On May 13, 2009, Cell Therapeutics, Inc. (the "Company") entered into an agreement (the "Severance Agreement") with the unions representing the employees of its Bresso, Italy operations in connection with the previously announced closure of the Company's Bresso facilities. The Company issued a press release announcing that it had entered into the Severance Agreement, a copy of which was filed as Exhibit 99.1 to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2009. The Severance Agreement relates to a reduction in force of 56 positions at the Bresso facility. In addition, the Company has sent notices of termination to the six managers of the Bresso facility and will endeavor to enter into separate severance arrangements with these managers. The Bresso facility was used for pre-clinical research and was underutilized due to the Company's focused business model on the development of late stage compounds and their commercialization. The Company expects to complete the closure of the Bresso facility by August 2009.

An English translation of the Severance Agreement is attached as Exhibit 10.1 to the Form 8-K.

In connection with the reduction in force and closure of the Bresso facility described in Item 1.01 above, the Company currently estimates that it will incur restructuring charges related to severance costs between $2.3 million and $3.1 million (which includes an estimate of the amounts payable to the managers of the Bresso facility) during the second quarter of 2009. These estimated costs will be paid over 42 months from the date of termination, with the majority paid throughout the first 13 months. The Company expects restructuring costs related to operating leases and clean-up activities of the Bresso facility's laboratories, excluding proceeds from the liquidation of the physical assets, will range from $1.3 million to $1.6 million. The preceding amounts are estimates and the actual amounts and timing of such costs may vary materially as the closure plans are finalized and implemented.

This Current Report on Form 8-K includes forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect actual future results. Specifically, the risks and uncertainties that could affect the development of products include risks associated with preclinical and clinical developments in the biopharmaceutical industry in general, determinations by regulatory, patent and administrative governmental authorities, competitive factors, technological developments, costs of developing, the Company's ability to continue to raise capital as needed to fund its operation, the Company's reduction in annual operating expenses may be less than projected and the risk factors listed or described from time to time in the Company's filings with the Securities and Exchange Commission including, without limitation, the Company's most recent filings on Forms 10-K, 10-Q, and 8-K. Except as may be required by law, the Company does not intend to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

(d) Exhibits

    Exhibit
    Number    Description
    10.1      English translation of Severance Agreement, dated May 13, 2009.