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                                                                    Exhibit 10.9

                           STRATEGIC MANAGEMENT TEAM
                              SEVERANCE AGREEMENT


  SEVERANCE AGREEMENT, dated as of January 22, 1999, by and between Cell
Therapeutics, Inc., a Washington corporation ("CTI"), and Edward F. Kenney (the
"Executive");

  WHEREAS, CTI recognizes the Executive's expertise in connection with
Executive's employment by CTI;

  WHEREAS, CTI desires to provide certain severance pay to Executive upon the
terms and conditions below, if the Executive's employment in position as
Executive Vice President and Chief Operating Officer is terminated for the
reasons set forth herein; and

  NOW, THEREFORE, in consideration of the following premises, mutual agreements
and covenants and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound hereby, agree as follows:

Definition of Terms.
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Termination for "Cause" shall mean termination of the Executive's employment by
CTI because of the Executive's:  (A) conviction for, or guilty plea to, a felony
or a crime involving moral turpitude, which shall include independently verified
unremedied substance abuse involving drugs or alcohol; (B) action or inaction,
which in the reasonable judgment of a majority of the Board of Directors of CTI,
constitutes willful dishonesty, larceny, fraud or gross negligence by Executive
in the performance of Executive's duties to CTI, or willful misrepresentation to
shareholders, directors or officers of CTI; (C) material failure to comply with
the provisions of the parties' Inventions and Proprietary Information Agreement
(attached); (D) willful and repeated failure, after 10 business days notice, to
materially follow the written policies of CTI; (E) failure, after 10 business
days notice, to correct materially unsatisfactory or unacceptable work
performance (including, but not limited to, technical or managerial
incompetence, misrepresentation or concealment, negligent acts or omissions or
willful misconduct); or (F) failure, after notice, to materially meet such
business objectives as shall be mutually agreed to by the parties.

Resignation for "Good Reason" shall mean the resignation of the Executive after
the following:  (A) notice in writing is given to Executive of Executive's
relocation, without the Executive's consent, to a place of business outside the
Greater Puget Sound area, or (B) a substantial diminution of the Executive's
responsibilities and compensation from those responsibilities in effect on the
date hereof, disregarding change in title and any alterations in Executive's
responsibilities which CTI imposes in response to any unsatisfactory or
unacceptable work performance by Executive.

"Severance Date" shall mean the date specified in a written notice of
termination from CTI to the Executive or the date which is the later of CTI's
actual receipt of Executive's written notice of

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resignation or the effective date of resignation.

"Severance End Date" shall mean a date one (1) year from the Executive's
Severance Date.

"Severance Pay" shall only mean the Executive's base salary at the Severance
Rate.

"Severance Rate" shall mean only the Executive's base salary in effect
immediately prior to the Severance Date and shall not include any commissions or
bonuses (unless already determined and awarded prior to the Severance Date),
vacation pay, sick leave, or the like whatsoever.

1.   Termination of Employment.  Subject to the Executive's continuing
     -------------------------
     obligations under the parties' Inventions and Proprietary Information
     Agreement (attached):

     (a)  Termination for Cause; Death; Disability; Resignation Without Good
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          Reason.  If the Executive's employment is terminated by CTI for Cause
          ------
          (as defined herein), or if the Executive resigns from employment
          hereunder, other than for Good Reason (as defined herein) or as a
          result of such Executive's death or disability (as defined in CTI's
          disability plan applicable to the Executive), the Executive shall be
          entitled only to receive:  i) Severance Pay through and including the
          Severance Date; and ii) pay for all vacation time accrued as of the
          Severance Date.

     (b)  Termination Without Cause; Resignation for Good Reason.  If the
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          Executive's employment is terminated by CTI without Cause, or if the
          Executive resigns from Executive's employment for Good Reason, the
          Executive shall be entitled to receive Severance Pay plus pay for all
          vacation time accrued as of the Severance Date, such payment rendered
          as a series of payments in accordance with CTI's normal payroll
          procedures from the Severance Date to the Severance End Date.  CTI
          shall continue to pay premiums to maintain any life insurance for
          Executive, existing and paid for by CTI as of the Severance Date until
          the Severance End Date.  In addition, CTI shall reimburse the
          Executive for any costs incurred by the Executive in electing COBRA
          continuation coverage for the Executive and Executive's covered
          dependents under CTI's medical plan only for the period from the
          Severance Date until the earlier of:  (1) a date twelve (12) months
          after the Severance Date; (2) a date on which the Executive is covered
          under the medical plan of another employer, which does not exclude
          pre-existing conditions; or (3) the Severance End Date.  At
          Executive's sole cost and expense, Executive may elect to exercise any
          disability insurance conversion originally available to Executive
          under the then existing group or individual disability insurance
          policies.  In the event of a breach of the Inventions and Proprietary
          Information Agreement, in addition to any other remedy available to
          CTI, CTI's obligation under this Section 1(b) shall terminate
          immediately.

          The Executive shall have no right under this Agreement or otherwise to
          receive any bonus, stock options, or other compensation awarded or
          benefits provided, determined or paid subsequent to the Severance Date
          to other employees of CTI, pro rata or otherwise.  However, if
          Executive is terminated by CTI without Cause or the

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          Executive resigns from Executive's employment for Good Reason, all
          unvested stock option shares to which the Executive may have rights on
          the Severance Date shall accelerate and immediately vest, and if and
          only if, CTI is a privately held company on the Executive's Severance
          Date, CTI shall recommend to the Board of Directors to extend an
          exercise period from three (3) months to two (2) years after the
          Severance Date for stock options other than any incentive stock
          options in which the Executive may have rights on the Severance Date;
          provided however, should CTI stock become publicly traded during any
          extended stock option exercise period granted hereunder, Executive may
          only exercise stock options in which Executive may have rights during
          the three (3) month period following the date a corresponding S-8
          registration statement is declared effective; or ii) the last day of
          the extended stock option exercise period. The decision to accept
          CTI's recommendation to extend the exercise period shall be within the
          sole discretion of the Board of Directors. If CTI Common Stock is
          publicly traded on the Severance Date, any exercise period will remain
          as provided for in the parties' corresponding Stock Option
          Agreement(s).

2.   Agreement Termination; Employment at Will.  This Agreement shall terminate
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     on the date of termination of the Executive's employment or, if applicable,
     the Severance End Date, but Executive's obligations under the attached
     Inventions and Proprietary Information Agreement shall continue in
     accordance with the terms and conditions therein.  Although this Agreement
     sets forth certain rights and obligations of CTI and Executive if
     Executive's employment is terminated without Cause by CTI or if the
     Executive resigns for Good Reason from CTI, nothing in this Severance
     Agreement is intended to limit CTI's right or ability to terminate the
     Executive's employment with or without Cause at any time or the Executive's
     ability to resign Executive's employment with or without Good Reason.  No
     term of this Severance Agreement shall be construed to conflict with or
     lessen Employee's obligations under the parties' Inventions and Proprietary
     Information Agreement (attached).

3.   Amendment; Waiver; Assignment.  This Agreement may not be modified, amended
     -----------------------------
     or waived in any manner except by an instrument in writing signed by both
     parties.  Any such modification, amendment or waiver on the part of CTI
     shall have been previously approved by the Board.  The waiver by either
     party of compliance with any provision of this Agreement by the other party
     shall not operate or be construed as a waiver of any other provision of
     this Agreement, or of any subsequent breach by such party of any provision
     of this Agreement.  This Agreement shall be binding upon any successor to
     CTI, by merger or otherwise.  CTI may assign this Agreement to any of its
     affiliates.  Executive may not assign the Agreement.

4.   Withholding.  Payments to the Executive of all compensation contemplated
     -----------
     under this Agreement shall be subject to all applicable legal requirements
     with respect to the withholding of taxes and similar deductions.
     Additionally, if the Executive owes any moneys to CTI on the Severance
     Date, Executive's signature below constitutes Executive's written consent
     to deduct from any Severance Pay amounts that the Executive owes CTI.

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5.   Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED,
     -------------
     CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
     WASHINGTON APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY
     WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
     CONFLICT OF LAWS.

6.   Supersedes Previous Agreements.  This Agreement supersedes all prior or
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     contemporaneous negotiations, commitments, agreements and writings with
     respect to the subject matter hereof.  All such other negotiations,
     commitments, agreements and writings shall have no further force or effect,
     and the parties to any such other negotiation, commitment, agreement or
     writing shall have no further rights or obligations thereunder.

7.   Voluntary Agreement.  Executive understands the significance and
     -------------------
     consequences of this Agreement and acknowledges that CTI has not coerced
     Executive's acceptance thereof, and has signed this Agreement only after
     full reflection and analysis.  Executive expressly confirms that the
     Agreement is to be given full force and effect according to all of its
     terms. Executive was advised to seek legal counsel prior to signing the
     Agreement.

  IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized
officer of CTI and by the Executive in Executive's individual capacity as of the
date first written above.

CELL THERAPEUTICS, INC.

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<CAPTION>
<S>                                             <C>
By:  /s/ James Bianco                           By:  /s/ Edward F. Kenney
    ------------------------------------------      ------------------------------------------
    James A. Bianco, MD                             Edward F. Kenney

Title:   President and CEO                      Title:   EVP & Chief Operating Officer
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Date:      February 26, 1999                    Date:       2/20/99
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Address:   201 Elliott Avenue West, Suite 400   Address:    2131 NE 101st Court
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           Seattle, WA  98119                               Redmond, WA 98053
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