SmallCaps Online LLC Issues Full-Length Report and Reiterates BUY Recommendation on Cell Therapeutics Inc.

Please Visit SmallCaps' Web Site at www.SmallCapsOnline.com for Detailed Report

New York, NY, May 12, 1999 - SmallCaps Online LLC announced today that it has issued a full-length report on Cell Therapeutics Inc. (Nasdaq: CTIC) and has reiterated its BUY recommendation on the company. The text of this report can be accessed at SmallCaps' web site, at www.SmallCapsOnline.com.

Excerpts from the report follow:

Jeffrey B. Davis, President of SmallCaps stated, "With the issuance of a full-length basic report, we are pleased to be able to offer investors a comprehensive look at Cell Therapeutics. In addition, we are encouraged that CTIC announced today the commencement of a Phase II trial of Apra, its novel anticancer drug to treat soft tissue sarcomas. Apra is already in multiple Phase II trials to treat hormone-and chemotherapy-refractory prostate cancer and the company expects to launch additional Phase II trials on Apra to treat lung cancer later this year. We continue to feel that CTIC stock is extremely undervalued, currently trading roughly at cash value, and that a steady flow of positive news events from the company over the next 6-12 months should fuel stock appreciation."

CTIC is an emerging pharmaceutical company focusing on the discovery, development, and commercialization of drugs useful in treating cancer and the serious side effects of various cancer treatments. The Company is building a deep, vertically integrated pipeline of cancer products targeting major unmet treatment needs, each with independent technology. This strategy enables use of multiple CTIC products by the same clinician and patient, and protects against the failure or ineffectiveness of any one particular technology. CTIC's lead product, Lisofylline ("LSF"), is in trials for two different indications: treating the side effects of high-dose chemotherapy and radiation, and for treatment of patients with acute respiratory distress syndrome (ARDS) and acute lung injury (ALI). CTIC has partnered with Johnson & Johnson ("JNJ") for the development of LSF; CTIC is actively seeking additional corporate partners for other drug candidates. We are initiating coverage of CTIC with a BUY rating, and recommend purchase of CTIC by investors tolerant of the risks associated with small-cap equity investments.

Integrated Oncology Strategy -- Broad, Late-Stage Product Pipeline

• Strategy: CTIC has a pipeline of promising products, two in late-stage clinical trials, addressing significant oncology market opportunities. The market for cancer drugs continues to grow; by 2000, cancer is expected to surpass heart disease as the leading cause of death in the U.S.
• Lisofylline: LSF is in Phase III trials for acute myelogenous leukemia (AML); CTIC anticipates completion of enrollment in June 1999 and announcement of results this summer. Results from the LSF Phase II/III trial for ARDS/ALI, sponsored by the National Heart, Lung and Blood Institute, should be announced in June 1999.
• Apra: Apra is currently in Phase II trials to treat patients with cancers resistant to conventional chemotherapy such as prostate, colon and breast cancer, as well as soft tissue sarcomas.

• PG-TXL is a polymer conjugate derivative of Taxol, the world's most popular cancer drug. Binding Taxol to a polymer enhances delivery of the drug to the tumor site and anti-cancer effectiveness, while reducing systemic side effects. PG-TXL is entering Phase I clinical trials for breast, colon, lung and other cancers.
• SC-7, an anti-angiogenic drug currently in preclinical research, is a copper chelator that binds with copper at a molecular level to block multiple steps in the growth of new blood vessels in tumors.

Strong Financial Position, Low Burn and Partnering Opportunities -- Trading at Cash Value

• As of 12/31/98, CTIC had approximately $50 million in cash and equivalents (approximately $3.25 per share). CTIC anticipates a reduction in burn rate this year, assuming additional corporate partnerships are secured.

• Since November 1996, CTIC has been collaborating with JNJ to develop LSF. JNJ has paid a total of $40.8 million to CTIC for LSF, and has an option to continue the collaboration following review of the results from the AML and ARDS/ALI studies (decision anticipated 4Q99). If JNJ does not exercise its option, we believe CTIC will be able to partner LSF in a timely fashion. CTIC is actively seeking partners on other programs.

Milestones - Strong Flow of Near-Term Corporate Events

• June 1999: Announce interim results from the Phase II/III study of LSF for ALI/ARDS; complete enrollment in Phase III trials of LSF for induction chemotherapy/AML.
• 2H99: Announce results of the Phase III trials for LSF for AML and the Phase II trials for Apra for prostate cancer patients; complete enrollment in Phase III of the LSF bone marrow transplant (BMT) trials; complete Phase II of LSF trials for mucositis; initiation of trials of PG-TXL; file an NDA for LSF in early 2000.

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SmallCaps Online LLC is a registered investment advisor focused on identifying emerging growth companies in the healthcare and information technology sectors that offer compelling investment opportunities over the long term. By providing comprehensive financial services, including corporate finance, M&A advisory, strategic partnering and communications consulting, the company positions itself to provide a fully integrated package of value-added services to emerging growth companies.

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