The Downtrend of CTI Biopharma Corp (Nasdaq:CTIC) Still Hard to Break

[[tagnumber 0]][[tagnumber 1]]CTI Biopharma Corp (Nasdaq:CTIC) seems to be following the well–paved path of a typical biopharmaceutical company. With a fully–marketable drug for sale in a few European countries and a leading product candidate in a late clinical trial stage, CTIC seems to be doing things the right way. Which would all be brilliant for stockholders had it not been for the hefty losses the company has been incurring as of late.[[tagnumber 2]] [[tagnumber 0]]A quick glance at CTI’s chart reveals a steady downtrend which, save for a few occasions here and there, has been debilitating the stock’s market value for the last twelve months or so. Those investors who got a stake in CTIC last June know exactly what has since happened and it is a 34 percent market depreciation of the stock. Back then, CTIC shares were traded above the $3.00 benchmark. Yesterday, they closed trade at $2.09 per share, up 6% from the day before following the announcement of yet another presentation of the results the Persist–1 pacritinib study, the first out of two Phase 3 trials to be completed.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]CTI’s pacritinib is an oral inhibitor aimed at treating patients with myelofibrosis – a rare medical condition that reduces the bone marrow’s ability to produce red blood cells, thus putting the spleen and liver under additional pressure to cover the growing deficiency. The product candidate is scheduled to undergo two Phase 3 clinical trials called Persist–1 and Persist–2, respectively. The promising results of the former revealed on May 30 gave the stock a 12% boost on June 1 to $2.46 per share, which has since subsided. Considering that the company must successfully complete the second Persist–2 Phase 3 study before even acquiring the right to submit an NDA to the FDA, a lot of traders might have expected this roll–back. Provided that the second study met with success and CTI’s managers were to file the most flawless possible NDA in due course, they would still have to wait for two months to get the sacred 74–day letter and then an additional 6 to 10 months for the substantive review. In the best–case scenario, the market debut of the company’s pacritinib inhibitor within the next two years seems unlikely. This makes the Pixuvri drug the main source of revenue for the biopharmaceutical entity for the forthcoming quarters.[[tagnumber 2]] [[tagnumber 0]]While the Pixuvri does generate millions of dollars in cash flow, it is still far from sufficient to cover the R&D expenses, let alone the administrative ones. As long as this is the case, the company will have no other choice but remain heavily dependent on debt and equity financing. In this respect, the recent amendment to the loan agreement with Hercules Technology Growth Capital, Inc. allowing CTIC to borrow an additional $5 million (to the outstanding debt of $20 million) within the next 12 months seems to a large extent indicative of what is to come in the forthcoming months.[[tagnumber 2]] [[tagnumber 0]]In a nutshell, there are quite a few challenges lying ahead for CTIC. However, it does not necessarily mean that the company’s prospects for success are slim to none. CTI BioPharma wants to meet an unmet medical need. If successful, the quarterly losses of $20+ million could become history in a fortnight. Yet, there is still a long way to go before CTIC gets to this stage.[[tagnumber 2]]