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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CELL THERAPEUTICS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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[CELL THERAPEUTICS, INC. LOGO APPEARS HERE]
September 11, 2000
Dear Shareholder:
You are cordially invited to attend the Cell Therapeutics, Inc. ("cti")
Special Meeting of Shareholders, to be held on September 29, 2000, at the
Company's offices at 201 Elliott Avenue West, Suite 400, Seattle, Washington
98119.
Information concerning the business to be conducted at the meeting is
included in the accompanying Notice of Special Meeting of Shareholders and
Proxy Statement. Please give all of the information contained in the Proxy
Statement your careful attention.
At this Special Meeting, shareholders will be asked to consider a proposal
to approve the issuance of shares of Common Stock in connection with the
acquisition of PolaRx Biopharmaceuticals, Inc. Your management and the Board of
Directors unanimously recommend that you vote FOR this proposal.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the meeting,
it is important that your shares be represented. Therefore, we urge you to
sign, date and promptly return the enclosed proxy in the enclosed postage paid
envelope. If your shares are held in a bank or brokerage account, you may be
eligible to vote your proxy electronically or by telephone. Please refer to the
enclosed voting form for instructions. If you attend the meeting, you will, of
course, have the right to vote in person. Shareholders who plan to attend the
meeting in person are requested to promptly return the enclosed postage paid
attendance card to provide us with an estimate of the number of persons to
expect for the Special Meeting.
I look forward to greeting you personally, and on behalf of the Board of
Directors and Management, I would like to express our appreciation for your
interest in cti.
Sincerely,
/s/ James Bianco
James A. Bianco, M.D.
President & Chief Executive Officer
Shareholder
<PAGE>
CELL THERAPEUTICS, INC.
201 Elliott Avenue West, Suite 400
Seattle, WA 98119
----------------
Notice of Special Meeting of Shareholders to be Held on
September 29, 2000
----------------
To Our Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Cell
Therapeutics, Inc. ("cti" or the "Company"), a Washington corporation, will be
held on September 29, 2000, at the Company's offices at 201 Elliott Avenue
West, Suite 400, Seattle, Washington 98119 for the following purposes:
(1) To approve the issuance of 2,000,000 shares of Common Stock and the
potential issuance of additional shares of Common Stock upon the
achievement of certain sales milestones, in connection with the
Company's acquisition of PolaRx Biopharmaceuticals, Inc.;
(2) To transact such other business as may properly come before the
meeting, and all adjournments and postponements thereof.
The accompanying Proxy Statement describes the proposal in more detail. We
encourage you to read the document carefully.
All shareholders are invited to attend the meeting. Shareholders of record
at the close of business on July 31, 2000, the record date fixed by the Board
of Directors, are entitled to notice of, and to vote at, the meeting and all
adjournments and postponements thereof. A complete list of shareholders
entitled to notice of, and to vote at, the meeting will be open to examination
by the shareholders beginning ten days prior to the meeting for any purpose
germane to the meeting during normal business hours at the office of the
Secretary of the Company at 201 Elliott Avenue West, Suite 400, Seattle,
Washington 98119.
Whether or not you intend to be present at the meeting, please sign and date
the enclosed proxy and return it in the enclosed envelope. If your shares are
held in a bank or brokerage account, you may be eligible to vote your proxy
electronically or by telephone. Please refer to the enclosed voting form for
instructions.
By Order of the Board of Directors
/s/ Michael J. Kennedy
Michael J. Kennedy
Secretary
Seattle, Washington
September 11, 2000
Your vote is important. Accordingly, you are urged to sign, date and
return promptly the accompanying proxy in the enclosed envelope regardless
of whether or not you plan to attend the meeting. You can revote your proxy
at any time before it is voted.
This Proxy Statement is dated September 11, 2000 and was first mailed to
shareholders on or about September 12, 2000.
<PAGE>
CELL THERAPEUTICS, INC.
201 Elliott Avenue West, Suite 400
Seattle, WA 98119
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PROXY STATEMENT
----------------
Information Regarding Proxies
General
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of Cell
Therapeutics, Inc. ("cti" or the "Company") for use at the Special Meeting of
Shareholders (the "Special Meeting"), to be held on September 29, 2000, at the
Company's offices at 201 Elliott Avenue West, Suite 400, Seattle, Washington
98119, and at any adjournment or postponement thereof. Only shareholders of
record on the books of the Company at the close of business on July 31, 2000
(the "Record Date") will be entitled to notice of, and to vote at, the Special
Meeting.
At the Special Meeting, shareholders will be asked to approve the issuance
of an indeterminate number of shares of Common Stock in connection with the
acquisition of PolaRx Biopharmaceuticals, Inc.
Solicitation of Proxies
This solicitation is made on behalf of the Board of Directors of the
Company. All expenses in connection with the solicitation of proxies will be
borne by the Company. In addition to solicitation by mail, officers, Directors
or other regular employees of the Company may solicit proxies by telephone,
facsimile or in person. No additional compensation will be paid to such persons
for such services.
Voting Rights and Outstanding Shares
Each share of common stock, without par value ("Common Stock"), of the
Company outstanding on the Record Date is entitled to one vote per share at the
Special Meeting. Each share of Series D Preferred Stock, without par value (the
"Series D Preferred Stock") of the Company outstanding on the Record Date is
entitled to one vote per share of Common Stock into which such share of Series
D Preferred Stock could have been converted on the Record Date. At the
conversion price of $2.1625 per share on the Record Date, each outstanding
share of Series D Preferred Stock was convertible into 462.43 shares of Common
Stock, and is therefore entitled to 462.43 votes per share at the Special
Meeting. The votes cast by the holders of the Series D Preferred Stock shall be
counted together with the votes cast by the holders of the Common Stock and not
separately as a class. Fractional votes by the holders of Series D Preferred
Stock shall not, however, be permitted and any fractional voting rights shall
(after aggregating all shares into which shares of Series D Preferred Stock
held by each holder could be converted) be rounded to the nearest whole number.
The Common Stock and the Series D Preferred Stock (on such as-converted basis),
voting together as a single class as set forth above shall be referred to
herein as the "Voting Stock."
At the close of business on the Record Date, there were issued and
outstanding 26,303,657 shares of Voting Stock, consisting of 25,182,271
outstanding shares of Common Stock and 1,121,386 shares of Common Stock
issuable upon the conversion of the 2,425 outstanding shares of Series D
Preferred Stock.
Vote and Quorum Required
The presence at the Special Meeting in person or by proxy of holders of
record of a majority of the outstanding shares of Voting Stock is required to
constitute a quorum for the transaction of all business at the Special Meeting.
Approval of Proposal No. 1 requires the affirmative vote of a majority of the
Voting Stock present or represented by proxy at the Special Meeting. Unless
otherwise instructed, it is the intention of the persons named in the
accompanying form of proxy to vote shares represented by properly executed
proxies for approval of the proposal of the issuance of Common Stock.
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Abstentions and Broker Non-Votes
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and "broker non-votes" (i.e., shares held by a broker or nominee
which are represented at the meeting, but with respect to which such broker or
nominee is not empowered to vote on a particular proposal). Abstentions will be
counted towards the tabulation of votes cast on proposals presented to the
shareholders and will have the same effect as negative votes against Proposal
1. Broker non-votes are counted towards a quorum, but are not counted for any
purpose in determining whether a matter has been approved.
All shares of Voting Stock represented by properly executed proxies which
are returned and not revoked will be voted in accordance with the instructions,
if any, given therein. If no instructions are provided in a proxy, the shares
of Voting Stock represented by such proxy will be voted FOR the approval of
Proposal 1 and in accordance with the proxy-holder's best judgment as to any
other matters raised at the Special Meeting.
Voting Electronically or by Telephone
If your shares are registered in the name of a bank or brokerage firm, you
may be eligible to vote your shares electronically over the Internet or by
telephone. A large number of banks and brokerage firms are participating in the
ADP Investor Communication Services online program. This program provides
eligible shareholders who receive a paper copy of the proxy statement the
opportunity to vote via the Internet or by telephone. If your bank or brokerage
firm is participating in ADP's program, your voting form will provide
instructions. If your voting form does not reference Internet or telephone
information, please complete and return the paper proxy card in the self-
addressed postage paid envelope provided.
Revocability of Proxies
Any shareholder of record executing a proxy has the power to revoke it at
any time prior to the voting thereof on any matter (without, however, affecting
any vote taken prior to such revocation) by delivering written notice to
Michael J. Kennedy, Secretary of the Company, at the Company's principal
executive offices, by executing and delivering another proxy dated as of a
later date or by voting in person at the meeting.
Expenses of Proxy Solicitation
The Company will pay the expenses of soliciting proxies to be voted at the
Special Meeting. Following the original mailing of the proxies and other
soliciting materials, the Company and its agents also may solicit proxies by
mail, telephone, telegraph or in person. Following the original mailing of the
proxies and other soliciting materials, the Company will request brokers,
custodians, nominees and other record holders of the Company's Voting Stock to
forward copies of the proxy and other soliciting materials to persons for whom
they hold shares of Company Voting Stock and to request authority for the
exercise of proxies. In such cases, the Company upon the request of the record
holders, will reimburse such holders for their reasonable expenses.
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Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial
ownership of Common Stock, as of June 30, 2000 (after giving effect to an
assumed conversion of all outstanding shares of Series D Preferred Stock at
June 30, 2000 into Common Stock at the conversion price of $2.1625 per share),
by (1) each shareholder known by the Company to be the beneficial owner of more
than 5% of its outstanding shares of Common Stock, (2) each of the Company's
directors, (3) each executive officer of the Company, and (4) all directors and
executive officers as a group:
<TABLE>
<CAPTION>
Number of Shares Shares Subject Percentage
Name and Address of Beneficial Owner Beneficially Owned(1) to Options Ownership(1)
------------------------------------ --------------------- -------------- ------------
<S> <C> <C> <C>
Essex Woodlands Health Ventures Fund IV, L.P.(2).. 3,855,519 -- 14.19%
15001 Walden Road, Suite 101
Montgomery, TX 77356
Lindsay A. Rosenwald and The Aries Master
Funds(3)......................................... 3,537,210 -- 13.27%
c/o Paramount Capital Asset Management, Inc.
787 Seventh Avenue, 48th Floor
New York, NY 10019
The International Biotechnology Trust plc(4)...... 1,358,156 -- 5.17%
c/o Rothschild Asset Management Limited
Five Arrows House, St. Swithin's Lane
London, England EC4N 8NR
James A. Bianco, M.D.**........................... 612,111 310,340 2.30%
Jack L. Bowman**.................................. 32,383 32,383 *
Jeremy L. Curnock Cook**.......................... 26,668 26,668 *
Wilfred E. Jaeger, M.D.**(5)...................... 39,670 39,335 *
Max E. Link, Ph.D.**.............................. 54,762 3,810 *
Mary O. Mundinger, DrPH**......................... 9,573 7,923 *
Phillip M. Nudelman, Ph.D.**...................... 32,611 31,811 *
Jack W. Singer, M.D.**............................ 309,544 82,865 1.18%
Louis A. Bianco................................... 216,523 98,198 *
Edward F. Kenney.................................. -- -- *
Robert A. Lewis, M.D.............................. 124,487 98,813 *
All Directors and executive officers as a group
(12 persons)..................................... 2,910,376 812,434 10.75%
</TABLE>
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* Less than 1%
** Denotes director of the Company
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission") and generally
includes voting or investment power with respect to securities. This table
is based upon information supplied by officers, directors, and Schedules
13D and 13G filed with the Commission. Shares of Common Stock subject to
options or warrants currently exercisable or convertible, or exercisable or
convertible within 60 days of June 30, 2000, are deemed outstanding for
computing the percentage of the person holding such option or warrant but
are not deemed outstanding for computing the percentage of any other
person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
beneficially owned.
(2) Consists of 2,941,233 shares of common stock beneficially owned by Essex
Woodlands Health Ventures Fund IV, L.P. and 914,286 shares issuable upon
exercise of warrants held by Essex Woodlands Health Ventures Fund IV, L.P..
Mr. Martin P. Sutter is the Managing Director of Essex Woodlands Health
Ventures Fund IV, L.P.
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(3) Includes (a) 973,918 shares of common stock and 35,000 warrants to purchase
35,000 shares of common stock held by Lindsay A. Rosenwald, M.D., (b)
780,578 shares of common stock of cti issuable upon conversion of 1,688
shares of Series D preferred stock, 257,219 warrants to purchase 257,219
shares of common stock, and 638,318 shares of common stock held by The
Aries Master Fund, a Cayman Island exempted company, (c) 316,301 shares of
common stock of cti issuable upon conversion of 684 shares of Series D
preferred stock, 104,229 warrants to purchase 104,229 shares of common
stock, and 329,132 shares of common stock held by Aries Domestic Fund L.P.
("Aries I"), (d) 24,509 shares of common stock of cti issuable upon
conversion of 53 shares of Series D preferred stock, 8,076 warrants to
purchase 8,076 shares of common stock, and 69,930 shares of common stock,
held by Aries Domestic Fund II, L.P. ("Aries II"). Paramount Capital Asset
Management, Inc. ("PCAM") is the general partner of each of Aries I and
Aries II and the investment manager of The Aries Master Fund. Dr. Rosenwald
is the chairman and sole shareholder of PCAM.
(4) Consists of 1,358,156 shares of common stock beneficially owned by
International Biotechnology Trust plc, a company formed under the laws of
England ("IBT") and managed by Rothschild Asset Management Limited
("Rothschild"). Pursuant to a contractual agreement, Rothschild manages the
business and assets of IBT, which includes the authority to make decisions
regarding the acquisition or disposition of portfolio securities by IBT and
the exercise of any rights (including voting rights) with respect to such
securities. IBT has the right to terminate Rothschild's appointment as
manager at any time if Rothschild is not performing its duties as manager
to the satisfaction of the Board of Directors of IBT. The Board of
Directors of IBT consists of John M. Green-Armytage, Donald Cecil, Gary M.
Brass, Peter B. Collacott, James D. Grant, Howard E. Green and Dennis M.J.
Turner. Mr. Curnock Cook was formerly a director of IBT and Rothschild.
(5) Includes 12,858 shares issuable upon exercise of options beneficially owned
by affiliates of Collinson Howe Venture Partners ("CHVP") pursuant to an
agreement with Dr. Jaeger. Dr. Jaeger, a director of the Company, is a
former partner at CHVP.
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PROPOSAL 1
APPROVAL OF THE ISSUANCE OF COMMON STOCK IN CONNECTION WITH THE
POLARX BIOPHARMACEUTICALS, INC. ACQUISITION
On January 7, 2000 the Company entered into a merger agreement with PolaRx
Biopharmaceuticals, Inc. ("PolaRx") pursuant to which the Company merged a
wholly owned transitory subsidiary into PolaRx and acquired all of the
outstanding equity of PolaRx. PolaRx's sole asset consisted of the intellectual
property and other rights associated with a product containing arsenic trioxide
or its metabolites, or ATO. The primary intellectual property and other rights
we acquired include the following:
. licenses to U.S. patent applications and a U.S. patent application
relating to methods of treatment, manufacturing processes, and injectable
compositions of ATO and oral compositions and derivatives of arsenic
sulfide;
. orphan drug designation by the Food and Drug Administration for ATO for
the treatment of acute promyelocytic leukemia;
. manufacturing and clinical trial relationships, including a cooperative
research and development agreement with the National Cancer Institute in
clinical testing of ATO for various oncologic diseases; and
. bioanalytical and statistical data, analysis and reporting for four
clinical ATO trials.
ATO is the sole product of the acquisition. When inhaled or ingested over
prolonged periods of time (10-20 years) arsenic has been associated with some
forms of cancer. Public and healthcare provider perceptions on arsenic may
adversely affect our ability to successfully market ATO. However, with brief
administration through the vein at doses 20 fold lower than those associated
with environmental exposure levels linked to cancer, ATO has resulted in
prolonged complete remissions in otherwise fatal forms of leukemia
significantly impacting disease free survival. For the indication in acute
promyelocytic leukemia we are reliant on market exclusivity granted under the
orphan drug status of ATO. This period of exclusivity extends for 7 years from
the time of marketing approval, but may be extended under certain circumstances
for up to an additional 2 to 3 years. For other indications in leukemia and
cancer, the Company has exclusive rights to several patents owned by Memorial
Sloan Kettering and PolaRx Biopharmaceuticals Inc. In addition, the Company has
filed and been granted orphan drug designation for ATO in multiple myeloma and
myelodysplasia.
On March 28, 2000 the Company filed a New Drug Application with the Food and
Drug Administration, or FDA, for ATO for the treatment of a type of relapsed
and refractory blood cell cancer called acute promyelocytic leukemia. On May
15, 2000 the FDA accepted the Company's filing and granted ATO priority review
status. Under the FDA regulations, the FDA must act on the filing within a six-
month period.
In addition to awaiting approval of ATO from the FDA for its first
indication in relapsed and refractory acute promyelocytic leukemia, we are also
conducting in cooperation with the National Cancer Institute more than 14 phase
II and phase III clinical trials with ATO in 10 different cancer indications.
Shareholder approval is not necessary for the issuance of Company Common
Stock in items (i) and (ii) below. The proposal requiring shareholder approval
pertains to the issuance of Company Common Stock in items (iii)-(vi) below. The
consideration for the purchase of PolaRx and ATO consists of the following:
(i) 2,000,000 shares of Company Common Stock purchased in connection with
the merger, which have already been issued;
(ii) an additional 1,000,000 shares of Company Common Stock to be issued
within the earlier of 30 days following the first New Drug
Application approved by the U.S. Food and Drug Administration
submitted by the Company for ATO or January 6, 2005;
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(iii) an additional 2,000,000 shares of Company Common Stock to be issued
within the earlier of 30 days following the first New Drug
Application approved by the U.S. Food and Drug Administration
submitted by the Company for ATO or January 6, 2005;
(iv) an additional number of Company Common Stock having a fair market
value of $4,000,000 to be issued within 30 days after the first
quarter where sales of ATO exceed $10,000,000 for the previous year;
(v) an additional number of Company Common Stock having a fair market
value of $5,000,000 to be issued within 30 days after the first
quarter where sales of ATO exceed $20,000,000 for the previous year;
(vi) within 30 days after the end of each year until expiration of ATO
patent rights or seven years following the first commercial sale of
ATO, if net sales of ATO exceed $40,000,000 during such year, a
number of shares of Company Common Stock having a fair market value
equal to 2% of such net sales; and
(vii) assumption by the Company of all of PolaRx's liabilities and
commitments (approximately $5 million).
The approximate aggregate market value of the 5,000,000 shares of Company
Common Stock issued, or issuable, under subsections (i) through (iii) above is
$33,750,000 and $224,062,500, based upon the closing price of the Company's
Common Stock on January 7, 2000 and September 8, 2000, respectively. These
computations do not include any Company Common Stock that may be issued under
subsections (iv), (v) and (vi) above.
The holders of the shares of Company Common Stock issued or issuable under
subsections (i) through (vi) above have registration rights, which, subject to
some exceptions, obligate the Company to register those shares for resale under
the Securities Act of 1933. The Company has on file with the Securities and
Exchange Commission an effective resale registration statement for the
2,000,000 shares specified in subsection (i) above.
It is possible, though unlikely, that the issuance of the shares covered by
subclauses (iv) through (vi) above in the future, could result in a change of
control of the Company. This could happen if the price of the Company's common
stock fell substantially and, at the same time, the Company had achieved the
sales targets specified in subclauses (iv), (v) or (vi) and was then required
to issue additional shares at such lower price. In this situation, which we
believe is highly unlikely, the former PolaRx shareholders could receive an
additional number of Company Common Stock sufficient to control the Company.
In addition, because of the registration rights discussed above, the
issuance of some or all of the shares of Company Common Stock could result in
sales by the former PolaRx shareholders of some or all of those shares. These
shares could exert downward pressure on the price of our Common Stock.
Under existing NASDAQ listing requirements, the Company is required to seek
shareholder approval of the shares of Company Common Stock that might be
issuable under subclauses (iii) through (vi) above because, at the time of
entering into the merger agreement the number of shares potentially issuable
under subclauses (i) through (vi) could exceed 20% of the then outstanding
shares of Company Common Stock. As of the date immediately preceding the filing
of this proxy statement, utilizing the Company's closing price of $44.8125 on
September 8, 2000 and assuming all milestones were achieved, a total of
5,218,689 shares of Company Common Stock would be issued, constituting
approximately 17% of the Company's currently outstanding shares. The number of
shares actually issued may be more or less than this amount based on the actual
fair market value of Company Common Stock and the number of shares of Company
Common Stock actually outstanding on the applicable dates.
Under the merger agreement the Company is required to seek shareholder
approval of the issuances under subclauses (iii) through (vi) above. If the
Company's shareholders do not approve this share issuance, the Company will not
issue the shares. Instead, the Company will be required to make cash payments
(or to issue other equity securities as may be offered by CTI and acceptable to
a majority of the PolaRx Stockholders (based upon the number of shares held by
each), to be determined in the sole and absolute discretion of a
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majority of the PolaRx Stockholders) to the former shareholders of PolaRx equal
to the fair market value of the shares of Company Common Stock that these
shareholders would have received if the Company's shareholders had approved the
share issuance. Based on the Company's closing price on September 8, 2000, the
aggregate cash payment for the 2,000,000 shares not subject to milestones would
be approximately $90 million in cash.
Holders of our Common Stock will experience immediate dilution in the net
tangible book value of our common stock from the issuance of additional shares
of common stock in connection with the acquisition. Net tangible book value per
share represents the amount of our total tangible assets less our total
liabilities, divided by the number of our shares of Common Stock outstanding.
As of December 31, 1999, we had a net tangible book value allocable to common
shareholders of $10.9 million, or $0.70 per share of Common Stock. After giving
effect to the issuance of the 5 million shares of Common Stock specified in
subclauses (i) through (iii) above, our net tangible book value as of December
31, 1999 would have been $6.2 million, or $0.30 per share. This represents an
immediate decrease in the net tangible book value of $0.40 per share to
existing shareholders.
The Company's Board of Directors unanimously recommends that Company
shareholders vote in favor of the share issuances specified in subclauses (iii)
through (vi) above. In reaching its recommendation, the Board considered that
the merger agreement and the transactions contemplated thereby allowed the
Company to acquire a near term revenue product, ATO, without the expenditure of
significant cash amounts. Moreover, assuming the Company's market price
increases if ATO is successful, the number of shares of Company Common Stock
issuable will decrease because the amount of shares issuable under subclauses
(iv) through (vi) is dependent on the fair market value of the Company's Common
Stock.
Since January 7, 2000, the Company's Common Stock has risen from $6.750 to
$44.8125 on September 8, 2000. A vote against Proposal 1 would require the
Company to utilize its cash resources, in an amount that, based on the
Company's closing price on September 8, 2000, would be significant
(approximately $90 million) to pay PolaRx shareholders. Any such payment would
reduce the amount of cash that the Company could devote to the development of
ATO, its other products and research and development, and would have a material
adverse effect on the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE ISSUANCE OF
COMMON STOCK IN CONNECTION WITH THE POLARX BIOPHARMACEUTICALS, INC.
ACQUISITION.
Other Business
As of the date of this Proxy Statement, management knows of no other
business that will be presented for action at the meeting. Management has not
received any advance notice of business to be brought before the meeting by any
shareholder. If other business requiring a vote of the shareholders should come
before the meeting, the person designated as your proxy will vote or refrain
from voting in accordance with his or her best judgment.
Representatives of Ernst & Young LLP are expected to be present at the
Special Meeting, will have an opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
Where You Can Find More Information
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's Public Reference Room at 450 Fifth Street N.W., Washington D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. Our SEC filings are also available to the public
from our web site at http://www.cticseattle.com or at the SEC's web site at
http://www.sec.gov.
Incorporation of Certain Documents By Reference
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated
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by reference is considered to be part of this proxy statement, and later
information filed with the SEC will update and supersede this information. We
incorporate by reference the documents listed below and any future filings
made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the date of the Special Meeting.
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
filed March 24, 2000, as amended by the Annual Report on Form 10-K/A
filed May 1, 2000, and as amended by the Annual Report on Form 10-K/A-2
filed September 11, 2000;
(b) Current Report on Form 8-K/A-2 filed September 11, 2000;
(c) Current Report on Form 8-K/A filed March 22, 2000;
(d) Current Report on Form 8-K dated February 28, 2000, filed February 29,
2000;
(e) Current Report on Form 8-K dated January 24, 2000, filed March 22,
2000;
(f) Quarterly Report on Form 10-Q for the quarter ended June 30, 2000,
filed August 14, 2000 as amended by the Quarterly Report on Form 10-Q/A
filed September 11, 2000;
(g) Quarterly Report on Form 10-Q, for the quarter ended March 31, 2000,
filed May 15, 2000, as amended by the Quarterly Report on Form 10-Q/A
filed September 11, 2000;
(h) The description of cti common stock contained in its registration
statement on Form 10 filed June 27, 1996 and June 28, 1996, including
any amendments or reports filed for the purpose of updating such
descriptions; and
(i) The description of cti's Preferred Stock Purchase Rights, contained in
its registration statement on Form 8-A filed on November 15, 1996,
including any amendments or reports filed for the purpose of updating
such description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Louis A. Bianco
Executive Vice President, Finance and Administration
Cell Therapeutics, Inc.
201 Elliott Avenue West
Seattle, WA 98119
(206) 282-7100
Shareholder Proposals
A shareholder who intends to nominate a candidate for election to the Board
of Directors or to present a proposal of business at the 2001 Annual Meeting
and desires that information regarding the proposal be included in the 2001
proxy statement and proxy materials must ensure that such information is
received in writing by the Secretary of the Company at the Company's principal
executive offices not later than April 8, 2001.
By Order of the Board of Directors
/s/ Michael J. Kennedy
Michael J. Kennedy
Secretary
Seattle, Washington
September 11, 2000
8
<PAGE>
The Board of Directors recommends a vote FOR the proposals regarding:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(1) Approval of the issuance of 2,000,000 FOR AGAINST ABSTAIN
shares of Common Stock and the
potential issuance of additional
shares of Common Stock upon the
achievement of certain sales milestones,
in connection with the acquisition [ ] [ ] [ ]
of PolaRx Biopharmaceuticals, Inc.
(2) Transaction of such other business as may FOR AGAINST ABSTAIN
properly come before the meeting or any
postponements or adjournments thereof. [ ] [ ] [ ]
I/We plan to attend the Special Meeting. [ ]
I/We will not be attending the Special Meeting. [ ]
</TABLE>
Number of Attendees ___
________________ _____ PLEASE MARK ALL [X]
ACCOUNT NUMBER SHARES CHOICES LIKE THIS
SIGNATURE __________________________________ DATE ___________________
Cell Therapeutics, Inc.
Special Meeting of the Shareholders
September 29, 2000
This Proxy is Solicited on Behalf of the Board of Directors
The shareholder(s) hereby appoints James A. Bianco, M.D., and Michael J.
Kennedy, and each of them, as proxies, with full power of substitution, to
represent and vote for and on behalf of the shareholder(s) the number of shares
of Common Stock of Cell Therapeutics, Inc. that the shareholder(s) would be
entitled to vote if personally present at the Special Meeting of Shareholders to
be held on September 29, 2000, or at any adjournment or postponement thereof.
The shareholder(s) directs that this proxy be voted as follows:
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting. This proxy, when properly executed,
will be voted in the manner directed herein by the shareholder(s). IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" ITEM 1.
Please sign exactly as your name(s) appears on your stock certificate(s). When
shares are held jointly, each person must sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. An
authorized person should sign on behalf of corporations, partnerships and
associations and give his or her title.
