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Cell Therapeutics, Inc. to Offer to Repurchase up to $124 Million of Its Notes

Friday, December 5, 2008 General News
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SEATTLE, Dec. 5 Cell Therapeutics, Inc. ("CTI"or the "Company") (Nasdaq and MTA: CTIC) today announced that that its Boardof Directors has authorized a "Modified Dutch Auction" tender offer topurchase a portion or all of five series of Convertible Notes (the "Notes") asfollows:
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The Company currently expects to utilize up to $10 million for the tender,from cash currently on hand, cash expected to be received in connection withthe closing of the recent collaboration with Spectrum Pharmaceuticals, and/orcash to be received in connection with a second closing of a sale of notes toa single institutional investor. Currently, there is an aggregate of $124million of Notes outstanding. The tender offer is expected to commence in thenear future.
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Under the "Modified Dutch Auction" procedure, CTI would offer to purchasea portion or all of the outstanding principal amount of the Notes at a pricecurrently expected to be no greater than $80 or less than $50 per $1,000principal amount of Notes, plus accrued and unpaid interest. A "Modified DutchAuction" tender offer allows holders of Notes to indicate the principal amountof Notes that such holders desire to tender and the price within the specifiedprice range at which they are prepared to tender such Notes.

CTI intends to conduct the tender offer in order to reduce the principalamount of its outstanding indebtedness and to provide an opportunity toholders of the Notes to gain liquidity with respect to the Notes that they maynot otherwise have. CTI believes that reducing its outstanding indebtednesswill be in the best interests of its stockholders as it will reduce thesubstantial interest payments required on the Notes and may help to providethe company with additional flexibility to raise additional capital in 2009.

This announcement is for informational purposes only and is not an offerto buy, or the solicitation of an offer to sell, any Notes. The Companyexpects to announce further information on the details of the proposed tenderoffer in the near future. The tender offer, if commenced, will be made solelyby and subject to the terms and conditions set forth in a Schedule TO(including the Offer to Purchase and related Letter of Transmittal) that willbe filed by CTI with the Securities and Exchange Commission ("SEC"). TheSchedule TO and related materials will contain important information,including complete instructions on how to tender Notes, and should be readcarefully and in their entirety before any decision is made with respect tothe Offer. The Offer to Purchase and Letter of Transmittal will be deliveredto all holders of Notes. Once the Schedule TO and offer documents are filedwith the SEC, they will be available free of charge on the SEC's website athttp://www.sec.gov.

This press release contains forward-looking statements that involve anumber of risks and uncertainties, the outcome of which could materiallyand/or adversely affect future results. The risks and uncertainties includewhether the closing conditions, including the consent of Biogen Idec Inc.,will be satisfied in order to consummate the collaboration with SpectrumPharmaceuticals, Inc.; whether the second closing of the sale of notes to aninstitutional investor will occur if the Company elects to sell suchadditional notes to them; that the Company may be unable to commence thecontemplated tender offer or complete the contemplated tender offer as itcontinues to have a substantial amount of debt outstanding and the quarterlyinterest expense associated with the debt is significant; the Company'soperating expenses continue to exceed its net revenues and the Company willcontinue to need to raise capital to fund its operating expenses; as well asother risks listed or described from time to time in the Company's most recentfilings with the SEC on Forms 10-K, 8-K and 10-Q. Except as required by law,the Company does not intend to update any of the statements in this pressrelease upon further developments.-- 4% Convertible Senior Subordinated Notes due 2010 -- 5.75% Convertible Senior Notes due 2011 -- 6.75% Convertible Senior Notes due 2010 -- 7.5% Convertible Senior Notes due 2011 -- 9% Convertible Senior Notes due 2012

SOURCE Cell Therapeutics, Inc.
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