Together we are redefining the landscape of cancer therapies.

cti annual report 2004

Cell Therapeutics, Inc. 501 Elliott Avenue West Seattle, Washington 98119 206.282.7100 www.cticseattle.com directors* senior management team* James A. Bianco, M.D. James A. Bianco, M.D. President, Chief Executive OKicer, and Director President, Chief Executive Ogcer, and Director Cell Therapeutics, Inc. Steve Aselage Max E. Link, Ph.D.(1, 2) Executive Vice President, Chairman of the Board of Directors Global Commercial Operations Former Chairman and CEO, Centerpulse, Ltd. Louis A. Bianco John M. Fluke Jr.(2, 3) Executive Vice President, Director Finance and Administration Chairman, Fluke Capital Management James Canfield, S.P.H.R.** Vartan Gregorian, Ph.D.(1) Executive Vice President, Director Chief Administrative Ogcer President, Carnegie Corporation Richard E. Leigh, Jr. Mary O. Mundinger, D.P.H.(1, 3) Executive Vice President, Director General Counsel and Corporate Secretary Dean of School of Nursing, Columbia University Jack W. Singer, M.D. Phillip M. Nudelman, Ph.D.(2, 3) Executive Vice President, Director Chief Medical Ogcer, and Director President and CEO, Hope Heart Institute Silvano Spinelli Erich Platzer, M.D. Executive Vice President, Director Development and Managing Director, Former Chairman of the Board of Directors Cell Therapeutics (Europe) S.r.l., and Director Novuspharma Except for the historical information contained herein, the matters Jack W. Singer, M.D. set forth in this Annual Report include information concerning Director our drug development pipeline, including anticipated regulatory timelines and the status of clinical trials, which are forward-looking Executive Vice President, Chief Medical Ogcer statements within the meaning of the “safe harbor” provisions of Cell Therapeutics, Inc. the Private Securities Litigation Reform Act of 1995. These forward- looking statements are subject to risks and uncertainties that may Silvano Spinelli cause actual results to diKer materially, including the likelihood of continued egcacy in treatment of cancers with our products, the Director commercialization of our products, and our ability to successfully Executive Vice President, develop and support new indications; the impact of technological advances and competition; the timing and ability to enroll and com- Development and Managing Director plete clinical trials; the role that other factors and other competitive Cell Therapeutics (Europe) S.r.l. products may play in accelerating the discovery and development of new therapeutic products; and other risks detailed elsewhere in this report and from time to time in CTI’s SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2004. These forward-looking statements speak only as of the date thereof. CTI disclaims any intent or obligation to update these forward-looking statements. CTI, TRISENOX, and XYOTAX (formerly referred to as PG-TXL) are our proprietary marks. All other product names, trademarks, and trade names referred to in this Annual Report are the property of (1) Member of the Compensation Committee. their respective owners. (2) Member of the Audit Committee. (3) Member of the Nominating and Governance Committee. *As of March 15, 2005 ** Resigned as of April 1, 2005 We believe the patient is our first priority.

cti annual report 2004 01 Loretta Carter is a XYOTAX™ patient on the single-agent phase III trial, STELLAR 4. She is fighting her cancer so she has more time to spend with her family.

After my initial surgery for lung cancer, I was in remission for seven years. When I relapsed, the cancer spread to my bones. My doctor told me that PS2 patients like me live for an average of only about four months. He also told me that the available treatments might help me feel more comfortable but probably wouldn’t do anything to stop the cancer. I was very scared. I beat cancer once, but I was worried that I wouldn’t beat it a second time. My children told me that cancer isn’t the death sentence it used to be, and with their support, I decided to participate in a clinical trial of XYOTAX. At first, the treatment made me nauseated, but I was able to manage this with anti- nausea medication. I also experienced some tingling in my toes, but I didn’t lose my hair or develop anemia. I’ve already survived twice as long as my doctor thought I would. I love feeling well enough to get out of the house. Mostly I’m thankful to have more time to spend with my four children and my grandchildren. I feel fortunate that I had the opportunity to do something positive for myself. Sitting here today with my kids, I’m glad I tried it.

right: Loretta Carter outside her Philadelphia home with her daughters Aletha Grimes and Nikita Carter and granddaughter Nik’ell Byrd. cti annual report 2004 02/03 We believe not only in extending survival, but also improving quality of life. cti annual report 2004 04/05 Gracie Pena is a full-time mother and non-Hodgkin’s lymphoma (NHL) survivor. She’s also a pixantrone clinical trial participant.

I never had any cancer symptoms, but a friend noticed some swelling in my neck and shoulder and insisted that I get it checked out. That was when the nightmare started. I was working full time and raising my daughters, one at home and one who had just left for college. My life was just as normal as everyone else’s, working full time as an examiner for a title agency and taking care of my family. With my first course of chemotherapy, I experienced tingling in my toes and fingers, as well as nausea and fatigue. I went into remission, but the cancer came back six months later. It was a very stressful time, and I was feeling overwhelmed. My girls thought they might lose their mom and that was hard for me. When the cancer came back, I enrolled in a pixantrone clinical trial. I had fewer side effects with this regimen, and I actually felt good during treatment. By the end of the fifth cycle, I was in complete remission and was able to undergo a stem cell transplant. I’ve been in remission for two and a half years. Today I enjoy spending time with my family, visiting my daughters, and working out. I have new priorities as a cancer survivor, and I’m glad I’ve been given a second chance on life. right: Gracie Pena pictured in her garden in Corpus Christi, Texas. cti annual report 2004 06/07 We believe the care of cancer patients can be significantly improved. According to the World Cancer Research Fund (WCRF) and its most recent cancer statistics from Globocan, there were approximately 11 million newly reported cases of cancer worldwide in 2002, with a projected prevalence in 2007 of more than 24 million. This year, for the first time, cancer surpassed heart disease as the leading killer of Americans under the age of 85.

An estimated 1.4 million patients worldwide were newly diagnosed with lung cancer in 2002, according to Globocan. We believe XYOTAX has the potential to provide a more effective, more tolerable treatment option for patients with this disease, with the aim of delivering more of the active ingredient directly to the tumor.

In 2002, an estimated 205,000 patients were newly diagnosed with ovarian cancer worldwide, according to Globocan’s statistics. XYOTAX may provide ovarian cancer patients with a treatment option that is more tolerable than current chemotherapy regimens, minimizing common side effects of standard treatment such as hair loss.

Non-Hodgkin’s lymphoma was diagnosed in 300,000 people worldwide in 2002, according to Globocan. Anthracyclines cause cardiac toxicity that limit their repeated use in the NHL patients who relapse following treatment. Pixantrone may provide a new treatment to these patients and to patients with preexisting cardiac risk factors.

cti annual report 2004 08/09 We believe doctors and patients need new and more tolerable treatment options. cti annual report 2004 10/11 “We’re still not curing enough cancer patients. I’m always looking for new therapeutic opportunities that will give my patients the power to manage their disease for the long term while maintaining a good quality of life during treatment. XYOTAX is a promising investigational cancer therapy that may be more effective and more tolerable than paclitaxel, giving patients an important new weapon in their fight against cancer.”

Alan B. Sandler, M.D. Associate Professor of Medicine Director, Thoracic Oncology, Vanderbilt-Ingram Cancer Center cti annual report 2004 12/13 XYOTAX has a unique profile that may provide superior tolerability, better efficacy, and an improved side effect profile when compared to other taxanes, one of the most widely prescribed classes of chemotherapy.

Overview XYOTAX (paclitaxel poliglumex) is a novel compound made by linking the active ingredient, paclitaxel, a taxane widely used in treating a variety of cancers, to a biodegradable polymer. According to IMS Health, 2003 U.S. taxane sales were nearly $1 billion and worldwide sales were approximately $2.5 billion, despite the difficulties associated with the administration and serious dose-limiting toxicities of taxane-based chemotherapies. Taxanes are a standard of care in lung and ovarian cancers, as well as breast and prostate cancers. A new approach to taxane chemotherapy Unlike paclitaxel, XYOTAX is readily dissolved in a solution of water and sugar and typically infused in just ten minutes, without the need for a surgically placed catheter. The biodegradable polymer eliminates the need for pretreatment with steroids and antihistamines in all but rare instances. Combined, these properties shorten and simplify the administration for patients treated with XYOTAX compared with standard taxane therapy. A novel compound, XYOTAX is better tolerated, which may allow more cumulative doses than can be administered with standard paclitaxel. This may result in improved effectiveness in controlling cancer progression. As XYOTAX travels through normal blood vessels, the polyglutamate polymer maintains paclitaxel in an inactive state. This reduces the systemic level of active paclitaxel in the body. Blood vessels within the tumor are leaky, allowing XYOTAX to leave the circulatory system and enter tumor tissue. The polymer is metabolized inside the cell, releasing active paclitaxel that halts tumor growth and induces tumor cell death. This novel formulation is designed to reduce systemic side effects and increase effi cacy by concentrating active paclitaxel within the tumor while protecting normal tissue from paclitaxel’s potent cell killing properties.

Paclitaxel Polymers

XYOTAX development status The STELLAR clinical trials are among the largest randomized trials to date in either second-line treatment for non-small cell lung cancer (NSCLC) or in fi rst-line treatment of NSCLC patients with a poor performance status (PS2). More than 1,700 patients were enrolled in the STELLAR trials. STELLAR 2 is designed to compare XYOTAX with docetaxel as a second-line treatment of NSCLC patients. STELLAR 3 evaluated carboplatin in combination with either XYOTAX or paclitaxel as fi rst-line treatment for PS2 NSCLC patients. STELLAR 4 compares XYOTAX to either gemcitabine or vinorelbine as fi rst-line treatment for PS2 NSCLC patients. Preliminary results of STELLAR 3 were reported in March 2005. Effi cacy appeared to be comparable to paclitaxel in combination with carboplatin. While the XYOTAX combi- nation missed its primary endpoint of improving overall survival, patients who received the XYOTAX regimen had signifi cantly less hair loss and a reduction in other side effects, including muscle and joint pain, cardiac symptoms, and an overall reduction in neurologic toxicities compared to patients who received the standard paclitaxel/ carboplatin regimen. The XYOTAX regimen was given in a convenient 10-minute infusion without the requirement for steroids and other premedications. Hypersensitivity reactions were rare on the XYOTAX/carboplatin arm of the study despite the lack of premedications. Data from the STELLAR 2 and STELLAR 4 trials are anticipated in the second quarter of 2005. XYOTAX also is being evaluated in a phase III trial for ovarian cancer.

cti annual report 2004 14/15 We believe we can overcome the limitations of treatment-related toxicities. cti annual report 2004 16/17 “The patients I’ve enrolled in the clinical trial of pixantrone have failed previous treatment regimens or never responded to first-line therapy for non-Hodgkin’s lymphoma. These are very difficult patients to treat, and they rarely respond to standard regimens. The complete response rate we have seen in pixantrone phase II studies has really been quite promising.”

Alexandra M. Levine, M.D. Chief, Division of Hematology Medical Director, USC/Norris Comprehensive Cancer Center and Hospital Distinguished Professor of Medicine, Keck School of Medicine, USC Ronald H. Bloom Family Chair in Lymphoma cti annual report 2004 18/19 Pixantrone may provide durable remissions and potential cures for non- Hodgkin’s lymphoma (NHL) with fewer of the cardiac toxicities associated with approved anthracyclines.

Overview Anthracyclines are one of the most potent classes of anti-cancer agents used in first-line treatment of aggressive NHL, leukemia, and breast cancer. Anthracycline- containing regimens can often produce long-term cancer remissions and cures. However, the currently marketed anthracyclines can cause severe, permanent, and life-threatening cardiac toxicity when administered beyond widely recognized cumulative lifetime doses. The approved first-line therapies for aggressive NHL include an anthracycline and may lead to remission in up to 70% of patients treated with these regimens. However, approximately 30% of patients who respond to first-line therapy eventually relapse and many are unable to undergo an additional course of anthracycline-containing therapy due to the risk of cardiac toxicity. There are no drugs approved for second- or third-line treatment for patients with relapsed aggressive NHL. An opportunity to improve efficacy and reduce toxicity A novel compound with better ease of administration, greater anti-tumor activity, and less cardiac toxicity would be an important advance in the treatment of NHL. Pixantrone has been designed to reduce the potential for the severe cardiac toxicity associated with anthracyclines. Pixantrone may provide an alternative to patients with relapsed or recurring NHL who have exceeded their lifetime cumulative dose of anthracyclines, or for patients with preexisting cardiac risk factors. Today, these patients lack approved therapies to help them in their fight against cancer. Pixantrone has the potential to address this significant unmet medical need. Moreover, because pixantrone is associated with potentially less cardiac toxicity, we believe the compound could replace standard anthracyclines in the first-line treatment of NHL or in novel combination regimens with a broader range of chemotherapies that cannot be combined with current anthracyclines due to additive cardiotoxic side effects. An additional potential advantage of pixantrone is its ease of administration, which eliminates the need for the surgical placement of a catheter. Preclinical data and phase I/II clinical studies in more than 220 patients indicate that pixantrone is easy to administer, may have a significantly reduced potential for cardiac toxicity, and may have more potent anti-tumor activity than marketed anthracyclines. In a phase II trial of 33 patients with relapsed aggressive NHL who failed a median of two or more prior regimens including prior anthracycline therapy, single-agent pixantrone produced an objective tumor response in nine of 33 patients (27%) with five patients (15%) experiencing a complete response. Pixantrone was well tolerated in this trial with neutropenia being the most frequently reported side effect. Cardiac symptoms were infrequent, with only three patients experiencing a decrease of more than 10% of the left ventricular ejection fraction, a marker of cardiac function, which was possibly treatment related. A phase I/II study of a variant of the CHOP chemotherapy regimen, known as CPOP, which replaces doxorubicin with pixantrone, has generated positive preliminary results. CHOP is the standard of care for the first-line treatment of NHL. In the study, CPOP produced a complete response rate of 47% with complete responses in 20 of 43 relapsed aggressive NHL patients. Significant cardiac toxicity was not observed, even though most patients had previously received a high cumulative dose of doxorubicin, which can cause serious and irreversible heart damage. Pixantrone development status A phase III trial of pixantrone as a single-agent for patients with aggressive NHL who have failed at least one second-line, multi- chemotherapy regimen was initiated in 2004. This study evaluates complete response, time to tumor progression, and overall survival. Several other studies of pixantrone in combination are planned or ongoing, including a study of the CPOP regimen in combination with rituximab.

cti annual report 2004 20/21 We believe there is not a life or a moment to lose. cti annual report 2004 22/23 TRISENOX® (arsenic trioxide) is indicated for patients with relapsed or refractory acute promyelocytic leukemia (APL).

Overview TRISENOX appears to have multiple targets and mechanisms of anti-leukemic activity. The drug degrades a protein that causes abnormal levels of immature white blood cells while simultaneously forcing immature cancer cells to self-destruct through a process called programmed cell death, or apoptosis. Direct induction of apoptosis represents a relatively new method of killing tumor cells that is different from the majority of conventional cancer drugs. As a result, in addition to its use as single-agent therapy, TRISENOX may work when administered in combination with other cancer therapies to produce more durable cancer response rates. In addition to its use in APL, TRISENOX also is being evaluated for use in other cancers in approximately 40 clinical and investigator-sponsored trials. It has been granted orphan drug designation for APL and other blood-related cancers including multiple myeloma (MM) and myelodysplastic syndrome (MDS) in the United States and Europe. Additionally, the April 2004 issuance of a new U.S. patent covering TRISENOX extends our market exclusivity in the United States through 2018. TRISENOX for relapsed/refractory APL The American Cancer Society estimates that 1,500 to 2,000 people are diagnosed each year in the United States with APL, a malignant disorder of the white blood cells. A similar number are diagnosed in Europe. Approximately 10% to 15% of APL patients die during first-line treatment, and others develop long-term side effects from the anthracycline drugs that are commonly used in first-line regimens. Of the patients who achieve remission following first-line therapy, up to 30% will relapse and face poor long-term outcomes. TRISENOX was investigated in relapsed and refractory APL patients in two open-label studies. One was a single investigator pilot trial involving 12 patients, and the other was a multicenter, pivotal trial of 40 patients. The pilot trial results and accompanying editorial describing the use of TRISENOX to treat patients with relapsed APL were published in November 1998 in The New England Journal of Medicine. The results of this study were confirmed by the pivotal trial that was published in September 2001 in the Journal of Clinical Oncology. Long-term follow up data were presented at the International Symposium on APL in October 2001. The results demonstrated that among the 85% of patients who achieved a complete remission, 82% were confirmed to have a molecular remission using a highly sensitive molecular test. With a median follow-up of 30 months, the overall survival estimate for the 52 patients in the combined pilot and pivotal studies was 66%. Ongoing TRISENOX development programs TRISENOX is being evaluated as a potential therapy for newly diagnosed APL, as well as MM, MDS, and other forms of blood-related cancer. Results of a 61 patient study published in April 2004 in the Proceedings of the National Academy of Sciences concluded that induction therapy with the combination of arsenic trioxide and ATRA, a vitamin A analogue, for first-line treatment of APL resulted in faster time to achieve complete response, significantly greater reduction in leukemia burden, and longer lasting remissions than either of the two drugs used alone. All 20 cases in the combination group remained in remission after a median follow-up of 18 months, whereas seven of the 37 patients (19%) treated with monotherapy relapsed. Preliminary results of an ongoing multicenter phase II trial of TRISENOX in combination with melphalan and vitamin C in patients with relapsed and/or refractory MM were presented in 2004. Of the 23 patients evaluated, 12 patients (52%) achieved an objective response and 18 patients (78%) achieved disease control. Data from phase II studies of TRISENOX monotherapy in patients with MDS also were reported in 2004. These data suggest that TRISENOX was well tolerated and resulted in a major hematologic response in 31 of the 115 MDS patients (27%). A decrease in transfusion dependence also has been observed. These trials are currently ongoing.

cti annual report 2004 24/25 Taxanes Anthracyclines

Camptothecins Platinum Compounds

Four major classes of chemotherapy agents Today, anthracyclines, camptothecins, platinum compounds, and taxanes account for 95% of all chemotherapy use. XYOTAX™ Pixantrone

CT-2106 Bisplatinum Compounds

CTI’s next-generation drug candidates CTI is developing novel drug candidates within each major chemotherapeutic class. These candidates are designed to provide improved efficacy and tolerability compared with existing chemotherapeutic agents.

cti annual report 2004 26/27 We believe a diverse pipeline increases our opportunities for success. First-line APL

Multiple Myeloma TRISENOX

Myelodysplastic Syndrome

Non-small Cell Lung Cancer XYOTAX Ovarian Cancer

Non-Hodgkin’s Lymphoma Pixantrone

Colorectal Cancer CT-2106 Ovarian Cancer

early dev. phase I phase II phase III approval

CTI’s pipeline CTI’s diverse pipeline of novel cancer therapies provides multiple approaches to making cancer more treatable and increases our ability to make a positive impact on the treatment of cancer patients. Approval may not be granted to any product regardless of phase of development.

cti annual report 2004 28/29 We believe in personal, corporate, and scientific integrity. To our shareholders:

At CTI, we are working to redefine the landscape of cancer therapies. In 2004 we made important progress toward achieving this goal, completing enrollment in our pivotal phase III trials of XYOTAX in non-small cell lung cancer (NSCLC) patients and initiating a pivotal phase III trial of pixantrone in relapsed aggressive non-Hodgkin’s lymphoma (NHL) patients. We also reported promising data from ongoing studies of TRISENOX in a variety of blood-related cancers, and advanced the development of CT-2106 in two phase II studies.

We are closer than ever to redefining how certain cancers are treated, a position that reflects our success in redefining our Company since the acquisition of Novuspharma at the beginning of 2004. Today CTI has an integrated pipeline of promising cancer therapies in a variety of stages of preclinical and clinical development and a robust research and discovery engine to drive the development of additional product candidates. Our operational base in Italy adds breadth to our existing U.S. commercial infrastructure, positioning us for the successful commercialization of our lead product candidates. We believe we have the resources, expertise, product candidates, focus, and commitment to be a global leader in cancer treatment. Our focus is to improve the efficacy and toler- ability of cornerstone cancer therapies. Our product candidates have the potential to offer patients superior efficacy and better tolerability than the standard treatments available today.

cti annual report 2004 30/31 Making the patient the priority While we strive to develop and commercialize innovative cancer therapies, we focus not only on the disease, but on the patients who are challenged to battle and live with it. As a company exclusively committed to transforming cancer therapy, we have assembled an extensive range of expertise in all areas of cancer drug development. We have the scientific expertise to evaluate novel therapies based on the underlying molecular biology of specific cancers, as well as the hands-on clinical experience to appreciate the needs of cancer patients, while maintaining dignity during treatment and keeping the hope for a cure alive. Our focus on patients informs every decision we make in prioritizing our numerous pipeline opportunities. Product candidates, such as XYOTAX and pixantrone, are more to us than just significant commercial opportunities. These therapies also have the potential to provide new therapeutic alternatives to patients who currently have few treatment options and little hope for survival. Aiming to extend survival and improve quality of life We are developing products that we believe have the potential to improve survival rates and quality of life during therapy. In 2004, we completed enrollment in our pivotal studies of XYOTAX in patients with NSCLC. These trials are among the largest ever conducted in patients with NSCLC. In March 2005, we reported preliminary results from STELLAR 3. We expect to report data from our two other trials in NSCLC in the second quarter of 2005. In 2004, we also initiated a pivotal phase III clinical trial of pixantrone in patients with relapsed aggressive NHL. The trial is designed to examine the complete response rate, time to tumor progression, and overall survival of patients with aggressive NHL who have failed first-line and at least one second-line multi-agent chemotherapy regimen. This patient population has few treatment options, and complete responses are not typically reported with currently available single-agent therapies. In addition to potentially improving clinical outcomes for these patients, pixantrone’s tolerability profile supports its use in patients who previously have been treated with anthracyclines and who are not candidates for anthracycline therapy due to the potential for cardiac toxicity. The data available from studies of XYOTAX and pixantrone to date suggest that each of these product candidates may improve survival trends while reducing toxicities. Confirmation of these results in our pivotal trial programs may support new treatment paradigms, fulfilling our objective of transforming the way cancer is treated. Addressing unmet medical needs Despite more than 30 years of advancement in the treatment of cancer, many cancer patients still have significant unmet medical needs. We believe chemotherapy will continue to be a mainstay in the arsenal of cancer treatments for years to come. By improving the efficacy and tolerability of the four major classes of chemotherapy agents in use today, we believe CTI is uniquely positioned to improve cancer care in a diverse set of cancer indications. In each class – taxanes, anthracyclines, camptothecins, and platinum agents – we are developing novel therapies that are designed to support superior tolerability and have the potential for superior efficacy compared with currently approved drugs in these classes. We believe our product portfolio has significant clinical and commercial potential, and its diversity increases our opportunity to improve cancer therapy while decreasing our development and commercialization risk. We also are researching innovative compounds that work through unique mechanisms of action. These compounds may open a new front in the war on cancer while further balancing our mix of product candidates. A key factor in our ability to address unmet medical needs is our understanding of the challenges faced each day by patients undergoing cancer therapy. Knowing the difficulties that cancer patients must face creates a sense of urgency that drives everyone at CTI to think creatively and approach work with a sense of responsibility. Our experience in oncology has enabled us to identify unmet medical needs and develop robust clinical trials that are designed to respond to these needs and answer important scientific questions about the future of cancer treatment.

cti annual report 2004 32/33 Closing in on our objectives As a result of our progress in 2004, we have the potential for an even more productive year in 2005. We expect to report complete results from all of the STELLAR trials and hope to file a new drug application (NDA) with the U.S. Food and Drug Administration for XYOTAX in NSCLC. The Gynecologic Oncology Group (GOG), a National Cancer Institute-sponsored research group of more than 250 affiliate and member institutions, initiated a phase III trial of XYOTAX for maintenance therapy in first-line ovarian cancer. We believe that the GOG’s interest in advancing the study of XYOTAX in ovarian cancer patients underscores the unique profile of this novel cancer therapy. In order to leverage the full potential of XYOTAX, we also hope to establish a worldwide partnership for this compound with a global pharmaceutical company in 2005. For pixantrone, we are targeting an interim data analysis from the ongoing phase III trial in NHL in 2005. We also anticipate continuing the phase II trials for CT-2106, selecting a lead bisplatinum agent for an investigational new drug (IND) filing to begin clinical trials, and continuing development of our novel proteasome inhibitor. We will continue to present data on TRISENOX, XYOTAX, pixantrone, and CT-2106 at major cancer conferences. This is a truly exciting time for everyone at CTI, and I would like to thank our employees for their dedication to bringing us to this point in our development as a company. We also deeply appreciate the important support and guidance we have received from leaders in the oncology community. Most important, I would like to thank the patients who have participated in our clinical trials. Their commitment to advancing the treatment of cancer drives our commitment to make new treatments a reality.

James A. Bianco, M.D. President, Chief Executive Officer, and Shareholder XYOTAX project team, front row: Jim Bianco, Bill Cadwallader, middle row: Jeff Fellows, Fred Oldham, Robert Heard, back row: Drew Nienstedt, Kevin Miodonski

cti annual report 2004 34/35 Corporate Directory shareholder inquiries For questions regarding accounts or to request corporate information, shareholders may write corporate headquarters or call: 501 Elliott Avenue West Shareholder Relations Seattle, Washington 98119 501 Elliott Avenue West 206.282.7100 Seattle, Washington 98119 www.cticseattle.com 800.664.CTIC independent auditors stock information Grant Thornton, LLP The Company’s initial public oKering was 701 Pike Street, Suite 1500 March 21, 1997. The Company’s common stock

Seattle, Washington 98101 trades on the NASDAQ and Nuovo Mercato stock exchanges under the symbol CTIC. raphics

general counsel G No dividends have been paid on the common

Richard E. Leigh, Jr. Color

EVP & General Counsel stock to date, and the Company does not antici- pate paying dividends in the foreseeable future.

501 Elliott Avenue West printer

Seattle, Washington 98119 On March 15, 2005, there were approximately 228 holders of record of the Company’s registrar and transfer agent common stock. Communications concerning transfer require- The following table lists the high and low ments, certificate exchanges, lost certificates, reported sales prices for the Company’s Gemini BioProjects LLC changes of address, and name changes should common stock as reported on NASDAQ: be directed to the Transfer Agent:

2004 writers Computershare Investor Services quarter high low 2 North La Salle Street 1st $ 10.25 $ 7.80

Chicago, Illinois 60602 Young Lee 2nd 9.43 6.75 312.588.4187 3rd 7.43 4.55 4th 8.62 5.69 investor relations/public relations photography Security analysts, investment professionals, annual meeting interested investors, and the media should Detailed information regarding the Annual Seattle direct their inquiries to: Meeting will be available on CTI’s Web site and 800.664.CTIC in the Proxy Statement. www.cticseattle.com Leonhardt:Fitch [email protected] [email protected] design directors* senior management team* James A. Bianco, M.D. James A. Bianco, M.D. President, Chief Executive OKicer, and Director President, Chief Executive Ogcer, and Director Cell Therapeutics, Inc. Steve Aselage Max E. Link, Ph.D.(1, 2) Executive Vice President, Chairman of the Board of Directors Global Commercial Operations Former Chairman and CEO, Centerpulse, Ltd. Louis A. Bianco John M. Fluke Jr.(2, 3) Executive Vice President, Director Finance and Administration Chairman, Fluke Capital Management James Canfield, S.P.H.R.** Vartan Gregorian, Ph.D.(1) Executive Vice President, Director Chief Administrative Ogcer President, Carnegie Corporation Richard E. Leigh, Jr. Mary O. Mundinger, D.P.H.(1, 3) Executive Vice President, Director General Counsel and Corporate Secretary Dean of School of Nursing, Columbia University Jack W. Singer, M.D. Phillip M. Nudelman, Ph.D.(2, 3) Executive Vice President, Director Chief Medical Ogcer, and Director President and CEO, Hope Heart Institute Silvano Spinelli Erich Platzer, M.D. Executive Vice President, Director Development and Managing Director, Former Chairman of the Board of Directors Cell Therapeutics (Europe) S.r.l., and Director Novuspharma Except for the historical information contained herein, the matters Jack W. Singer, M.D. set forth in this Annual Report include information concerning Director our drug development pipeline, including anticipated regulatory timelines and the status of clinical trials, which are forward-looking Executive Vice President, Chief Medical Ogcer statements within the meaning of the “safe harbor” provisions of Cell Therapeutics, Inc. the Private Securities Litigation Reform Act of 1995. These forward- looking statements are subject to risks and uncertainties that may Silvano Spinelli cause actual results to diKer materially, including the likelihood of continued egcacy in treatment of cancers with our products, the Director commercialization of our products, and our ability to successfully Executive Vice President, develop and support new indications; the impact of technological advances and competition; the timing and ability to enroll and com- Development and Managing Director plete clinical trials; the role that other factors and other competitive Cell Therapeutics (Europe) S.r.l. products may play in accelerating the discovery and development of new therapeutic products; and other risks detailed elsewhere in this report and from time to time in CTI’s SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2004. These forward-looking statements speak only as of the date thereof. CTI disclaims any intent or obligation to update these forward-looking statements. CTI, TRISENOX, and XYOTAX (formerly referred to as PG-TXL) are our proprietary marks. All other product names, trademarks, and trade names referred to in this Annual Report are the property of (1) Member of the Compensation Committee. their respective owners. (2) Member of the Audit Committee. (3) Member of the Nominating and Governance Committee. *As of March 15, 2005 ** Resigned as of April 1, 2005 Together we are redefining the landscape of cancer therapies.

cti annual report 2004

Cell Therapeutics, Inc. 501 Elliott Avenue West Seattle, Washington 98119 206.282.7100 www.cticseattle.com