ATNM - Actinium Pharmaceuticals: Moving Towards FDA Approval

Summary

• Today, we take our first new look at a small developmental firm called Actinum Pharmaceuticals in nearly two years.
• The company posted promising results from a pivotal trial around its lead candidate in October and should soon submit a Biologic License Application around the compound.
• An investment analysis around Actinium Pharmaceuticals follows in the paragraphs below.

If we can't alter the tide of events, at least we can be nearby with towels to mop up .”? Peter David

It has been nearly two years since my first article around ' Tier 4 ' small cap concern Actinium Pharmaceuticals, Inc. ( ATNM ). We concluded that piece by noting ATNM ' at best merited a small "watch item"' position for patient long term investors in this space ' due mainly to the slow pace of development at the company. Actinium Pharmaceuticals made some notable progress on the developmental front in 2022. Therefore it is time to revisit the investment case around the company. An updated analysis follows below.

Company Overview:

Actinium Pharmaceuticals, Inc. is based in New York City. The firm is focused on developing and commercializing therapies for bone marrow transplant or a type of cellular therapy, and for other adoptive cell therapies. The stock is up approximately 25% since we first looked in on it and sports an approximate $250 million market capitalization.

Actinum Pharmaceuticals remains focused on developing Antibody Radiation-Conjugates or ARCS using its proprietary Antibody Warhead Enabling (AWE) platform. As described in our first article on Actinum:

The power of this technology lies in its alpha emitting payload actinium-225. It emits a powerful dose of high energy but only over a very short distance - about the distance of a few cells or less than the thickness of a piece of paper. This focuses the radiation on the cancer cells and limits exposure to normal tissues. "

Pipeline Developments:

The company has several compounds in development. By far the most advanced and most important to Actinum's near term future is Iomab-B which is also known as asapamistamab-I-131. As the rest of the company's pipeline is much earlier staged, Iomab-B will be the focus of this analysis.

At the end of October, the company disclosed positive results that met the primary endpoint (six months of durable complete remission after the initial remission compared to the control arm) in a pivotal 150 person Phase 3 trial involving patients with acute myeloid leukemia or AML.

The company now expects to post additional data from this trial at an upcoming healthcare conference. A Biologic License Application or BLA should soon follow.

This is how the company describes Iomab-B on its website :

Iomab-B via the monoclonal antibody apamistamab, targets CD45, an antigen widely expressed on all types of blood cancer cells and immune cells including bone marrow progenitor stems cells. Iomab-B links apamistamab to the radioisotope iodine-131 and once attached to its target cells emits energy that travels a relatively long distance, destroying a patient's cancer cells and ablating their bone marrow. By carrying iodine-131 directly to the bone marrow in a targeted manner, Actinium believes Iomab-B will avoid side effects of non-targeted chemotherapy and/or external beam radiation on most healthy tissues while effectively killing the patient's cancer and marrow cells ."

The compound is also in an ongoing Phase 1/2 clinical trial being conducted at UC Davis. This study is evaluating Iomab-B as part of an anti-HIV stem cell gene therapy in patients with relapsed or refractory HIV-related lymphoma.

Analyst Commentary & Balance Sheet:

The analyst firm community seems to be growing more sanguine about the company's prospects. Over the past month, four analyst firms including Maxim Group and B. Riley Financial have reiterated Buy/Outperform ratings on the stock. Price targets proffered range from $18 to $53 a share.

The company ended the third quarter with approximately $110 million in cash and marketable securities on its balance sheet against no long term debt. The company posted a net loss of just over $22 million for the first nine months of FY2022. Approximately five percent of the outstanding float is currently held short. There has been no insider activity in these shares since late 2018.

Verdict:

The company has made some nice progress advancing its primary drug candidate since we first visited with Actinium early in 2021. If all goes to plan, Iomab-B could be approved to treat AML by the close of 2023 or very soon thereafter. Both B. Riley Financial and Cantor Fitzgerald have stated that Iomab-B could eventually see $360 million annually in peak sales.

Actinium has the wholly owned rights to Iomab-B in the United States. The company partnered with Immedica Pharma AB for distribution/marketing in Europe, the Middle East and North Africa last Spring. Immedica Pharma AB paid $35 million upfront as part of this collaboration agreement. Actinium will get 25% royalties on sales and can earn just over $400 million in regulatory and sales milestones as well.

Given the company's market cap, balance sheet and the potential of Iomab-B; the stock seems to continue to merit at least a ' watch item ' holding as the company moves closer to FDA approval. Options are available against this equity and they are liquid. This makes a covered call strategy viable and how I continue to hold my shares in this name.

What we wish upon the future is very often the image of some lost, imagined past .”? Graham Swift, Waterland

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