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.
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.
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.
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.
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:
|
●
|
Phase 1 investigator initiated Actimab-A + CLAG-M combination trial with the salvage chemotherapy regimen CLAG-M (cladribine, cytarabine, filgrastim and mitoxantrone) for fit patients age 18 and above with relapsed or refractory AML at the Medical College of Wisconsin (“MCW”). The combination of Actimab-A + CLAG-M is supported by mechanistic rationale for combining inhibitors of DNA replication and/or repair processes such as mitoxantrone, a topoisomerase-II inhibitor, and radiation, as imparted by tumor-targeting of Ac-225 with Actimab-A. In September 2020, we announced that we completed the third and planned final dose cohort of 0.75 µCi/kg of Actimab-A. At the 2020 American Society of Hematology Annual Meeting, it was reported that 100% of patients (3/3) receiving 0.75 µCi/kg of Actimab-A, and CLAG-M achieved a complete remission, which is nearly 85% greater than the 55% remission rate observed in a study of CLAG-M alone conducted at MCW in the same r/r AML patient population. Complete Remission (“CR”) or Complete Remission with Incomplete blood count recovery (“CRi”) were observed in all dose cohorts (0.25, 0.50 and 0.75 µCi/kg) with 67% of patients (10/15) achieving CR or CRi. The 0.25 and 0.50 µCi/kg doses of Actimab-A have been shown to be subtherapeutic as a single agent. Of the 10 patients achieving CR or Cri, 70% achieved negative minimal residual disease (“MRD) status with no detectable disease via flow cytometry, indicating that these are deep remissions. No dose-limiting toxicities (“DLTs”) were reported in the third dose cohort of 0.75 µCi/kg and therefore maximum tolerable dose (MTD) was not reached. As a result, MCW amended the study protocol to allow for continued dose escalation and the trial is now enrolling patients at a dose of 1.0 µCi/kg. Upon completion of this Phase 1 trial, we will work to develop a regulatory and development pathway that can potentially support a registration for the Actimab-A + CLAG-M combination. In addition, the Actimab-A + CLAG-M combination study has provided proof of principle that the addition of subtherapeutic doses of Actimab-A to other AML therapies can lead to well-tolerated regimens with improved responses.
|
|
●
|
Phase 1/2 Actimab-A + Ven combination trial with the BCL-2 inhibitor Venetoclax (“ven”) for fit and unfit patients age 18 and above with relapsed or refractory AML. This multi-center trial is being led by UCLA Medical Center. In September 2020, we announced that we successfully completed enrollment of the first dose cohort and are continuing to advance to the next cohort of this dose-escalation trial. This combination is supported by mechanistic evidence in preclinical studies using ven-resistant AML tumor cell lines. In these models, we have demonstrated that Actimab-A can deplete Mcl-1 and Bcl-XL, two proteins implicated in mediating resistance to venetoclax, in addition to causing potentially lethal double-stranded DNA breaks in these CD33 expressing cells. Furthermore, in vivo studies in animal models of ven-resistant AML demonstrated robust tumor regression and improved survival in cohorts receiving the Actimab-A ven combination compared to ven alone. The rationale for this clinical study is that the addition of Actimab-A will; 1) have a direct anti-tumor effect via double-stranded DNA breaks and 2) deplete Mcl-1 and BCL-XL making the AML cells more susceptible to ven. At the 2020 ASH annual meeting, data from the first dose cohort of 0.50 µCi/kg Actimab-A in combination with ven were presented. There was a 67% overall response rate (2/3 patients), including one CR and one partial response (“PR”) with blast count reduction of 50%. All 3 patients were poor risk with adverse cytogenetics and each patient had an additional high-risk marker (FLT3-ITD+, antecedent JAK2+ myelofibrosis, or TP53 mutation). The patient achieving a CR was in second relapse and a TP53 mutation as well as multiple other high-risk markers. The trial is now active and recruiting at 4 trial sites in dose escalation cohorts. We expect to have Phase 1 safety and preliminary proof of concept clinical data from this combination study in 2021.
|
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.
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.
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.
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, Mylotarg™, 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.
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.
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.
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.
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
in this Annual Report on Form 10-K to enhance the readability and accessibility of our risk factor disclosures. We encourage you
to carefully review the full risk factors contained in this Annual Report on Form 10-K in their entirety for additional information
regarding the material factors that make an investment in our securities speculative or risky. These risks and uncertainties include,
but are not limited to, the following:
|
●
|
We
are a clinical-stage company and have generated no revenue from commercial sales to date;
|
|
|
|
|
●
|
We
have incurred net losses in every year since our inception and anticipate that we will
continue to incur net losses in the future;
|
|
|
|
|
●
|
If
we fail to obtain additional financing, we will be unable to continue or complete our
product development and you will likely lose your entire investment;
|
|
|
|
|
●
|
We
are highly dependent on the success of Iomab-B and the SIERRA trial and we many not able
to complete the necessary clinical development or our development efforts may not result
in the data necessary to receive regulatory approval;
|
|
|
|
|
●
|
Our
business could be adversely affected by the effects of health epidemics, including the
global COVID-19 pandemic;
|
|
|
|
|
●
|
We
have not demonstrated that any of our products are safe and effective for any indication
and will continue to expend substantial time and resources on clinical development before
any of our current or future product candidates will be eligible for FDA approval, if
ever;
|
|
|
|
|
●
|
Our
clinical trials may fail to demonstrate adequately the efficacy and safety of our product
candidates, which would prevent or delay regulatory approval and commercialization;
|
|
|
|
|
●
|
Healthcare
legislative reform measures intended to increase pressure to reduce prices of pharmaceutical
products paid for by Medicare or, otherwise, affect the federal regulation of the U.S.
healthcare system could have a material adverse effect our business, future revenue,
if any, and results of operations;
|
|
|
|
|
●
|
We
rely on third parties to conduct our clinical trials. If these third parties do not successfully
carry out their contractual duties or meet expected deadlines or comply with regulatory
requirements, we may not be able to obtain regulatory approval for or commercialize our
product candidates;
|
|
|
|
|
●
|
We
currently depend on a single third-party manufacturer to produce our pre-clinical and
clinical trial drug supplies. Any disruption in the operations of our current third-party
manufacturer, or other third-party manufacturers we may engage in the future, could adversely
affect our business and results of operations;
|
|
|
|
|
●
|
Our
product candidates may cause undesirable side effects or have other properties that could
halt their clinical development, prevent their regulatory approval, limit their commercial
potential, or result in significant negative consequences;
|
|
|
|
|
●
|
Our
patent position is highly uncertain and involves complex legal and factual questions.
|
|
|
|
|
●
|
The
use of hazardous materials, including radioactive and biological materials, in our research
and development efforts imposes certain compliance costs on us and may subject us to
liability for claims arising from the use or misuse of these materials;
|
|
|
|
|
●
|
We
are highly dependent on our key personnel, and if we are not successful in attracting
and retaining highly qualified personnel, we may not be able to successfully implement
our business strategy;
|
|
|
|
|
●
|
Certain
provisions of our Certificate of Incorporation and Bylaws and Delaware law make it more
difficult for a third party to acquire us and make a takeover more difficult to complete,
even if such a transaction were in our stockholders’ interest; and
|
|
|
|
|
●
|
Our
ability to utilize our net operating loss carryforwards and certain other tax attributes
may be limited.
|
Risks Related to Our Business
We are a clinical-stage company and have generated no revenue
from commercial sales to date.
We are a clinical-stage
biopharmaceutical company with a limited operating history. We have no products approved for commercial sale and have not generated
any revenue from product sales to date. We will encounter risks and difficulties frequently experienced by early-stage companies
in rapidly evolving fields. If we do not address these risks successfully, our business will suffer.
We have incurred net losses in every year since our inception
and anticipate that we will continue to incur net losses in the future.
We are not profitable and
have incurred losses in each period since our inception. As of December 31, 2020 and December 31, 2019, we had an accumulated deficit
of $231.0 million and $208.8 million, respectively. We reported a net loss of $22.2 million and $21.9 million for the years ended
December 31, 2020 and 2019, respectively. We expect to continue to operate at a net loss as we continue our research and development
efforts, continue to conduct clinical trials and develop manufacturing, sales, marketing and distribution capabilities. There can
be no assurance that the products under development by us will be approved for sale in the United States or elsewhere. Furthermore,
there can be no assurance that if such products are approved, they will be successfully commercialized, which would have an adverse
effect on our business prospects, financial condition and results of operation.
If we fail to obtain additional financing,
we will be unable to continue or complete our product development and you will likely lose your entire investment.
On April 24, 2020, we issued
and sold 4.3 million shares of common stock and pre-funded warrants to purchase 2.8 million shares of common stock. Gross proceeds
from this offering to us were $31.6 million, before deducting underwriting discounts and commissions and other offering expenses
payable by us. On June 19, 2020, we issued and sold 1.9 million shares of common stock and 0.7 million pre-funded warrants to purchase
shares of common stock. Gross proceeds from this offering to us were $25.0 million, before deducting underwriting discounts and
commissions and other offering expenses payable us. In August 2020, we entered into the Capital on Demand™ Sales Agreement
with JonesTrading, pursuant to which we may sell, from time to time, through or to JonesTrading Institutional Services LLC (“JonesTrading”),
up to an aggregate of $200 million of our common stock. Shares of common stock are offered pursuant to our shelf registration statement
filed with the United States Securities and Exchange Commission (“SEC”) on August 7, 2020. As of December 31, 2020,
we sold 2.1 million shares of common stock, resulting in gross proceeds of $22.6 million and net proceeds of $21.7 million. As
of the date of filing this report, we expect that our existing resources will be more than sufficient to fund our planned operations
for more than 12 months following the date of this report.
Our business or operations
may change in a manner that would consume available funds more rapidly than anticipated and substantial additional funding may
be required to maintain operations, fund expansion, develop new or enhanced products, acquire complementary products, business
or technologies or otherwise respond to competitive pressures and opportunities, such as a change in the regulatory environment
or a change in preferred cancer treatment modalities. However, we may not be able to secure funding when we need it or on favorable
terms or indeed on any terms. In addition, from time to time, we may not be able to secure enough capital in a timely enough manner
which may cause the generation of a going-concern opinion from our auditors which can and may impair our stock market valuation
and also our ability to finance on favorable terms or indeed on any terms.
To raise additional capital,
we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common
stock. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share
that is equal to or greater than the price per share paid by investors, and investors purchasing shares or other securities in
the future could have rights superior to existing stockholders.
If we cannot raise adequate
funds to satisfy our capital requirements, we will have to delay, scale back or eliminate our research and development activities,
clinical studies or future operations. We may also be required to obtain funds through arrangements with collaborators, which arrangements
may require us to relinquish rights to certain technologies or products that we otherwise would not consider relinquishing, including
rights to future product candidates or certain major geographic markets. We may further have to license our technology to others.
This could result in sharing revenues which we might otherwise have retained for ourselves. Any of these actions may harm our business,
financial condition and results of operations.
The amount of funding we
will need depends on many factors, including the progress, timing and scope of our product development programs; the progress,
timing and scope of our preclinical studies and clinical trials; the time and cost necessary to obtain regulatory approvals; the
time and cost necessary to further develop manufacturing processes and arrange for contract manufacturing; our ability to enter
into and maintain collaborative, licensing and other commercial relationships; and our partners’ commitment of time and resources
to the development and commercialization of our products.
We have limited access to the capital
markets and even if we can raise additional funding, we may be required to do so on terms that are dilutive to you.
We have limited access
to the capital markets to raise funds. The capital markets have been unpredictable in the recent past for radioisotope and other
oncology companies and unprofitable companies such as ours. In addition, it is generally difficult for development-stage companies
to raise capital under current market conditions. The amount of capital that a company such as ours is able to raise often depends
on variables that are beyond our control. As a result, we may not be able to secure financing on terms attractive to us, or at
all. If we are able to consummate a financing arrangement, the amount raised may not be sufficient to meet our future needs. If
adequate funds are not available on acceptable terms, or at all, our business, including our technology licenses, results of operations,
financial condition and our continued viability will be materially adversely affected.
We are highly dependent on the success
of Iomab-B and the SIERRA trial and we may not able to complete the necessary clinical development or our development efforts may
not result in the data necessary to receive regulatory approval.
Iomab-B, which we licensed
from the Fred Hutchinson Cancer Research Center (“FHCRC”) in June 2012 is our lead program to which we allocate a significant
portion of our resources. We are currently enrolling patients in the pivotal Phase 3 SIERRA trial (Study of Iomab-B in Elderly
Relapsed or Refractory AML), a 150-patient multi-center randomized trial that will compare outcomes of patients who receive Iomab-B
and a BMT to those patients receiving physician’s choice of salvage chemotherapy, defined as conventional care, as no standard
of care exists for this patient population. The SIERRA trial may be unsuccessful and fail to demonstrate a safety and efficacy
profile that is necessary to receive favorable regulatory approval. The trials DMC may recommend that the trial be stopped early
for safety or efficacy concerns, which could prevent us from completing the SIERRA trial. Even if Iomab-B receives favorable regulatory
approval, we may not be successful in securing adequate reimbursement or establishing successful commercial operations. Any or
all of these factors could have a material adverse impact on our business and ability to continue operations.
We may be unable to establish sales,
marketing and commercial supply capabilities.
We do not currently have,
nor have we ever had, commercial sales and marketing capabilities. If any of our product candidates become approved, we would have
to build and establish these capabilities in order to commercialize our approved product candidates. The process of establishing
commercial capabilities will be expensive and time consuming. Even if we are successful in building sales and marketing capabilities,
we may not be successful in commercializing any of our product candidates. Any delays in commercialization or failure to successfully
commercialize any product candidate may have material adverse impacts on our business and ability to continue operations.
Our business could be adversely affected by the effects of
health epidemics, including the global COVID-19 pandemic.
In December 2019, a novel
strain of coronavirus was reported in China. Since then, COVID-19 has spread globally. The spread of COVID-19 from China to other
countries resulted in the World Health Organization (WHO) declaring the outbreak of COVID-19 as a “pandemic,” or a
worldwide spread of a new disease, on March 11, 2020. Many countries around the world have imposed quarantines and restrictions
on travel and mass gatherings to slow the spread of the virus and have closed non-essential businesses, and many domestic jurisdictions
continue to have such restrictions in place.
As many domestic jurisdictions
continue to maintain such restrictions in place, our ability to continue to operate our business may also be limited. These restrictions
may result in a period of business, supply and drug product manufacturing disruption, and in reduced operations, any of which could
materially affect our business, financial condition and results of operations. In response to COVID-19, we implemented remote working
and thus far have not experienced a significant disruption or delay in our operations as it relates to the clinical development
of our drug candidates. Such government-imposed precautionary measures may have been relaxed in certain countries or states, but
there is no assurance that more strict measures will be put in place again due to a resurgence in COVID-19 cases, including those
involving new variants of the coronavirus, which may be more contagious and deadly than prior strains. Therefore, the COVID-19
pandemic may continue to affect our operation, may further divert the attention and efforts of the medical community to coping
with COVID-19 and disrupt the marketplace in which we operate and may have a material adverse effect on our operations.
The spread of COVID-19,
which has caused a broad impact globally, may materially affect us economically. While the ultimate economic impact brought by,
and the duration of, the COVID-19 pandemic may be difficult to assess or predict, including new information which may emerge concerning
the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others, the pandemic has resulted in significant
disruptions in the general commercial activity and the global economy and caused financial market volatility and uncertainty in
significant and unforeseen ways in the recent months. A continuation or worsening of the levels of market disruption and volatility
seen in the recent past could have an adverse effect on our ability to access capital, which could in the future negatively affect
our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our
business and the value of our common stock.
Currently, the Phase 3
SIERRA trial for our lead program, Iomab-B, continues to remain active at a majority of our clinical trial sites, with investigators
providing feedback that recruitment and enrollment will remain active because of the acute nature of the disease, the high unmet
needs of patients with relapsed or refractory AML, the potentially curative nature of BMT and the differentiated profile of Iomab-B.
Certain sites that had not been actively enrolling due to COVID-19 at the initial outbreak of the pandemic resumed recruitment
and enrollment in mid-2020, and we currently do not have any sites that are not recruiting and enrolling due to COVID-19. We also
believe our earlier stage clinical trials for our CD33 program will also continue to recruit and enroll patients given the acute
nature of relapsed or refractory AML. The continuation of the pandemic globally could adversely affect our planned clinical trial
operations, including our ability to conduct the trials on the expected timelines and recruit and retain patients and principal
investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if their geography is impacted
by the pandemic. Further, the continuation and/or resurgence of the COVID-19 pandemic could result in delays in our clinical trials
due to prioritization of hospital resources toward the pandemic, restrictions in travel, potential unwillingness of patients to
enroll in trials at this time, or the inability of patients to comply with clinical trial protocols if quarantines or travel restrictions
impede patient movement or interrupt healthcare services. In addition, we rely on independent clinical investigators, contract
research organizations and other third-party service providers to assist us in managing, monitoring and otherwise carrying out
our preclinical studies and clinical trials, and the pandemic may affect their ability to devote sufficient time and resources
to our programs or to travel to sites to perform work for us.
Additionally, COVID-19
may result in delays in receiving approvals from domestic and foreign regulatory authorities, delays in necessary interactions
with Institutional Review Boards (“IRBs”), domestic and foreign regulators, ethics committees and other important agencies
and contractors due to limitations in employee resources or forced furlough of government employees.
COVID-19 has caused severe
disruptions in transportation and limited access to our facility, resulting in limited support from our staff and professional
advisors.
We continue to monitor
the impacts of COVID-19 on the global economy and on our business operations. However, the ultimate impact from COVID-19 on our
business operations and financial results during 2021 will depend on, among other things, the ultimate severity and scope of the
pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease,
the rate at which historically large increases in unemployment rates will decrease, if at all, and whether, and the speed with
which the economy recovers. We are not able to fully quantify the impact that these factors will have on our financial results
during 2021 and beyond, but developments related to COVID-19 may materially affect us in 2021.
Our business is subject to cybersecurity risks.
Our operations are increasingly
dependent on information technologies and services. Threats to information technology systems associated with cybersecurity risks
and cyber incidents or attacks continue to grow, and include, among other things, storms and natural disasters, terrorist attacks,
utility outages, theft, viruses, phishing, malware, design defects, human error, and complications encountered as existing systems
are maintained, repaired, replaced, or upgraded. Risks associated with these threats include, among other things:
|
●
|
theft or misappropriation of funds;
|
|
|
|
|
●
|
loss, corruption, or misappropriation of intellectual property, or other proprietary, confidential or personally identifiable information (including supplier, clinical data or employee data);
|
|
|
|
|
●
|
disruption or impairment of our and our business operations and safety procedures;
|
|
|
|
|
●
|
damage to our reputation with our potential partners, patients and the market;
|
|
|
|
|
●
|
exposure to litigation;
|
|
|
|
|
●
|
increased costs to prevent, respond to or mitigate cybersecurity events.
|
Although we utilize various
procedures and controls to mitigate our exposure to such risk, cybersecurity attacks and other cyber events are evolving and unpredictable.
Moreover, we have no control over the information technology systems of third parties conducting our clinical trials, our suppliers,
and others with which our systems may connect and communicate. As a result, the occurrence of a cyber incident could go unnoticed
for a period time.
We recently secured cybersecurity
insurance coverage to protect against cybersecurity risks. However, we cannot ensure that it will be sufficient to cover any particular
losses we may experience as a result of such cyberattacks. Any cyber incident could have a material adverse effect on our business,
financial condition and results of operations.
Risks Related to Regulation
The FDA or comparable foreign regulatory
authorities may disagree with our regulatory plans and we may fail to obtain regulatory approval of our product candidates.
Our products are subject
to rigorous regulation by the FDA and numerous other federal, state and foreign governmental authorities. The process of seeking
regulatory approval to market an antibody radiation-conjugate product is expensive and time-consuming, and, notwithstanding the
effort and expense incurred, approval is never guaranteed. If we are not successful in obtaining timely approval of our products
from the FDA, we may never be able to generate significant revenue and may be forced to cease operations. In particular, the FDA
permits commercial distribution of a new antibody radiation-conjugate product only after a BLA for the product has received FDA
approval. The BLA process is costly, lengthy and inherently uncertain. Any BLA filed by us will have to be supported by extensive
data, including, but not limited to, technical, preclinical, clinical trial, chemistry, manufacturing and controls (“CMC”)
and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the product for its intended use.
The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain
regulatory approval to market our product candidates, which would significantly harm our business, results of operations and prospects.
In addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or
more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent
on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include
the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing
scenarios could materially harm the commercial prospects for our product candidates.
The approval process in
the United States and in other countries could result in unexpected and significant costs for us and consume management’s
time and other resources. The FDA and other foreign regulatory agencies could ask us to supplement our submissions, collect non-clinical
data, conduct additional clinical trials or engage in other time-consuming actions, or it could simply deny our applications. In
addition, even if we obtain approval to market our products in the United States or in other countries, the approval could be revoked,
or other restrictions imposed if post-market data demonstrates safety issues or lack of effectiveness. We cannot predict with certainty
how, or when, the FDA or other regulatory authorities will act. If we are unable to obtain the necessary regulatory approvals,
our financial condition and cash flow may be materially adversely affected, and our ability to grow domestically and internationally
may be limited. Additionally, even if we obtain approval, regulatory authorities may approve any of our product candidates for
fewer or more limited indications that we request. The Company’s products may not be approved for the specific indications
that are most necessary or desirable for successful commercialization or profitability.
We have not demonstrated that any of
our products are safe and effective for any indication and will continue to expend substantial time and resources on clinical development
before any of our current or future product candidates will be eligible for FDA approval, if ever.
We expect that a substantial
portion of our efforts and expenditures over the next few years will be devoted to development of our existing and contemplated
biological product candidates. Accordingly, our business currently depends heavily on the successful development, FDA approval,
and commercialization of such candidates, which may never receive FDA approval or be successfully commercialized even if FDA approval
is received. The research, testing, manufacturing, labeling, approval, sale, marketing, and distribution of our biological product
candidates are, and will remain, subject to extensive regulation by the FDA and other regulatory authorities in the United States
and other countries, as applicable. We are currently not permitted to market any of our current or future product candidates in
the United States until we receive FDA approval (of each) via the BLA process. To date, we have two product candidates in clinical
development and have not-yet submitted a BLA for any of our candidates and, for many such candidates, do not expect to be in a
position to do so for the foreseeable future, as there are numerous developmental steps that must be completed before we can prepare
and submit a BLA.
In the United States, the FDA regulates pharmaceutical
and biological product candidates under the FDCA and the Public Health Service Act (“PHSA”), as well as their respective
implementing regulations. Such products and product candidates are also subject to other federal, state, and local statutes and
regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local,
and foreign statutes and regulations requires the expenditure of substantial time and financial resources. The process required
by the FDA before a drug or biological product may be marketed in the United States generally involves the following:
|
●
|
completion of preclinical laboratory tests and animal studies in accordance with FDA’s good laboratory practices (“GLPs”) and applicable requirements for the humane use of laboratory animals or other applicable regulations;
|
|
|
|
|
●
|
submission to the FDA of an Investigational New Drug (“IND”), which must become effective before human clinical trials in the United States may begin;
|
|
|
|
|
●
|
performance of adequate and well-controlled human clinical trials in accordance with FDA’s IND regulations, GCPs, and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed biological product for its intended use;
|
|
|
|
|
●
|
submission to the FDA of a BLA for marketing approval that meets applicable requirements to ensure the continued safety, purity, and potency of the product that is the subject of the BLA based on results of preclinical testing and clinical trials;
|
|
|
|
|
●
|
satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced, to assess compliance with cGMPs and assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity;
|
|
|
|
|
●
|
potential FDA audit of the nonclinical study and clinical trial sites that generated the data in support of the BLA; and
|
|
|
|
|
●
|
FDA review and approval, or denial, of the BLA.
|
Before testing any biological
product candidate in humans, the product candidate enters the preclinical testing stage. Preclinical tests include laboratory evaluations
of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the product
candidate. The conduct of the preclinical tests must comply with federal regulations and requirements including GLPs. The clinical
trial sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available
clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. Some preclinical testing may continue
even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises
concerns or questions regarding the proposed clinical trials and places the trial on a clinical hold within that 30-day time period.
In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA
may also impose clinical holds on a biological product candidate at any time before or during clinical trials due to safety concerns
or non-compliance. If the FDA imposes a clinical hold, trials may not recommence without FDA authorization and then only under
terms authorized by the FDA. Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical
trials to begin or that, for those that have already commenced under an active IND, that issues will not arise that suspend or
terminate such trials.
Clinical trials involve
the administration of the biological product candidate to healthy volunteers or patients under the supervision of qualified investigators,
generally physicians not employed by or under the trial sponsor’s control. Clinical trials are conducted under protocols
detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria,
and the parameters to be used to monitor subject safety, including stopping rules that assure a clinical trial will be stopped
if certain adverse events should occur. Each protocol and any amendments to the protocol must be submitted to the FDA as part of
the IND. Clinical trials must be conducted and monitored in accordance with the FDA’s regulations composing the GCP requirements,
including the requirement that all research subjects provide informed consent. Further, each clinical trial must be reviewed and
approved by an independent institutional review board, or IRB, at or servicing each institution at which the clinical trial will
be conducted. An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether
the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.
The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject or his or
her legal representative and must monitor the clinical trial until completed. Human clinical trials are typically conducted in
three sequential phases that may overlap or be combined:
|
●
|
Phase 1. The biological product is initially introduced into healthy human subjects and tested for safety. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in subjects.
|
|
|
|
|
●
|
Phase 2. The biological product is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule.
|
|
|
|
|
●
|
Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy, potency, and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk to benefit ratio of the product and provide an adequate basis for product labeling.
|
Post-approval clinical
trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These clinical trials
are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for
long-term safety follow-up.
After the completion of
clinical trials of a biological product, FDA approval of a BLA must be obtained before commercial marketing of the biological product.
The BLA must include results of product development, laboratory and animal studies, human trials, information on the manufacture
and composition of the product, proposed labeling and other relevant information. The FDA may grant deferrals for submission of
data, or full or partial waivers. The testing and approval processes require substantial time and effort and there can be no assurance
that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.
Before approving a BLA, the FDA will inspect the facilities at which the product is manufactured. The FDA will not approve the
product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate
to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will
typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with IND trial requirements
and GCP requirements. To assure cGMP and GCP compliance, an applicant must incur significant expenditure of time, money and effort
in the areas of training, record keeping, production, and quality control.
Notwithstanding the submission
of relevant data and information, the FDA may ultimately decide that the BLA does not satisfy its regulatory criteria for approval
and deny approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than
we interpret the same data. Our product candidates are in the earliest stages of clinical development and, therefore, a long way
from BLA submission. We cannot predict with any certainty if or when we might submit a BLA for regulatory approval for our product
candidates or whether any such BLA will be approved by the FDA. Human clinical trials are very expensive and difficult to design
and implement, in part because they are subject to rigorous regulatory requirements. For example, the FDA may not agree with our
proposed endpoints for any clinical trial we propose, which may delay the commencement of our clinical trials. The clinical trial
process is also lengthy and requires substantial time and effort.
In December 2015, the FDA
cleared our IND filing for Iomab-B (for acute myeloid leukemia or AML), and we are currently enrolling patients in a randomized,
controlled, pivotal Phase 3 clinical trial under such IND to study Iomab-B in patients 55 years of age or older with relapsed or
refractory AML. Assuming the Phase 3 trial meets its endpoints and there are no unexpected issues or delays, it will form the basis
for a BLA in the reasonably near future for Iomab-B for use in preparing and conditioning AML patients for BMTs. Additionally,
there are physician IND trials at the FHCRC that have been conducted or are currently ongoing at FHCRC with Iomab-B (for other
target indications) and the BC8 antibody we licensed. And, we have multiple Phase 1 and Phase 2 clinical trials ongoing and others
that we have planned but not-yet commenced, for our other drug candidates under our own sponsorship and multiple investigator-initiated
trials ongoing. Except for Iomab-B (for patients with AML), we expect that the clinical trials we need to conduct to be in a position
to submit BLAs for our product candidates currently in-development will take, at least, several years to complete. Moreover, failure
can occur at any stage of the trials, and we could encounter problems that cause us to abandon or repeat clinical trials. Also,
the results of early preclinical and clinical testing may not be predictive of the results of subsequent clinical trials. A number
of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy
or adverse safety profiles, notwithstanding promising results in earlier studies. And, preclinical and clinical data are often
susceptible to multiple interpretations and analyses. Many companies that have believed their product candidates performed satisfactorily
in preclinical studies and clinical trials have, nonetheless, failed to obtain marketing approval of their products. Success in
preclinical testing and early clinical trials does not ensure that later clinical trials, which involve many more subjects, and
the results of later clinical trials may not replicate the results of prior clinical trials and preclinical testing. Any failure
or substantial delay in our product development plans may have a material adverse effect on our business.
We may encounter substantial delays in
our clinical trials or may not be able to conduct our trials on the timelines we expect.
We cannot predict whether
we will encounter problems with any of our ongoing or planned clinical trials that will cause us or regulatory authorities to delay,
suspend, or discontinue clinical trials or to delay the analysis of data from ongoing clinical trials. Any of the following could
delay or disrupt the clinical development of our product candidates and potentially cause our product candidates to fail to receive
regulatory approval:
|
●
|
conditions imposed on us by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials;
|
|
|
|
|
●
|
delays in receiving, or the inability to obtain, required approvals from IRBs or other reviewing entities at clinical sites selected for participation in our clinical trials;
|
|
|
|
|
●
|
delays in enrolling patients into clinical trials;
|
|
|
|
|
●
|
a lower than anticipated retention rate of patients in clinical trials;
|
|
|
|
|
●
|
the need to repeat or discontinue clinical trials as a result of inconclusive or negative results or unforeseen complications in testing or because the results of later trials may not confirm positive results from earlier preclinical studies or clinical trials;
|
|
|
|
|
●
|
inadequate supply, delays in distribution, deficient quality of, or inability to purchase or manufacture drug product, comparator drugs or other materials necessary to conduct our clinical trials;
|
|
|
|
|
●
|
unfavorable FDA or other foreign regulatory inspection and review of a clinical trial site or records of any clinical or preclinical investigation;
|
|
|
|
|
●
|
serious and unexpected drug-related side effects experienced by participants in our clinical trials, which may occur even if they were not observed in earlier trials or only observed in a limited number of participants;
|
|
|
|
|
●
|
a finding that the trial participants are being exposed to unacceptable health risks;
|
|
|
|
|
●
|
the placement by the FDA or a foreign regulatory authority of a clinical hold on a trial; or
|
|
|
|
|
●
|
delays in obtaining regulatory agency authorization for the conduct of our clinical trials.
|
We may suspend, or the
FDA or other applicable regulatory authorities may require us to suspend, clinical trials of a product candidate at any time if
we or they believe the patients participating in such clinical trials, or in independent third-party clinical trials for drugs
based on similar technologies, are being exposed to unacceptable health risks including but not limited to unacceptable or suboptimal
factors related to toxicity, clinical efficacy, imbalances in safety and efficacy profiles or for other reasons.
Further, individuals involved
with our clinical trials may serve as consultants to us from time to time and receive stock options or cash compensation in connection
with such services. If these relationships and any related compensation to the clinical investigator carrying out the study result
in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected interpretation
of the study, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the
clinical trial itself may be jeopardized. The delay, suspension or discontinuation of any of our clinical trials, or a delay in
the analysis of clinical data for our product candidates, for any of the foregoing reasons, could adversely affect our efforts
to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses and have a material
adverse effect on our financial results.
Clinical trials may also
be delayed or terminated as a result of ambiguous or negative interim results. In addition, a clinical trial may be suspended or
terminated by us, the FDA, the IRBs at the sites where the IRBs are overseeing a trial, or a data safety monitoring board, or DSMB
(Data Safety Monitoring Board)/DMC (Data Monitoring Committee), overseeing the clinical trial at issue, or other regulatory authorities
due to a number of factors, including:
|
●
|
failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
|
|
|
|
|
●
|
inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;
|
|
|
|
|
●
|
varying interpretation of data by the FDA or similar foreign regulatory authorities;
|
|
|
|
|
●
|
failure to achieve primary or secondary endpoints or other failure to demonstrate efficacy;
|
|
|
|
|
●
|
unforeseen safety issues; or
|
|
|
|
|
●
|
lack of adequate funding to continue the clinical trial.
|
Modifications to our product candidates may require federal
approvals.
The BLA application is
the vehicle through which the company may formally propose that the FDA approve a new pharmaceutical for sale and marketing in
the United States. Once a particular product candidate receives FDA approval, expanded uses or uses in new indications of our products
may require additional human clinical trials and new regulatory approvals, including additional IND and BLA submissions and premarket
approvals before we can begin clinical development, and/or prior to marketing and sales. If the FDA requires new approvals for
a particular use or indication, we may be required to conduct additional clinical studies, which would require additional expenditures
and harm our operating results. If the products are already being used for these new indications, we may also be subject to significant
enforcement actions.
Conducting clinical trials
and obtaining approvals is a time-consuming process, and delays in obtaining required future approvals could adversely affect our
ability to introduce new or enhanced products in a timely manner, which in turn would have an adverse effect on our business prospects,
financial condition and results of operation.
The FDA or comparable foreign regulatory
authorities may disagree with our regulatory plans, and we may fail to obtain regulatory approval of our product candidates.
In June 2012, we acquired
rights to BC8 (Iomab), a clinical stage monoclonal antibody with safety and efficacy data in more than 300 patients in need of
a BMT. Iomab-B is our product candidate that links I-131 to the BC8 antibody that is being studied in an ongoing Phase 3 pivotal
trial. Product candidates utilizing this antibody would require BLA approval before they can be marketed in the United States.
We are also evaluating a lower dose of the BC8 antibody and I-131 for lymphodepletion prior to CAR-T or adoptive cell therapy.
We are currently evaluating clinical trials that would use our construct for lymphodepletion. Our lintuzumab-Ac-225 product candidate
is also being studied in several Phase 1 trials under our sponsorship and investigator-initiated trials in patients with AML, myelodysplastic
syndrome and multiple myeloma. Product candidates utilizing the lintuzumab antibody would require BLA approval before they can
be marketed in the United States. We are in the early stages of evaluating other product candidates consisting of conjugates of
Ac-225 with human or humanized antibodies for pre-clinical and clinical development in other types of cancer. The FDA may not approve
these products for the indications that are necessary or desirable for successful commercialization. The FDA may fail to approve
any BLA we submit for new product candidates or for new intended uses or indications for approved products or future product candidates.
Failure to obtain FDA approval for our products in the proposed indications would have a material adverse effect on our business
prospects, financial condition and results of operations.
Clinical trials necessary to support
approval of our product candidates are time-consuming and expensive.
Initiating and completing
clinical trials necessary to support FDA approval of a BLA for Iomab-B, CD33 program candidates, and other product candidates,
is a time-consuming and expensive process, and the outcome is inherently uncertain. Moreover, the results of early clinical trials
are not necessarily predictive of future results, and any product candidate we advance into clinical trials may not have favorable
results in later clinical trials. We have worked with the FDA to develop a clinical trial designed to test the safety and efficacy
of Iomab-B in patients with relapsed or refractory AML who are age 55 and above prior to a BMT. This trial is designed to support
a BLA filing for marketing approval by the FDA, pending results from the trial. In addition to clinical data, a BLA filing encompasses
preclinical, CMC, labeling and other information. Even if the clinical data from the SIERRA trial is positive, there can be no
assurances that the BLA filing we produce will meet all of the FDA’s requirements or that they will not request additional
information or studies, which may delay the FDA’s review or we may not be able to produce. We have also worked with the FDA
to develop a regulatory pathway for our Actimab-MDS trial that consists of a dose-confirming Phase 1 trial that can be followed
by a randomized, controlled pivotal trial that could support a BLA filing. There can be no assurance that the data generated during
the trial will meet our chosen safety and effectiveness endpoints or otherwise produce results that will eventually support the
filing or approval of a BLA. Even if the data from this trial are favorable, the data may not be predictive of the results of any
future clinical trials.
Our clinical trials may fail to demonstrate
adequately the efficacy and safety of our product candidates, which would prevent or delay regulatory approval and commercialization.
Even if our clinical trials
are completed as planned, we cannot be certain that their results will support our product candidate claims or that the FDA or
foreign authorities will agree with our conclusions regarding them. Success in pre-clinical studies and early clinical trials does
not ensure that later clinical trials will be successful, and we cannot be sure that the later trials will replicate the results
of prior trials and pre-clinical studies. The clinical trial process may fail to demonstrate that our product candidates are safe
and effective for the proposed indicated uses. If FDA concludes that the clinical trials for Iomab-B, lintzumab-Ac-225, or any
other product candidate for which we might seek approval, have failed to demonstrate safety and effectiveness, we would not receive
FDA approval to market that product candidate in the United States for the indications sought. In addition, such an outcome could
cause us to abandon the product candidate and might delay development of others. Any delay or termination of our clinical trials
will delay or preclude the filing of any submissions with the FDA and, ultimately, our ability to commercialize our product candidates
and generate revenues. It is also possible that patients enrolled in clinical trials will experience adverse side effects that
are not currently part of a product candidate’s profile.
The intellectual property related to
antibodies we have licensed has expired or likely expired.
The key patents related
to the humanized antibody, lintuzumab, which we use in our CD33 program product candidates have expired. It is generally possible
that others may be eventually able to use an antibody with the same sequence, and we will then need to rely on additional patent
protection covering alpha particle drug products comprising Ac-225. Our final drug construct consists of the lintuzumab antibody
labeled with the isotope Ac-225. We have licensed issued patents that relate to the linker technology we use to conjugate the isotope
to the antibody. Further, we own issued and pending patents related to methods for drug conjugation and isotope labeling and for
methods of isotope production. In addition, we possess trade secrets and know how related to the manufacturing and use of isotopes.
Any competing product based on the lintuzumab antibody is likely to require several years of development before achieving our product
candidate’s current status and may be subject to significant regulatory hurdles but is nevertheless a possibility that could
negatively impact our business in the future. We own an issued patent in the US relating to composition of the Iomab-B product
candidate. Five related patents are also pending in the US and internationally. We have and may continue to file patents related
to Iomab-B that can provide barriers to entry but there is no certainty that these patents will be granted or such granting thereof
will adequately prevent others from seeking to replicate and use the BC8 antibody or the construct. We have pending patents 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. Any competing product based on the
antibody used in Iomab-B is likely to require several years of development before achieving our product candidate’s current
status and may be subject to significant regulatory hurdles but is nevertheless a possibility that could negatively impact our
business in the future.
Our CD33 program clinical trials are
testing the same drug construct.
Our CD33 program is comprised
of several clinical trials including investigator-initiated trials in AML that are studying the same drug construct consisting
of lintuzumab-Ac-225. Negative results from any of these trials could negatively impact our ability to enroll or complete our other
trials studying lintzumab-Ac-225. Additionally, negative outcomes including safety concerns, may result in the FDA discontinuing
other trials utilizing lintuzumab-Ac-225.
We may be unable to obtain a sufficient
supply of isotopes to support clinical development or at commercial scale.
Iodine-131 is a key component
of our Iomab-B drug candidate. We currently source medical grade I-131 from three suppliers including two leading global manufacturers.
Currently, there is sufficient supply of I-131 to advance our ongoing SIERRA clinical trial, support additional trials we may undertake
utilizing I-131 and for commercialization of Iomab-B. We continually evaluate I-131 manufacturers and suppliers and intend to have
multiple qualified suppliers prior to the commercial launch of Iomab-B. While we consider I-131 to be commoditized and obtainable
through several suppliers, there can be no guarantee that we will be able to secure I-131 or obtain I-131 on terms that are acceptable
to us.
Actinium-225 is a key component
of our CD33 ARC program, AWE platform and other drug candidates that we might consider for development with the Ac-225 payload.
There are adequate quantities of Ac-225 available today to meet our current needs via our present supplier, the Department of Energy
(“DOE”). The current Ac-225 currently supplied to Actinium’s clinical trials from the DOE is derived from the
natural decay of thorium-229 from so-called ‘thorium-cows’ and is able to produce sufficient quantities that are several
multiples of the amount of Ac-225 we require to supply our clinical programs through to early commercialization phase. The DOE
is also producing Ac-225 from a recently developed alternative route for Ac-225 production via a linear accelerator that is currently
being evaluated by Actinium. Initial preclinical and modelling results have indicated that the linear accelerator sourced Ac-225
does not impact labelling efficiency and expected distribution. Per representations made by the DOE, the capacity of Ac-225 from
this route is expected to be sufficient to supply all of Actinium’s pipeline and commercial Ac-225 needs and support new
program expansion by not just Actinium but also other companies that are developing Ac-225 based products. Additional routes of
Ac-225 production are being pursued by the DOE including the generation of new thorium cows and production via a cyclotron. The
cyclotron production method for Ac-225 production leverages Actinium’s proprietary technology and know-how and presents an
additional path towards production of high-quality Ac-225 that would be able to satisfy commercial needs. In addition, we are aware
of at least six other government and non-government entities globally including the U.S., Canada, Russia, Belgium, France and Japan
that have, or expect to have ability to supply Ac-225 or equipment for its production within the timeframes relevant to first commercial
approval of our Ac-225 ARC.
Our contract for supply
of this isotope from the DOE must be renewed yearly, and the current contract extends through the end of 2021. While we expect
this contract will be renewed at the end of its term as it has since 2009, there can be no assurance that the DOE will renew the
contract or that change its policies that allow for the sale of isotope to us. Failure to acquire sufficient quantities of medical
grade Ac-225 would make it impossible to effectively complete clinical trials and to commercialize any Ac-225 based drug candidates
that we may develop and would materially harm our business.
Our ability to conduct
clinical trials to advance our ARC drug candidates is dependent on our ability to obtain the radioisotopes I-131, Ac-225 and other
isotopes we may choose to utilize in the future. Currently, we are dependent on third party manufacturers and suppliers for our
isotopes. These suppliers may not perform their contracted services or may breach or terminate their agreements with us. Our suppliers
are subject to regulations and standards that are overseen by regulatory and government agencies and we have no control over our
suppliers’ compliance to these standards. Failure to comply with regulations and standards may result in their inability
to supply isotope could result in delays in our clinical trials, which could have a negative impact on our business. We have developed
intellectual property, know-how and trade secrets related to the manufacturing process of Ac-225. While we have manufactured medical
grade Ac-225 of a purity compared to the cyclotron sourced material in the past, this activity was terminated due to operating
cost reasons and we currently do not have experience in manufacturing medical grade Ac-225 and may not obtain the resources necessary
to establish our own manufacturing capabilities in future. Our inability to build out and establish our own manufacturing facilities
would require us to continue to rely on third party suppliers as we currently do. However, based on our current third-party suppliers
and potential future suppliers of Ac-225 we expect to have adequate isotope supply to support our current ongoing clinical trials,
current AWE program activities and commercialization should our drug candidates receive approval.
If we encounter difficulties enrolling
patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
The timely completion of
clinical trials in accordance with their protocols depends on our ability to enroll a sufficient number of patients who remain
in the trial until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of
reasons, including:
|
●
|
the size and nature of the patient population;
|
|
|
|
|
●
|
the patient eligibility criteria defined in the protocol;
|
|
|
|
|
●
|
the size of the study population required for analysis of the trial’s primary endpoints;
|
|
|
|
|
●
|
the proximity of patients to trial sites;
|
|
|
|
|
●
|
the design of the trial;
|
|
|
|
|
●
|
our ability to recruit clinical trial investigators with the appropriate competencies and expertise;
|
|
|
|
|
●
|
competing clinical trials for similar or alternate therapeutic treatments;
|
|
|
|
|
●
|
clinician’s and patients’ perceptions as to the potential advantages and side effects of the product candidate being studied in relation to other available therapies;
|
|
|
|
|
●
|
our ability to obtain and maintain patient consents; and
|
|
|
|
|
●
|
the risk that patients enrolled in clinical trials will not complete a clinical trial.
|
In addition, refractory
patients, which several of our trials are enrolling, participating in clinical trials are seriously and often terminally ill and
therefore may not complete the clinical trial due to reasons including comorbid conditions or occurrence of adverse medical events
related or unrelated to the investigational products, or death. Even if we are able to enroll a sufficient number of patients in
our clinical trials, delays in patient enrollment will result in increased costs or affect the timing of our planned trials, which
could adversely affect our ability to advance the development of our product candidates.
FDA may take actions that would prolong,
delay, suspend, or terminate clinical trials of our product candidates, which may delay or prevent us from commercializing our
product candidates on a timely basis.
There can be no assurance
that the data generated in our clinical trials will be acceptable to FDA or that if future modifications during the trial are necessary,
that any such modifications will be acceptable to FDA. Certain modifications to a clinical trial protocol made during the course
of the clinical trial have to be submitted to the FDA. This could result in the delay or halt of a clinical trial while the modification
is evaluated. In addition, depending on the quantity and nature of the changes made, FDA could take the position that some or all
of the data generated by the clinical trial is not usable because the same protocol was not used throughout the trial. This might
require the enrollment of additional subjects, which could result in the extension of the clinical trial and the FDA delaying approval
of a product candidate. If the FDA believes that its prior approval is required for a particular modification, it can delay or
halt a clinical trial while it evaluates additional information regarding the change.
Any delay or termination
of our current or future clinical trials as a result of the risks summarized above, including delays in obtaining or maintaining
required approvals from IRBs, delays in patient enrollment, the failure of patients to continue to participate in a clinical trial,
and delays or termination of clinical trials as a result of protocol modifications or adverse events during the trials, may cause
an increase in costs and delays in the filing of any submissions with the FDA, delay the approval and commercialization of our
product candidates or result in the failure of the clinical trial, which could adversely affect our business, operating results
and prospects. Lengthy delays in the completion of our Iomab-B clinical trials would adversely affect our business and prospects
and could cause us to cease operations.
We have obtained orphan drug designation
from FDA for two of our current product candidates and intend to pursue such designation for other candidates and indications in
the future, but we may be unable to obtain such designations or to maintain the benefits associated with any orphan drug designations
we have received or may receive in the future.
We have received orphan
drug designation for Iomab-B and lintuzumab-CD33 ARC for treatment of AML in both the United States and the EU. Under the Orphan
Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a
disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals
in the United States, there is no reasonable expectation that the cost of developing and making available a drug or biologic for
this type of disease or condition will be recovered from sales in the United States for that drug or biologic. Similarly, the EMA
grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention, or treatment
of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the EU.
Orphan drug designation
neither shortens the development time or regulatory review time of a drug or biologic nor gives the drug or biologic any advantage
in the regulatory review or approval process. In the United States, orphan drug designation entitles a party to financial incentives,
such as opportunities for grant funding towards clinical trial costs, tax advantages, and application fee waivers. In addition,
if a product candidate receives the first FDA approval for the indication for which it has orphan designation, such product is
entitled, upon approval, to seven years of orphan-drug exclusivity, during which the FDA may not approve any other application
to market the same drug for the same indication, unless a subsequently approved product is clinically superior to orphan drug or
where the manufacturer is unable to assure sufficient product quantity in the applicable patient population. In the EU, orphan
drug designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity
following drug or biological product approval. This period may be reduced to six years if the orphan drug designation criteria
are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market
exclusivity.
Even if we obtain (or have
obtained) orphan drug designation for certain product candidates, we may not be the first to obtain marketing approval for such
candidates for the applicable indications due to the uncertainties inherent in the development of novel biologic products. And,
an orphan drug candidate may not receive orphan-drug exclusivity upon approval if such candidate is approved for a use that is
broader than the indication for which it received orphan designation. In addition, exclusive marketing rights in the United States
may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable
to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
Finally, even if we successfully
obtain orphan-drug exclusivity for an orphan drug candidate upon approval, such exclusivity may not effectively protect the product
from competition because (i) different drugs with different active moieties can be approved for the same condition; and (ii) the
FDA or EMA can also subsequently approve a subsequent product with the same active moiety and for the same indication as the orphan
drug if the later-approved drug if deemed clinically superior to the orphan drug.
Even if we receive regulatory approval
of our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review.
Any regulatory approvals
that we receive for our product candidates will require surveillance to monitor the safety and efficacy of the product candidate.
The FDA may also require a REMS in order to approve our product candidates, which could entail requirements for a medication guide,
physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries
and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates,
the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import,
export and recordkeeping for our product candidates will be subject to extensive and ongoing regulatory requirements. These requirements
include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with
cGMPs and GCPs for any clinical trials that we conduct post-approval. In addition, the FDA could require us to conduct another
study to obtain additional safety or biomarker information. Later discovery of previously unknown problems with our product candidates,
including adverse events of unanticipated severity or frequency, or with our third-party suppliers or manufacturing processes,
or failure to comply with regulatory requirements, may result in, among other things:
|
●
|
restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls;
|
|
|
|
|
●
|
fines, warning letters or holds on clinical trials;
|
|
|
|
|
●
|
refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;
|
|
|
|
|
●
|
product seizure or detention, or refusal to permit the import or export of our product candidates; and
|
|
|
|
|
●
|
injunctions or the imposition of civil or criminal penalties.
|
The FDA’s and other
regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit
or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation
that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable
to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain
regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.
Coverage and reimbursement may be limited
or unavailable in certain market segments for our product candidates which could limit our sales of our product candidates, if
approved.
The commercial success
of our product candidates in both domestic and international markets will be substantially dependent on whether third-party coverage
and reimbursement is available for patients that use our products. However, the availability of insurance coverage and reimbursement
for newly approved cancer therapies is uncertain, and therefore, third-party coverage may be particularly difficult to obtain even
if our products are approved by the FDA as safe and efficacious. Patients using existing approved therapies are generally reimbursed
all or part of the product cost by Medicare or other third-party payors. Medicare, Medicaid, health maintenance organizations and
other third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement
of new drugs, and, as a result, they may not cover or provide adequate payment for these products. Submission of applications for
reimbursement approval generally does not occur prior to the filing of a BLA for that product and may not be granted until many
months after BLA approval. In order to obtain coverage and reimbursement for these products, we or our commercialization partners
may have to agree to a net sales price lower than the net sales price we might charge in other sales channels. The continuing efforts
of government and third-party payors to contain or reduce the costs of healthcare may limit our revenue. Initial dependence on
the commercial success of our products may make our revenues particularly susceptible to any cost containment or reduction efforts.
Healthcare legislative reform measures
intended to increase pressure to reduce prices of pharmaceutical products paid for by Medicare or, otherwise, affect the federal
regulation of the U.S. healthcare system could have a material adverse effect our business, future revenue, if any, and results
of operations.
In the United States, there
have been a number of legislative and regulatory initiatives focused on containing the cost of healthcare. The Affordable Care
Act, for example, substantially changed the way healthcare is financed by both governmental and private insurers. The Affordable
Care Act contains a number of provisions that could impact our business and operations, primarily, once we obtain FDA approval
to commercialize one of our product candidates in the United States, if ever, and may also affect our operations in ways we cannot
currently predict. Affordable Care Act provisions that may affect our business include, among others, those governing enrollment
in federal healthcare programs, reimbursement changes, rules regarding prescription drug benefits under health insurance exchanges,
expansion of the 340B program, expansion of state Medicaid programs, fees and increased discount and rebate obligations, transparency
and reporting requirements, and fraud and abuse enforcement. Such changes may impact existing government healthcare programs, industry
competition, formulary composition, and may result in the development of new programs, including Medicare payment for performance
initiatives, health technology assessments, and improvements to the physician quality reporting system and feedback program.
There have been significant
ongoing judicial, administrative, executive, and legislative initiatives to modify, limit, replace, or repeal the Affordable Care
Act. For example, former President Trump issued several Executive Orders and other directives designed to delay the implementation
of certain provisions of the Affordable Care Act or otherwise circumvent some of the requirements for health insurance mandated
by the Affordable Care Act. Concurrently, Congress considered legislation that would repeal or replace all or part of the Affordable
Care Act. While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation the Affordable
Care Act have been passed. For example, the Tax Cuts and Jobs Act of 2017 eliminated the Affordable Care Act provision requiring
individuals to purchase and maintain health coverage, or the “individual mandate,” by reducing the associated penalty
to zero, beginning in 2019. In December 2018, a district court in Texas held that the individual mandate is unconstitutional and
that the rest of the Affordable Care Act is, therefore, invalid. On appeal, the Fifth Circuit Court of Appeals affirmed the holding
on the individual mandate but remanded the case back to the lower court to reassess whether and how such holding affects the validity
of the rest of the Affordable Care Act. The U.S. Supreme Court is currently reviewing the case. Substantial uncertainty remains
as to the future of the Affordable Care Act. There is no way to predict whether, and to what extent, if any, the Affordable Care
Act will remain in-effect in the future, and it is unclear how these decisions, subsequent appeals, or other efforts to repeal
and replace the Affordable Care Act will impact the United States healthcare industry or our business.
Furthermore, we cannot
predict what reform measures the Biden administration will implement in connection with the Affordable Care Act or otherwise. The
adoption or implementation of new or amended legislation at the federal or state level could affect our ability to obtain regulatory
approval for any of our vaccine candidates and the commercial viability of our future approved products, if any. We cannot predict
the ultimate nature, timing, or effect of any changes to the Affordable Care Act or other federal and state reform efforts, and
there is no assurance that such efforts will not adversely affect our future business and financial results.
In addition to the Affordable
Care Act, there have been several recent Congressional inquiries and proposed and enacted federal and state legislation designed
to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient
programs, and reform government program reimbursement methodologies for drug products. Pharmaceutical product prices have been
the focus of increased scrutiny by the government, including certain state attorneys general, members of Congress and the United
States Department of Justice. State or federal healthcare reform measures or other social or political pressure to lower the cost
of pharmaceutical products could have a material adverse impact on our business, results of operations and financial condition.
Our relationships with customers, health
care professionals and third-party payors may be subject to applicable healthcare laws, which could expose us to penalties, including
administrative, civil or criminal penalties, damages, fines, imprisonment, exclusion from participation in federal healthcare programs
such as Medicare and Medicaid, reputational harm, the curtailment or restructuring of our operations and diminished future profits
and earnings.
Healthcare professionals
and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain
marketing approval. Our current and future arrangements with customers, healthcare professionals and third-party payors may expose
us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial
arrangements and relationships through which we conduct research, market, sell and distribute any products for which we obtain
marketing approval. Federal and state healthcare laws and regulations that may affect our operations, directly or indirectly, include
the following, among others:
|
●
|
the
federal Anti-Kickback Statute, which prohibits persons and entities from, among other
things, knowingly and willfully soliciting, offering, receiving or providing remuneration,
directly or indirectly, in cash or in kind, to induce or reward either the referral of
an individual for, or the purchase, lease, order or recommendation of, any good, facility,
item or service, for which payment may be made under federal and state healthcare programs
such as Medicare and Medicaid;
|
|
|
|
|
●
|
the
federal false claims laws, including civil whistleblower or qui tam actions under the
federal False Claims Act, which impose criminal and civil penalties against individuals
or entities for, among other things, knowingly presenting, or causing to be presented,
to the federal government, claims for payment that are false or fraudulent or making
a false statement to avoid, decrease or conceal an obligation to pay money to the federal
government;
|
|
|
|
|
●
|
the
federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended
by the Health Information Technology for Economic and Clinical Health Act of 2009, or
HITECH, which imposes criminal and civil liability for, among other things, executing
a scheme to defraud any healthcare benefit program or making false statements relating
to healthcare matters and also imposes obligations, including mandatory contractual terms,
on covered entities, including certain healthcare providers, health plans, and healthcare
clearinghouses, and their respective business associates that create, receive, maintain
or transmit individually identifiable health information for or on behalf of the covered
entity as well as their covered subcontractors, with respect to safeguarding the privacy,
security and transmission of individually identifiable health information;
|
|
|
|
|
●
|
the
federal Civil Monetary Penalties Law, which prohibits, among other things, the offering
or transfer of remuneration to a Medicare or state healthcare program beneficiary if
the person knows or should know it is likely to influence the beneficiary’s selection
of a particular provider, practitioner, or supplier of services reimbursable by Medicare
or a state healthcare program, unless an exception applies;
|
|
●
|
the
federal Physician Payments Sunshine Act, created under the Affordable Care Act, and its
implementing regulations, which requires 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; and
|
|
|
|
|
●
|
analogous
state laws and regulations, including (among others) state anti-kickback and false claims
laws, which may apply to our business practices, including, but not limited to, research,
distribution, sales and marketing arrangements and claims involving healthcare items
or services reimbursed by any third-party payor, including private insurers; state laws
that require pharmaceutical companies to comply with the pharmaceutical industry’s
voluntary compliance guidelines and the relevant compliance guidance promulgated by the
United States federal government, or otherwise restrict payments that may be made to
healthcare providers and other potential referral sources; state laws and regulations
that require drug manufacturers to file reports relating to pricing and marketing information
and that require tracking gifts and other remuneration and items of value provided to
healthcare professionals and entities; state and local laws that require the registration
of pharmaceutical sales representatives; and state laws governing the privacy and security
of health information in certain circumstances, many of which differ from each other
in significant ways and often are not preempted by federal law, thus complicating compliance
efforts.
|
Efforts to comply with
applicable healthcare laws and regulations will involve substantial costs. Interpretations of standards of compliance under these
laws and regulations are rapidly changing and subject to varying interpretations and it is possible that governmental authorities
will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable
fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or
any other laws that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines,
exclusion from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, 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), and the curtailment or restructuring of our operations, any of which could diminish our future
profits or earnings. If any of the physicians or other providers or entities with whom we expect to do business are found to be
not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions
from government funded healthcare programs.
Third-party payors may not adequately
reimburse customers for any of our products that we may commercialize or promote, and may impose coverage restrictions or limitations
such as prior authorizations and step edits that affect their use.
Our ability to commercialize
any product candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement for these
products and related treatments will be available from government health programs, private health insurers, integrated delivery
networks and other third-party payors. Third-party payors decide which medications they will pay for and establish reimbursement
levels. A significant trend in the United States healthcare industry and elsewhere is cost containment. Government authorities
and third-party payors have attempted to control costs by limiting coverage and the amount of payment for particular medications.
Increasingly, third-party payors are requiring that drug companies provide predetermined discounts from list prices and are challenging
the prices charged for medical products. Coverage and reimbursement may not be available for any product that we commercialize
and, if reimbursement is available, the level of reimbursement may not be sufficient for commercial success. Coverage and reimbursement
may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. If coverage and reimbursement
is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate
for which we obtain marketing approval.
Obtaining reimbursement
approval for any product candidate for which we obtain marketing approval from any government or other third-party payor is a time-consuming
and costly process. There may be significant delays in obtaining coverage and adequate reimbursement for newly approved products.
Moreover, eligibility for coverage and reimbursement does not imply that any product will be paid for in all cases or at a rate
that covers our costs, including research, development, manufacture, sale and distribution. Even when a payor determines that a
product that we may commercialize or promote is eligible for reimbursement under its criteria, the payor may impose coverage limitations
that preclude payment for some uses that are approved by the FDA, or may impose restrictions, such as prior authorization requirements,
or may simply deny coverage altogether. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to
cover our costs and may not be made permanent. Coverage and reimbursement rates may vary according to the use of the drug and the
medical circumstances under which it is used may be based on reimbursement levels already set for lower cost products or procedures
or may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or
rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict
imports of drugs from countries where they may be sold at lower prices than in the United States. Furthermore, the Centers for
Medicare and Medicaid Services frequently change product descriptors, coverage policies, product and service codes, payment methodologies
and reimbursement values. Commercial third-party payors often rely upon Medicare coverage policies and payment limitations in setting
their own reimbursement policies. Our inability to promptly obtain and maintain coverage and profitable payment rates from both
government-funded programs and private payors for any approved products that we develop could have a material adverse effect on
our operating results, our ability to raise capital needed to commercialize our approved products and our overall financial condition.
Risks Related to Third Parties
We rely on third parties to conduct our
clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines or comply
with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our product candidates.
We do not have the ability
to independently conduct our clinical trials for our product candidates and we must rely on third parties, such as contract research
organizations, medical institutions, clinical investigators and contract laboratories to conduct such trials. Our reliance on these
third parties for clinical development activities results in reduced control over these activities. Moreover, the FDA requires
us to comply with regulations and standards, commonly referred to as GCPs (good clinical practices), for conducting, recording
and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the trial
participants are adequately protected. Our reliance on third parties does not relieve us of these responsibilities and requirements.
If we or any of our third-party contractors fail to comply with applicable GCPs, the clinical data generated in our clinical trials
may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical
trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority,
such regulatory authority will determine that any of our clinical trials complies with GCP regulations. In addition, our clinical
trials must be conducted with product produced under current good manufacturing practice, or cGMP, regulations. Our failure to
comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.
If our consultants, contract
research organizations and other similar entities with which we are working do not successfully carry out their contractual duties,
meet expected deadlines, or comply with applicable regulations, we may be required to replace them. Although we believe that there
are a number of other third-party contractors, we could engage to continue these activities, we may not be able to enter into arrangements
with alternative third-party contractors or to do so on commercially reasonable terms, which may result in a delay of our planned
clinical trials and delayed development of our product candidates.
In addition, our third-party
contractors are not our employees, and except for remedies available to us under our agreements with such third-party contractors,
we cannot control whether or not they devote sufficient time and resources to our programs. If these third parties do not successfully
carry out their contractual duties or regulatory obligations or meet expected deadlines, or if the quality or accuracy of the data
they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons,
our pre-clinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be
able to obtain regulatory approval for, or successfully commercialize, our product candidates on a timely basis, if at all, and
our business, operating results and prospects would be adversely affected.
The antibodies we use in our antibody
radiation-conjugate product candidates may be subject to generic competition.
We are not aware of any
existing or pending regulations or legislation that pertains to generic radiopharmaceutical products such as our antibody radiation-conjugate
product candidates. Our product candidates are regulated by the FDA as biologic products and we intend to seek approval for these
products pursuant to the BLA pathway. The Biologics Price Competition and Innovation Act of 2009, or BPCIA, created an abbreviated
pathway for the approval of biosimilar and interchangeable biologic products. The abbreviated regulatory pathway establishes legal
authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable”
based on its similarity to an existing brand product. Under the BPCIA, an application for a biosimilar product cannot be approved
by the FDA until 12 years after the original branded product was approved under a BLA. The law is complex and is still being interpreted
and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty. Even if a
biosimilar gets approved for one of the antibodies that we use, the final constructs of our drug candidates consist of an antibody,
radioisotope and in some cases a linker. Therefore, we do not believe that the final drug product of our candidates can be subject
to competition from a biosimilar as outlined in BPCIA.
Our product candidates may never achieve
market acceptance.
Iomab-B, CD33 ARC program
candidates and future product candidates that we may develop may never gain market acceptance among physicians, patients and the
medical community. The degree of market acceptance of any of our products will depend on a number of factors, including the actual
and perceived effectiveness and reliability of the product; the results of any long-term clinical trials relating to use of the
product; the availability, relative cost and perceived advantages and disadvantages of alternative technologies; the degree to
which treatments using the product are approved for reimbursement by public and private insurers; the strength of our marketing
and distribution infrastructure; and the level of education and awareness among physicians and hospitals concerning the product.
We believe that oncologists
and other physicians will not widely adopt a product candidate unless they determine, based on experience, clinical data, and published
peer-reviewed journal articles, that the use of that product candidate provides an effective alternative to other means of treating
specific cancers. Patient studies or clinical experience may indicate that treatment with our product candidates does not provide
patients with sufficient benefits in extension of life or quality of life. We believe that recommendations and support for the
use of each product candidate from influential physicians will be essential for widespread market acceptance. Our product candidates
are still in the development stage and it is premature to attempt to gain support from physicians at this time. We can provide
no assurance that such support will ever be obtained. If our product candidates do not receive such support from these physicians
and from long-term data, physicians may not use or continue to use, and hospitals may not purchase or continue to purchase, them.
Failure of Iomab-B, CD33
ARC program candidates or any of our other product candidates to significantly penetrate current or new markets would negatively
impact our business financial condition and results of operations.
We may be subject to claims that our
third-party service providers, consultants or current or former employees have wrongfully used or disclosed confidential information
of third parties.
We have received confidential
and proprietary information from third parties. In addition, we employ individuals who were previously employed at other biotechnology
or pharmaceutical companies. We may be subject to claims that we or our employees, consultants or independent contractors have
inadvertently or otherwise used or disclosed confidential information of these third parties or our employees’ former employers.
Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation
could result in substantial cost and be a distraction to our management and employees.
We currently depend on single third-party
manufacturers to produce our pre-clinical and clinical trial drug supplies. Any disruption in the operations of our current third-party
manufacturers, or other third-party manufacturers we may engage in the future, could adversely affect our business and results
of operations.
We do not currently operate
manufacturing facilities for pre-clinical or clinical production of any of our product candidates. We rely on third-party manufacturers
to supply, store, and distribute pre-clinical and clinical supply of the components of our drug product candidates including monoclonal
antibodies, linkers and radioisotopes, as well as the final construct which comprises our drug product candidates. We expect to
continue to depend on third-party manufacturers for the foreseeable future. Any performance failure on the part of our existing
or future manufacturers could delay clinical development, cause us to suspend or terminate development or delay or prohibit regulatory
approval of our product candidates or commercialization of any approved products. Further avenues of disruption to our clinical
or eventual commercial supply may also occur due to the sale, acquisition, business reprioritization, bankruptcy or other unforeseen
circumstances that might occur at any of our suppliers or contract manufacturing partners including an inability to come to terms
on renewal of existing contracts or new contracts.
We currently rely on single
manufacturers to manufacture our pre-clinical and clinical trial drug supplies. With a view to maintaining business continuity
we are evaluating alternatives and second and even third sources of supply or manufacturing for our core suppliers and manufacturing
partners, however there can be no assurances that we will be able to identify such suppliers or partners and assuming we did, that
we would be able to enter into contracts that are on favorable terms or on terms that will enable sufficient supply to ensure business
continuity and support our growth plans.
Our product candidates
require precise, high-quality manufacturing. Failure by our current contract manufacturer or other third-party manufacturers we
may engage in the future to achieve and maintain high manufacturing standards could result in patient injury or death, product
recalls or withdrawals, delays or failures in testing or delivery, cost overruns, or other problems that could seriously hurt our
business. Contract manufacturers may encounter difficulties involving production yields, quality control, and quality assurance.
These manufacturers are subject to ongoing periodic and unannounced inspections by the FDA and corresponding state and foreign
agencies to ensure strict compliance with cGMPs and other applicable government regulations and corresponding foreign standards;
we do not have control over third-party manufacturers’ compliance with these regulations and standards.
We depend on vendors with
specialized operations, equipment and know-how to manufacture the respective components of our drug candidates. We have entered
into manufacturing and supply agreements with these third-parties, and in some instances, we have agreed that such vendor be the
exclusive manufacturer and supplier. If any of the third-parties we depend on encounter difficulties in their operations, fail
to comply with required regulations or breach their contractual obligations it may be difficult, or we may be unable to identify
suitable alternative third-party manufacturers. While we identify and evaluate third-party manufacturers from time to time, even
if we do identify suitable alternative third-parties, we may fail to reach agreement on contractual terms, it may be prohibitively
expensive and there can be no assurance that we can successfully complete technology transfer and development work necessary or
complete the necessary work in a timely manner. Any of which could prevent us from commencing manufacturing with third-parties
which could cause delays or suspension of our clinical trials and pre-clinical work that may have a negative impact on our business.
Furthermore, these third-party
contractors, whether foreign or domestic, may experience regulatory compliance difficulty, mechanical shut downs, employee strikes,
or any other unforeseeable acts that may delay or limit production. Our inability to adequately establish, supervise and conduct
(either ourselves or through third parties) all aspects of the formulation and manufacturing processes, and the inability of third-party
manufacturers to consistently supply quality product when required would have a material adverse effect on our ability to develop
or commercialize our products. We have faced delays and risks associated with reliance on key third party manufacturers in the
past and may be faced with such delays and risks in the future. Any future manufacturing interruptions or related supply issues
could have an adverse effect on our company, including delays in clinical trials.
If we are successful in obtaining marketing
approval from the FDA and/or other regulatory agencies for any of our product candidates, we anticipate continued reliance on third-party
manufacturers.
To date, our product candidates
have been manufactured in small quantities for preclinical and clinical testing by third-party manufacturers. If the FDA or other
regulatory agencies approve any of our product candidates for commercial sale, we expect that we would continue to rely, at least
initially, on third-party specialized manufacturers to produce commercial quantities of approved products. These manufacturers
may not be able to successfully increase the manufacturing capacity for any approved product in a timely or economic manner, or
at all. Significant scale-up of manufacturing may require additional validation studies, which the FDA must review and approve.
Scale-up for commercial product may require financial commitment or investment by us, which we may not have sufficient capital
for or may elect not to undertake. If third party manufacturers are unable to successfully increase the manufacturing capacity
for a product candidate, or we are unable to establish our own manufacturing capabilities, the commercial launch of any approved
products may be delayed or there may be a shortage in supply, which in turn could have a material adverse effect on our business.
In addition, the facilities
used by our contract manufacturers to manufacture our product candidates must be approved by the FDA pursuant to inspections that
will be conducted after we submit a BLA to the FDA. We do not control the manufacturing process of, and are completely dependent
on, our contract manufacturing partners for compliance with cGMPs. If our contract manufacturers cannot successfully manufacture
material that conforms to our specifications and the strict regulatory requirements of the FDA or other regulatory authorities,
they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. If the FDA or a comparable
foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws
any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our
ability to develop, obtain regulatory approval for or market our product candidates, if approved.
We may have conflicts with our partners
that could delay or prevent the development or commercialization of our product candidates.
We may have conflicts with
our partners, such as conflicts concerning the interpretation of preclinical or clinical data, the achievement of milestones, the
interpretation of contractual obligations, payments for services, development obligations or the ownership of intellectual property
developed during our collaboration. If any conflicts arise with any of our partners, such partner may act in a manner that is averse
to our best interests. Any such disagreement could result in one or more of the following, each of which could delay or prevent
the development or commercialization of our product candidates, and in turn prevent us from generating revenues: unwillingness
on the part of a partner to pay us milestone payments or royalties we believe are due under a collaboration; uncertainty regarding
ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into
additional collaborations; unwillingness by the partner to cooperate in the development or manufacture of the product, including
providing us with product data or materials; unwillingness on the part of a partner to keep us informed regarding the progress
of its development and commercialization activities or to permit public disclosure of the results of those activities; initiating
litigation or alternative dispute resolution options by either party to resolve the dispute; or attempts by either party to terminate
the agreement.
We face significant competition from
other biotechnology and pharmaceutical companies.
Our product candidates
face, and will continue to face, intense competition from large pharmaceutical and biotechnology companies, as well as academic
and research institutions. We compete in an industry that is characterized by (i) rapid technological change, (ii) evolving industry
standards, (iii) emerging competition and (iv) new product introductions. Our competitors have existing products and technologies
that will compete with our product candidates and technologies and may develop and commercialize additional products and technologies
that will compete with our product candidates and technologies. Because several competing companies and institutions have greater
financial resources than us, they may be able to (i) provide broader services and product lines, (ii) make greater investments
in research and development, or R&D, and (iii) carry on broader R&D initiatives. Our competitors also have greater development
capabilities than we do and have substantially greater experience in undertaking preclinical and clinical testing of product candidates,
obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products. They also have greater name recognition
and better access to customers than us.
Our product candidates may cause undesirable
side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their
commercial potential, or result in significant negative consequences.
Undesirable side effects
caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could
result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.
The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result
in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.
Even if any of our product candidates receives marketing approval, as greater numbers of patients use a product following its approval,
an increase in the incidence of side effects or the incidence of other post-approval problems that were not seen or anticipated
during pre-approval clinical trials could result in a number of potentially significant negative consequences, including:
|
●
|
regulatory authorities may withdraw their approval of the product;
|
|
|
|
|
●
|
regulatory authorities may require the addition of labeling statements, such as warnings or
contraindications;
|
|
|
|
|
●
|
we may be required to change the way the product is administered, conduct additional clinical
trials or change the labeling of the product;
|
|
|
|
|
●
|
we may elect, or we may be required, to recall or withdraw product from the market;
|
|
|
|
|
●
|
we could be sued and held liable for harm caused to patients; and
|
|
|
|
|
●
|
our reputation may suffer.
|
Any of these events could
substantially increase the costs and expenses of developing, commercializing and marketing any such product candidates or could
harm or prevent sales of any approved products.
Risks Related to Our Intellectual Property
We depend upon securing and protecting critical intellectual
property.
We are dependent on obtaining
and maintaining patents, trade secrets, copyright and trademark protection of our technologies in the United States and other jurisdictions,
as well as successfully enforcing this intellectual property and defending this intellectual property against third-party challenges.
The degree of future protection of our proprietary rights is uncertain for product candidates that are currently in the early stages
of development because we cannot predict which of these product candidates will ultimately reach the commercial market or whether
the commercial versions of these product candidates will incorporate proprietary technologies.
Our patent position is highly uncertain
and involves complex legal and factual questions.
Accordingly, we cannot
predict the breadth of claims that may be allowed or enforced under our patents or in third-party patents. For example, we or our
licensors might not have been the first to make the inventions covered by each of our pending patent applications and issued patents;
we or our licensors might not have been the first to file patent applications for these inventions; others may independently develop
similar or alternative technologies or duplicate any of our technologies; it is possible that none of our pending patent applications
or the pending patent applications of our licensors will result in issued patents; our issued patents and issued patents of our
licensors may not provide a basis for commercially viable technologies, or may not provide us with any competitive advantages,
or may be challenged and invalidated by third parties; and, we may not develop additional proprietary technologies that are patentable.
As a result, our owned
and licensed patents may not be valid, and we may not be able to obtain and enforce patents and to maintain trade secret protection
for the full commercial extent of our technology. The extent to which we are unable to do so could materially harm our business.
We or our licensors have
applied for and will continue to apply for patents for certain products. Such applications may not result in the issuance of any
patents, and any patents now held or that may be issued may not provide us with adequate protection from competition. Furthermore,
it is possible that patents issued or licensed to us may be challenged successfully. In that event, if we have a preferred competitive
position because of such patents, such preferred position would be lost. If we are unable to secure or to continue to maintain
a preferred position, we could become subject to competition from the sale of generic products. Failure to receive, inability to
protect, or expiration of our patents for medical use, manufacture, conjugation and labeling of Ac-225, the antibodies that we
license from third parties, or subsequent related filings, would adversely affect our business and operations.
Patents issued or licensed
to us may be infringed by the products or processes of others. The cost of enforcing our patent rights against infringers, if such
enforcement is required, could be significant, and we do not currently have the financial resources to fund such litigation. Further,
such litigation can go on for years and the time demands could interfere with our normal operations. There has been substantial
litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical industry. We may
become a party to patent litigation and other proceedings. The cost to us of any patent litigation, even if resolved in our favor,
could be substantial. Some of our competitors may be able to sustain the costs of such litigation more effectively than we can
because of their substantially greater financial resources. Litigation may also absorb significant management time.
Unpatented trade secrets,
improvements, confidential know-how and continuing technological innovation are important to our scientific and commercial success.
Although we attempt to and will continue to attempt to protect our proprietary information through reliance on trade secret laws
and the use of confidentiality agreements with our partners, collaborators, employees and consultants and other appropriate means,
these measures may not effectively prevent disclosure of our proprietary information, and, in any event, others may develop independently,
or obtain access to, the same or similar information.
Certain of our patent rights
are licensed to us by third parties. If we fail to comply with the terms of these license agreements, our rights to those patents
may be terminated, and we will be unable to conduct our business.
If we are found to be infringing on patents
or trade secrets owned by others, we may be forced to cease or alter our product development efforts, obtain a license to continue
the development or sale of our products, and/or pay damages.
Our manufacturing processes
and potential products may violate proprietary rights of patents that have been or may be granted to competitors, universities
or others, or the trade secrets of those persons and entities. As the pharmaceutical industry expands and more patents are issued,
the risk increases that our processes and potential products may give rise to claims that they infringe the patents or trade secrets
of others. These other persons could bring legal actions against us claiming damages and seeking to enjoin clinical testing, manufacturing
and marketing of the affected product or process. If any of these actions are successful, in addition to any potential liability
for damages, we could be required to obtain a license in order to continue to conduct clinical tests, manufacture or market the
affected product or use the affected process. Required licenses may not be available on acceptable terms, if at all, and the results
of litigation are uncertain. If we become involved in litigation or other proceedings, it could consume a substantial portion of
our financial resources and the efforts of our personnel.
Our ability to protect and enforce our
patents does not guarantee that we will secure the right to commercialize our patents.
A patent is a limited monopoly
right conferred upon an inventor, and his successors in title, in return for the making and disclosing of a new and non-obvious
invention. This monopoly is of limited duration but, while in force, allows the patent holder to prevent others from making and/or
using its invention. While a patent gives the holder this right to exclude others, it is not a license to commercialize the invention
where other permissions may be required for commercialization to occur. For example, a drug cannot be marketed without the appropriate
authorization from the FDA, regardless of the existence of a patent covering the product. Further, the invention, even if patented
itself, cannot be commercialized if it infringes the valid patent rights of another party.
We rely on confidentiality agreements
to protect our trade secrets. If these agreements are breached by our employees or other parties, our trade secrets may become
known to our competitors.
We rely on trade secrets
that we seek to protect through confidentiality agreements with our employees and other parties. If these agreements are breached,
our competitors may obtain and use our trade secrets to gain a competitive advantage over us. We may not have any remedies against
our competitors and any remedies that may be available to us may not be adequate to protect our business or compensate us for the
damaging disclosure. In addition, we may have to expend resources to protect our interests from possible infringement by others.
The use of hazardous materials, including
radioactive and biological materials, in our research and development efforts imposes certain compliance costs on us and may subject
us to liability for claims arising from the use or misuse of these materials.
Our research, development
and manufacturing activities involve the controlled use of hazardous materials, including chemicals, radioactive and biological
materials, such as radioactive isotopes. We are subject to federal, state, local and foreign environmental laws and regulations
governing, among other matters, the handling, storage, use and disposal of these materials and some waste products. We cannot completely
eliminate the risk of contamination or injury from these materials and we could be held liable for any damages that result, which
could exceed our financial resources. We currently maintain insurance coverage for injuries resulting from the hazardous materials
we use; however, future claims may exceed the amount of our coverage. Also, we do not have insurance coverage for pollution cleanup
and removal. Currently the costs of complying with such federal, state, local and foreign environmental regulations are not significant,
and consist primarily of waste disposal expenses. However, they could become expensive, and current or future environmental laws
or regulations may impair our research, development, production and commercialization efforts.
We may undertake international operations,
which will subject us to risks inherent with operations outside of the United States.
Although we do not have
any international operations at this time, we intend to seek market clearances in foreign markets that we believe will generate
significant opportunities. However, even with the cooperating of a commercialization partner, conducting drug development in foreign
countries involves inherent risks, including, but not limited to difficulties in staffing, funding and managing foreign operations;
unexpected changes in regulatory requirements; export restrictions; tariffs and other trade barriers; difficulties in protecting,
acquiring, enforcing and litigating intellectual property rights; fluctuations in currency exchange rates; and potentially adverse
tax consequences.
If we were to experience
any of the difficulties listed above, or any other difficulties, any international development activities and our overall financial
condition may suffer and cause us to reduce or discontinue our international development and registration efforts.
We are highly dependent on our key personnel,
and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement
our business strategy.
Our future operations and
successes depend in large part upon the continued service of key members of our senior management team whom we are highly dependent
upon to manage our business. If any member of our current senior management terminates his employment with us and we are unable
to find a suitable replacement quickly, the departure could have a material adverse effect on our business.
Our future success also
depends on our ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical
and regulatory personnel. There can be no assurance that such professionals will be available in the market, or that we will be
able to retain existing professionals or meet or continue to meet their compensation requirements. Furthermore, the cost base in
relation to such compensation, which may include equity compensation, may increase significantly, which could have a material adverse
effect on us. Failure to establish and maintain an effective management team and workforce could adversely affect our ability to
operate, grow and manage our business.
Managing our growth as we expand operations
may strain our resources.
We expect to need to grow
rapidly in order to support additional, larger, and potentially international, pivotal clinical trials of our product candidates,
which will place a significant strain on our financial, managerial and operational resources. In order to achieve and manage growth
effectively, we must continue to improve and expand our operational and financial management capabilities. Moreover, we will need
to increase staffing and to train, motivate and manage our employees. All of these activities will increase our expenses and may
require us to raise additional capital sooner than expected. Failure to manage growth effectively could materially harm our business,
financial condition or results of operations.
We may expand our business through the
acquisition of rights to new product candidates that could disrupt our business, harm our financial condition and may also dilute
current stockholders’ ownership interests in our company.
Our business strategy includes
expanding our products and capabilities, and we may seek acquisitions of product candidates, antibodies or technologies to do so.
Acquisitions involve numerous risks, including substantial cash expenditures; potentially dilutive issuance of equity securities;
incurrence of debt and contingent liabilities, some of which may be difficult or impossible to identify at the time of acquisition;
difficulties in assimilating acquired technologies or the operations of the acquired companies; diverting our management’s
attention away from other business concerns; risks of entering markets in which we have limited or no direct experience; and the
potential loss of our key employees or key employees of the acquired companies.
We can make no assurances
that any acquisition will result in short-term or long-term benefits to us. We may incorrectly judge the value or worth of an acquired
product, company or business. In addition, our future success would depend in part on our ability to manage the rapid growth associated
with some of these acquisitions. We cannot assure that we will be able to make the combination of our business with that of acquired
products, businesses or companies work or be successful. Furthermore, the development or expansion of our business or any acquired
products, business or companies may require a substantial capital investment by us. We may not have these necessary funds, or they
might not be available to us on acceptable terms or at all. We may also seek to raise funds by selling shares of our preferred
or common stock, which could dilute each current stockholder’s ownership interest in the Company.
Risks Related to Ownership of Our Common
Stock
The sale of securities by us in any equity
or debt financing could result in dilution to our existing stockholders and have a material adverse effect on our earnings.
We have financed our operations
primarily through sales of stock and warrants. It is likely that during the next twelve months we will seek to raise additional
capital through the sales of stock and warrants in order to expand our level of operations to continue our research and development
efforts.
Any sale of common stock
by us in a future offering could result in dilution to our existing stockholders as a direct result of our issuance of additional
shares of our capital stock. In addition, our business strategy may include expansion through internal growth or by establishing
strategic relationships with targeted customers and vendors. In order to do so, or to finance the cost of our other activities,
we may issue additional equity securities that could dilute our stockholders’ stock ownership. We may also assume additional
debt and incur impairment losses related to goodwill and other tangible assets if we acquire another company and this could negatively
impact our earnings and results of operations.
Our common stock is subject to price
volatility which could lead to losses by stockholders and potential costly security litigation.
The trading volume of our
common stock has been and may continue to be extremely limited and sporadic. We expect the market price of our common stock to
fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth,
quarterly operating results of other companies in the same industry, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our competitors or us. This volatility has had a significant
effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could
have the same effect on our common stock.
The trading price of our
common stock may be highly volatile and could fluctuate in response to factors such as:
|
●
|
actual or anticipated variations in our operating results;
|
|
|
|
|
●
|
announcements of developments by us or our competitors;
|
|
|
|
|
●
|
the timing of IND and/or BLA approval, the completion and/or results of our clinical trials;
|
|
|
|
|
●
|
regulatory actions regarding our products;
|
|
|
|
|
●
|
announcements by us or our competitors of significant acquisitions, strategic partnerships,
joint ventures or capital commitments;
|
|
|
|
|
●
|
adoption of new accounting standards affecting our industry;
|
|
|
|
|
●
|
additions or departures of key personnel;
|
|
|
|
|
●
|
introduction of new products by us or our competitors;
|
|
|
|
|
●
|
sales of our common stock or other securities in the open market; and
|
|
|
|
|
●
|
other events or factors, many of which are beyond our control.
|
The stock market is subject
to significant price and volume fluctuations. Moreover, the COVID-19 pandemic has resulted in significant financial market volatility
and uncertainty in recent months. In the past, following periods of volatility in the market price of a company’s securities,
securities class action litigation has often been initiated against such a company. Litigation initiated against us, whether or
not successful, could result in substantial costs and diversion of our management’s attention and our resources, which could
harm our business and financial condition.
We do not intend to pay dividends on
our common stock, so any returns will be determined by the value of our common stock.
We have never declared
or paid any cash dividends on our common stock. For the foreseeable future, it is expected that earnings, if any, generated from
our operations will be used to finance the growth of our business, and that no dividends will be paid to holders of our common
stock. As a result, the success of an investment in our common stock will depend upon any future appreciation in its value. There
is no guarantee that our common stock will appreciate in value.
Certain provisions of our Certificate
of Incorporation and Bylaws and Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult
to complete, even if such a transaction were in our stockholders’ interest.
Provisions of our certificate
of incorporation and bylaws may delay or discourage transactions involving an actual or potential change in our control or change
in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions
that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the
price of our stock. Among other things, the certificate of incorporation and bylaws:
|
●
|
provide that the authorized number of directors may be changed by resolution of the board of directors;
|
|
|
|
|
●
|
provide that all vacancies, including newly-created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
|
|
|
|
|
●
|
divide the board of directors into three classes;
|
|
|
|
|
●
|
provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and meet specific requirements as to the form and content of a stockholder’s notice;
|
In addition, we are governed
by Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a public Delaware corporation from engaging
in a “business combination” with an “interested stockholder” for a period of three years after the date
of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed
manner. A “business combination” includes mergers, asset sales or other transactions resulting in a financial benefit
to the stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or
within three years, did own, 15% or more of the corporation’s outstanding voting stock. These provisions may have the effect
of delaying, deferring or preventing a change in our control.
Compliance with the reporting requirements
of federal securities laws can be expensive.
We are subject to the information
and reporting requirements of the Exchange Act and other federal securities laws, and the compliance obligations of the Sarbanes-Oxley
Act. The costs of preparing and filing annual and quarterly reports and other information with the Securities and Exchange Commission
and furnishing audited reports to stockholders are substantial. In addition, we will incur substantial expenses in connection with
the preparation of registration statements and related documents with respect any offerings of our common stock.
Our ability to utilize our net operating
loss carryforwards and certain other tax attributes may be limited.
Our ability to utilize
our federal net operating loss and tax credit carryforwards may be limited under Sections 382 and 383 of the Internal Revenue Code
of 1986, as amended, or the Code. The limitations apply if we experience an “ownership change”, generally defined
as a greater than 50 percentage point change in the ownership of our equity by certain stockholders over a rolling three-year period. Similar
provisions of state tax law may also apply. We have not assessed whether such an ownership change has previously occurred. If
we have experienced an ownership change at any time since our formation, we may already be subject to limitations on our ability
to utilize our existing net operating losses and other tax attributes to offset taxable income. In addition, future changes in
our stock ownership, which may be outside of our control, may trigger an ownership change and, consequently, the limitations under
Sections 382 and 383 of the Code. As a result, if or when we earn net taxable income, our ability to use our pre-change net
operating loss carryforwards and other tax attributes to offset such taxable income may be subject to limitations, which could
adversely affect our future cash flows.
Failure to establish and maintain adequate
finance infrastructure and accounting systems and controls could impair our ability to comply with the financial reporting and
internal controls requirements for publicly traded companies.
As a public company, we
operate in an increasingly demanding regulatory environment, including with respect to more complex accounting rules. Company responsibilities
required by the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act, include establishing and maintaining corporate
oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls
are necessary for us to produce reliable financial reports and are important to help prevent financial fraud.
Our compliance with Section
404 of the Sarbanes-Oxley Act requires that we incur substantial accounting expense and expend significant management efforts.
We complied with Section 404 at December 31, 2020 and 2019 and while our testing did not reveal any material weaknesses in our
internal controls, any material weaknesses in our internal controls in the future would be required us to remediate in a timely
manner so as to be able to comply with the requirements of Section 404 each year. If we are not able to comply with the requirements
of Section 404 in a timely manner each year, we could be subject to sanctions or investigations by the SEC, NYSE American or other
regulatory authorities which would require additional financial and management resources and could adversely affect the market
price of our common stock. Furthermore, if we cannot provide reliable financial reports or prevent fraud, our business and results
of operations could be harmed, and investors could lose confidence in our reported financial information.
If securities or industry analysts do
not publish research or publish inaccurate or unfavorable research about our business, the price of our common stock and trading
volume could decline.
The trading market for
our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
Multiple securities and industry analysts currently cover us. If one or more of the analysts downgrade our common stock or publish
inaccurate or unfavorable research about our business, the price of our common stock would likely decline. If one or more of these
analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which could
cause the price of our common stock and trading volume to decline.
Our amended and restated bylaws,
as amended, designate the U.S. federal district courts as the exclusive forum for the resolution of any
complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
Our amended and restated bylaws,
as amended, provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts
of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under
the Securities Act of 1933, as amended. In addition, our amended and restated bylaws, as amended, state that any person purchasing
or otherwise acquiring any interest in our security shall be deemed to have notice of and to have consented to such provision.
Such choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable
for disputes with us or our directors, officers or other employees, which may discourage such lawsuits, if successful, might benefit
our stockholders. Stockholders who do bring a claim in the federal district courts of the United States of America could face additional
litigation costs in pursuing any such claim.