Yes, the Cell Therapeutics Rally is For Real (CTIC)

If you're reading this, then odds are you already know that the last two weeks (not even a full two weeks) have been more fruitful for Cell Therapeutics Inc. (NASDAQ:CTIC) shareholders than the prior two years have been - the stock's up 28% since last Thursday. And, odds are you already know why. The question most of you are asking now is, can CTIC actually keep climbing at this pace, or even keep climbing at any pace? The answer is "yes", though floating that answer almost inherently requires a deeper explanation.

On the off chance you're not familiar with the company or its portfolio and pipeline, CTIC is the company behind the much-ballyhooed drug called Pixantrone. It was all the rage - and the source of great debate - back in 2010 when the company was aiming for an FDA approval. The non-Hodgkins lymphoma treatment was ultimately rejected, but in Europe, it was approved last year. In fact, it was the drug's success in Europe that ultimately prompted the recent rally.

Last quarter, Cell Therapeutics Inc. sold about $1.1 million worth of Pixantrone (under the trade name PIXUVRI) in Europe, well up from $300,000 in sales in the prior quarter... both of which were higher than the year-ago quarters when there are no sales of the drug at all. The vast majority of the company's revenue stems Pixantrone sales.

Compared to the loss of $17.9 million last quarter, that revenue seems tepid. Compared to the CTIC market cap of $150 million, a little more than a million bucks in revenue seems downright weak. And truth be told, it was weak. On the other hand, for a drug's second quarter of being on the market in a fairly competitive NHL market, $1.1 million actually isn't bad. Revenue will ramp up for years before Pixantrone hits its full stride in Europe.

In the meantime - and this is the aspect of Cell Therapeutics Inc. that most investors don't fully appreciate - the company has another drug in the pipeline (Pacritinib) taking aim at two indications, and Pixantrone is being tested in combination with another NHL drug. Outside of the company's own in-house drugs, it's also conducting three trials for two other drugs developed and/or owned by outside parties. All of those other drugs are in Phase 2 or Phase 3 trials, which bodes very well for CTIC shareholders. Oh, it may take a while to reach the endzone with those tests, but as veteran biotech traders can attest, the market rewards milestones.

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All that being said, make no mistake - it was signs of life with Pixantrone in Europe that lit the current fire. Thing is, now that the fire is lit, a bunch of other bullish factors are coming out of the woodwork.

The bottom line is, although traders (and especially newcomers) should continue to expect volatility from the stock, this nudge is a big deal for CTIC. The bump knocked shares out of a rut, and above the 200-day moving average line (green) for the first time in well over a year. Now that the stock's out of the rut, it'll be much easier to keep rolling higher. And, there are plenty of ways for the company to tout itself now, and keep new buyers interested.

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