Cell Therapeutics, Inc. Exchanges 83% of Remaining Convertible Preferred Stock Into New Non-dividend Bearing, Non-redeemable Convertible Preferred Stock With Conversion Price of $0.14 per Share

SEATTLE, Feb. 5 /PRNewswire-FirstCall/ -- Cell Therapeutics (CTI) announced today that it has issued 6,634 shares of Series F Preferred Stock in exchange for 6,634 shares of CTI's Series A, B and C Convertible Preferred Stock. The exchange constitutes 83% in interest of all series of CTI's Convertible Preferred Stock. Each share of the new Preferred Stock will become convertible into 7,143 shares of CTI's common stock, at a conversion price of $0.14 per common share representing a significant premium to the current market price.

The Series F Preferred Stock cannot become convertible into common stock sooner than April 1, 2009. Additionally, the Company has the ability to redeem all, but not less than all, of the outstanding Series F Preferred Stock for cash when the Volume-Weighted Average Price (VWAP) has exceeded $0.28 for ten previous trading days. The Series F Preferred Stock does not provide a redemption right for the holders as did the Series A, B and C Convertible Preferred Stock, thereby eliminating the possibility that the Company could be required to make involuntary cash redemption payments of approximately $6.6 million on the preferred stock that was exchanged. The Series F Preferred Stock does not bear a fixed dividend rate.

"We are pleased that almost all of the remaining preferred shareholders were willing to trade in their securities and enable CTI to avoid their redemption rights and dividend payments, saving the company approximately $6.6 million over the next 6 months, for a meaningful equity position in the Company upon their conversion into common stock," noted James A. Bianco, M.D., CEO of CTI. "With the prospects for three drug approvals in 2009, we believe they chose to participate based on the price appreciation potential of CTI should we be successful with the approvals this year."

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 http://www.celltherapeutics.com.

This press release contains forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect future results. The risks and uncertainties include that the Company's operating expenses continue to exceed its net revenues and the Company will continue to need to raise capital to fund its operating expenses; as well as other risks listed or described from time to time in the Company's most recent filings 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 press release upon further developments.

CONTACT: Media, Dan Eramian, +1-206-272-4343, cell, +1-206-854-1200,
media@ctiseattle.com; or Investors, Ed Bell, +1-206-272-4345, or Lindsey
Jesch Logan, +1-206-272-4347, fax, +1-206-272-4434, invest@ctiseattle.com,
all of Cell Therapeutics, Inc.

Web site: http://www.celltherapeutics.com/