ATNM - Actinium Pharmaceuticals: Prep For February

Summary

• Actinium Pharmaceuticals is delivering the goods on a deep pipeline of therapeutics.
• It has deepened its bench with experienced operators.
• The sell-off over the data delay is overdone.
• Shares have drifted down from a November high of $14.41 to $9.88, offering an interesting entry point prior to the Tandem Meetings.

2023 will be a big year for Actinium Pharmaceuticals ( ATNM ). After stellar phase 3 and phase 1 results were reported last quarter, the clinical-stage biotech is starting out the new year with a lot of momentum. Expect market interest to build as we approach an important conference in mid-February.

Actinium is dedicated to the commercialization of targeted radiotherapies which will fulfill the unmet needs in various cancer treatments. What makes the company so fascinating? It creates novel “pre-transplant conditioning therapies,” drugs which are designed to attack specific targets in order to "deplete or condition" them prior to, say, a bone marrow transplant. This leads to far better acceptance, less toxicity, and much better treatment outcomes. The current setback for a bone marrow transplant [BMT] in many patients is that the body's immune system will attack any transplanted cells. Actinium provides a “pacification” operation of sorts: the drug glides in a radioactive payload that knocks off those sentinel immune cells keen on rejecting a transplant.

The company had a busy news cycle last quarter:

October 30: Actinium announced the results of its Phase 3 (SIERRA) trial which assessed the safety/efficacy of its lead product candidate –Iomab-B– in patients who are afflicted by relapse/refractory acute myeloid leukemia and are undergoing a bone marrow transplant.

The study is using Iomab-B as a preconditioning agent in patients over the age of 55 with active relapsed/refractory Acute Myeloid Leukemia (R/R AML) prior to receiving a hematopoietic stem cell transplant. Iomab-B links the antibody apamistamab with radioisotope iodine-131 to provide the benefits of radiation without toxic side effects. As this will allow many more patients to benefit from being able to receive HSCT, the therapy would be of substantial benefit.

The clinical trial compared Iomab-B (as a conditioning regimen) against a control arm before a bone marrow transplant in 153 relapsed/ refractory AML patients aged 55 years or older. The SIERRA trial met the main goal: those who received Iomab-B indicated 6 months of durable complete remission –compared to the control arm (p<0.0001). The ticker jumped 23% pre-market.

The market opportunity is very high for Iomab, most immediately, in the BMT market. Bridging 100% of R/R AML patients to BMT (versus 20-30% by best available treatment) would be a game changer in patient treatment.

At the time, Chief Executive Sandesh Seth said the company expected to release additional clinical data from the trial by the year-end. (More on this below.)

November 3: Actinium reported positive results from the Phase 1 trial evaluating Actimab-A with salvage chemotherapy regimen CLAG-M in fit patients with relapsed or refractory acute myeloid leukemia (AML). Actinium’s Actimab-A CLAG-M combination showed a 100 percent remission rate in relapsed or refractory acute myeloid leukemia patients receiving 0.75 ?Ci/kg in Phase I study. With 53% 1-year Overall Survival and 32% 2-year Overall Survival. Patients in the study received a median of 2 lines of prior therapy with 57% receiving prior treatment with venetoclax and 67% had adverse cytogenetics with 52% of patients having a TP53 mutation.

Why is Actimab-A an important program? It allows the treatment of AML patients to receive radiation at the cellular level, presently not possible with traditional external beam radiation. The expectation is that this ARC CD33 drug will be used with other agents to improve patient outcomes in hematological malignancies.

November 22: Actinium Pharmaceuticals dropped 13% after issuing a shareholder letter which suggested a potential delay for a Phase 3 readout for Iomab-B. At the time of the October SIERRA trial release, CEO Sandesh Seth had said he expected to release additional clinical data by December 2022. In this letter, Seth said that the company would disclose all detailed SIERRA data at an upcoming medical conference.

Since then, shares have drifted down from its November high of $14.41 to $9.88, approaching substantial support line. This may be a good opportunity for entry as February will bring a strong news cycle.

The conference that the CEO mentioned in November for full detailed disclosure is best understood to be the 2023 Tandem Transplantation & Cellular Therapy Meetings of ASTCT and CIBMTR. The Tandem Meetings are the premier event in the field of BMT and cellular therapy. This year, it takes place February 15-19 in Orlando, Florida. That is now only five weeks away.

New Partnerships?

Partnerships are the lifeblood of commercialization: absorbing costs, furthering the launch, providing FDA expertise, and instilling investor confidence. For Iomab, Actinium has initiated the process, recently signing a partnership with Sweden's Immedica Pharma AB which will handle the EMENA region (Europe, the Middle East, and North Africa). Actinium will receive 25% sales royalties. Actinium will receive an upfront payment of $35M with the potential of up to $417M in milestones payment. Based on 29 million shares, the Immedica deal is probably worth about $15.58 per share.

Immedica AB is an excellent partnership, but an additional collaboration will be key this coming year. If Europe, the Middle East and North Africa are worth $452 million in partnership deals, how much are the Asia and Americas partnerships worth? At least double that.

Actinium has a lot to recommend itself. It has over 195 patents. The company’s two most advanced franchises –Iomab-B and Actimab– have wide application across diverse cancer indication (its antibody can hit multiple targets, including CD45, CD33, CD38, and CD47). Not to mention the market potential of the proprietary AWE Technology to eventually create targeted radiotherapies for many other things: blood cancers, solid tumors, multiple myeloma, and lymphoma. This is a company that is proving itself in the lab and may be see new partnerships announced this winter (or perhaps even a buyout).

As of September 30, 2022, Actinium Pharmaceuticals had cash and cash equivalents of approximately $111.8 million. With the current cash on hand, plus the deal made with Immedica AB, the company has stated that it has enough cash to fund its operations through mid-2025. It is also deepening its bench with experienced operators: Caroline Yarbrough, who most recently served at Novartis as Portfolio General Manager, US Oncology, recently joined as Chief Commercial Officer; Jenny Hsieh joins Actinium as Chief Strategy Officer from Gilead Sciences; Sunitha Lakshminarayanan , now Head of CMC and Product Development, joins from Bristol Myers Squibb; and Stephen Dressel , a 20-year veteran from Regeneron.

The February BMT Tandem conference is the industry’s premier shindig. Actinium will be there with guns blazing: with its full Iomab-B data, insights into its 2023 Actimab-A development strategy, deeper bench, and perhaps an Iomab-B FDA marketing authorization application a few months away. ATMN will see a lot of positive press and participant engagement. Serious buyers of the company might well be kicking the tires prior to the event.

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