Processed and formatted by SEC Watch - Visit SECWatch.

com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): February 20, 2009

CELL THERAPEUTICS, INC.

(Exact n am e of re gistran t as spe cifie d in its ch arte r)

Washington 001-12465 91-1533912

(State or oth e r jurisdiction of (C om m ission File Nu m be r) (I.R.S . Em ploye r
incorporation or organ iz ation) Ide n tification Nu m be r)

501 Elliott Avenue West, Suite 400

Seattle, Washington 98119
(Addre ss of prin cipal e xe cu tive office s)

Registrant’s telephone number, including area code: (206) 282-7100

Not applicable
(Form e r n am e or form e r addre ss, if ch an ge d since last re port).

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):

® Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

® Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

® Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

® Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 Processed and formatted by SEC Watch - Visit SECWatch.com

Item 8.01. Other Events.

On February 20, 2009, Cell Therapeutics, Inc. (the “Company”) exercised its option to sell its 50% ownership interest in the 50/50 owned
joint venture with Spectrum Pharmaceuticals, Inc. (“Spectrum”) to commercialize and develop Zevalin® (ibritumomab tiuxetan) (“Zevalin”) in
the United States to Spectrum for $18 million, as may be adjusted for amounts owed between the Company and the joint venture as of the
closing (the “Purchase Price”), pursuant to the term of the operating agreement for the joint venture, dated December 15, 2008 (the “LLC
Agreement”). The Company and Spectrum established the joint venture, RIT Oncology, LLC, in December 2008, pursuant to the Purchase and
Formation Agreement dated November 26, 2008 (“Purchase Agreement”), at which time the Company contributed all of the Zevalin related
assets to the joint venture and sold to Spectrum a 50% membership interest in the joint venture for $15 million, plus certain milestone
payments.

At the closing of the sale of the Company’s 50% membership interest in the joint venture to Spectrum, Spectrum shall either pay the
Purchase Price in full or at its option the Company will receive one-third of the Purchase Price, with another one-third of the Purchase Price
paid 45 days after the closing and the remaining one-third of the Purchase Price paid 90 days after the closing. The consummation of the sale
option transaction is contingent upon the satisfaction of certain closing conditions, including the delivery of a legal opinion from counsel to
the Company, as specified in the LLC Agreement. Additionally, a $750,000 consent fee is required to be paid to Biogen Idec, Inc. (“Biogen”)
under the terms of a certain security agreement and guarantee in favor of Biogen (which fee shall be shared equally between the Company and
Spectrum pursuant to the terms of the pledge agreement dated December 15, 2008).

The Purchase Agreement was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 19, 2008.

Attached as Exhibit 99.1 is a press release relating to the events described herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exh ibit No. De scription

99.1 Press Release of Cell Therapeutics, Inc. dated February 20, 2009.
 Processed and formatted by SEC Watch - Visit SECWatch.com

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

CELL THERAPEUTICS, INC.

Date: February 23, 2009 By: /s/ James A. Bianco

James A. Bianco
Chief Executive Officer

-2-
 Processed and formatted by SEC Watch - Visit SECWatch.com

EXHIBIT INDEX

Exh ibit No. De scription

99.1 Press Release of Cell Therapeutics, Inc. dated February 20, 2009.

-3-
Exhibit 99.1

Cell Therapeutics, Inc.

Making cancer more treatable

LOGO 501 Elliott Ave. W. #400 T 206.282.7100

Seattle, WA 98119 F 206.272.4010

CELL THERAPEUTICS EXERCISES ITS OPTION TO SELL

INTEREST IN ZEVALIN JOINT VENTURE TO
SPECTRUM PHARMACEUTICALS FOR $18 MILLION

CTI to focus on Pixantrone and OPAXIO Approval and Commercialization

February 20, 2009 Seattle—Cell Therapeutics, Inc. (CTI) (NASDAQ and MTA: CTIC) announced today that it exercised its option to sell its
50% ownership interest in the Zevalin joint venture to Spectrum Pharmaceuticals, Inc. (Spectrum) for $18 million. CTI and Spectrum established
a joint venture in December 2008 to develop and commercialize Zevalin. At that time CTI contributed all of the Zevalin related assets to the
joint venture and sold to Spectrum a 50% membership interest in the joint venture for $15 million, plus certain milestone payments.

The Company will focus its resources on the approval of pixantrone for relapsed aggressive non-Hodgkin’s lymphoma (NHL) and OPAXIO for
non-small cell lung and ovarian cancer. CTI estimates that as a result of the sale of the Zevalin interest it will reduce expenses by approximately
$15 million annually from activities previously associated with Zevalin while providing CTI with non-dilutive source of operating capital.

“CTI continues to believe in the value of Zevalin as a commercially attractive product and effective form of cancer therapy; however, with the
impressive clinical trial results for pixantrone and given the company’s need for operating capital, we are compelled to exercise our option and
focus our resources on pixantrone,” noted James Bianco, MD, CEO of CTI. “CTI has been proud to have provided Zevalin to patients since we
acquired it in December, 2007 and having the foresight to bring the first line consolidation for indolent NHL data to the FDA for potential label
expansion in the front line consolidation setting. With the progress we made in removing many of the barriers that prevent its more widespread
use, we are confident Spectrum will be able to ultimately make Zevalin a commercially attractive product.”

At the closing of the sale of CTI’s 50% membership interest in the joint venture to Spectrum, CTI will receive $6 million, with the remainder of
the $18 million to be paid within 90 days following such closing. The closing of the sale option transaction is contingent upon the satisfaction
of certain closing conditions, including the delivery of a legal opinion from counsel to CTI, as specified in the operating agreement for the
Zevalin joint venture. CTI believes that it will be in a position to promptly satisfy all of the closing conditions.
 Processed and formatted by SEC Watch - Visit SECWatch.com

About Zevalin®
Zevalin® (Ibritumomab Tiuxetan) is a form of cancer therapy called radioimmunotherapy and is indicated as part of the Zevalin therapeutic
regimen for treatment of relapsed or refractory, low-grade or follicular B-cell non-Hodgkin’s lymphoma, including patients with rituximab
refractory follicular NHL. Zevalin is also indicated, under accelerated approval, for the treatment of relapsed or refractory, rituximab-naïve, low-
grade and follicular NHL based on studies using a surrogate endpoint of overall response rate. It was approved by the FDA in February of
2002 as the first radioimmunotherapeutic agent for the treatment of NHL.

Rare deaths associated with an infusion reaction symptom complex have occurred within 24 hours of rituximab (Rituxan ®) infusions. Yttrium-90
Zevalin administration results in severe and prolonged cytopenias in most patients. Severe cutaneous and mucocutaneous reactions have
been reported. The most serious adverse reactions of the Zevalin therapeutic regimen were primarily hematologic, including neutropenia,
thrombocytopenia and anemia. Infusion-related toxicities were associated with pre-administration of rituximab. The risk of hematologic toxicity
correlated with the degree of bone marrow involvement prior to Zevalin therapy. Myelodysplasia or acute myelogenous leukemia was
observed in 2 percent of patients (8 to 34 months after treatment). Zevalin should only be used by health care professionals qualified by
training and experience in the safe use of radionuclides.

Patients and healthcare professionals can visit www.zevalin.com for more information.

About Non-Hodgkin’s Lymphoma

Non-Hodgkin’s lymphoma (NHL) is caused by the abnormal proliferation of white blood cells and normally spreads through the lymphatic
system, a system of vessels that drains fluid from the body. NHL can be broadly classified into two main forms – aggressive NHL, a rapidly
spreading acute form of the disease, and indolent NHL, which progresses more slowly. According to the National Cancer Institute’s SEER
database there were nearly 400,000 people in the U.S. with NHL in 2004. The American Cancer Society estimates that in the United States
66,120 people are expected to be diagnosed with NHL in 2008. Additionally, approximately 19,160 are expected to die from this disease in 2008.

About Cell Therapeutics, Inc.

Headquartered in Seattle, CTI is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at
making cancer more treatable. For additional information, please visit www.celltherapeutics.com.

This press release includes forward-looking statements that involve a number of risks and uncertainties, the outcome of which could
materially and/or adversely affect actual future results. Specifically, the risks and uncertainties that could affect the development of Zevalin
include risks associated with preclinical and clinical developments in the biopharmaceutical industry in general and with Zevalin in
particular including, without limitation, the potential for Zevalin FIT data to be acceptable to the FDA for this expanded indication or any
other indication, the determinations by regulatory, patent and administrative governmental authorities, competitive factors, technological
developments, and costs of developing, producing and selling Zevalin. There is also a risk that even if label expansion of Zevalin is
approved, it
 Processed and formatted by SEC Watch - Visit SECWatch.com

may not result in a significant market increase for the drug due to the presence of other treatment options, failure to gain market
acceptance and other factors. Additionally, the closing of the sale option and receipt of the purchase price assumes that the company will
be able to satisfy all of the closing conditions and that Spectrum fulfills its legal obligations to timely deliver the purchase price.
Disposition of our interest in Zevalin may not reduce our expenses to the extent as currently projected. You should also review the risk
factors listed or described from time to time in the Company’s filings with the Securities and Exchange Commission including, without
limitation, the Company’s most recent filings on Forms 10-K, 8-K, and 10-Q. 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.

###

Media Contact:
Dan Eramian
T: 206.272.4343
C: 206.854.1200
E: media@ctiseattle.com
www.CellTherapeutics.com/press_room

Investors Contact:
Ed Bell
T: 206.272.4345
Lindsey Jesch Logan
T : 206.272.4347
F : 206.272.4434
E: invest@ctiseattle.com
www.CellTherapeutics.com/investors