UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. _____)
XCYTE Therapies, Inc.
_____________________________________________
(Name of Issuer)
Common Stock, .001 Par Value
_______________________________________________
(Title of Class of Securities)
98389F309
_________________________________________________
(CUSIP Number)
with a copy to:
Austin W. Marxe Allen B. Levithan, Esq.
153 East 53rd Street Lowenstein Sandler PC
New York, New York 10022 65 Livingston Avenue
Roseland, New Jersey
07068
(973) 597-2406
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 29, 2004
(Date of Event which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this
Schedule is filed:
____ Rule 13d-1(b)
_x__ Rule 13d-1(c)
____ Rule 13d-1(d)
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be ?filed? for the purpose of Section 18 of the Securities
Exchange Act of 1934 (?Act?) or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
Cusip No. 98389F309 13G Page 2 of 6
Pages
1.Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only):
Austin W. Marxe and David M. Greenhouse
2. Check the Appropriate Box if a Member of a Group (See
Instructions):
(a) [ ] Not Applicable
(b) [ ]
3. SEC Use Only
4. Source of Funds (See Instructions): 00
5. Check if Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e):
Not Applicable
6. Citizenship or Place of Organization: United States
Number of 7. Sole Voting Power: 0
Shares Beneficially 8. Shared Voting Power: 2,437,276*
Owned by
Each Reporting 9. Sole Dispositive Power: 0
Person With 10. Shared Dispositive Power:
2,437,276*___
11. Aggregate Amount Beneficially Owned by Each Reporting
Person:
2,437,276*
12. Check if the Aggregate Amount in Row (11) Excludes Certain
Shares
(See Instructions): Not Applicable
13. Percent of Class Represented by Amount in Row (11):
14.9%*
14. Type of Reporting Person (See Instructions): IA, IN
* This is a joint filing by Austin W. Marxe (?Marxe?) and David M.
Greenhouse (?Greenhouse?). Marxe and Greenhouse share sole voting and
investment power over 241,842 shares of Common Stock and 87,500 shares
of Preferred Stock convertible for 372,340 shares of Common Stock owned
by Special Situations Cayman Fund, L.P., and 706,073 shares of Common
Stock and 262,500 shares of Preferred Stock convertible for 1,117,021
shares of Common Stock owned by Special Situations Fund III, L.P. See
Items 2 and 4 of this Schedule for additional information.*1
Page 3 of 6 Pages
Item 1. Security and Issuer:
(a) XCYTE Therapies, Inc.
(b) 1124 Columbia Street, Suite 130, Seattle, WA 98104
Item 2. (a) Name of Person Filing:
The persons filing this report are Austin W. Marxe (?Marxe?)
and David M. Greenhouse (?Greenhouse?), who are the controlling
principals of AWM Investment Company, Inc. (?AWM?), the general partner
of and investment adviser to Special Situations Cayman Fund, L.P.
(?Cayman?). AWM also serves as the general partner of MGP Advisers
Limited Partnership (?MGP?), the general partner of and investment
adviser to Special Situations Fund III, L.P. (?SSF3?). (SSF3 and Cayman
will hereafter be referred to as, the ?Funds?). The principal business
of each Fund is to invest in equity and equity-related securities and
other securities of any kind or nature.
(b) Address of Principal Business Office or, if none,
Residence:
The principal business address for Marxe and Greenhouse is
153 East 53rd Street, 55th floor, New York, NY 10022.
(c) Citizenship:
Austin W. Marxe and David M. Greenhouse are
United States citizens.
(d) Title of Class of Securities: Common Stock.
(e) CUSIP Number: 98389F309.
Item 3. If this statement is filed pursuant to $240.13d-1(b) or
240.13d-2(b), check whether
the person filing is a: Not Applicable
(a) ( ) Broker or Dealer registered under section 15 of the Act;
(b) ( ) Bank as defined in section 3(a) (6) of the Act;
(c) ( ) Insurance Company as defined in section 3(a) (19) of the
Act;
(d) ( ) Investment Company registered under section 8 of the
Investment Company Act of 1940;
(e) ( ) An Investment Adviser in accordance with $240.13d
-1(b)(I)(ii)(E);
(f) ( ) An employee benefit plan or endowment fund in accordance
with $240.13d-1(b)(I)(ii)(F);
Page 4 of 6 Pages
(g) ( ) A parent holding company or control person in accordance
with $240.13d-
1(b)(1)(ii)(G);
(h) ( ) A savings association as defined in Section 3(b) of the
Federal Deposit Insurance
Act;
(i) ( ) A church plan that is excluded from the definition of an
investment company under section 3(c)(14) of the Investment
Company Act of 1940;
(j) ( ) Group, in accordance with $240.13d-1(b)(1)(ii)(J).
Item 4. Ownership:
(a) Amount Beneficially Owned: Messrs. Marxe and Greenhouse
beneficially own a total of 947,915 shares of Common Stock and 350,000
Preferred Shares convertible for 1,489,361 Common Shares. This amount
includes 241,842 shares of Common Stock and 87,500 Preferred Shares
convertible for 372,340 shares of Common Stock owned by Cayman and
706,073 shares of Common Stock and 262,500 Preferred Shares convertible
for 1,117,021 shares of Common Stock owned by SSF3.*1
(b) Percent of Class: Messrs. Marxe and Greenhouse beneficially
own 14.9% of the shares outstanding. Cayman owns 4.0% of the
outstanding shares and SSF3 owns 11.4% of the outstanding shares.
(c) Number of Shares as to which the person has:
(i) Sole power to vote or to direct the vote: 0
(ii) Shared power to vote or to direct the vote: 2,437,276
(iii) Sole power to dispose or to direct the disposition of:
0
(iv) Shared power to dispose or to direct the disposition
of: 2,437,276
Item 5. Ownership of Five Percent or Less of a Class: If this statement
is being filed to report the fact that as of the date hereof the
reporting person has ceased to be the beneficial owner of more that five
percent of the class of securities, check the following __.
Item 6.Ownership of More than Five Percent on Behalf of Another Person:
Not Applicable.
Item 7. Identification and Classification of the Subsidiary Which
Acquired the Security being Reported on By the Parent Holding Company:
Not Applicable.
Item 8. Identification and Classification of Members of the Group: Not
applicable
Page 5 of 6 Pages
Item 9. Notices of Dissolution of Group: Not applicable.
Item 10.Certification:
By signing below I certify that, to the best of my knowledge and
belief, the securities
referred to above were acquired and are held in the ordinary course of
business and were not
acquired and are not held for the purpose of or with the effect of
changing or influencing the
control of the issuer of the securities and were not acquired and are
not held in connection with
or as a participant in any transaction having that purpose or effect.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: November 9, 2004
/s/ Austin W. Marxe
AUSTIN W. MARXE
/s/David M Greenhouse
DAVID M. GREENHOUSE
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).
*1 Subsequent to the October 29, 2004 public offering to purchase 6%
Convertible Exchangeable Preferred Stock, the ?Funds? elected to
convert the Preferred Stock to its Common Stock equivalent. In
addition the ?Funds? received Common Shares as a result of a make
whole dividend payment.
Page 6 of 6 Pages
JOINT FILING AGREEMENT
Austin W. Marxe and David M. Greenhouse hereby agree that the
Schedule 13G to which this agreement is attached is filed on behalf of
each of them.
/s/_Austin W. Marxe
Austin W. Marxe
/s/_David M. Greenhouse
David M. Greenhouse
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S5313/1
1319328.02