Cellectar Biosciences, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020; filed March 2, 2021. This is an annual report, not a standalone fourth-quarter report. Cellectar is a clinical-stage cancer biopharmaceutical company developing its phospholipid drug conjugate (PDC) platform. It reported no product revenue.
Financial performance and position
| Metric | FY2020 / Dec. 31, 2020 | FY2019 / Dec. 31, 2019 |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense | $10.14 million | $9.00 million |
| General and administrative expense | $5.15 million | $5.18 million |
| Net loss | $15.09 million | $14.09 million |
| Net loss per share, basic and diluted | $0.76 | $1.84 |
| Cash and cash equivalents | $57.17 million | $10.61 million |
| Cash used in operating activities | $13.93 million | $11.69 million |
| Total liabilities | $3.86 million | $3.19 million |
Operating loss was $15.29 million in 2020 versus $14.18 million in 2019. The company had an accumulated deficit of $126.78 million. As a development-stage company without reported revenue, conventional revenue margins are not meaningful. No cash-flow-from-operations margin is applicable.
Financing provided $60.55 million of net cash in 2020, principally from equity offerings; investing activities used $62,000. June and December offerings generated approximately $59.7 million in aggregate net proceeds, with additional proceeds from warrant exercises. Common shares issued and outstanding rose from 9.39 million at year-end 2019 to 45.44 million at year-end 2020; 50.50 million were outstanding as of March 1, 2021. The December Series D preferred shares were convertible subject to stockholder approval, which was obtained in February 2021.
Debt was limited: the approximately $184,000 PPP loan and accrued interest were forgiven in December 2020. Remaining reported liabilities were primarily accounts payable, accruals and lease liabilities. Management said year-end cash was adequate for basic budgeted operations for at least 12 months from the filing, but additional funding would be needed to pursue its operating plan beyond that period.
Changes versus FY2019
- R&D expense increased $1.14 million, or about 13%, mainly from higher personnel and general R&D costs; manufacturing-related costs declined.
- G&A expense was broadly stable, decreasing about $33,000.
- Net loss increased about $1.00 million. The 2020 loss included a $185,000 gain from PPP debt forgiveness; 2019 included a $43,000 noncash gain on derivative warrant revaluation.
- Cash increased by $46.55 million, largely due to equity financing, while operating cash use increased by about $2.24 million.
- Loss per share narrowed to $0.76 from $1.84, alongside a substantial increase in weighted-average shares; this does not indicate improved operating profitability.
Business, outlook and risks
Lead candidate CLR 131, an iodine-131 PDC, was being studied in adult hematologic cancers and pediatric cancers. The company reported positive but preliminary clinical findings, including a 40% overall response rate in a subset of triple-class-refractory multiple myeloma patients receiving at least 60 mCi total body dose, and responses among six Waldenstrom’s macroglobulinemia patients in an earlier study. A pivotal, single-arm, 50-patient CLOVER-WaM study was initiated in January 2021. These results are from limited clinical populations and do not establish approval or commercial efficacy.
Other programs included preclinical CLR 1900 and partnered PDC programs. Management described continued development as dependent on financing, clinical progress and collaborators. CLR 131 supply for clinical studies relied on CPDC as the exclusive drug-product supplier, creating a concentration risk. The company had 11 employees and relied substantially on outside manufacturers, CROs and clinical sites.
Management said it had not experienced significant COVID-19 impacts to date, but warned that the pandemic could disrupt patient recruitment, clinical timelines, supply and financing. Other material risks include clinical failure or adverse events, regulatory delays, competition, commercialization and reimbursement uncertainty, potential dilution from future financings and securities, and reliance on third parties. The independent auditor issued an unqualified opinion on the financial statements; it did not provide an internal-control audit opinion. Management reported disclosure controls and internal control over financial reporting were effective as of year-end.
Key facts for investors to verify
- Current cash, operating burn and financing runway, including whether the stated 12-month budget coverage remains applicable.
- Subsequent share issuance and conversion activity, outstanding warrants and potential dilution from Series D preferred stock.
- Enrollment, safety, response durability and regulatory feedback for CLOVER-WaM and other CLR 131 trials; assess the small and non-comparator nature of reported datasets.
- Continuity and capacity of the sole CLR 131 drug-product supplier and any COVID-19-related effects on trials or supply.
- Whether future financing, collaboration or licensing arrangements can fund development without materially adverse dilution or loss of rights.