10-K
1
f10k2020_actiniumpharma.htm
ANNUAL REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ Annual Report Under Section 13 Or
15(d) Of The Securities Exchange Act Of 1934
For the fiscal year ended December 31,
2020
or
☐ Transition Report Under Section 13
Or 15(d) Of The Securities Exchange Act Of 1934
For the transition period from _____ to _____
COMMISSION FILE NUMBER: 000-52446
ACTINIUM PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its
charter)
275 Madison Avenue, 7th Fl.
New York, NY 10016
(Address of principal executive offices) (Zip
Code)
(646) 677-3870
Registrant’s telephone number, including
area code
Securities registered
pursuant to Section 12(b) of the Act:
Title of each class Trading symbol Name of exchange on which registered
Common stock, par value $0.001 ATNM NYSE American
Securities registered
pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the act): Yes ☐ No ☒
The aggregate market value of voting stock
held by nonaffiliates of the registrant as of June 30, 2020, the last business day of the registrant’s most recently
completed second fiscal quarter, based on the closing price of the common stock on the NYSE AMERICAN on June 30, 2020 was $138,896,884.
As of March 31, 2021, 19,245,638 shares of
common stock, $0.001 par value per share, were outstanding.
Table of Contents
Page
PART I
Item 1. Business 1
Item 1A. Risk Factors 12
Item 1B. Unresolved Staff Comments 42
Item 2. Properties 42
Item 3. Legal Proceedings 42
Item 4. Mine Safety Disclosures 42
PART II
Item 6. Selected Financial Data 44
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 51
Item 9B. Other Information 51
PART III
Item 10. Directors, Executive Officers and Corporate Governance 52
Item 11. Executive Compensation 67
Item 12. Security Ownership of Certain Beneficial Owners and Management 71
Item 14. Principal Accountant Fees and Services 73
PART IV
Item 15. Exhibits, Financial Statement Schedules 74
Signature Page 79
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This Annual Report on Form 10-K (this “Report”)
contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Description
of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations.” All statements other than statements of historical fact contained in this Report, including statements
regarding future events, our future financial performance, business strategy and plans and objectives of management for future
operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,”
“believes,” “can,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “should,”
or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements
unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions
and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors”
or elsewhere in this Report, which may cause our or our industry’s actual results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment.
New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of
all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ
materially from those contained in any forward-looking statements. All forward-looking statements included in this document are
based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.
You should not place undue reliance on any
forward-looking statement, each of which applies only as of the date of this Report. Before you invest in our securities, you should
be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this Report
could negatively affect our business, operating results, financial condition and stock price. Except as required by law, we undertake
no obligation to update or revise publicly any of the forward-looking statements after the date of this Report to conform our statements
to actual results or changed expectations.
ii
PART I
Item 1. Business.
Business Overview
Actinium Pharmaceuticals,
Inc. is a clinical-stage, biopharmaceutical company applying its proprietary platform technology and deep understanding of radiobiology
to the development of novel targeted therapies known as Antibody Radiation-Conjugates (“ARCs”). Radiation is an effective
therapeutic modality that is used in the treatment of over fifty percent of all cancer patients and is often combined with chemotherapy,
immunotherapy and other treatments for greater therapeutic effect. Radiation is typically administered via an external beam source
from outside the body, leading to off-target exposure to normal healthy tissue and organs, which can constrain the amount of radiation
that can be administered to patients due to associated dose-limiting toxicities. In addition, use of external beam radiation is
largely limited to solid tumors and cannot be used in blood cancers, which are diffuse throughout the body of a patient. ARCs combine
the cell-killing ability of radiation via a radioisotope payload with a targeting agent, such as a monoclonal antibody to deliver
radiation in a precise manner inside the body to specific, targeted cells, to potentially achieve greater efficacy with lower toxicity
than with external beam radiation. ARCs enable a broader usage of radiation than external beam radiation as they can be used in
the treatment of both solid tumors and blood cancers. Blood or hematologic cancers are known to be highly sensitive to radiation.
Our clinical pipeline is focused on ARCs targeting the antigens CD45 and CD33, both of which are expressed in multiple hematologic
cancers. Our clinical programs are focused on two primary areas: (1) targeted conditioning prior to a bone marrow transplant (“BMT”),
adoptive cell therapy (“ACT”) such as CAR-T or gene therapy and (2) ARC therapeutic combinations with other agents.
Our product development strategy is actively informed by clinical data with our ARCs in over 500 patients, including our ongoing
Pivotal Phase 3 SIERRA trial. Our clinical pipeline has emanated from our Antibody Warhead Enabling (“AWE”) technology
platform, which is protected by over 140 issued and pending patents, trade secrets and know-how and is being utilized in a collaborative
research partnership with Astellas Pharma, Inc. (“Astellas”).
Targeted Conditioning
To the best of our
knowledge, we are advancing the only multi-target, multi-indication, clinical-stage pipeline for targeted conditioning and the
only ARC-based targeted conditioning regimens in development. Our ARCs for targeted conditioning are intended to potentially enable
improved access and outcomes to cell-based therapies with curative potential, including BMT, ACT, and Gene Therapy. Conditioning
in the context of BMT, ACT or Gene Therapy is the act of depleting certain blood and immune-forming cells, including bone marrow
stem cells and, in some cases, cancer cells prior to transplanting new cells into a patient. Currently, conditioning is accomplished
using a combination of cytotoxic chemotherapeutic agents and external radiation. These non-targeted conditioning regimens are highly
toxic and may prevent a patient from receiving a potentially curative therapy and hinder outcomes. ARCs have the potential to increase
patient access and outcomes by way of their ability to selectively deplete targeted cells while sparing normal healthy cells, resulting
in potentially lower systemic and off-target toxicities. We use our ARCs both at high isotope dose levels to achieve myeloablation,
which fully depletes bone marrow stem cells and at lower isotope dose levels to achieve lymphodepletion, which spares bone marrow
stem cells from depletion. In addition, dosing may be titrated downward from myeloablative doses to achieve partial myeloablation,
which may be appropriate for certain gene therapy programs.
1
CD45 Targeted Conditioning Program
Our CD45 ARC is comprised
of the anti-CD45 monoclonal antibody known as apamistamab (formerly BC8) and the radioisotope Iodine-131 (“I-131”).
CD45 is an antigen expressed on leukemia, lymphoma and myeloma cancer cells, as well as nucleated immune cells including bone marrow
stem cells, but is not expressed outside of the hematopoietic, or blood forming, system. This unique expression on blood cancer
and immune cells enables simultaneous depletion of both cell types, making CD45 an optimal antigen for targeted conditioning applications.
CD45 is a cell surface antigen with an average expression of 200,000 copies per cell, however, it only internalizes at a rate of
10-15%. We believe our ARC approach is the most effective method to target CD45 positive cells, as the radioisotope payload linear
energy transfer can readily ablate a targeted cell without requiring payload internalization like an antibody drug conjugate or
without relying on biological effector function processes like a naked antibody. Furthermore, since CD45 expression level varies
from low to high antigen density as the immune cells become more terminally differentiated, we can selectively condition depending
on the therapeutic application, from full myeloablation to transient lymphodepletion, by adjusting the dose or intensity of the
I-131 isotope payload. Full myeloablation can be achieved with high doses of I-131, as its energy pathlength and crossfire effect
can penetrate into bone marrow niches to target and deplete blood and immune system forming bone marrow stem cells. Myeloablation
is applicable to autologous or allogeneic BMT and to autologous gene-edited or modified therapies that can reconstitute a patient’s
blood and immune systems. Alternatively, low doses of I-131 can be transiently lymphodepleting and spare a patient’s bone
marrow stem cells, which we believe is ideal for ACT applications such as CAR-T. We intend to develop our CD45 targeted conditioning
program for BMT, ACT and Gene Therapy applications for malignant and non-malignant diseases and believe that multiple radioisotopes
beyond I-131 may be utilized including alpha and beta emitters.
Our lead CD45 targeted
conditioning product candidate is Iomab-B, which uses high doses of I-131 to achieve myeloablative conditioning prior to a BMT.
Iomab-B is currently being studied in the pivotal Phase 3 Study of Iomab-B in Elderly Relapsed or Refractory AML (“SIERRA”),
clinical trial for targeted conditioning prior to an allogeneic BMT for patients with active, relapsed or refractory (“r/r”)
Acute Myeloid Leukemia, (“AML”), who are age 55 or older. Patients with active, r/r AML are not normally considered
eligible for BMT and the SIERRA trial is the only randomized Phase 3 trial to offer BMT as a treatment option for this patient
population. The SIERRA trial compares outcomes of patients randomized to receive Iomab-B and a BMT (the “study arm”)
to those patients randomized to receive physician’s choice of salvage therapy (the “control arm”). The control
arm is also defined as conventional care, as no standard of care exists for this patient population and includes over 20 agents
that may be used as single agents or in combination including venetoclax, a targeted Bcl-2 inhibitor, Midostaurin and Sorafenib,
targeted FLT3 inhibitors, hypomethylating agents and cytotoxic chemotherapies. Patients who fail to achieve a Complete Response
(“CR”) on the control arm are ineligible to proceed to a BMT, but the trial design permits these patients to “cross
over” to receive the study arm treatment if they meet the eligibility criteria. The primary endpoint of the SIERRA trial
is durable Complete Remission (“dCR”) of 180 days and the secondary endpoint is Overall Survival (“OS”).
When the crossover patients receive Iomab-B and BMT, they have not achieved remission with their salvage therapy and are considered
to be failures for the primary endpoint of the study. The SIERRA trial is currently active at 5 sites in the United States and
Canada, which includes many of the leading BMT sites based on volume. We expect to complete enrollment of the SIERRA trial and
have topline data that we believe will support the submission of a Biologics License Application (“BLA”) with the U.S.
Food and Drug Administration (“FDA”). If approved, we expect our initial commercial launch would target the leading
50-100 BMT and medical centers that perform the vast majority of BMT’s in the United States. In the European Union (“EU”),
we received favorable feedback from the European Medicines Agency (“EMA”) via their scientific advice program that
the trial design, primary endpoint and planned statistical analysis from the SIERRA trial are acceptable as the basis for a Marketing
Authorization Application, or MAA. Additionally, the EMA commented that it does not anticipate the need for further standalone
preclinical toxicology or safety studies. Overall, transplant procedures in the EU are approximately fifty percent higher than
in the United States with a similar market dynamic, with a majority of BMT volume being conducted in a concentrated number of leading
medical centers. Currently we intend to secure a partner for Iomab-B in the EU.
2
The SIERRA trial is powered
to show a two-times difference in the primary endpoint of dCR of at least 180 days at complete enrollment of the planned 150 patients.
The SIERRA trial design allowed for up to two interim analyses of the primary endpoint, exercisable at our discretion and triggered
by an enrollment range of 70 to 110 patients. In April 2020, we exercised a single ad hoc analysis on a number of patients representing
less than two thirds of full trial enrollment of 150 patients, which required a higher success threshold compared to the two-time
difference in dCR rate at full trial enrollment. In December 2020, we announced that the independent Data Monitoring Committee
(“DMC”) completed the single ad hoc interim analysis. Based on the DMC’s review of unblinded data, including the study’s
primary endpoint of dCR of at least 180 days, it was recommended that the study continue as planned to full enrollment of 150 patients.
We did not receive the unblinded primary and secondary endpoint efficacy data from SIERRA. By exercising only a single interim
analysis, there was a minimal alpha spend resulting in a p-value threshold of 0.046 for the primary endpoint evaluation at full
enrollment of 150 patients. The SIERRA trial reached 75% enrollment, representing 113 patients, in the third quarter of 2020.
Data from the first
113 patients enrolled in the SIERRA trial, which represents 75% of the total of 150 patients to be enrolled in the trial, was presented
in oral presentations at the American Society of Hematology (“ASH”) Annual Meeting in December 2020 and at the Transplantation &
Cellular Therapy (“TCT”) Meetings of the American Society for Transplantation and Cellular Therapy (“ASTCT”)
and Center for International Bone & Marrow Transplant Research (“CIBMTR”) in February 2021. It was reported
that 100% of patients (49/49) on the study arm that received a therapeutic dose of Iomab-B received a BMT, with a median time to
BMT of 30 days, and all patients achieved neutrophil and platelet engraftment in a median time of 18 days despite a high median
blast count of 29%. On the control arm, only 18% of patients (10/57) achieved remission after salvage therapy, and then received
a BMT with a median time to BMT of 67 days and median blast count of 20%. Of the 82% of patients failing to achieve a CR with conventional
care (47/57), 30 patients were eligible to cross over to receive Iomab-B followed by transplant. These patients are considered
as having failed the primary endpoint of the study. All crossover patients who received the therapeutic dose of Iomab-B (30/30)
received a BMT, with a median time to BMT of 24 days and they achieved engraftment in a median time of 19 days despite high median
blast count of 22% at time of crossover. It was also reported that 100-day non-relapse transplant-related mortality (100-day TRM)
of the study or Iomab-B arm was only 4% (2/45) of patients that received a BMT compared to 20% of patients (2/10) who received
a BMT after salvage therapy on the control arm. The universal engraftment rate and low 100-day TRM rate of the Iomab-B arm resulted
in 43 patients potentially evaluable for the primary endpoint compared to 8 patients in the control arm, a greater than five times
difference.
Our Iomab-ACT program
is intended for targeted conditioning prior to ACT or Gene Therapy and uses the same I-131-apamistamab ARC construct as Iomab-B
at varying doses. At lower doses of one-eighth to one-sixth of the myeloablative dose, it is applicable for lymphodepletion prior
to CAR-T or certain Gene Therapy applications where stem cell myeloablation is not necessary. At higher doses it is applicable
for Gene Therapy applications where stem cell myeloablation is necessary.
We believe our Iomab-ACT
program is highly differentiated when compared to Fludarabine and Cyclophosphamide (“Flu/Cy”) or other chemotherapy-based
regimens that are used as the standard of practice today for lymphodepletion prior to CAR-T. CD45 is an antigen expressed on certain
immune cell types that are relevant to the mechanism of CAR-T therapies including lymphocytes, regulatory T-cells and macrophages
that have been associated with clinical responses that may limit the safety, efficacy and durability of response of these CAR-T
therapies including cytokine release syndrome (“CRS”) and neurotoxicity. Some of these limitations may be attributable
to the chemotherapy-based conditioning agents that are being used prior to CAR-T therapies. Preclinical data supporting the rational
for our Iomab-ACT program was presented at multiple medical conferences in 2019. Unlike chemotherapy, Iomab-ACT is targeted in
nature and, due to this CD45-directed targeting, we expect we can improve CAR-T cell expansion, potentially resulting in responses
that are more durable, but also resulting in reduced CAR-T related toxicities. Importantly, we expect the Iomab-ACT program construct
to enable lymphodepletion through a single-dose, outpatient administration versus Flu/Cy or other chemotherapy-based lymphodepletion
regimens that can require multiple infusion cycles over several days. Because of this potentially superior profile, the Iomab-ACT
construct could result in improved access to CAR-T therapy and better outcomes.
3
In October 2020, we
announced a clinical collaboration with Memorial Sloan Kettering Cancer Center (“MSKCC”) to use our Iomab-ACT for targeted
conditioning prior to administration of MSKCC’s 19-28z CD19 targeting CAR-T in patients with relapsed or refractory B-cell
acute lymphoblastic leukemia (“ALL”) or diffuse large B-cell lymphoma (“DLBCL”). We received grant funding
from the National Institute of Health (“NIH”) to fund this trial with MSKCC being a co-recipient on this grant. This
is a first of its kind study to use an ARC-based conditioning regimen with CAR-T therapy. MSKCC received clearance from the FDA
to initiate this trial and patient enrollment in this study has commenced. The hypothesized rationale for this study is that Iomab-ACT
will exert an anti-tumor effect on the chemotherapy-refractory B-ALL cells that are sensitive to radiation resulting in reduced
disease burden and simultaneously deplete CD45 expressing immune cells implicated in CAR-T related toxicities, resulting in an
optimal homeostatic environment for the CAR-T cells. Results with MSKCC’s 19-28z CD-19 CAR-T in 53 patients with r/r B-ALL
published in the New England Journal of Medicine reported complete remissions in 83% (44/53) of patients, which compares favorably
to standard chemotherapy regimens that have complete remission rates of 18% - 45% in this patient population. Median event-free
survival (EFS) was 6.1 months and median overall survival (OS) was 12.9 months at a median follow up period of 29 months (range
1 – 65 months). There was a 26% (14/53) rate of Grade 3 or greater CRS and a 42% rate of Grade 3 or 4 neurotoxicity reported.
The study will evaluate the feasibility of using an ARC-based conditioning regimen with CAR-T therapy and will evaluate safety
measures including incidence of CRS and neurotoxicity and efficacy measures including responses and survival outcomes. Proof of
concept data from this study is expected in 2021.
In January 2020, we announced
a collaboration with University of California Davis to utilize Iomab-ACT conditioning in an ongoing Phase 1/2 trial with a novel
anti-HIV autologous stem cell gene therapy for patients with HIV-related lymphoma. We believe this would be the first Gene Therapy
trial to use an ARC-based conditioning regimen. I-131-Apamistamab has clinical proof of concept as a targeted conditioning regimen
for patients with high-risk, relapsed or refractory lymphoma prior to an autologous stem cell transplant from a previous study,
where a favorable safety profile with no dose-limiting toxicities and minimal non-hematologic toxicities were observed and promising
efficacy with median overall survival not reached (range: 29 months to not reached) and 31% of patients in prolonged remission
at a median of 36 months follow up (range: 25 – 41 months). In this study, Iomab-ACT is intended to replace the chemotherapy-based
condition regimen known as BEAM (BCNU/carmustine, etoposide, cytarabine, and melphalan) to simultaneously kill the patient’s
lymphoma cells and deplete the patient’s stem cells to make room for the transplant. Upon engraftment, the transplanted gene-modified
autologous stem cells containing three anti-HIV genes are intended to equip the patient with a new immune system that is resistant
to the HIV virus. We continue to identify additional gene therapies for which Iomab-ACT can be used for targeted conditioning with
the goal of collaborating with multiple academic or industry developers to establish Iomab-ACT as a non-chemotherapy universal
targeted conditioning solution.
In March 2021, we announced
an Ac-225-based CD45 ARC, a next-generation targeted conditioning agent. Dosimetry results with this Ac-225-based alpha emitting
ARC showed selective accumulation in immune cell target organs such as bone marrow, spleen, and liver with the potential for lower
exposure to non-target tissues from longer path length beta emitter radioisotopes like Iodine-131 and Lutetium-177. Preclinical
data demonstrated that conditioning with this Ac-225-based CD45-targeting agent result in depletion of peripheral immune cells
and hematopoietic progenitor cells, thereby enabling engraftment of donor cells. A dose dependent response was observed with low
doses depleting white blood without effecting hematopoietic progenitor cells, representing a lymphodepletive dose that is relevant
for adoptive cell therapies such as CAR-T, while higher doses eliminated peripheral immune cells and hematopoietic progenitor cells,
which is applicable to ex vivo gene therapies and BMT.
4
CD33 Program: Combinations Trials and Targeted
Conditioning
Our CD33 program is evaluating
the clinical utility of Actimab-A, an ARC comprised of the anti-CD33 mAb lintuzumab linked to the potent alpha-emitting radioisotope
Actinium-225 (“Ac-225”). CD33 is expressed in the majority of patients with AML and myelodysplastic syndrome (“MDS”)
as well as approximately one-third of patients with multiple myeloma. Our CD33 development program is driven by data obtained from
nearly one hundred fifty treated patients, including results from a Phase 1/2 trial that was conducted in 58 patients with newly
diagnosed AML, which was completed in 2018. This clinical data, as well as our experience with Iomab-B, is shaping a two-pronged
approach with our CD33 program, where at high doses we are exploring its use for targeted conditioning and at low doses we are
exploring its use for therapeutic combinations with other treatment modalities.
We believe that radiation
via an ARC can be synergistic when used in combination with chemotherapy, targeted agents and immunotherapy based on mechanistic
rationales supported by our own clinical data, preclinical research and scientific and clinical evidence in the literature. We
have prioritized our efforts and resources in favor of combination trials for our CD33 program development strategy rather than
single agent trials at this time. Our CD33 ARC development program encompasses the following ongoing trials:
Combination Trials:
In addition to these active
trials, we are working to identify additional modalities and agents that can be the basis for Actimab-A therapeutic combinations.
5
Targeted Conditioning:
Actimab-MDS is our second
clinical trial focused on targeted conditioning, in this case for patients with high-risk MDS and is our second pivotal program.
Actimab-MDS is informed by prior experience with our CD33 ARC in multiple trials for patients with AML, and for patients that have
progressed from MDS to AML, which is also known as secondary AML. Data from these trials showed that our CD33 ARC had single-agent
activity capable of producing complete remissions (CRs) in certain patients at varying dose levels with minimal non-hematologic
extramedullary toxicities. However, dose-dependent myelosuppression, a class effect of CD33 directed therapies, was seen in many
of these patients. Given that myelosuppression is necessary prior to a BMT and that a BMT can rescue patients with myelosuppression,
we decided to pursue a trial in targeted conditioning in high-risk MDS patients with this ARC in combination with Reduced Intensity
Conditioning, or RIC, regimens. RIC regimens are comprised of low doses of chemotherapies such as fludarabine, cytarabine, busulfan
or melphalan. A BMT is the only curative treatment option for these patients with high-risk MDS who have poor, or very poor cytogenetics.
However, these patients have poor outcomes due to high relapse rates following a BMT. Based on our interactions with FDA to date,
we intend to conduct a Phase 1 dose-finding clinical trial that can be followed by a randomized trial that, depending on the results
observed, may potentially serve as a pivotal trial to support the submission of a BLA.
Antibody Warhead Enabling Technology Platform
Our proprietary AWE Technology
Platform is supported by intellectual property, know-how and trade secrets that cover the generation, development, methods of use
and manufacture of ARCs and certain of their components. Our AWE technology patent portfolio includes 34 patent families comprised
of over 140 issued and pending patent applications, of which 10 are issued and 29 are pending in the United States, and 104 are
issued or pending internationally. The effective life of the patents in our portfolio range from expirations between 2021 and 2040.
Our technology enables the direct labeling, or conjugation and labeling, of a biomolecular targeting agent to a radionuclide warhead
and its development and use as a therapeutic regimen for the treatment of diseases such as cancer. Our AWE intellectual property
covers various methods of use for ARCs in multiple diseases, including indication, dose and scheduling, radionuclide warhead, and
therapeutic combinations. We have particular expertise in the area of ARCs utilizing the alpha emitting isotope Ac-225 including
clinical experience in treating approximately 150 patients with our alpha-emitter ARCs, “gold standard” linker technology
and 5 issued patents in the United States and 49 patents internationally related to the manufacturing or Ac-225 in a cyclotron,
which we believe has the potential to produce higher quantities of Ac-225 then currently utilized methods.
In the third quarter of
2020 we enhanced our research and development capabilities around AWE by securing research facilities that were staffed and became
operational in the fourth quarter. Our research laboratories are focused on applying our AWE technology platform to the development
of radiation conjugates and to execute on research collaborations. Our R&D efforts employ a multidisciplinary approach leveraging
our team’s knowledge and experience in cancer cell biology, radiochemistry, radiation sciences, immunology and oncology drug
development. We intend to focus on generating ARCs using our existing intellectual property, evaluating assets for in-licensing
to complement our existing clinical pipeline and securing collaborations and partnerships with biopharmaceutical companies. By
adding research and development capabilities to our clinical development and clinical supply chain capabilities, we seek to enable
the rapid translation of radiotherapies. We have formed a wholly owned research subsidiary for the purposes of advancing certain
of our R&D objectives.
In January 2021, we announced
a collaborative research agreement with Astellas that will utilize our AWE technology platform will be utilized with select targeting
agents owned by Astellas in the development of theranostics for solid tumor indications, which combine the ability of radioisotopes
to be used for both diagnostic and therapeutic purposes.
6
Intellectual Property Portfolio and Regulatory Protections
Intellectual Property
We have developed or in-licensed
numerous patents and patent applications and possess substantial know-how and trade secrets related to the development and manufacture
of our products. As of March 2021, our patent portfolio includes 34 patent families comprised of 143 issued and pending patent
applications, of which 10 are issued and 29 are pending in the United States, and 104 are issued and pending internationally. Several
non-provisional patent applications are expected to be filed in 2021 based on provisional patent applications filed in 2020. More
than 90% of our patents are Actinium-owned and the remainder are in-licensed from third parties. These patents cover key areas
of our business, including use of actinium-225 and other alpha- or beta-emitting isotopes attached to cancer specific carriers
like monoclonal antibodies, methods for manufacturing key components of our product candidates including actinium-225, an alpha
particle emitting radioisotope and carrier antibodies, or Iodine-131, a beta particle emitting radioisotope, and methods for manufacturing
finished product candidates for use in cancer treatment.
We own five issued patents
in the United States and 49 patents outside of the United States, related to the manufacturing of actinium-225
in a cyclotron, that will expire between 2024 through 2027. Three related global patents are pending. We own or have licensed the
rights to five issued patents in the United States and 11 issued patents outside of the United States related to the generation,
formulation, or use of radioimmunoconjugates, including patents related to our Iomab-B and Actimab-A programs, that will expire
between 2021 and 2037. Thirteen related United States or global patents are pending. Further, we own the rights to 57 additional
pending patents in the United States and abroad related to radioimmunoconjugate composition, formulation administration, and methods
of use in solid or liquid cancers. This matter includes composition, administration, and methods of treatment for our products
Actimab-A and Iomab-B. In addition, for Iomab-ACT, we own 11 patents pending covering methods of use and composition in cancer
and non-malignant disease.
Regulatory Protections
The indications for which
we are developing our product candidates for are orphan drug designations, which are disease indications that affect fewer than
200,000 patients in the United States and less than 5 in 10,000 patients in the EU. We have received orphan drug designation for
Iomab-B and our lintuzumab-CD33 ARC for patients with AML in both the United States and the EU. As a result, if our products are
to be approved, they may receive 7 years and 10 years of market exclusivity in the United States and EU, respectively. In addition,
our product candidates are biologics combined with radioisotopes. The Hatch-Waxman Act requires that a manufacturer of generic
drugs, for which a biologic drug is called a biosimilar, demonstrate bioequivalence to the innovator. We believe that the nature
of radioisotopes having half-lives combined with the complexities of biologic drugs would make it difficult for a manufacturer
to demonstrate bioequivalence to our product candidates.
Competition Overview
In the field of targeted
conditioning, pharmaceuticals currently used for myeloablation prior to a bone marrow transplant or lymphodepletion prior to CAR-T
are largely generic chemotherapeutic agents and/or radiation. In targeted conditioning, we face competition from Magenta Therapeutics,
Inc., who is developing anti-CD45 and anti-CD117 (cKIT) Antibody Drug Conjugates (ADCs) that are in the preclinical stage of development
and Jasper Therapeutics, Inc, who is developing an anti-CD117 monoclonal antibody that is being studied in a Phase 1 clinical trial.
Forty Seven, Inc.(acquired by Gilead), who is developing a conditioning regimen comprised of the anti-CD47 monoclonal antibody
Magrloimab that is being studied in a Phase 2 clinical trial as a therapeutic with an anti-CD117 monoclonal antibody, which is
in preclinical development, in collaboration with bluebird bio, Inc., Molecular Templates, who is developing conditioning regimens
using its Engineered Toxin Bodies (ETBs) with two targets that have not been disclosed in collaboration with Vertex. Allogene Therapeutics,
who is developing an anti-CD52 monoclonal antibody for use as a lymphodepletion agent in conjunction with CAR-T therapies. To our
knowledge, we are the only company with a pivotal Phase 3 trial for a targeting conditioning agent and the only anti-CD45 ARC in
clinical development.
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For our CD33 ARC, there
are several companies developing drugs for AML, MDS and Multiple Myeloma based on numerous approaches/modalities, including chemotherapy,
targeted agents, antibody drug conjugates, naked monoclonal antibodies, bispecific antibodies, immunotherapies and cellular therapies.
Specific to CD33, MylotargTM, an ADC developed and marketed by Pfizer is the only FDA approved CD33 targeted therapy for adult
patients and children two years and older with relapsed or refractory CD33-positive AML. Seattle Genetics was developing SGN-CD33A,
a CD33 targeting ADC, but discontinued the development of its clinical trials associated with this product candidate in June 2017.
Amgen is developing a CD3/CD33 bispecific BiTE (AMG330) as is Amphivena (AMV-564), both of which are in Phase 1 clinical trials
for r/r AML patients age 18 and above. Boehringer Ingelheim developed a CD33 targeting naked antibody (BI836858) that was studied
in patients with r/r AML and MDS with the trial in patients with MDS being terminated and development has been discontinued. These
drugs have different safety profiles and mechanisms of action compared to our drug candidates. AML in older patients remains an
area of high medical need that could accommodate many new products with favorable safety and efficiency profiles. We have begun
studying our CD33 ARC in combination with the salvage chemotherapy regimen CLAG-M in fit patients with relapsed or refractory AML
as well as in combination with the Bcl-2 inhibitor venetoclax in fit and unfit patients with relapsed or refractory AML. Combination
therapies are commonly used in hematologic indications, but we believe we are the only Ac-225 based product candidate that is being
explored in combination studies in hematologic indications. To our knowledge, we are the only company with a CD33 targeting drug
and the only AC-225 based ARC product candidate for patients with multiple myeloma.
Government Regulation
Governmental authorities
in the United States and other countries extensively regulate, among other things, the research, development, testing, manufacture,
labeling, promotion, advertising, distribution and marketing of radioimmunotherapy pharmaceutical products such as those being
developed by us. In the United States, the FDA regulates such products under the Federal Food, Drug and Cosmetic Act (“FDCA”)
and implements regulations. Failure to comply with applicable FDA requirements, both before and after approval, may subject us
to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA to approve pending applications, warning
letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or criminal
prosecution.
U.S. Food and Drug Administration Regulation
Our research, development
and clinical programs, as well as our manufacturing and marketing operations, are subject to extensive regulation in the United
States and other countries. Most notably, products that may in the future be sold in the United States are subject to regulation
by the FDA. Certain of our product candidates in the United States will require FDA approval of a BLA prior to marketing. Foreign
countries may require similar or more onerous approvals to manufacture or market these products.
FDA Approval Process for Biologics License
Applications
Prior to testing a biological
product on humans, the product must clear the preclinical testing stage. The goal of preclinical testing is to perform laboratory
evaluations of the product’s chemistry and formulation as well as evaluate the product’s potential for adverse events
by performing in vitro and animal studies. This information is packaged together and submitted to the FDA as part of an investigational
new drug (“IND”) application, which must be approved by the FDA before administering the product to human subjects
in clinical trials.
From there, the product
moves to the clinical stage, where it is administered to healthy volunteers or patients. The data gathered from the preclinical
testing and clinical trials is used to support the BLA submission. The FDA must approve the BLA prior to commercial marketing of
a biological product. The BLA must include information about product development, laboratory and animal studies, human trials,
manufacturing information, the composition of the product, and proposed labeling. The approval process requires significant time
and financial resources and does not guarantee that FDA will accept the BLA filing or ultimately approve the BLA.
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The Prescription Drug User
Fee Act, as amended (“PDUFA”), requires each BLA to be accompanied by a substantial user fee. The amount of the user
fee changes on an annual basis. In addition to the BLA user fee, PDUFA also imposes an annual program fee for biological products.
The FDA will waive or reduce the fee under limited circumstances, such as for first applications filed by small businesses.
Within 60 days following
submission of the BLA, the FDA reviews the BLA submission for completion to determine if it will accept it for filing. The FDA
may refuse to file the BLA if it deems the submission incomplete or not properly reviewable at the time of submission. For the
BLA review process to proceed, the BLA must be resubmitted with the necessary additional information. After the BLA is accepted
for filing, the FDA commences its substantive review of the BLA. The FDA reviews the BLA to determine, among other things, whether
the proposed product is safe, potent, and/or effective for its intended use, has an acceptable purity profile, and whether the
product’s manufacturing is consistent with current Good Manufacturing Processes (“cGMPs”) to ensure that the
product meets the appropriate standards for identity, safety, strength, quality, potency and purity.
The FDA may involve an
advisory committee for novel biological products that present complex questions of safety or efficacy. The advisory committee typically
consists of a panel that includes clinicians and other subject matter experts that assist with the reviewing and evaluating the
product. While the advisory committee provides a recommendation for whether the product should be approved and under what conditions,
the FDA is not bound to follow the recommendations. However, the advisory committee’s recommendations are usually given significant
consideration.
The FDA may also consider
requiring a risk evaluation and mitigation strategy (“REMS”) if it determines that one is necessary to ensure that
the biological product is used safely. If the FDA requires a REMS, the BLA sponsor must develop and submit a proposed REMS for
the BLA review process to move forward.
The manufacturer of the
biological product is also subject to FDA inspection prior to the approval of the BLA. The purpose of the inspection is to determine
whether the manufacturer adequately complies with the applicable cGMP requirements to ensure that the biological product is manufactured
safely and within the required specifications. Additionally, the FDA may choose to inspect one or more clinical sites to assess
compliance with IND trial requirements and good clinical practices (“GCPs”). Compliance with cGMP and GCP requirements
involves significant expenditures of time, money, and effort for BLA sponsors due to associated training, recordkeeping, production,
and quality control needs.
If the FDA decides not
to approve the BLA in the form submitted, it will issue what is called a complete response letter that outlines the specific deficiencies
it would like to see addressed. The deficiencies identified can be minor (e.g., labeling changes) or major (e.g., the need for
additional clinical trials). The complete response letter may also include recommended actions the applicant may take to move closer
towards securing an approval. At this point, applicants may choose to resubmit the BLA to address FDA’s concerns or withdraw
the application.
In addition, under the
Pediatric Research Equity Act, a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of the product
for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric
subpopulation for which the product is safe and effective. The FDA may grant deferrals for submission of data or full or partial
waivers.
Post-Approval Requirements
If the BLA is approved,
the FDA may include additional conditions as part of its approval, such as limiting the approval by designating specific diseases
for which the product may be used. Additionally, conditions may include requiring the labeling to include specific contraindications,
warnings, or precautions, requiring post marketing clinical trials (sometimes referred to as Phase 4 clinical trials), and implementation
of surveillance program to monitor the approved product once commercialized.
Products approved by the
FDA under a BLA are subject to ongoing regulatory requirements, including, among other things, record-keeping requirements, adverse
event reporting requirements, responsibility for reporting updated safety and efficacy information to FDA, sampling and distribution
requirements, complying with advertising and promotion requirements, and complying with cGMPs.
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Quality control and manufacturing
procedures must continue to comply with cGMP requirements even after the BLA is approved. The cGMP regulations include, but are
not limited to, requirements to ensure quality control, maintain appropriate manufacturing records and documentation, and the obligation
to investigate and address deviations from cGMPs, when identified. Manufacturers are also required to register their establishments
with the FDA and certain state agencies. The establishments are also subject to unannounced inspections by regulators.
The advertising and promotion
of drug and biologic products are also subject to specific laws and regulations. These authorities provide standards for direct-to-consumer
advertising, restrictions on promoting products for uses or to patient populations that are not described in the product’s
approved uses, known as “off-label” use, limitations on industry-sponsored scientific and educational activities, and
requirements for promotional activities involving the internet.
Regulatory Enforcement
Failure to comply with
applicable regulatory requirements can result in enforcement action by the FDA, the Nuclear Regulatory Commission or other regulatory
authorities, which may result in sanctions, including but not limited to, untitled letters, warning letters, fines, injunctions,
consent decrees and civil penalties; customer notifications or repair, replacement, refunds, recall, detention or seizure of our
products; operating restrictions or partial suspension or total shutdown of production; refusing or delaying our requests for BLA
premarket approval of new products or modified products; withdrawing BLA approvals that have already been granted; and refusal
to grant export.
Additional Healthcare Laws
In addition to FDA regulations,
several other types of state and federal laws may restrict our business activities, including certain healthcare laws. These laws
include, without limitation, anti-kickback laws, false claims laws, data privacy and security laws, as well as transparency laws
regarding payments or other items of value provided to healthcare providers.
The federal Anti-Kickback
Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce
or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item, good, facility
or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has
been broadly interpreted to include anything of value. This statute has been interpreted to apply to arrangements between pharmaceutical
manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. Although there are a number
of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions,
the exceptions and safe harbors are drawn narrowly and arrangements must meet every element to qualify for an exception or safe
harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not
make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the arrangement will be evaluated on a
case-by-case basis based on the facts and circumstances involved. Courts have interpreted the statute’s intent requirement
to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare program business,
the federal Anti-Kickback Statute has been violated. Additionally, the intent standard under the federal Anti-Kickback Statute
was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation
Act of 2010, collectively the “Affordable Care Act,” to a stricter standard such that a person or entity no longer
needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition,
the Affordable Care Act codified case law that a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent
claim for purposes of the federal False Claims Act.
Federal false claims laws,
including the federal False Claims Act, and civil monetary penalties laws, prohibit any person or entity from, among other things,
knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or
causing to be made, a false statement to have a false claim paid. Whistleblower or qui tam provisions under the False Claims Act
permit whistleblowers to sue in the name of the federal government for False Claims Act violations, and to share in the recovery
from any award. Pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly
inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement
rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs
for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws.
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The federal Health Insurance
Portability and Accountability Act of 1996, or HIPAA, created additional federal civil and criminal statutes that prohibit among
other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program,
including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully
obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up
a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment
for healthcare benefits, items or services. Like the federal Anti-Kickback Statute, the Affordable Care Act amended the intent
standard for certain healthcare fraud under HIPAA such that a person or entity no longer needs to have actual knowledge of the
statute or specific intent to violate it in order to have committed a violation.
In addition, if we engage
in certain activities, we may be subject to data privacy and security regulation under HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act, or HITECH. HIPAA imposes certain requirements on covered entities, which include
certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors
that receive or obtain protected health information in connection with providing a service on behalf of a covered entity that involves
the use or disclosure of individually identifiable health information.
Additionally, the federal
Physician Payments Sunshine Act, created under the Affordable Care Act, and its implementing regulations, require certain manufacturers
of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s
Health Insurance Program (with certain exceptions) to report annually information related to certain payments or other transfers
of value provided to physicians and any ownership and investment interests held by physicians or their immediate family members.
Beginning in 2022, applicable manufacturers also will be required to report such information regarding payments and other transfers
of value to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered
nurse anesthetists and certified nurse midwives during the previous year.
The majority of states
also have statutes or regulations similar to the aforementioned federal healthcare laws, including fraud and abuse laws, some of
which are broader in scope and apply to items and services reimbursed under Medicaid and other state programs, or, in some states,
apply regardless of the payor. Many states also have some form of health information privacy or data security laws that could apply.
Further, some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance
guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers
to report information related to payments or other transfers of value provided to physicians and other healthcare providers and
entities, marketing expenditures, or drug pricing. Certain state and local laws also require the registration of pharmaceutical
sales representatives.
If our operations are found
to be in violation of any of the healthcare regulatory laws described above or any other laws that apply to us, we may be subject
to potentially significant criminal, civil and administrative penalties, damages, fines, disgorgement, imprisonment, additional
reporting obligations and oversight (if we become subject to a corporate integrity agreement or other agreement to resolve allegations
of non-compliance with these laws), exclusion from participation in government healthcare programs, as well as contractual damages,
reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our
operations, any of which could adversely affect our ability to operate our business and our results of operations.
Employees
As of March 31, 2021, we have 32 full-time employees
including 13 with M.D., Ph.D. or other advanced degrees.
We believe that our future
success largely depends upon our continued ability to attract and retain highly skilled employees. We provide our employees with
competitive salaries and bonuses, opportunity for equity ownership, development programs that enable continued learning and growth,
and a robust employment package that promotes wellness across all aspects of their lives, including healthcare, retirement planning,
and paid time off. None of these employees are covered by a collective bargaining agreement, and we believe our relationship with
our employees is good. We also engage consultants on an as-needed basis to supplement existing staff.
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ITEM 1A. RISK FACTORS
In analyzing our company,
you should consider carefully the following risk factors, together with all of the other information included in this Annual Report
on Form 10-K. Factors that could cause or contribute to differences in our actual results include those discussed in the following
subsection, as well as those discussed above in “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and elsewhere throughout this Annual Report on Form 10-K. Each of the following risk factors, either
alone or taken together, could adversely affect our business, operating results and financial condition, as well as adversely affect
the value of an investment in our company. The risks and uncertainties described below are not the only ones we face. Additional
risks not currently known to us or other factors not perceived by us to present significant risks to our business at this time
also may impair our business operations.
Summary of Risk Factors
We are providing the following summary of the risk factors contained