Saturday, April 25, 2015

Reader's question: What do you think about Actinium Pharmaceuticals ATNM?

I got the following question from Anonymous.  Thank you for the question and spent a few hours researching Actinium Pharmaceuticals ATNM and below are a summary of my thoughts on the company and their planned phase 3 trial in AML.

I think there are much better Biotech investments with similar or even lower market values.  Note that ATNM's current market cap is $104 million.  Here are my concerns:

-  They have no big pharma partnerships.  Always a red flag as we have no quality, third party due diligence done on the technology and/or leadership team.  Also, a small cap biotech would jump on the chance for a partnership so if their lead compound truly has blockbuster potential, as leadership boasts, why haven't they secured a partnership going into phase 3 trials?

-  They recently raised capital but have less than $30 million in cash and plan to launch a Phase 3 study of their lead compound.  Quality phase 3 studies cost in excess of $100 million so they will need to raise more capital (i.e. shareholder dilution).  

-  The phase 2 trial was not randomized (compared to the control arm being used for the phase 3 trial) and only had 27 patients.  THIS IS A HUGE RED FLAG!  They are assuming the results from a 27 patient study and comparing them to prior trials done in the planned control arm for the phase 3 trial. I see these types of assumptions used going into phase 3 trials all of the time and they almost always fail.  Beware!

-  There's a crossover component in the phase 3 trial.  Remember Aveo's failed phase 3 study?  They had a crossover for ethical reasons as well and that didn't work out for them.  Crossovers can muddle results and I don't like them.  

-  I'm also surprised they don't have a relationship with the Leukemia and Lymphoma Society which provides various degrees of funding for research and trials in their lead indication.  both CPXX and ONTX are in Phase 3 trials and have funding grants from this leading non-profit organization.  Why don't they?

If I were to invest in a company focused on AML/MDS, I'd look at CPXX and ONTX.  Cheaper companies, more cash on hand, better partnerships, and further along.  

Thank you again for the question and best of luck!  

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