ATNM - Actinium: Highly Derisked Late Stage Molecule With Successful Trial

2023-04-10 08:00:00 ET

Summary

• ATNM has finally delivered complete data from SIERRA, and it is solid.
• They are going to file later this year.
• The stock is down 50% from its catalytic highs, creating a highly derisked opportunity.

I covered Actinium ( ATNM ) in March 2022, and a lot has happened since then. For example, the stock is up nearly 100% at the time of writing (the period between March 2022 and April 2023), and they have scored major goals in their late stage leukemia trial. This trial, codenamed SIERRA, has been going on for a long time, as I was lamenting last year. Good to see that the trial is now over, and we finally have some concrete progress.

SIERRA was a pivotal phase 3 trial for lead candidate Iomab-B in patients aged 55 and above with relapsed or refractory acute myeloid leukemia (AML). Iomab-B is an Antibody Radiation-Conjugate, or ARC, which combines an antibody with a radio-molecule. The antibody seeks out the tumor cell, and the radiation then kills it off. I discussed how, despite a good theory, these molecules have not been too successful, either in human trials or in the market. Their lack of success in the market is unfortunate, and is more about individual - I don’t want to call it greed, but see the discussion in my previous article - and has not much to do with the efficacy or safety of the therapy. Hopefully, this time around, there will be a better solution. Actinium avoids some of the issues I discussed by giving Iomab-B in a hospital setting.

In April 2022, in a move that validated the SIERRA trial, Actinium signed a supply agreement with Immedica Pharma AB, against which the company received $35mn in upfront fees, and may receive $417mn in biobucks with royalties in the mid-twenty percent range on net sales, and Immedica will hold the commercialization rights for Iomab-B in Europe and MENA countries. Actinium retains rights in the U.S. and the rest of the world and will also be responsible for certain clinical and regulatory activities and manufacturing of the drug.

According to B Riley analysts, Iomab-B projected peak net sales is in the $360mn range, see here . Iomab-B is a bone marrow transplant conditioning agent, to be given prior to transplant, in AML patients. Sales should start happening in 2025, if the approval process goes as planned. I don't know how B Riley arrived at this analysis because I don't have the detailed calculations from them. It is a tough calculation because iomab-b is a conditioning agent and not a drug per se, so the cost will be some fraction of bone marrow transplant cost, which costs anywhere between $40,000 to $800,000 depending on various factors, including geography.

In October, SIERRA finally published topline data. Data showed that Iomab-B patients had six months of durable complete remission after the initial remission compared to the control arm (p<0.0001). Other key details:

In the Iomab-B arm, 22% of patients achieved dCR, while no patient in the control arm reached dCR. Patients who reached 6-month dCR did not achieve median OS but indicated 92% of 1-year survival and 60% of 2-year survival.

Actinium also said the Iomab-B arm showed a "significant improvement" in the secondary endpoint of event-free survival (EFS), with a 78% decline in the probability of an event (Hazard Ratio=0.22, p<0.0001).

The study drug was well tolerated with a favorable safety profile. The sepsis events in the active arm stood at ~6% compared to ~29% in the control arm while other treatment-related adverse events were also lower in the Iomab-B arm.

The company is planning a BLA in the second half of this year. In pursuing its efforts at commercialization, the company inducted a new Chief Commercial Officer in November, an ex-Novartis executive with experience in commercializing Kymriah, the first CAR-T cell therapy.

Another interesting little tidbit from their second asset:

Actimab-A + CLAG-M demonstrated 59% 1-year and 32% 2-year survival in r/r AML patients subset that failed venetoclax; NCI CRADA provides broad support including late-stage trials expected to be balance sheet sparing.

Actimab-A is a CD33 targeting radiotherapeutic agent targeting patients in a phase 1/2 trial in r/r AML. CLAG-M is a salvage therapy regimen in patients with r/r AML. This trial was in a set of heavily pretreated patients , “had adverse cytogenetics (i.e., 67% had adverse cytogenetics with 52% having a TP53 mutation associated with very poor outcomes) or failed Venetoclax, and consequently have dismal survival ranging from approximately two to six months.” This molecule, I have noted before, has gone through its own delays and hiccups, so it is good to see some data here. These patients have a historical survival duration of between 2 and 4 months.

To sum it all up, according to Sandesh Seth, Chairman and CEO of Actinium:

These highly impressive improvements in survival of high-risk relapsed and refractory (r/r) acute myeloid leukemia (AML) patients were demonstrated by each product candidate in a complementary fashion across the patient journey. Iomab-B facilitates transplants for currently not transplantable, unfit patients and Actimab-A+CLAG-M provides a better therapeutic option for fit, high-risk patients. Based on these results, Actinium intends to forge ahead with the development and commercialization of Iomab-B and Actimab-A to build a specialty radiotherapeutics company that can offer AML patients an opportunity for extended survival that just does not exist currently.

Financials and risks

ATNM has a market cap of $240mn and a cash balance of $109mn. Research and development expenses were $23.1 million for the year ended December 31, 2022, while general and administrative expenses were $12.0 million. This is a thrifty company, and it has managed to rein in expenses even at these late clinical stages. Given that, I can agree with the company’s assessment that their funds will last them until 2025. Not that they will not dilute at a good opportunity, but despite the stock rising 1.5x in the last few months on good data, they did not make an effort to raise funds. I find that self-control commendable.

On another note, orphan-designated Iomab-B has patent protection till 2037.

As far as risks is concerned, the low uptake of ARCs, despite the mitigating scenario I set out in the article, is a risk. There's also the risk of dilution, because the cash balance is pretty low for a late stage company, despite their ability to keep the overheads low. Lastly, ATNM delays things; while the FDA application might take the timeline out of their hands, their low G&A may mean they are understaffed; whether that is true or not, I wish they will wrap things up before their cash runs out.

Bottomline

ATNM went up considerably after the trial win, but is now down 50% due to nothing much, really. They will file a BLA, and then there will be an approval, which looks more and more likely. As such, at current prices, I consider this a sound opportunity and will take a pilot position in this solidly derisked stock.

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