Cell Therapeutics to build ties to Italy
New stock offering to raise $1.27 million
By JOSEPH TARTAKOFF
P-I REPORTER
Cell Therapeutics Inc.'s headquarters overlook Elliott Bay, but thousands of miles away -- in Milan, Italy -- investors hold increasing sway.
This week, the biotech company announced a deal that most likely will put even more of its stock in the hands of Italian investors, who already own a majority of the company's shares. Cell Therapeutics said it would raise roughly $1.27 million by selling new shares on an Italian stock exchange through a French bank. The deal was expected to close Wednesday.
It is not unusual for foreigners to own shares in American companies, but the scope of the foreign ownership at Cell Therapeutics and the stock's listing on both the Nasdaq stock market in the U.S. and the Milan Stock Exchange have caused problems in the past.
In 2006, the company had to delay plans to issue additional shares for almost 10 months because it could not get enough of its Italian shareholders to submit votes at the company's shareholders meetings.
Cell Therapeutics has lost almost $1.1 billion over its history and expects to continue losing money over the next several years. It depends partly on selling stock to finance operations.
In June 2006, the company hosted its annual meeting in Seattle, but although 90 percent of the company's American shares were voted, only 6 percent of the Italian shares were submitted -- not enough to reach a quorum.
Cell Therapeutics tried again in late November that year -- this time moving the meeting to Milan in an attempt to boost Italian participation. Once again, the company could not reach a quorum, as only 7 percent of the Italian shares were voted.
Then, in early 2007, the company released a statement threatening to delist its stock from the Italian exchange, "in the hope that in doing so such shares or a portion of them would be transferred to U.S. holders or accounts which have a much higher historical record of attending and voting at shareholder meetings."
The threat was not necessary, though; the company was finally able to reach a quorum at an April meeting after reaching out to Italian banks. A shareholder meeting was held in September without incident, and the company will host another meeting Jan. 28 in Seattle.
Cell Therapeutics' Italian connection dates to 2003 when the company bought Milan-based Novuspharma, an Italian drug maker, to acquire its chemotherapy drug, Pixantrone. As part of that $236 million transaction, Novuspharma shareholders ended up owning about 31 percent of Cell Therapeutics.
Cell Therapeutics -- which translates much of its Web site, including its news releases, into Italian -- employs 71 people in a suburb of Milan. An additional 140 work in Seattle.
The latest stock offering with the French bank, Societe Generale, dates to June 2006, when Cell Therapeutics signed a financing agreement under which the bank agreed to buy up to $72 million of Cell Therapeutics' shares over the course of two years, in order to sell them on the Italian market.
A Cell Therapeutics spokesman, Dan Eramian, could not comment, citing a "quiet period" because of the offering. In a prospectus that accompanied the offering, the company said it would use the new money for general corporate purposes.
P-I reporter Joseph Tartakoff can be reached at 206-448-8293 or joetartakoff@seattlepi.com.
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