Actinium Pharmaceuticals, Inc. — Q1 2019 Form 10-Q
Reporting period: Three months ended March 31, 2019. The interim financial statements are unaudited. Actinium is a clinical-stage biopharmaceutical company developing antibody radiation-conjugates, including Iomab-B, which was in a pivotal Phase 3 trial, and other programs for blood cancers and cellular-therapy conditioning. The company reported no commercial revenue.
Financial results and liquidity
| Metric | Q1 2019 | Q1 2018 / comparison |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense, net | $4.34 million | $4.47 million; down about 3% |
| General and administrative expense | $1.36 million | $1.89 million; down about 28% |
| Total operating expenses | $5.70 million | $6.35 million; down about 10% |
| Net loss | $5.67 million | $6.32 million; loss narrowed about 10% |
| Net loss per share, basic and diluted | $0.05 | $0.07 |
| Cash used in operating activities | $5.49 million | $5.46 million |
| Cash, cash equivalents and restricted cash at period end | $10.36 million | $14.10 million at December 31, 2018 |
At March 31, 2019, cash and cash equivalents were $9.92 million; current assets were $10.26 million and current liabilities were $5.85 million. Total liabilities were $6.89 million, including a $175,000 note payable and lease obligations. Stockholders’ equity was $5.34 million. The company had an accumulated deficit of $192.5 million. Profit margins are not meaningful because there was no revenue.
Changes and financing
- Operating expenses and net loss declined year over year, mainly because of lower general and administrative costs and Astellas collaboration payments recorded as a reduction of R&D expense. Operating cash use was essentially unchanged.
- Q1 financing provided $1.79 million, including $1.50 million from warrant exercises and $0.38 million from an at-the-market share sale. Cash and restricted cash declined by $3.75 million during the quarter.
- In April 2019, after quarter-end, the company raised $15.1 million net by selling 42.9 million shares and warrants to purchase up to another 42.9 million shares. Management stated that, as of the report date, available resources were expected to fund planned operations for at least 12 months.
- Common shares outstanding were 119.1 million at March 31; the cover page reports 162.0 million outstanding as of May 9, reflecting post-quarter share issuance.
Outlook, risks and other items
- Management expects continued losses and negative operating cash flows while it funds research, clinical trials and development. No revenue or earnings guidance was provided.
- Key risks include clinical-trial results, enrollment and timing; FDA approval; financing needs and potential dilution; reliance on third-party manufacturers and isotope suppliers; and the ability to protect intellectual property and commercialize any approved products.
- The SIERRA Phase 3 trial of Iomab-B is a pivotal program; failure to demonstrate safety and efficacy could materially affect prospects. Actinium-225 supply depends on third parties, including a DOE supply contract that ran through 2019 and required annual renewal.
- The company adopted the new lease accounting standard in January 2019, recognizing right-of-use assets and lease liabilities. It reported no legal proceedings and no material off-balance-sheet arrangements. Management judged disclosure controls effective as of March 31, 2019.
Important facts for investors to verify
- Progress, enrollment, timing and eventual results of the Iomab-B SIERRA trial and other clinical programs.
- Whether the April financing and the stated 12-month funding outlook adequately cover planned spending, and the potential dilution from issued shares and warrants.
- Quarterly cash burn, cash availability and future financing requirements.
- Reliability and renewal of isotope supply, manufacturing capacity, and remaining commitments, including the estimated $3.1 million remaining Medpace agreement cost.
- Patent protection, regulatory pathway, reimbursement prospects and the company’s ability to commercialize candidates if approved.