Actinium Pharmaceuticals, Inc. quarterly report, Q2 FY2020

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Actinium Pharmaceuticals, Inc. — Q2 2020 Form 10-Q

Period: Three and six months ended June 30, 2020; filed August 14, 2020. Financial statements are unaudited. Dollar amounts below are in millions unless otherwise noted.

Business context

Actinium is a clinical-stage biopharmaceutical company developing antibody radiation-conjugates (ARCs) for cancer. It had no approved products or commercial revenue. Its lead program, Iomab-B, is in the pivotal Phase 3 SIERRA trial for patients age 55 or older with relapsed or refractory AML before bone marrow transplant. Other programs include Iomab-ACT for targeted conditioning and Actimab-A/CD33 candidates for conditioning or combination treatment.

Financial results and liquidity

  • Revenue: $0 in Q2 and H1 2020, unchanged from the comparable 2019 periods.
  • Q2 2020: R&D expense was $3.508 million versus $4.010 million; G&A was $1.154 million versus $1.076 million. Operating loss was $4.662 million versus $5.086 million; net loss was $4.625 million versus $5.027 million. Basic and diluted loss per share was $0.41 versus $1.00.
  • H1 2020: R&D expense was $7.659 million versus $8.345 million; G&A was $2.686 million versus $2.440 million. Operating loss was $10.345 million versus $10.785 million; net loss was $10.295 million versus $10.697 million. Basic and diluted loss per share was $1.20 versus $2.39.
  • Cash flow: H1 cash used in operations was $10.365 million, compared with $10.853 million in H1 2019. Investing cash flow was zero; financing provided $54.577 million, versus $16.808 million in the prior-year period.
  • Liquidity at June 30: Cash and cash equivalents were $53.466 million; cash, cash equivalents and restricted cash totaled $53.905 million. Current assets were $54.508 million and current liabilities $4.656 million. Management expected existing resources to fund planned operations for more than 12 months from the filing date.
  • Debt and obligations: Note payable was $0.154 million, all current. Lease liabilities totaled approximately $0.938 million ($0.747 million operating and $0.191 million finance). Total liabilities were $5.184 million.
  • Equity and dilution: Accumulated deficit was $219.054 million. H1 equity financing generated $54.839 million net from common stock and pre-funded warrants. At June 30, 2.259 million pre-funded warrants remained outstanding at an exercise price of $0.003 each; these are treated as outstanding in loss-per-share calculations.

No meaningful profit margins are reported because the company had no revenue and incurred operating losses.

Changes versus prior comparable periods

  • H1 net loss narrowed by $0.402 million, primarily due to lower R&D spending, partly offset by higher G&A. Management attributed lower R&D expense chiefly to sufficient prior manufacturing of Iomab-B antibody supply.
  • Q2 net loss narrowed by $0.402 million year over year. G&A rose, primarily due to higher professional fees; interest income declined with lower interest rates.
  • Cash rose substantially from $9.254 million at December 31, 2019, mainly from April and June equity offerings. Those offerings generated net proceeds of $29.1 million and $23.0 million, respectively; the company also received $2.5 million net from its at-the-market program and $0.2 million from Lincoln Park sales.
  • Common shares issued and outstanding were 13,171,824 at June 30, 2020, compared with 5,490,038 at December 31, 2019. Share and per-share figures were retroactively adjusted for the subsequent 1-for-30 reverse split.

Outlook, risks and unusual items

  • Management expected to complete SIERRA enrollment and report topline data in 2021. It initiated a single ad hoc SIERRA analysis in Q2, expected by year-end 2020; positive results could provide topline primary-endpoint data and permit early trial termination. The trial remained active, but COVID-19 affected enrollment at some sites.
  • Management planned to complete the Actimab-A plus CLAG-M trial by year-end 2020, expected preliminary proof-of-concept data from Actimab-A plus venetoclax by year-end 2020, and expected to initiate an Actimab-A plus 7+3 trial by year-end 2020. Iomab-ACT proof-of-concept data were expected in 2021. These are company expectations, not assurances.
  • COVID-19 had not caused a reported financial impact or significant clinical-development or drug-production delay to date, but could disrupt trials, manufacturing, regulatory interactions, operations and access to capital. The company also reported transportation and facility-access disruptions and limited staff/advisor support.
  • The company reported an April 29 NYSE American deficiency notice related to its share price; continued listing depended on a reverse split or sustained price improvement by October 29, 2020. A 1-for-30 reverse split became effective August 10, 2020, with split-adjusted trading beginning August 11.
  • Key risks include clinical and regulatory failure or delay, dependence on Iomab-B and SIERRA, future financing and shareholder dilution, reliance on third-party manufacturers and isotope suppliers, patient enrollment, competition, intellectual-property protection, and reimbursement and commercialization uncertainty. Actinium-225 supply depended in part on a DOE contract due for renewal at year-end 2020.
  • Subsequent events included an August registration statement covering up to $500 million of securities and a prospectus for up to $200 million of common stock under an ATM sales agreement. These provide potential financing capacity, not proceeds already received.
  • No legal proceedings were reported. The filing disclosed new executive employment agreements and a modification removing anti-dilution protection from a warrant held by CEO Sandesh Seth. The CEO agreement’s stated service term “until February 24, 2020” appears inconsistent with its August 2020 execution and should be checked against the exhibit.

Important facts for investors to verify

  • SIERRA enrollment status, the timing and statistical interpretation of the ad hoc analysis, and whether trial results support a BLA.
  • Actual cash burn and runway relative to management’s greater-than-12-month estimate, including subsequent financing and spending.
  • Fully diluted share count, remaining pre-funded warrants, reverse-split-adjusted figures, and potential dilution from the disclosed shelf and ATM capacity.
  • Whether COVID-19, clinical-site capacity, manufacturing, or isotope availability changes trial timelines or supply plans.
  • The NYSE American listing status after the reverse split, and the precise terms and dates in the CEO employment agreement and warrant amendment.