Investor Updateesto UpdateCharting the path to profitability

J A Bi M DJames A. Bianco, M.D.Chief Executive Officer

Forward Looking Statement

This presentation contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this presentation include statements about future financial and operating results and risks and uncertainties that could affect CTI’s product andstatements about future financial and operating results, and risks and uncertainties that could affect CTI s product and products under development.These statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may

t t Th f t l t d lt diff t i ll f h t i d h i Inot prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which CTI expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished.

The following factors among others could cause actual results to differ materially from those described in the forwardThe following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: risks associated with preclinical, clinical and sales and marketing developments in the biopharmaceutical industry in general and in particular including, without limitation, the potential failure of Opaxio™ to prove safe and effective for treatment of non-small cell lung and ovarian cancers, the potential failure of Pixuvri (pixantrone dimaleate) to prove safe and effective (including complete and overall response rates) for treatment of non-Hodgkin’s lymphoma, determinations by regulatory, patent and administrative governmental authorities, competitive factors, technological developments, costs of developing, producing and selling CTI’s products under development; and other economic, business, competitive, and/or regulatory factors affecting CTI’s business generally, including those set forth in CTI’s filings with the SEC, including its Annual Report on Form 10-K for its most recent fiscal year and its most recent Quarterly Report on Form 10-Q, especially in the “Factors Affecting Our Operating Results” and “Management’s ece t Qua te y epo t o o 0 Q, espec a y t e acto s ect g Ou Ope at g esu ts a d a age e t sDiscussion and Analysis of Financial Condition and Results of Operations” sections, and its Current Reports on Form 8-K. Except as may be required by law, CTI does not intend to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

Overview

Focused on ProfitabilitySuccessfully turning around the business

Reduced Opex 72% y/y while advancing key assets toward marketR i d $68 YTDRaised $68mm YTD

$31.5mm without selling stock (Zevalin asset sale)

Removed $52.9mm of debt increased shareholder equity by$43.7mmq y yListed on Russell 3000, Russell 2000 and Russell Global IndexesPositioned to break even in Q4 2009 attractive EPS growth 2010

Successful Pixuvri phase III trial, NDA submission and product launch will drive near term valueAttractive Oncology PipelineManagement team experienced in oncology product sales

Building a Powerful Cancer Drug Portfolio

Preclinical Phase I Phase II Phase III Marketed

NDA iNDA reviewNP sales EU

MAA reviewNSCL Lung cancer MAA reviewPhase 3

Brostallicin

NSCL Lung cancer 1° line Ovarain cancer

Brostallicin

Bisplatinates

NP sales = named patient sales

Charting the Path to Profitabilityan

ds)

$ th

ousa

($

Charting the Path to Profitabilityan

ds)

$ th

ousa

($

Charting the Path to ProfitabilityCleaned up Capital Structure• Retired all preferred; only common stock & warrants to purchase p ; y p

common stock outstandingCleaning up Balance Sheet• Removed $52 9 mm ($1 89/share) of debt increased shareholder• Removed $52.9 mm ($1.89/share) of debt increased shareholder

equity by $43.7 million

Historical Proforma**

Increasing Shareholder Equity*Historical Proforma

Accumulated Deficit $1,325,444 $1,318,342CTI Total Shareholder Deficit <$115,984> <$54,131>Total Liabilities & Shareholder Deficit $42,933 $54,572

*All values thousands*All values thousands**Proforma based on unaudited financial data for quarter ended March 31, 2009 adjustedfor sale of shares in May 2009 and debt redemption.

Stock Price and Market Cap AppreciationCell Therapuetics Inc.

(Mercato Closing Price) *expressed in Euros

€ 1.00

€ 1.20

€ 1.40

g P

rice

€ 0.40

€ 0.60

€ 0.80

Mer

cato

Clo

sing

1/23/20090.04 Euros

6/2/20091.301 Euros

(A.H.)

Cell Therapeutics Inc. (Market Cap.)

*expressed in Euros

€ 0.00

€ 0.20 (A.L.)

*expressed in Euros

€ 450 000 000 00€ 500,000,000.00€ 550,000,000.00€ 600,000,000.00€ 650,000,000.00€ 700,000,000.00

atio

n

6/2/2009650.5 million

Euros

€ 100,000,000.00€ 150,000,000.00€ 200,000,000.00€ 250,000,000.00€ 300,000,000.00€ 350,000,000.00€ 400,000,000.00€ 450,000,000.00

Mar

ket C

apita

liza

1/23/200920.0 million

Euros

€ 0.00€ 50,000,000.00

01/23

/0901

/29/09

02/04

/0902

/10/09

02/23

/0902

/27/09

03/05

/0903

/11/09

03/17

/0903

/24/09

03/30

/0904

/03/09

04/09

/0904

/17/09

04/23

/0904

/29/09

05/06

/0905

/12/09

05/18

/0905

/22/09

05/28

/0906

/03/09

06/09

/0906

/15/09

06/19

/0906

/25/09

Cell Therapuetics Inc. (NASDAQ Closing Price)

$2.00

$2.50

rice

6/1/2009

$2.09 (YTD High)

$1.00

$1.50

asda

q C

losi

ng P

r

1/23/2009

$0.00

$0.50Na

1/23/2009

$0.05 (YTD Low)

Cell Therapeutics Inc. (Market Capitalization)

$900 000 000 00$950,000,000.00

$1,000,000,000.00$1,050,000,000.00 6/1/2009

$1.049 billion(YTD High)

$450,000,000.00$500,000,000.00$550,000,000.00$600,000,000.00$650,000,000.00$700,000,000.00$750,000,000.00$800,000,000.00$850,000,000.00$900,000,000.00

Cap

italiz

atio

n

(YTD High)

$0.00$50,000,000.00

$100,000,000.00$150,000,000.00$200,000,000.00$250,000,000.00$300,000,000.00$350,000,000.00$400,000,000.00

8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9

Mar

ket

1/23/2009$20.0 million (YTD Low)

12/31

/0801

/07/09

01/13

/0901

/20/09

01/26

/0901

/30/09

02/05

/0902

/18/09

02/24

/0903

/02/09

03/06

/0903

/12/09

03/18

/0903

/24/09

03/30

/0904

/03/09

04/09

/0904

/16/09

04/22

/0904

/28/09

05/04

/0905

/08/09

05/14

/0905

/20/09

05/27

/0906

/02/09

06/08

/0906

/12/09

06/18

/0906

/24/09

06/30

/09

CTI’s Successful Cancer Treatments

Excellent Return on Investment

Highly effective therapy for first and subsequent relapse in acute promyelocytic leukemia (APL)

Excellent Return on Investment• Purchased in 2000 for $12mm in stock

• Stock price appreciation 5000% ($1.50 to $77.00)• Peak sales $22mmPeak sales $22mm

• Sold to Cephalon in 2005 for $70mm cash

Highly effective therapy for patients with relapsed or refractory, low-grade non-Hodgkin's lymphoma (NHL)

Excellent Return on Investment• Purchased from Biogen-Idec $10mm December 2007• Sold to Spectrum in March 2009 $31.5mm

CTI’s Successful Cancer Treatments

Highly effective therapy for patients with relapsed aggressive NHL

Pixuvri History• Discovered by Novuspharma, acquired by CTI in January 2004y p q y y

Patient benefit• Initial Label Indication - 9,760 US patients + 6,832 EU patients• Label expansion could reach additional 51,000 patients US/EU

Potential to Take Company to ProfitabilityT t l P t ti l M k t Si 66 592 ti t /• Total Potential Market Size 66,592 patients/yr

• $44,000 per patient/yr

Th i h i fTh i h i fThe superior choice for The superior choice for an an anthracyclineanthracycline in NHLin NHL

Successful Phase III Trial results

Opportunity AssessmentOpportunity Assessment

• Anthracyclines – 3rd most commonly used class anti-y ycancer agents

• >300,000 pts receive an anthracycline each year• Potentially curative in

– Lymphoma (NHL)( )– Leukemia (AML)

– Breast cancer– Sarcoma

• Cornerstone class in 1st line treatment regimens

AnthracyclineAnthracycline Use (US+EU)Use (US+EU)

231,417

302,000 Patients/year

tient

sPa

t

20,200 15,794 11,706 11,650 11,346

Source: Tandem Cancer Audit 2004

Aggressive NHL Aggressive NHL –– Treatment Regimens Treatment Regimens (US data)(US data)

AnthracyclinesAnthracyclines Standard of Care in 1Standard of Care in 1stst line Treatmentline TreatmentAnthracyclinesAnthracyclines Standard of Care in 1Standard of Care in 1stst line Treatmentline Treatment

100,0%

120,0%

12,3%

Other

bortezomib

R‐CNOP

80,0%

11,3%

8,9%0,4%3,0%1,4%0,8%

37,8%45,7%

CVP

R‐CHOPM

lenalidomide

CAV

40 0%

60,0%

11,2%

5,2%3,4%

3,3%

1,1%

1,8%

3,5%

5,4%

1,7%

1,8%

1,7%

3,5%

2,9%

4,5%Treanda+

R‐ESHAP

RF

20,0%

40,0%60,9%

25,2% 19,1%

4,5%3,3%3,3%

RICE

R‐CVP

R

R + CHOP

0,0%

1st LOT 2nd LOT 3rd+ LOT

6,3% 7,1%

IntrinsiQ March 09

1st Line 2nd Line 3rd Line+Patient # 30,029 10,150 9,767

™™

Heart Failure Limits ReHeart Failure Limits Re‐‐treatmenttreatmentailure 

f Heart Fa

cide

nce of

nt (%

) Inc

Perce

16

Like cardiac toxicity, extravasation is a serious concern with current anthracyclinesconcern with current anthracyclines

Next Generation Anthracycline 

• Rationally Designed to Reduce Oxygen RadicalRationally Designed to Reduce Oxygen Radical Generation

Significant reduction in cardiac damage in animal models Vs– Significant reduction in cardiac damage in animal models Vs current marketed anthracyclines

– No extravasation concerns‐ peripheral vein infusionNo extravasation concerns‐ peripheral vein infusion

O OH

OH

OOH

O NH NH2

COOHO NH N

HOHOH

O O OH OO

OH

NHH

N

O NH NH2

COOH

COOH

O NH NH

OHOH

2 HCl 2

NH2

MitoxantroneDoxorubicin pixantrone

PIX 301Phase III Study DesignPIX 301Phase III Study Design

‐ Randomized Controlled International Multicenter Phase III trial‐ Relapsed or refractory aggressive NHL >2nd relapse‐ 140 patients

• Treatment every month up to 6 cycles

• CT scan every 2 cyclesStandard Primary Endpoint*

Complete Remission (CR/CRu)CT scan every 2 cycles x 3 then every 3 months

Chemotherapy ‐ Complete Remission (CR/CRu)Secondary Endpoints*

‐ Overall Response Rate (ORR)

• Treatment every 21 days up to 6 cyclesCT 2 lPi t

‐ Responses > 4months‐ Time to response‐ Progression Free Survival

• CT scan every 2 cycles x 3 then every 3 months

Pixantrone ‐ Safety

19*All response and progression data determined by IAP

PIX 301 Phase III Trial in Relapsed NHLPIX 301 Phase III Trial in Relapsed NHLpp

Intent to Treat :Primary endpoint achievedIntent to Treat :Primary endpoint achieved

Pixantrone (n=70) Control (n=70) P‐value

CR 11 4% (8) 0% (0)CR 11.4% (8) 0% (0)

CRu 8.6%  (6) 5.7% (4)

CR/CRu 20.0% (14) 5.7% (4) 0.021

Intent to Treat : Secondary endpoint achieved

CR/CRu 20.0% (14) 5.7% (4) 0.021

Population Pixantrone Control P‐value

ORR (PR+CR/CRu) 37% (26/70) 14.3% (10/70) 0.003

PIX 301 Phase III Trial in Relapsed NHLPIX 301 Phase III Trial in Relapsed NHLPIX 301 Phase III Trial in Relapsed NHLPIX 301 Phase III Trial in Relapsed NHL

Pixantrone increased progression free survival > 80% (ITT)

Median PFS 4.7 Vs 2.6 monthsHR 0.60 (p=0.007)

Pixantrone

Standard Chemotherapypy

Lifetime Anthracycline/Anthracenedione Exposure(Doxorubicin Equivalent Dose)(Doxorubicin Equivalent Dose)

Treatment Cycle

Pixantrone Treatment Cumulative Dose*

LifetimeCumulative Dose**

N Median  (mg/m2) Median  (mg/m2)

1 68 74 365.2

2 54 148 430.2

3 43 209 498 13 43 209 498.1

4 36 275 571.8

5 25 356 631 55 25 356 631.5

6 22 427 695.0

* Pixantrone dose converted to dox equivalent dose by factor 3.4**  Dox equivalent dose based on  “P. McLaughlin JCO Vol14, No 4, 1996”

Encouraging Cardiac Safety DataEncouraging Cardiac Safety Data

Frequency % CHF Expected Vs Observed by Total

Doxorubicin Doxorubicin Pixantrone

Frequency % CHF Expected Vs Observed by Total Doxorubicin Equivalent Exposure

Doxorubicin Equivalent Exposure (mg/m2)

DoxorubicinN=620

PixantroneN=70

<300 5.6% 2/68

500 15% 2/43500  15% 2/43

600 32% 0/36

>600 48% 1/25

23

* Swain, et al. Cancer 2003; 97(11): 2869-2879; Sonnenveld et al. JCO 1995, 13:2530-2539

Summary & Implications PIX301 Phase III ResultsSummary & Implications PIX301 Phase III Results

• Superior efficacy over standard of care • First trial  in relapsed/refractory  aNHL to demonstrate

• Superior CR rates 24% Vs. 7% p=0.009*

• Superior ORR 40% Vs 14% p=0 001*• Superior ORR  40% Vs. 14% p=0.001*

• Superior PFS 4.7 months Vs. 2.6 months p=0.007

• Superior duration of CR  7 months Vs. 3.5 months p=0.03

• Unprecedented cardiac safety profile despite median dox‐equivalent exposure of 515mg/m2• Non‐dose dependant occurrence of CHF (5 Vs 2) drug relationship unlikely

• Cumulative occurrence  7% Vs expected  25% to 48%  standard doxorubicin

• Activity preserved even among  patients with extensive prior doxorubicin and y p g p prituximab treatment

• Available for named patient sales in Europe*Includes both treatment and follow up periods*Includes both treatment and follow‐up periods

™™

Commercial Opportunity

Commercial Analysis

AssumptionsPricing $24/mg $1 200 vial = average use 36 vials/patient• Pricing $24/mg – $1,200 vial, = average use 36 vials/patient

• Exclusivity in the market to 2018 (US) / 2020(EU)• Regulatory approval – aggressive relapsed NHLg y pp gg p

• US Q4-2009, EU Q3-2010

Modeling assumptions (US only)O CTI peak Market Research• Only NHL is included

• 1st line 30,029 patients• 2nd line 10,150 patients

3rd line 9 767 patients

CTI peak Market ResearchNHL in model Peak

Aggressive1st-line 15% 26%2nd-line 20% 38%• 3rd line 9,767 patients

Peak Penetration• Assumes EU ~70% US market

2 line 20% 38%3rd-line+ 25% 36%Indolent 1st-line 4% 27%2nd-line 8% 34%

• 15,800 pts US +10,600 pts EU• Total peak patients/yr = 26,400• Cost per patient/yr = $44 000

2 line 8% 34%3rd-line+ 8% 32%

• Cost per patient/yr = $44,000

Novartis – CTI Agreement(s)

If NVS exercises its option for Pixantrone the LicenseIf NVS exercises its option for Pixantrone the License would have the following features• Reimburses CTI for 50% of expenses from 9/06* >$25,000,000p $ , ,• Pays CTI $7,500,000 option fee upon license execution• Pays $10,000,000 FDA approval milestone in 3rd line aNHL

Pays additional $94 000 000 in potential future registration & sales• Pays additional $94,000,000 in potential future registration & sales milestones

• Controls future development and commercialization of product & 100% f tfuture expenses

• CTI may field 35 FTE in US at Novartis’ expense up to $9M• Pays CTI royalties 28% to 32% on net sales beyond $50 million

*from date of execution of license agreement

A bioengineered version of Taxol®(paclitaxel)

Singer et al. In: Adv Exp Med Biol. 2003; 519:81-99

PG Technology: Selective Delivery of Cytotoxic DrugsCytotoxic Drugs

Macromolecules are preferentially distributed to and retained in tumor microvasculature“EPR” effectEnhanced

bilit dpermeability and retentionThey are then taken up into the cancerup into the cancer cell by a process called endocytosis, where they arewhere they are metabolized releasing the chemotherapychemotherapy

OPAXIO™15–20 minute infusion

Paclitaxel3 to 24 hour infusion3 to 24 hour infusion

Opaxio Regulatory Status

EU- 1st line single agent NSCLC, PS=2MAA review nearing completionMAA review nearing completion• Submission based off non-inferior survival, better side effects

US/EU- 1st line maintenance in ovarian cancerPivotal trial (GOG212)Pivotal trial (GOG212) • Targeting interim PFS results early 2010: late 2010 NDA-approval• Market size ~15,000 patients/year ($32,000/patient)

Additional Registration Trial- 2010• Esophageal/Gastric- XRT sensitization

I i f (45%) h l i l i i• Impressive rates of (45%) pathologic complete remission rates• Would be 1st radiation sensitizer approved in US/EU

• Phase II-III to start Q1-2010Q

Novartis–CTI Agreement(s)

Worldwide license to OPAXIOWorldwide license to OPAXIO• $75M in potential development expense reimbursement*• $270M in potential registration and sales milestones$ p g• CTI to field 35 FTE at NVS expense up to $9M• NVS to assume all development and commercial expenses• Royalties 20-25% on WW net sales

*50% expenses from date of execution of license agreement

Capital Structure/Financials

Dual Listed NASDAQ:CTIC, MTA:CTIC.MILi id t k 50 h /d US/EU• Liquid stock ~50mm shares/day US/EU

Cleaned up Capital Structure• Retired all preferred- only common stock outstandingRetired all preferred only common stock outstanding• 502mm shares outstanding

Cleaning up Balance Sheet$ $• Redeemed $52.9mm debt@ $1.89/share

• Returned $43.7 mm to shareholder equityReduced OpEx to $2 5mm/monthReduced OpEx to $2.5mm/monthCash end Q1- $750,000• Raised ~$53mm April/May, $24mm non-stock based

Listed on Russell Indexes

Upcoming Milestones

Upcoming Milestones – 2H-09• FDA acceptance NDA - grant priority (6month review)• EMEA opinion on OPAXIO MAA for lung cancer• Potential FDA approval• Potential Novartis option exercise

• Up to $45mm in payments

• Phase III results on OPAXIO 1st line Ovarian cancer t i ltrial

Charting the Path to Profitability

Closing CommentsSuccessfully turning around the business without government bail out money!

Si ifi t t d ti hil d i k t t d• Significant cost reductions while advancing key assets toward market

• Smart negotiation of “Zevalin sale put right” to Spectrum Pharmag p g p• Provided attractive 215% 1 yr ROI ($21.5 million net of initial $10mm

investment)

Raised $44 mm at increasing valuations limiting dilution• Raised $44 mm at increasing valuations, limiting dilution• Raised $31.5mm without selling stock (Zevalin asset sale)• International peer reviewed acknowledgement of Pixuvri• International peer reviewed acknowledgement of Pixuvri

benefit to patients at Amercian Society of Clinical Oncology (ASCO) Meetings

• Positioned to break even Q4 2009 and profitable in 2010

Resources

Cell Therapeutics, Inc. (CTI)501 Elliott Ave W Suite 400501 Elliott Ave. W., Suite 400Seattle, WA 98119+1 206.282.7100www.CellTherapeutics.com

Investors Contact:

CTI Barabino & Partners IRCTI Barabino & Partners IR

Elena Murador Omar Al BayatyT +39 02 610 35 808 T +39 02.72.02.35.35F +39 02 610 35 601 F +39 02.89.00.519F 39 02 610 35 601 F 39 02.89.00.519E: elena.murador@ctimilano.com E: o.albayaty@barabino.it

www.CellTherapeutics.com/investors.htm

For the latest financial information, including investor updates, SEC filings, press releases, and webcasts, please visit our Web site at www.CellTherapeutics.com.

For more product and clinical trial information including references, clinical trial information, and

© CTI 2009

For more product and clinical trial information including references, clinical trial information, and product fact sheets for pixantrone, OPAXIO™, and brostallicin, visit our Web site, www.CellTherapeutics.com.