Cell Therapeutics, Inc. (CTI) Announces Cancellation of Approximately $9.1 Million of Existing Notes due 2008

Cell Therapeutics, Inc. ("CTI" or the "Company") (Nasdaq: CTIC; MTAX) today announced that it exchanged $8.943 million in aggregate principal of its outstanding 5.75% Convertible Senior Subordinated Notes due 2008 (the "Senior Subordinated Notes") and approximately $150,000 in aggregate principal of its outstanding 5.75% Convertible Subordinated Notes due 2008 (the "Subordinated Notes," and together with the Senior Subordinated Notes, the "Notes"), together with the accrued and unpaid interest on the Notes, for approximately 6.85 million shares of the Company's common stock, no par value (the "Common Stock"). The Common Stock was issued in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). Approximately $10.7 million in Senior Subordinated Notes and Subordinated Notes remain outstanding and mature in June 2008.

The Common Stock to be issued pursuant to the exchange agreement has not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state laws.