CTI BioPharma Prices Underwritten Public Offering of $50M of Convertible Preferred Stock

CTI BioPharma Corp. ("CTI") (NASDAQ and MTA: CTIC) today announced the pricing of an underwritten public offering of 50,000 shares of its Series N-1 Preferred Stock, offered at a price to the public of $1,000 per share of Series N-1 Preferred Stock (the "Offering"). Each share of Series N-1 Preferred Stock is convertible at the option of the holder, at any time, into 800 shares of common stock at a conversion price of $1.25 per share of common stock, for a total of 40,000,000 shares of common stock. The shares of Series N-1 Preferred Stock will automatically convert into shares of common stock in certain circumstances. The gross proceeds to CTI from this Offering are expected to be $50 million, before deducting underwriting discounts and commissions and other estimated offering expenses payable by CTI. CTI plans to use the net proceeds from this Offering to support the commercial launch of pacritinib in the U.S. for patients with myelofibrosis, to conduct additional research concerning the possible application of pacritinib in indications outside of myelofibrosis, to advance the commercialization of PIXUVRI(R) and to support the development of tosedostat in registration-directed trials, as well as for general corporate purposes, which may include funding research and development, conducting preclinical and clinical trials, acquiring or in-licensing potential new pipeline candidates, preparing and filing possible new drug applications and general working capital. The Offering is expected to close on or about October 30, 2015, subject to customary closing conditions. Piper Jaffray & Co. is acting as sole book-running manager for the Offering. Ladenburg Thalmann & Co. Inc. is acting as lead manager and National Securities Corporation, a wholly owned subsidiary of National Holdings Corporation

, is acting as co-manager for the Offering. The securities described above are being offered by CTI pursuant to a shelf registration statement previously filed with the Securities and Exchange Commission (the "SEC"), which the SEC declared effective on December 8, 2014. The final prospectus supplement related to the Offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the Offering, when available, may be obtained from Piper Jaffray & Co., Attention: Prospectus Department, 800 Nicollet Mall, J12S03, Minneapolis, MN 55402, by email to prospectus@pjc.com or by telephone at (800) 747-3924. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. The shares of Series N-1 Preferred Stock (and the shares of common stock into which each share of Series N-1 Preferred Stock will be convertible) will not be offered, sold or distributed, directly or indirectly, in Italy in an offer to the public of financial products under the meaning of Article 1, paragraph 1, letter t) of Legislative Decree No. 58 of February 24, 1998, as amended (the "Financial Services Act"), unless an express exemption from compliance with the restrictions on offers to the public, including, without limitation, as provided under Article 100 of the Financial Services Act and Article 34-ter of CONSOB Regulation No. 11971 of May 14, 1999, as amended, applies.