UPDATE 5-Cell Therapeutics drug draws US FDA staff concerns

* FDA staff raise issues with safety, effectiveness

* Wednesday panel meeting postponed due to weather

* Company says drug works, side effects manageable

* Shares fall nearly 40 pct (Updates panel meeting postponed)

By Lisa Richwine

WASHINGTON, Feb 8 (Reuters) - U.S. drug reviewers questioned effectiveness data from Cell Therapeutics Inc CTIC.OCTIC.MI for an experimental lymphoma drug and said the medicine had substantial side effects, according to documents released on Monday.

Cell Therapeutics shares fell 42 cents to close at 64 cents on Nasdaq.

A Food and Drug Administration advisory panel review of the drug, originally scheduled for Wednesday, was postponed due to weather. The Washington region is digging out from a storm that dumped two feet (half-meter) of snow, and more snow was forecast for Tuesday and Wednesday.

Seattle-based Cell Therapeutics is seeking approval to sell pixantrone under the brand name Pixuvri for treating non-Hodgkin’s lymphoma that has stopped responding to other treatments.

FDA reviewers, in an analysis prepared for the advisory committee, said issues raised in their review included “the reliability of (the efficacy) conclusions” and “substantial hematologic and cardiac toxicity.”

The company’s main study tested 140 patients whose cancer worsened after at least two chemotherapy regimens, FDA staff said. That was less than half the 320 originally planned. Cell Therapeutics told the FDA it had trouble attracting patients because doctors preferred multiple chemotherapy drugs or supportive care, the FDA staff summary said.

FDA reviewers also said they had concerns about re-readings of patient results by independent experts.

The agency said it would ask the advisory panel if the company has provided enough evidence that pixantrone worked and if benefits outweighed risks.

The FDA usually follows panel recommendations when deciding whether to approve drugs. A final decision is due by April 23.

Cell Therapeutics spokesman Dan Eramian said many of the key issues raised by FDA staff were addressed in a company summary prepared for the panel.

In the summary, the company said pixantrone worked better than other drugs with “manageable toxicities.” Twenty percent of patients treated with pixantrone met the study’s main goal of having a major decrease in their disease, compared with about 6 percent with a different medicine.

Non-hodgkin’s lymphoma is a blood cancer that affects about 66,000 U.S. patients annually. Patients who have relapsed following two prior regimens often live less than six months.

“Pixantrone fulfills an unmet medical need in multiply relapsed patients with aggressive NHL,” Cell Therapeutics said.

FDA reviewers said data suggested pixantrone could be toxic to the heart, “but no conclusions can be drawn” about how the risks compared with cancer drugs called anthracyclines or anthracenediones, which are known to cause cardiac damage.

In the company study, deaths and serious complications from heart damage and bone marrow suppression “were all more common” in patients treated with pixantrone versus other cancer drugs, FDA staff said.

Swiss drugmaker Novartis NOVN.VX has an option for a worldwide license to develop and sell pixantrone.

The FDA has not set a new date for the panel meeting, FDA spokeswoman Karen Riley said. (Reporting by Lisa Richwine; Editing by Gerald E. McCormick; Steve Orlofsky; and Carol Bishopric)