Actinium Pharmaceuticals, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Unaudited financial statements; amounts below are U.S. dollars unless stated otherwise. Actinium is a clinical-stage biopharmaceutical company developing targeted radiotherapies and reported no commercial product revenue.
Financial results and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Commercial revenue | $0 | $0 | $0 | $0 |
| Other revenue | $0.045m | $0.266m | $0.985m | $0.888m |
| Research and development expense, net | $4.662m | $3.631m | $9.031m | $7.907m |
| General and administrative expense | $3.233m | $1.710m | $4.968m | $3.428m |
| Net loss | $7.767m | $5.021m | $12.896m | $10.341m |
| Basic and diluted loss per share | $0.33 | $0.25 | $0.56 | $0.54 |
Revenue was immaterial and there is no meaningful commercial gross margin. Q2 operating expenses increased about $2.6m year over year; management attributed higher R&D costs mainly to compensation, staffing and laboratory research, and higher G&A to compensation, professional and consulting fees, recruitment and legal fees. Six-month net loss increased about $2.6m year over year.
- Cash and liquidity: Cash and cash equivalents were $116.330m at June 30, 2022, versus $77.829m at December 31, 2021; restricted cash was $0.392m. Current assets were $118.297m and current liabilities $6.282m.
- Cash flows: Six-month operating cash flow was positive $22.137m, versus use of $10.226m in 2021, principally because of the $35m Immedica upfront payment. The payment is recorded as deferred license revenue, not recognized as current-period revenue. Investing cash use was $0.277m; financing cash provided was $16.641m, primarily from common-stock sales.
- Debt and obligations: The filing reports no conventional borrowings. Lease liabilities totaled approximately $2.648m, including $2.627m operating and $0.021m finance lease liabilities. Total liabilities were $43.619m, including $35m long-term deferred license revenue.
- Equity financing: The company sold 2.7m shares for $16.7m net proceeds in the first half under its at-the-market sales agreement. Shares outstanding increased from 22.14m at year-end 2021 to 24.87m at June 30, 2022; 25.18m were outstanding August 12.
Material developments and outlook
- In April 2022, Actinium licensed exclusive Iomab-B commercialization rights in the EUMENA territories to Immedica. Actinium received a $35m upfront payment in May, is eligible for regulatory and commercial milestones and mid-20% royalties on net sales in certain countries, and retained U.S. and other rights. The upfront payment remains deferred and is to be recognized upon EU regulatory approval. Actinium remains responsible for certain development and manufacturing activities.
- The pivotal Phase 3 SIERRA trial completed enrollment of 153 patients; the last patient received a bone marrow transplant in Q4 2021. Management expected topline durable-complete-remission data in Q4 2022 and said it expected to file an Iomab-B BLA in the first half of 2023, subject to trial results and regulatory requirements.
- Management expected proof-of-concept data in the second half of 2022 from the Iomab-ACT collaboration with Memorial Sloan Kettering. Actimab-A combination programs included a completed Phase 1 CLAG-M study and a Phase 1/2 venetoclax study; development and registration strategies remained under evaluation.
- Management stated existing resources were expected to fund planned operations for more than 12 months from the filing date. This outlook depends on planned spending and does not assure future financing availability. The company also continued to access equity financing; after quarter-end it sold 0.3m shares for $1.4m net proceeds.
- Management said COVID-19 had not had a financial impact to date and reported no significant operational disruption, but warned that future waves could affect trials, suppliers, manufacturing, site access and regulatory timelines.
Risks, contingencies and unusual items
- The company has no approved commercial products, has incurred recurring losses, and depends substantially on Iomab-B and SIERRA outcomes. Trial results, regulatory review, safety, efficacy, manufacturing and reimbursement remain uncertain; preliminary and interim clinical data may change.
- Actinium relies on third parties for clinical trials, manufacturing and isotope supply. It identified potential supply, quality, capacity and regulatory risks, including annual renewal of its DOE Actinium-225 supply contract, which then ran through year-end 2022.
- Continued equity issuance may dilute shareholders. Access to additional capital is uncertain despite management’s stated runway; the filing warns that insufficient financing could force delays or reductions in development.
- Other material risks include competition, patent and trade-secret uncertainty, dependence on key personnel, hazardous radioactive materials, cybersecurity, clinical-trial delays and evolving healthcare pricing and reimbursement rules.
- The company disclosed a new five-year office lease effective June 2022. It reported no legal proceedings, defaults on senior securities or material changes in internal control; disclosure controls were deemed effective.
Important facts for investors to verify
- Whether SIERRA’s final primary-endpoint data support the anticipated BLA, and whether the expected filing and regulatory timelines were achieved.
- How and when the $35m Immedica deferred revenue will be recognized, and the conditions, milestones and royalty terms governing future payments.
- Whether cash burn excluding the one-time license advance is consistent with the stated greater-than-12-month runway, and the extent of further ATM share issuance and dilution.
- Current clinical-trial status and data for Iomab-ACT and Actimab-A combinations, including safety and whether early findings translate into later-stage results.
- Continuity and scalability of isotope and drug-product supply, including DOE Actinium-225 contract renewals and backup suppliers.