Actinium Pharmaceuticals, Inc. — Q2 2021 Form 10-Q
Reporting period: Three and six months ended June 30, 2021. Unaudited results; dollar amounts below are in millions unless otherwise noted. Actinium is a clinical-stage biopharmaceutical company developing antibody radiation-conjugates (ARCs), with no approved products or commercial sales.
Financial performance and liquidity
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Commercial revenue | $0 | $0 | $0 | $0 |
| Other revenue | $0.266 | $0 | $0.888 | $0 |
| R&D expense | $3.631 | $3.508 | $7.907 | $7.659 |
| General and administrative expense | $1.710 | $1.154 | $3.428 | $2.686 |
| Net loss | $(5.021) | $(4.625) | $(10.341) | $(10.295) |
| Basic and diluted loss per share | $(0.25) | $(0.41) | $(0.54) | $(1.20) |
| Cash used in operating activities | — | — | $(10.226) | $(10.365) |
At June 30, cash and cash equivalents were $81.912 million; cash, cash equivalents and restricted cash totaled $82.352 million. Total current assets were $83.171 million versus current liabilities of $3.873 million. Total liabilities were $3.955 million, principally lease obligations; the balance sheet reported no borrowings. Stockholders’ equity was $80.499 million. The company reported an accumulated deficit of $241.315 million.
Net cash from financing was $28.644 million for the first half, mainly from common-stock sales under its JonesTrading at-the-market sales agreement. The company sold 3.5 million shares for $28.7 million net proceeds in the period. It reported that existing resources were expected to fund planned operations for more than 12 months from the filing date. This runway depends on planned spending and is not a guarantee of future funding sufficiency.
Changes versus prior comparable periods
- Q2 net loss increased by $0.396 million year over year; higher R&D and G&A costs were partly offset by $0.266 million of collaboration revenue.
- For the first half, net loss was broadly unchanged year over year: higher R&D and G&A expenses were offset by $0.888 million in other revenue and higher interest income.
- First-half R&D rose modestly, mainly due to added staff and new laboratory costs, partly offset by lower CD45-program expenses. G&A increased primarily because of higher professional fees.
- First-half operating cash use was slightly lower than in 2020. Financing cash inflow was lower than the prior-year period, when the company completed two equity and pre-funded-warrant offerings.
- Common shares outstanding increased from 17.533 million at December 31, 2020 to 21.091 million at June 30, 2021, reflecting equity sales. The filing also reports 21,331,314 shares outstanding on July 28, 2021.
Margins are not meaningful for this pre-commercial company: reported revenue was collaboration-related research revenue, not product sales, and operating expenses substantially exceeded revenue.
Programs, outlook, risks and unusual items
- Iomab-B/SIERRA: The lead candidate was in a pivotal Phase 3 trial for older patients with relapsed or refractory AML receiving bone marrow transplant conditioning. The trial was planned for 150 patients; the filing reports it reached 75% enrollment (113 patients) in Q3 2020. A December 2020 independent monitoring review recommended continuing the study to full enrollment; the company did not receive unblinded efficacy results. Management expected to complete enrollment and report topline data it believed could support a BLA, but the filing gives no clear completion date.
- The company cited interim data from the first 113 SIERRA patients, including transplant and engraftment outcomes, but cautioned that preliminary and interim results may change and are subject to verification. Investors should distinguish these reported interim observations from final, randomized trial efficacy results.
- Other development: Iomab-ACT, an investigational conditioning approach for CAR-T and gene therapy, had begun enrolling in a collaboration with Memorial Sloan Kettering; the company expected proof-of-concept data in the second half of 2021. Actimab-A combination trials were ongoing, including CLAG-M dose escalation and a venetoclax combination; the company expected preliminary Phase 1 safety and proof-of-concept data in 2021.
- Funding and dilution: Operations have been funded primarily through equity and warrant sales. The company may need additional capital, which could be unavailable or dilutive. After quarter-end, it sold 0.2 million shares for $1.8 million net proceeds under its sales agreement.
- Clinical and operating risks: The business depends substantially on successful development of Iomab-B and other candidates. Trials may fail, be delayed or reveal safety issues; regulatory approval, commercialization, reimbursement and market acceptance are uncertain. The company relies on third parties for clinical trials, manufacturing and isotope supply, including a DOE Ac-225 supply agreement renewed annually and then extending through year-end 2021.
- COVID-19: Management reported no financial impact and no significant clinical-development or drug-production disruption to date, while warning that resurgences, variants, site constraints, supply interruptions or regulatory delays could affect operations and timelines.
- Contingencies and other items: A $1 million milestone payment to Fred Hutchinson Cancer Research Center would be due upon FDA approval of the first drug using the licensed BC8 antibody, with 2% royalties on net sales upon commercial sale. No legal proceedings were reported. The Chief Scientific and Technology Officer resigned July 26, 2021; the filing stated the resignation was not due to a disagreement with the company or board.
Disclosure controls and procedures were assessed as effective as of June 30, 2021, and the company reported no material change in internal control over financial reporting during the quarter. No specific numerical financial guidance was provided.
Most important facts for investors to verify
- SIERRA final enrollment, topline results, endpoint analysis and whether results support a BLA; assess final data separately from interim observations.
- Actual cash burn and updated runway against the company’s stated expectation of more than 12 months of funding, including future trial, laboratory and manufacturing costs.
- Further equity issuance under the $200 million sales agreement, resulting dilution, and shares outstanding after the reported subsequent sale.
- Clinical milestones and safety data for Iomab-ACT and Actimab-A combinations, including whether anticipated 2021 data were delivered.
- Reliability and renewal of third-party manufacturing and isotope supply, particularly the annual Ac-225 agreement, and any trial or regulatory delays.