovia’s “Ten for ‘05” Biotechnology Conference

Dec. 16, 2004 New York—Cell Therapeutics, Inc. (CTI) (NASDAQ and Nuovo Mercato: CTIC) presented an update on the clinical development of XYOTAX, including survival estimates for its STELLAR 3 and 4 trials in non-small cell lung cancer (NSCLC), at the Wachovia Capital Markets’ Ten for ’05 Biotechnology Conference. Earlier this year, CTI extended the timelines for the pivotal trial data release due to higher than historically predicted survival rates. In his update today, James A. Bianco, M.D., President and CEO of CTI, said that at the current rate the trials would not reach the 311 events (deaths) required for data analysis until early January and February next year for STELLAR 3 and 4, respectively. As of December 9, 281 deaths have been reported in the doublet therapy trial, STELLAR 3, and 222 events among 388 patients who received XYOTAX at the 175 mg/m2 dose or control in the single agent trial, STELLAR 4. The STELLAR trials are the largest trials ever conducted in the PS2 population and address very important unmet medical needs in the treatment of NSCLC.

“With a median follow up of over one year for STELLAR 3 and almost eight months for STELLAR 4, the increase in the number of doses of chemotherapy being administered as well as the survival estimates are very encouraging,” stated Bianco. “On the STELLAR 3 trial, 36 percent of the patients received six cycles of the doublet therapy, with 50 percent of the patients on STELLAR 4 receiving four to six cycles of single agent therapy. Recently published results report that for front-line treatment of NSCLC, PS2 patients tolerate on average only two cycles of therapy, with only 10 percent to 20 percent being alive at one year following single agent or doublet therapy, respectively. Because the trials have not yet reached the number of events required for analysis, the study data remains blinded; however, we’re observing ‘blended’ rates of tolerability and survival that are substantially outside the range of what is in the literature.”

In addition to the STELLAR 3 and 4 updates, Bianco presented information on the clinical development of XYOTAX in ovarian cancer. The Company, in conjunction with the Gynecologic Oncology Group (GOG), has advanced a phase II trial in relapsed ovarian cancer patients to the second stage of the study based on meeting the protocol-defined response criteria and plans to initiate its phase III trial in ovarian cancer in January.

About STELLAR Trials
STELLAR 2 is a phase III clinical trial of XYOTAX™ versus docetaxel for the potential second-line treatment of NSCL cancer patients. STELLAR 3 is a phase III clinical trial of carboplatin in combination with either XYOTAX™ or paclitaxel for the potential front-line treatment of poor performance status (PS2) patients with NSCL cancer.
STELLAR 4 is a phase III clinical trial of XYOTAX™ versus either gemcitabine or vinorelbine for the potential front-line treatment of poor performance status (PS2) patients with NSCL cancer.

XYOTAX (paclitaxel poliglumex) is a pharmaceutical that links paclitaxel, the active ingredient in Taxol®, to a biodegradable polyglutamate polymer. This polymer technology results in a new chemical entity, designed to selectively deliver higher and potentially more effective levels of active chemotherapeutics to tumors. Blood vessels in tumor tissue, unlike blood vessels in normal tissue, are porous to molecules like polyglutamate. Based on preclinical studies, it appears that XYOTAX is preferentially trapped in the tumor blood vessels allowing significantly more of the dose of chemotherapy to localize in the tumor. Because more of the chemotherapy is targeted to the tumor and the levels of chemotherapy delivered to normal tissue are reduced, XYOTAX may be potentially more effective and have less severe side effects than currently available chemotherapeutics.

This press release includes forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect actual future results. Specifically, the risks and uncertainties that could affect the development of CTI’s products under development include risks associated with preclinical and clinical developments in the biopharmaceutical industry in general and with XYOTAX in particular including, without limitation, the survival estimates in clinical data regarding XYOTAX treatment and the possibility that preliminary indications of results from clinical trial data may vary materially from final results of clinical trials, the potential failure of XYOTAX to prove safe and effective for treatment of non-small cell lung and ovarian cancers, determinations by regulatory, patent and administrative governmental authorities, competitive factors, technological developments, costs of developing, producing and selling XYOTAX, and the risk factors listed or descr bed from time to time in the Company’s filings with the Securities and Exchange Commission including, without limitation, the Company’s most recent filings on Forms 10-K, 8-K, and 10-Q. 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.

For further information please contact:
Cell Therapeutics, Inc.
Leah Grant
T: 206.282.7100 F: 206.272.4434
E: invest@ctiseattle.com
Cell Therapeutics, Inc.
Susan Callahan
T: 206.272.4472 F: 206.272.4434
E: media@ctiseattle.com

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