Actinium Pharmaceuticals, Inc. — Q3 2020 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2020; filed October 23, 2020. Financial statements are unaudited. Unless noted, figures are in U.S. dollars and financial statement amounts are in millions.
Business context
Actinium is a clinical-stage biopharmaceutical company developing antibody radiation-conjugates for cancer. It had no approved products or commercial revenue. Its lead program, Iomab-B, was in the pivotal Phase 3 SIERRA trial for conditioning patients with relapsed or refractory AML before bone marrow transplant. Other programs included Iomab-ACT and Actimab-A combinations and targeted-conditioning studies.
Financial performance and liquidity
| Metric | Q3 2020 | Q3 2019 | Nine months 2020 | Nine months 2019 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $3.788 | $4.830 | $11.446 | $13.176 |
| General and administrative expense | $1.825 | $1.822 | $4.512 | $4.262 |
| Total operating expenses | $5.613 | $6.652 | $15.958 | $17.438 |
| Net loss | $5.540 | $6.599 | $15.835 | $17.297 |
| Basic and diluted loss per share | $0.36 | $1.21 | $1.46 | $3.60 |
| Operating cash used | Not separately reported | Not separately reported | $15.359 | $16.451 |
Margins are not meaningful given the absence of revenue. At September 30, cash and cash equivalents were $48.234 million, plus restricted cash of $0.439 million. Current assets were $49.180 million and current liabilities $4.680 million, implying working capital of approximately $44.5 million. Total liabilities were $5.100 million, including $0.038 million of note payable and lease obligations. Accumulated deficit was $224.594 million.
Financing activities provided $54.347 million of cash in the first nine months, principally from April and June equity and pre-funded-warrant offerings. The company reported $54.705 million net proceeds from those offerings, plus $2.5 million from its ATM program and $0.2 million from Lincoln Park sales. It stated that existing resources were expected to fund planned operations for more than 12 months from the filing date. A $200 million JonesTrading at-the-market facility remained available at September 30.
Material changes versus the prior comparable period
- Q3 net loss narrowed by $1.059 million year over year; nine-month net loss narrowed by $1.462 million. Management attributed the improvement primarily to lower R&D expense, reflecting prior manufacturing of sufficient Iomab-B antibody supply for SIERRA and other planned trials.
- Nine-month G&A rose $0.250 million, primarily from higher professional fees; net interest income declined to $0.123 million from $0.141 million due to lower interest rates.
- Nine-month operating cash use improved by $1.092 million. Financing cash inflow increased to $54.347 million from $17.158 million, largely because of the 2020 offerings; cash and restricted cash increased by $38.980 million.
- Common shares outstanding were 13,586,525 at October 23, 2020, versus 5,490,038 at December 31, 2019. The company completed a 1-for-30 reverse split in August 2020; presented share and per-share data are retrospectively adjusted. Additional dilution is possible through pre-funded warrants, options, warrants, and future equity sales.
Outlook, management commentary, and risks
- Management reported SIERRA had reached 75% enrollment and expected completion of enrollment and topline data in 2021. A single ad hoc interim analysis was exercised in Q2; it was expected to be completed in Q4 2020 and could recommend continuation or early termination for futility. The company said final success criteria at full enrollment would use a p-value of 0.046 and that it intended to consult FDA if futility of the control arm were recommended.
- Management planned to report additional SIERRA safety and feasibility data from 113 patients. Previously reported data from the first 75 patients included 100% transplant receipt among therapeutic-dose Iomab-B study-arm patients (31/31) and 6% 100-day transplant-related mortality (2/31); these interim observations do not establish trial success.
- Other development milestones included expected CLAG-M combination data by year-end 2020; initial Actimab-A plus venetoclax data by year-end and proof-of-concept data in 2021; and expected 2021 proof-of-concept data from Iomab-ACT collaborations. The filing provided no formal financial guidance.
- COVID-19 had not caused a reported financial impact or significant clinical-development delay to date, but could disrupt enrollment, sites, suppliers, regulatory interactions, operations, and access to capital.
- Principal risks include SIERRA or other clinical-trial failure or delay, regulatory non-approval, continuing losses and financing needs, dilution, reliance on third-party manufacturers and isotope suppliers, and uncertain commercialization, reimbursement, and market acceptance. The company noted its Ac-225 supply agreement with the Department of Energy extended through 2020 and required annual renewal.
- Commitments include a $1 million milestone payable to Fred Hutchinson Cancer Research Center upon FDA approval of the first drug using the licensed BC8 antibody and 2% royalties on net sales after commercialization. Lease liabilities had a present value of $0.668 million for operating leases and $0.171 million for finance leases. No legal proceedings were reported.
Important facts for investors to verify
- Outcome, timing, and FDA interaction following the SIERRA interim analysis, and whether trial enrollment and the 2021 data timetable remain on track.
- Actual cash burn and runway relative to management’s greater-than-12-month estimate, including planned clinical and manufacturing spending.
- Future equity issuance under the available $200 million ATM facility and the effect of outstanding pre-funded warrants, options, and warrants on dilution.
- Clinical-trial progress and data for the Actimab-A combinations and Iomab-ACT collaborations, distinguishing preliminary findings from pivotal evidence.
- Renewal and adequacy of isotope supply and manufacturing capacity, as well as any COVID-related operational or enrollment disruption.