It’s simple math.
Take a $100 million market cap pharma company entering Phase 3 clinical trials for a novel cancer drug with enormous market potential.
Add in that there’s no dilution in sight and several near term positive catalysts coming into play.
Top this off with increasing institutional investment…
and the result is a pharma stock on the verge of a breakout.
We believe Actinium Pharmaceuticals Inc. (ATNM) is a STRONG BUY based on reasons discussed below.
defin: the chemical element of atomic number 89, a radioactive metallic element of the actinide series. It is rare in nature, occurring as an impurity in uranium ores.
Founded in 2000 and based in New York, Actinium Pharmaceuticals Inc. (www.actiniumpharma.com) is developing drugs that utilize innovative targeted payload immunotherapeutics for the treatment of advanced cancers. The company’s targeted radiotherapy products are based on its patented, proprietary delivery platform for the therapeutic utilization of alpha-emitting actinium-225 and bismuth-213 and certain beta emitting radiopharmaceuticals in conjunction with monoclonal antibodies. The Company’s lead radiopharmaceutical product candidate, Iomab-B, is designed to be used in preparing patients for hematopoietic stem cell transplant, commonly referred to as bone marrow transplant. In 2015, Actinium will be conducting a single, pivotal, multicenter Phase 3 clinical study of Iomab-B in refractory and relapsed AML patients over the age of 55 with a primary endpoint of durable complete remission. In both Phase I and Phase II trials, Iomab-B has led to effective cures in patients with no options left. The Company’s second product candidate, Actimab-A, is continuing clinical development in a Phase I/II trial for newly diagnosed AML patients over the age of 60 in a single-arm multicenter trial. In addition to leukemia drugs, ATNM’s technology has been used to produce drug candidates for treatment of metastatic colorectal and prostate cancers, antiangiogenesis (prevention of blood supply to and growth of many solid cancers) and bone marrow ablation, part of a curative treatment for leukemias, lymphomas and multiple myeloma.
ATNM Share Structure
Shares issued and outstanding: 35.7 million
Market cap: $103 million as of close 5/22
Insider & 5% owners: 23%
Trading float: 29 million
Strong Balance Sheet
One of the first things investors in development stage pharma/biotech stocks should consider is the balance sheet in order to minimize risk of experiencing near term dilution. In the case of Actinium Pharmaceuticals, the balance sheet (SEC filing link) is exceptionally strong with nearly $20 million in cash and current assets and only $3.6 million in liabilities. The current ratio is an extremely healthy 5.5.
Risk of near term dilution is minimal following a February 2015 capital raise of $20 million at $4.50/share, and in our discussion with management we were told the company is “well capitalized far into 2016.”
The ability to invest in Actinium Pharmaceuticals at a 30% discount to institutional investors a few months ago is especially appealing as the pharmaceutical industry overall is having a strong year with investors benefiting from an abundance of M&A activity. Moreover, we ATNM shares are one announcement or clinical update away from rebounding north of the $4.50 capital raise level.
Increasing Institutional Participation
Increasing institutional participation is always a good sign in a stock.
In the most recent quarter 8 institutions started new positions in Actinium and 26 institutions increased their positions. Institutions now hold just over 9% of shares in Actinium Pharmaceuticals, a 17% increase over the prior quarter.
|Institutional Share Purchases||830.5K||335.9K|
|Institutional Shares Sold||256.1K||326.2K|
|Net Institutional Shares Purchased||574.4K||9.7K|
|Change in Ownership||17.46%||0.36%|
In Good Company
In addition to increasing institutional buying, investors should know that Actinium’s largest shareholder is a subsidiary of Memorial Sloan Kettering Cancer Center, widely considered to be the nation’s #1 ranked cancer research facility. Moreover, Actinium’s second largest shareholder is a subsidiary of industry behemoth Merck and Co. (MRK).
Together, the Memorial Sloan Kettering and Merck subsidiaries own about 15% of Actinium Pharmaceuticals shares.
Actinium Pharmaceuticals has multiple drugs in the pipeline which address extremely large patient populations as the graphic below shows.
Leading drug candidates are Actimab-A and Iomab-B, which I’ll discuss below.
Actimab-A is currently in Phase 1/2 multicenter trials for the treatment of Acute Myeloid Leukemia (AML) in patients over the age of 60. Unfortunately, more than 18,800 new cases of AML were diagnosed last year and there were over 10,000 deaths from AML in 2014 according to the American Cancer Society estimates.
The clinical trials have attracted support from leading experts at prestigious, high-volume cancer treatment hospitals due to its safety and efficacy as well as potential potency, specificity and ease of use. Trials are being conducted at world-class cancer institutions such as Memorial Sloan Kettering Cancer Center, MD Anderson Cancer Center, Johns Hopkins Medicine, Columbia University Medical Center, University of Pennsylvania Health System, Fred Hutchinson Cancer Research Center, and the Texas Oncology-Baylor Charles A. Sammons Cancer Center.
Iomab-B Entering Phase 3
Iomab-B is the only drug currently in development which can offer a cure for elderly AML patients and has been successfully used in over 250 patients with incurable blood cancers. Both Phase I and Phase II trials Iomab-B led to effective cures in patients with no options left.
The Phase 3 clinical trial will begin this year in which 75 patients will be treated with Iomab-B and bone marrow transplant while 75 control patients will be treated with current therapy. The primary endpoint is durable complete remission rates. Because the trial includes patients who had relapsed or had refractory refractory AML, a cross-over aspect to the trial will be in place where if a complete response cannot be achieved for the standard of care arm, the patient will be allowed to crossover to the Iomab-B study arm. This underscores the seriousness of the disease state in the patient population for which Iomab-B may be the only real hope that can be offered. Additionally, there is no generally recognized, successful standard of care for these patients. This was illustrated last year during this panel discussion on Iomab-B and its positive clinical results.
Actinium plans to develop Iomab-B through a regulatory approval via a pivotal registration trial in AML refractory/relapsing patients. This could provide a potentially curative treatment to patients who currently have little or no chance of achieving remission, (let alone a cure), and could also result in a faster pathway to commercialization.
Additionally. Iomab-B has demonstrated strong potential for other indications as well- including Myelodysplastic Syndrome, Acute Lymphoblastic Leukemia, Hodgkin’s Disease and Non-Hodgkin Lymphoma. These follow-on indications could greatly expand Iomab-B’s ultimate market opportunity.
Why Actimab-A and Iomab-B Could be Game-Changing Cancer Drugs
Actimab-A and Iomab-B are a new class of “Targeted Payload Cancer Therapeutics” that act as a guided missiles that effectively kill cancer cells without the side effects experienced from chemical toxins and external radiation therapies currently in use.
In the video below, Dr. Philip Cohen discusses the technology utilized, as well as the benefits, initial trial results, and broad market implications for both Actimab-A and Iomab-B. The discussion is easy to follow and extremely informational. In 15 minutes you will completely understand the blockbuster drug potential that Actinium Pharmaceuticals has in the pipeline.
See also: Actinium Pharmaceuticals April, 2015 Investor Presentation for an in-depth look at Actimab-A and Iomab-B
2.9 Billion Reasons to be Bullish
Investors should understand that there is no approved treatment for Iomab-B targeted patients, implying blockbuster drug potential. Moreover, targeted alpha radiation-delivering drugs like Actimab-A are that are extremely cancer-cell selective are both expensive and rare.
Bayer bought the rights to commercialize the targeted alpha-radiation delivering drug Xofigo (formally called Ahparadin) for $2.9 billion (see Reuters) and we believe as Actimab-A and Iomab-B progress further through clinical trials, Actinium’s flexible strategic partnership platform could result in a significant joint or strategic partnership.
Near Term Catalysts
Near-term forward catalysts for Actinium Pharmaceuticals include the initiation of Phase 3 trials for Iomab-B and a clinical update on Actimab-A at ASCO 2015, the 51st Annual Meeting of American Society of Clinical Oncology, in Chicago on May 29 – June 2.
Dragan Cicic, MD, Chief Medical Officer of Actinium stated last week that:
“We believe the responses observed for Actimab-A, with minimal toxicity being reported, are impressive in this disease setting. These findings build upon those presented and published over the past year which demonstrated a clear survival benefit in secondary AML patients. We remain steadfast in our belief that Actimab-A could play an important role in the treatment regimen for newly diagnosed elderly AML patients who currently have limited treatment options.”
“The positive results on both safety and anti-leukemic effect demonstrated in the completed third cohort represents a significant achievement for the Actimab-A program, and support the advancement to a higher dose with the potential to further enhance the already strong results we have seen to date.”
Actinium Pharmaceuticals is also seeking Orphan Drug Designation (ODD) for Iomab-B this year. If granted, the ODD status would include the following very significant benefits:
- a 50% tax credit on the cost of clinical trials undertaken in the USA
- a seven year period of marketing exclusivity following the marketing approval
- some written recommendations provided by the FDA concerning clinical and preclinical studies to be completed in order to register the new drug
- a fast-track procedure for the FDA to evaluate registration files
For the last year ATNM shares had been in a declining channel which saw it drop from the mid teens to a triple bottom low near 2.30-2.40
Last week it spiked up off those lows on HEAVY volume, especially Thursday when it traded a record 2 million shares. This could be the initiation of a new up trend underway. Resistance is overhead near 3.35 & 3.65 if taken out with volume should lead to a run near 4.50 (short term target ) then possibly 6.50 (the intermediate target ) Longer term target is 8.20.
Technical analysis and chart by Harry Boxer at TheTechTrader.com.
Actinium Pharmaceuticals is coming off recent lows and we believe shares are on the verge of a strong move to the upside. This conclusion is based on:
- Very positive results from earlier clinical trials of the company’s leading drug candidates, Actimab-A and Iomab-B
- Phase 3 trials of Iomab-B starting
- Large addressable patient populations and/or populations where there is currently no approved treatment underscore the blockbuster drug potential of the pipeline
- Actinium Pharmaceuticals is well-funded, has a strong balance sheet, and risk of near term dilution is minimal to nil
- Increasing institutional investment in the company
- Memorial Sloan Kettering Cancer Center and Merck and Co. are largest shareholders
- Currently trading at > 30% discount to February capital raise at $4.50/share
Presently there are (only) 2 analysts following Actinium Pharmaceuticals, both with a “buy” rating and an average price target of $16/share. As Iomab-B enters Phase 3 trials and more data from clinical trials of Actimab-A become public, (as soon as next week), we believe additional analysts will begin following the company. Simply put, the market for Actinium’s drug pipeline is too big and the results from clinical trials have been too good to be overlooked much longer by analysts.
We see Actinium Pharmaceuticals as a STRONG BUY at current prices, and have a 12 month price target of $12/share. We believe this is a very realistic and conservative target, and we look forward to following Actinium’s developments closely in the coming months and sharing them with our subscribers.
Disclosure: The publishers of MicrocapResearch.com own shares of Actinium Pharmaceuticals (ATNM) bought in the open market and received compensation of $20,000 from an unrelated third party for our article and facilitation of investor awareness in the company.