Actinium Pharmaceuticals, Inc. — Q3 2022 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2022. The financial statements are unaudited. Actinium is a clinical-stage biopharmaceutical company developing targeted radiotherapies; it reported no commercial product revenue.
Financial results and liquidity
Amounts below are in millions of dollars, except per-share data and where noted.
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Total revenue | $0.045 | $0.233 | $1.030 | $1.121 |
| Research and development expense, net | $6.771 | $4.708 | $15.802 | $12.615 |
| General and administrative expense | $3.073 | $1.994 | $8.041 | $5.422 |
| Net loss | $(9.474) | $(6.423) | $(22.370) | $(16.764) |
| Basic and diluted loss per share | $(0.38) | $(0.30) | $(0.94) | $(0.84) |
- Cash and liquidity: Cash and cash equivalents were $111.8 million at September 30, 2022, versus $77.8 million at December 31, 2021. Including restricted cash, the total was $112.5 million. Current assets were $113.4 million and current liabilities $8.4 million.
- Cash flow: Nine-month operating cash flow was positive $16.4 million, compared with cash used of $15.8 million in 2021. This swing principally reflects the $35.0 million Immedica upfront payment recorded as deferred license revenue, not recognized revenue. Financing provided $18.2 million, chiefly from stock sales; investing used $0.35 million.
- Debt and obligations: The balance sheet reports no borrowings. Lease liabilities totaled approximately $2.6 million, largely operating leases. Long-term deferred license revenue was $35.0 million.
- Margins: Commercial revenue was zero, so commercial operating margins are not meaningful. The company remains loss-making, with an accumulated deficit of $278.1 million.
Changes versus the prior comparable periods
- Q3 net loss widened by $3.1 million year over year; nine-month net loss widened by $5.6 million. Management attributed the increases mainly to higher R&D and G&A spending.
- Q3 R&D expense rose $2.1 million, driven by increased manufacturing and CMC activity, laboratory research costs, and staffing. Nine-month R&D rose $3.2 million.
- Q3 G&A rose $1.1 million; the nine-month increase was $2.6 million, reflecting compensation, equity compensation, professional and consulting fees, recruitment, and legal costs.
- Interest income increased to $0.3 million for Q3 and $0.4 million for nine months, attributed to higher cash balances and interest rates.
- Cash increased substantially, primarily from the Immedica upfront payment and equity issuance. The company sold approximately 3.0 million shares in the first nine months for $18.3 million net proceeds; shares outstanding increased to 25.2 million at quarter-end from 22.1 million at year-end 2021.
Outlook, developments, and risks
- Iomab-B: On October 31, 2022, after quarter-end, the company announced that its pivotal Phase 3 SIERRA trial met the durable complete remission primary endpoint with p<0.0001. Additional data, including survival results, were expected by year-end 2022. The company said it intended to submit a U.S. BLA in 2023; approval and timing remain uncertain.
- Immedica license: The April 2022 agreement granted Immedica exclusive Iomab-B commercialization rights in specified EUMENA territories. Actinium received $35 million in May, eligible for additional milestones and mid-20% royalties on certain-country net sales. The upfront amount remains deferred and is to be recognized upon EU regulatory approval. Actinium retains U.S. and other worldwide rights and remains responsible for certain development and manufacturing activities.
- Actimab-A: The company reported Phase 1 CLAG-M combination results, including a 67% overall response rate across dose cohorts, median overall survival of 12 months, and 53% and 32% overall survival at one and two years, respectively. Results were slated for an ASH presentation in December 2022. The Venetoclax combination trial continued dose escalation; proof-of-concept data were expected in 2023.
- Other programs: Iomab-ACT is being studied for conditioning before CAR-T therapy, with proof-of-concept data expected in 2023. These are development expectations, not guaranteed outcomes.
- Funding outlook: Management stated that existing resources were expected to fund planned operations for more than 12 months from the filing date. The company nevertheless expects continued losses and may need additional financing; further equity sales could dilute shareholders. After quarter-end, it sold 0.3 million shares for $2.7 million net proceeds.
- Key risks: Clinical and regulatory uncertainty, dependence on Iomab-B and SIERRA, reliance on third-party manufacturers and isotope suppliers, potential trial delays, reimbursement and commercialization challenges, competition, intellectual-property uncertainty, and possible COVID-19-related disruption. The Ac-225 supply contract with the Department of Energy extended through year-end 2022 and required annual renewal.
- Other items: The company reported no legal proceedings. Management considered disclosure controls effective at September 30, 2022 and reported no material change in internal control over financial reporting during the quarter. Inflation was not considered to have had a material effect during the periods discussed.
Most important facts for investors to verify
- Final SIERRA results, including survival and safety data, and whether they support the planned BLA and regulatory review.
- Whether EU regulatory approval occurs, triggering recognition of the $35.0 million deferred license payment, and the terms and timing of any additional milestones or royalties.
- Cash burn and runway excluding the one-time license advance, together with future equity issuance and dilution.
- Clinical progress, safety, enrollment, and regulatory pathways for Actimab-A and Iomab-ACT.
- Availability and continuity of isotope and contract-manufacturing supply, including renewal of the Ac-225 supply arrangement.