Actinium Pharmaceuticals has just seen its position in the race to find a treatment for newly diagnosed AML patients substantially improved. ATNM did get some help from Seattle Genetics (SGEN), who announced that they are suspending their phase III CASCADE study to treat AML, but current ATNM investors already know that ATNM is blazing its own path toward regulatory approval.

Many of those following the AML trials were aware of the potential flaws in the SGEN study, a trial that utilized cytotoxins as a treating agent, which may have contributed to patient death during its 2016 trial. Recently, SGEN took the halt to the endpoint, ceasing the study after consultation with the Data Monitoring Committee, who determined that the treatment may have been the cause of higher death rates and fatal infection.

The bad news for SGEN investors, as well as for patients, is that another once-promising treatment has proved to lack therapeutic value, leaving AML patients increasingly reliant on emerging innovation that could potentially treat and cure the disease. With the clinical field shrinking, only a handful of prospective drug developers appears to be a viable contender in creating the solution. However, there is one company that is separating themselves from the pack, based on a credible and innovative method of treatment.

Once again, investors need to say hello to Actinium Pharmaceuticals.

Some biotech investors tend to root for stocks over patients, ignoring the crucial need for treatments that can cure deadly and debilitating diseases. I am not one of those. With the scars of cancer in my family tree, finding a cure is a top interest. The task of discovering the companies that may provide these therapeutic answers then involves digging deep into the technology to find trends in both efficacy and innovation. From an investment perspective, the rewards will follow success, therefore, finding the emerging gems of the industry provides an opportunity for both patient survival and financial reward.

Actinium investors have long compared the differences in the company’s Actimab-A trials to the trials conducted by SGEN and Pfizer. In no uncertain terms, ATNM investors have come to believe that the path taken by the competitors mentioned above is plagued with clinical concerns. Unfortunately, it took several additional patient deaths before SGEN stopped the trial, and now Pfizer is filing a new application to bring Mylotarg back to the market. Those who follow the progress made in the AML sector know that Mylotarg was already stripped from the market in 2010 due to its debilitating and harmful effects on patients. Perhaps Pfizer believes that the FDA may become more amenable to giving the drug a second chance based on the somewhat small development landscape. Let’s hope not.

The FDA has better tools at their disposal that make far greater sense than subjecting patients to more of the same from Mylotarg. In fact, the FDA does not have to look far, with ATNM’s phase II trial producing consistent and impressive results that position the company closer to an actual product approval.

Can ATNM jump through a few hurdles and be granted either Fast Track Designation or Breakthrough status for Actimab-A? With a successful phase II trial, I think they can. And, that’s precisely the path that investors are looking for ATNM to take.

The Actimab-A Difference

Some investors are just now learning about ATNM and its active pipeline of promising treatments. But, with the most recent setbacks by SGEN and PFE, it’s time for investors to pay close attention to the details. ATNM has several irons in the fire, with Actimab-A its contender to treat patients with AML. Not only is it a contender, but Actimab-A may now be the sole viable candidate in the clinic, with the therapy being the only CD33 targeting radioisotope-based drug candidate currently in human clinical trials.

More specifically, the drug is intended to treat elderly patients newly diagnosed with AML. Actimab-A, developed at Memorial Sloan Kettering, is a second-generation therapy using ATNM’s HuM195- alpha program. To date, ATNM has treated more than ninety patients in four clinical trials targeting CD33; a molecule expressed on 90% of AML cells. Born through a prior study of Bismap-A, ATNM is demonstrating that the second generation therapy produces an apparent anti-leukemic effect, leading to increased survival rates among patients.

A stark departure from using toxic measures to treat the disease, ATNM is utilizing the radioisotope Actinium-225. Despite the potential for cytotoxicity from the isotope, the company has demonstrated in clinical data that the cytotoxins only travel a minimal distance during the therapy, and therefore, the risk of serious adverse events due to a toxicity profile is benign. Furthermore, because the drug has produced such limited adverse reactions, many of the critics that initially looked at the cytotoxins as a potential flaw in the treatment have been largely quieted.

Similar to the path taken by most drugs approved by the FDA, the evolution of design for Actimab-A has proliferated pieces of previous trials and combined the best and most promising elements from each to advance the current phase II trial. Now capitalizing on a clean safety profile and an apparent anti-leukemic effect, the commercially viable isotope 225 has become an essential element in the drug’s design. The key to it all, though, is that ATNM has found that targeting CD33 notably intensifies the therapeutic value. Actinium’s progress in effectively targeting CD33 has opened the eyes of many in the large pharma space, recognizing that ATNM’s Actimab-A trial is currently one of the most advanced programs addressing CD33, and brings with it the serious potential to become a best-in-class therapy in treating AML.

Now, with only Mylotarg coming back into FDA focus, the chances that Actimab-A gets afforded an expedited FDA review may become likely. ATNM knows Mylotarg well. In fact, the Chief Medical Officer at ATNM, Dr. Mark Berger, was a lead developer for Mylotarg during his tenure at Wyeth (now Pfizer). While I can’t speak for the good doctor, his decision to join ATNM is a strong testament to his belief that Actimab-A is on the verge of not only exposing the flaws in Mylotarg but at the same time bringing a drug to market that will have superior therapeutic value for patients. Although the drug demonstrated limited patient benefit, few in the industry will argue the facts that Mylotarg falls well short of being a viable therapy to treat the disease. At this point, limited benefit with proven severe side effects gains little favor, and when compared to Actimab-A, Mylotarg has fallen well short of patient value.

Targeting CD33 Is The Difference

Now with attention focused on the benefits of targeting CD33, ATNM is gaining momentum in the eyes of its peers. The lagging share price is not in line with clinical results, but those things end up taking care of themselves quickly once supporting data is confirmed. As experienced investors know, it’s not uncommon for stocks in the biotech sector to gain hundreds of percentage points in a single session based on compelling data. Now, with ATNM looking to conclude its phase II trial and report results in the second half of 2017, investors are closely monitoring the details.

With valuation being a concern, it’s fair to take a moment and look at the lack of consistency in providing fair market cap valuations. ATNM, at current share prices, holds a market cap of roughly $59 million. Compare this valuation to a company like Immunogen (IMGN), who is also targeting newly acquired AML by utilizing the same ADC-alpha emitters, and the difference in valuation becomes a head scratcher. It is fair to say that not only is the sentiment disproportionate, the difference becomes more blatant when investors acknowledge that ATNM is in a better position to advance through its phase II and III trials quicker than IMGN. But, investors can’t expect markets to be fair, nor do investors expect markets to understand clinical data. It’s up to the investment community to figure out these metrics, and that’s what creates opportunity.

Significant opportunity is what makes the ATNM story so compelling. To date, the phase II Actimab-A trial has treated 18 patients, with the age of patients being 60 or older. Utilizing data from the successful Phase I trial, which treated patients with relapsed or refractory conditions, the phase II trial is designed to address elderly patients with newly diagnosed AML. The trial design is also a fractionalized, dose escalating trial, a departure from the single dose phase I design.

Safety and tolerability results have been exceptional, and when compared to competitors, specifically Mylotarg, it emerges as a best-in-class opportunity for the drug. The refined approach in the phase II trial is designed to be more responsive than the phase I trial, and includes not only fractionalized dosing but has also led the medical team to hypothesize that the regimen produced corrections in peripheral blasts, in turn eliciting higher favorable response rates from patients. The fractionalized dosing during the phase II trial has likely contributed to these favorable results, and also encouraging is the fact that the efficacy rates generated appear to be independent of patient population or severity of the disease.

ATNM is working a classic study, and their accumulation of positive data may very well lead to drug approval. Preliminary data is impressive, but ATNM still has some work to do before investors can rejoice. Despite sitting in a position that deserves far more market attention, ATNM will need to complete its 53 patient trial data set and work closely with the FDA to facilitate their refined testing protocol, which now incorporates PB burden thresholds in the inclusion data.

By a wide margin, ATNM appears to have secured the enviable position of being the clear leader in treating AML. Their direction is unique, and the science has amassed substantial credibility from industry peers. For investors, Actimab-A offers great opportunity to be rewarded by significant increases in share value. For investors, the next eighteen months are primed to deliver numerous milestone achievements.

Actinium Catalysts

The bottom line for most investors comes down to the near-term catalysts that a company has to offer, and there’s nothing wrong with that philosophy. And, for ATNM investors, the near term is positioned to generate significant milestones. Other than the Actimab-A trial, ATNM is well on their way to further success from its phase III SIERRA trial with Iomab-B.

Iomab-B, a second promising pipeline candidate, received Orphan Drug designation from the EMA in 2016. Investors can expect interim updates and analysis on this trial in 2017, as well as enrollment and DMC reports provided to the market when appropriate. Top-line data from the planned 150 patient trial is expected during the first half of 2018. Investors can further expect to follow an ambitious clinical plan, with four simultaneous clinical trials in progress, each offering significant potential for partnership, licensing, and strategic opportunity.

Yes, these clinical trials cost money, and the company’s cash balance of roughly $18 million at the end of March 2017 is projected to last through the first half of 2018. ATNM listed approximately 58 million shares outstanding as of March 2017. Along with the stable capital position, investors should also keep in mind that partnership opportunity exists for each of the trials currently underway, and additional value drivers can come from any of the twelve potential milestones expected during the next 18 months.

Drugs don’t get approved quickly in the United States, and clinical trials are often lengthy and frustrating for investors. But, keep in mind that while these frustrations exist, ATNM is ahead of any competitive threat in treating both AML and multiple myeloma. Indeed, that’s a strong reason to consider an investment into ATNM, seizing an opportunity to generate significant value in the next few months. ATNM management is the first to acknowledge that the clinical programs have taken longer than expected, but they are also quick to point out that the company has not lost a shred of competitive advantage over potential competing therapies. The programs advanced by ATNM are fresh, progressive, and innovative.

Is the sum of the parts greater than the whole in the case of the ATNM valuation? Many believe it is, and they are smart to follow in that belief. At a buck and change a share, the valuation borders on ridiculous, and appears to be more punitive in nature than it is a real indication of the current and near-term position of ATNM as it relates to clinical progress on multiple fronts.

At a market cap of $59 million, even a single partnership or licensing collaboration could double or triple the market cap in an instant. For investors, picking an investment timeline is crucial, and while investors may believe that the ATNM opportunity will take months to materialize, they may want to reconsider and act quickly. With both SGEN and PFE all but out of the race for a viable treatment, the opportunity to buy ATNM at current levels may finally and accordingly get corrected.

Disclaimer – I/We have no shares mentioned herein.

This post was originally featured on CNA Finance.

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