Actinium Pharma's stock tanks after FDA says phase 3 trial of leukemia treatment not enough for BLA

By Ciara Linnane

New York-based biotech needs to conduct another trial to move radiotherapy program forward

The stock of biotech Actinium Pharmaceutics Inc. tumbled 68% Monday, after the Food and Drug Administration said a late-stage trial of the company's Iomab-B leukemia treatment is not enough to support a request for approval.

The news was expected to disappoint investors in the company (ATNM), which was rated a buy by all six analysts offering coverage on FactSet.

Iomab-B is a treatment for active relapsed or refractory acute myeloid leukemia. The phase 3 trial, called Sierra, met the primary endpoint of durable complete remission with statistical significance and met other secondary endpoints, including event-free survival and safety.

However, "the FDA has now determined that demonstrating an overall survival benefit in a randomized head-to-head trial is required for a BLA filing," said Actinium, referring to a biologics license application.

The New York-based company said it would meet with the FDA to discuss the specifics of an additional trial. It will also seek a strategic U.S. partner for Iomab-B and focus its development efforts on its other radiotherapy programs Actimab-A and Iomab-ACT, as well as on preclinical programs.

The Sierra trial involved 153 patients and some 60% of patients were allowed to cross over from the control arm. The new trial will not allow such crossover as it "confounded the overall survival analysis in the intent to treat, or ITT, patient population," the company said.

"The 12 oral presentations of the Sierra results at prestigious bone-marrow transplant, hematology and nuclear-medicine medical conferences in the U.S. and E.U. are an attestation of the strong interest from the transplant community for better conditioning regimens due to the high unmet need," Dr. Avinash Desai, Actinium's chief medical officer, said in prepared remarks.

Maxim Equity Research said the company's shares were looking oversold as they were being swept up in the broader market rout driven by fears that the U.S. is in a recession. Maxim maintained its buy rating on the stock, citing the company's radiopharma-focused pipeline.

But analysts Jason McCarthy and Michael Okunewitch lowered their stock price target to $5 from $30.

The stock is trading "well below cash value; we estimate the company has $80 million in cash," they wrote in a note to clients.

The analysts were surprised by the news and believe the trial should have been enough to file.

"There are multiple paths forward for this company, which as a reminder, has never actually had a failed a trial," said the analysts. "We have pushed out timelines for Iomab to 2028, from 2025, and increased the risk adjustment to 70%, from 30%."

Actinium's stock has wiped out its year-to-date gains and is down 68% for the period, while the SPDR S&P Biotech ETF XBI is up 3% and the S&P 500 SPX has gained 9%.

-Ciara Linnane

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08-05-24 1354ET

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