Cellectar Biosciences, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter report. Cellectar is a pre-commercial, clinical-stage biopharmaceutical company developing cancer therapies using its phospholipid drug conjugate (PDC) platform. Its lead candidate, iopofosine I-131, was under clinical evaluation; the filing reports no product revenue.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | No product revenue reported | No product revenue reported |
| Research and development expense | $17.6 million | $10.1 million |
| General and administrative expense | $6.5 million | $5.1 million |
| Operating loss | $24.1 million | $15.3 million |
| Net loss | $24.1 million | $15.1 million |
| Basic and diluted loss per share | $0.43 | $0.76 |
| Cash, cash equivalents and restricted cash at year-end | $35.7 million | $57.2 million |
| Cash used in operating activities | $22.6 million | $13.9 million |
Margins are not meaningful for this pre-revenue company. The rise in operating loss largely reflected higher clinical costs, especially for the pivotal Waldenstrom’s macroglobulinemia (WM) study; R&D expense increased 73% and G&A expense increased 27% year over year. FY2020 included a $185,000 gain from forgiveness of a Paycheck Protection Program loan; the loan and accrued interest were forgiven in December 2020.
At December 31, 2021, total liabilities were $4.2 million, primarily accounts payable, accrued liabilities and lease liabilities; the filing reports no outstanding loan debt. Stockholders’ equity was $33.0 million. Cash declined by $21.5 million during 2021. The company said year-end cash was expected to fund basic budgeted operations for at least 12 months from the March 21, 2022 filing date, but funding beyond that depends on obtaining additional capital or completing a strategic transaction. The company reported an accumulated deficit of $150.9 million.
Material changes and business developments
- Clinical project costs rose by $7.1 million, primarily due to the CLOVER-WaM pivotal study. The company reported material enrollment delays associated with COVID-19-related resourcing issues at study sites and patient concerns about trial participation.
- Common shares outstanding increased from 45.4 million at year-end 2020 to 61.1 million at year-end 2021, including conversion of Series D preferred stock. The company received approximately $35,000 net from its at-the-market program in 2021 and $1.2 million from warrant exercises.
- In July 2021, Cellectar expanded its IntoCell collaboration and entered a co-development and commercialization collaboration with LegoChemBio. Its Orano Med collaboration met stated preclinical endpoints, but Cellectar elected to pursue an alternative alpha-emitting radioisotope because of lead-212’s short half-life and logistical challenges.
- The company filed a lawsuit in October 2021 against two former insiders, alleging diversion of intellectual property. It says the disputed IP does not directly affect current clinical studies but could be relevant to future research and commercialization.
Outlook, pipeline and key risks
- Lead program: Iopofosine was being studied in the Phase 2 pivotal CLOVER-WaM trial, a Phase 2B multiple myeloma (MM) study, and the Phase 1 CLOVER-2 pediatric study. CLOVER-WaM was designed to enroll 50 patients; the filing does not provide a clear year-end enrollment total. The company described FDA alignment on study design, dose, endpoints and an interim safety/futility assessment.
- Reported clinical findings: Cellectar reported preliminary results from small patient groups, including a 45.5% overall response rate among 11 triple-class-refractory MM patients presented at ASH in December 2021, and an 80% response rate in a five-patient quad/penta-refractory subset. These are limited, non-definitive clinical data and do not establish efficacy or approval.
- Safety: Cytopenias, including thrombocytopenia, anemia and neutropenia, were common across studies. The filing also reports fatalities due to infection in patients treated with iopofosine; causality is not established in the provided text.
- Other programs: CLR 1900 remained in early preclinical development, alongside partnered PDC assets. No regulatory approval or commercial launch guidance was provided.
- Funding and execution: Management expects operating losses to continue and plans to pursue financing. Equity or debt issuance, or a strategic arrangement, may dilute shareholders or require giving up economic or intellectual-property rights. Cash needs depend on trial progress, costs, manufacturing and regulatory timelines.
- Operating risks: Cellectar relies on third parties, including CPDC as the exclusive supplier of iopofosine drug product. Clinical enrollment and timelines may be affected by COVID-19; manufacturing disruption, adverse trial results, regulatory setbacks, competition and reimbursement or pricing changes are additional risks.
- Listing risk: Nasdaq notified the company in November 2021 that its share price was below the $1 minimum bid requirement. The filing said the company had until May 2, 2022 to regain compliance, with possible additional compliance time subject to conditions.
Most important facts for investors to verify
- Current cash, operating burn and financing runway, including any financing or strategic transaction completed after the filing.
- Enrollment progress, data maturity and regulatory status of CLOVER-WaM and the MM and pediatric studies; assess the small sample sizes and whether results are confirmed in larger trials.
- Updated safety information, particularly severe cytopenias and reported infection-related fatalities.
- Current iopofosine manufacturing capacity and any change in reliance on CPDC or other key vendors.
- Nasdaq bid-price compliance and the potential effects of further share issuance, outstanding warrants and stock-based compensation.
- Status and potential financial or intellectual-property consequences of the lawsuit involving former insiders.
The independent auditor issued an unqualified opinion on the consolidated financial statements and reported no critical audit matters. Management stated that disclosure controls and internal control over financial reporting were effective as of December 31, 2021; the auditor did not attest to internal-control effectiveness.