Cellectar Biosciences(CLRB) - 2022 Q2 - Quarterly Report

Forward-Looking Statements This section outlines the inherent uncertainties and risks associated with the company's forward-looking business projections and financial estimates - The report contains forward-looking statements regarding business strategy, R&D activities, COVID-19 impacts, product development, operating results, funding, and market conditions[6] - Readers are cautioned that actual results may differ materially from expectations due to inherent estimates, assumptions, and uncertainties, and the company undertakes no obligation to update these statements[8][9] PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents Cellectar Biosciences, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with accompanying notes. The financial data reflects a decrease in cash and stockholders' equity, and continued net losses, raising concerns about the company's going concern ability Condensed Consolidated Balance Sheets | Metric | June 30, 2022 | Dec 31, 2021 | Change (Absolute) | Change (%) | | :--------------------------- | :------------ | :----------- | :---------------- | :--------- | | Cash and cash equivalents | $24,805,565 | $35,703,975 | $(10,898,410) | -30.52% | | Total current assets | $25,285,233 | $36,571,460 | $(11,286,227) | -30.86% | | Total assets | $25,892,396 | $37,201,809 | $(11,309,413) | -30.40% | | Total current liabilities | $5,606,110 | $3,990,363 | $1,615,747 | 40.49% | | Total liabilities | $5,698,324 | $4,156,655 | $1,541,669 | 37.09% | | Total stockholders' equity | $20,194,072 | $33,045,154 | $(12,851,082) | -38.89% | | Accumulated deficit | $(164,472,629)| $(150,897,789)| $(13,574,840) | 9.00% | Condensed Consolidated Statements of Operations | Metric (Unaudited) | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $4,498,657 | $4,627,636 | $8,385,656 | $9,260,830 | | General and administrative | $2,936,867 | $1,401,053 | $5,190,095 | $3,127,391 | | Total costs and expenses | $7,435,524 | $6,028,689 | $13,575,751 | $12,388,221 | | Loss from operations | $(7,435,524) | $(6,028,689) | $(13,575,751) | $(12,388,221) | | Net loss | $(7,435,043) | $(6,028,030) | $(13,574,840) | $(12,385,200) | | Basic and diluted net loss per common share | $(1.22) | $(1.14) | $(2.22) | $(2.45) | Consolidated Statements of Stockholders' Equity | Metric | Dec 31, 2021 | Mar 31, 2022 | June 30, 2022 | | :--------------------------- | :------------- | :------------- | :------------- | | Preferred Stock Amount | $1,382,023 | $1,382,023 | $1,382,023 | | Common Stock Par Amount | $61 | $61 | $61 | | Additional Paid-In Capital | $182,560,859 | $182,864,664 | $183,284,617 | | Accumulated Deficit | $(150,897,789) | $(157,037,586) | $(164,472,629) | | Total Stockholders' Equity | $33,045,154 | $27,209,162 | $20,194,072 | - Stock-based compensation contributed $303,805 and $419,953 to additional paid-in capital for the three months ended March 31, 2022, and June 30, 2022, respectively[22] Condensed Consolidated Statements of Cash Flows | Metric (Six Months Ended June 30) | 2022 | 2021 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------- | :------------- | :---------------- | :--------- | | Net loss | $(13,574,840) | $(12,385,200) | $(1,189,640) | 9.61% | | Cash used in operating activities | $(10,797,361) | $(11,628,761) | $831,400 | -7.15% | | Cash used in investing activities | $(101,049) | $(7,559) | $(93,490) | 1236.89% | | Cash provided by financing activities | $0 | $1,248,798 | $(1,248,798) | -100.00% | | Net decrease in cash | $(10,898,410) | $(10,387,522) | $(510,888) | 4.92% | | Cash at end of period | $24,805,565 | $46,777,855 | $(21,972,290) | -47.00% | - Cash used in operating activities decreased by $831,400, or 7.15%, primarily due to changes in accounts payable and accrued liabilities[26] - Purchases of fixed assets increased significantly from $7,559 in 2021 to $101,049 in 2022[26] Notes to Condensed Consolidated Financial Statements 1. Nature of Business and Organization - Cellectar Biosciences, Inc. is a late-stage clinical biopharmaceutical company focused on cancer drug discovery and development using its proprietary phospholipid drug conjugate (PDC™) delivery platform[29] - As of June 30, 2022, the company had an accumulated deficit of approximately $164.5 million and a net loss of approximately $13.6 million for the six months ended June 30, 2022[30] - The company's cash balance is expected to fund operations into Q3 2023, but additional funding is required, raising substantial doubt about its ability to continue as a going concern[30] 2. Fair Value - Financial instruments are grouped into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs) based on market observability[43][44][46] - The carrying value of cash, cash equivalents, and other current financial assets and liabilities approximates their fair value due to their short-term nature[47] 3. Stockholders' Equity - A 1-for-10 reverse stock split was approved by stockholders on June 24, 2022, and became effective on July 21, 2022, to satisfy Nasdaq listing requirements[48] - In February 2021, the authorized common stock was increased from 80,000,000 shares to 160,000,000 shares[49] - A December 2020 public offering and private placement generated approximately $41.4 million in net proceeds, involving the sale of common stock and Series D convertible preferred stock[52][53][56] 4. Stock-Based Compensation - Stockholders approved an increase of 500,000 shares available for issuance under the 2021 Stock Incentive Plan[59] | Stock-Based Compensation (Employee & Director) | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | | :--------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $44,499 | $41,400 | $86,427 | $70,795 | | General and administrative | $375,454 | $159,217 | $637,331 | $254,386 | | Total stock-based compensation | $419,953 | $200,617 | $723,758 | $325,181 | - As of June 30, 2022, there was approximately $1.34 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements[71] 5. Income Taxes - No income tax provision or benefit was recorded for the six months ended June 30, 2022, or 2021, due to continuous tax losses since inception[72] - A full valuation allowance has been provided against the company's gross deferred tax assets due to limited operating history and uncertainty of NOL utilization[72] 6. Net Loss Per Share - Potentially dilutive securities, including warrants, preferred shares, and stock options, were excluded from diluted net loss per share calculations because their inclusion would be antidilutive due to the net loss[76][77] | Potentially Dilutive Securities (Six Months Ended June 30) | 2022 | 2021 | | :------------------------------------------------------- | :-------- | :-------- | | Warrants | 1,563,381 | 1,607,961 | | Preferred shares as convertible into common stock | 111,111 | 694,444 | | Stock options | 657,317 | 470,178 | | Total potentially dilutive shares | 2,331,809 | 2,772,583 | 7. Commitments and Contingencies - The company's corporate headquarters lease in Florham Park, NJ, commenced in October 2018 and terminates in February 2024, with an option for a 60-month extension[77] - As of June 30, 2022, the HQ Lease's net Right-of-Use (ROU) asset was approximately $161,000, and the lease liability was approximately $236,000[84] | Undiscounted Lease Payments (as of June 30, 2022) | Amount | | :------------------------------------------------ | :--------- | | Remainder of 2022 | $79,000 | | 2023 | $161,000 | | 2024 | $14,000 | | Total undiscounted lease payments | $254,000 | | Less: Imputed interest | $(18,000) | | Present value of lease liabilities | $236,000 | - The company is involved in a lawsuit against former director Dr. Jamey Weichert and former employee Dr. Anatoly Pinchuk, alleging breach of contractual and fiduciary duties by diverting intellectual property[157] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of Cellectar Biosciences' business, its clinical and preclinical pipeline, and a detailed analysis of its financial condition and results of operations. The company is a late-stage biopharmaceutical firm focused on cancer treatments, facing clinical trial delays due to COVID-19 and ongoing liquidity challenges requiring additional funding Overview - Cellectar is a late-stage clinical biopharmaceutical company focused on cancer drug development using its proprietary Phospholipid Drug Conjugate (PDC™) delivery platform[90] - The CLOVER-WaM pivotal clinical study has experienced material delays in patient recruitment and enrollment due to COVID-19 related issues at study sites[91] - Iopofosine has received Fast Track Designation for LPL/WM, MM, and DLBCL, and Orphan Drug Designations for LPL/WM, MM, neuroblastoma, and sarcomas[92][104] - The PDC platform is designed for selective delivery of oncologic payloads to cancer cells, leveraging a metabolic pathway utilized by all tumor cell types, aiming to improve efficacy and safety[95][96] Clinical Pipeline CLOVER-WaM: Phase 2 Study Pivotal Study in: Patients with r/r Waldenstrom's Macroglobulinemia - The CLOVER-WaM study is a single-arm, pivotal Phase 2 study enrolling 50 r/r WM patients who have failed BTKi therapy[106][108] - The primary endpoint is major response rate (MRR), defined as a partial response (≥50% IgM reduction) or better, in patients receiving a minimum total body dose (TBD) of 60 mCi[108] - An independent data monitoring committee (DMC) unanimously recommended continuation of the trial after an interim safety and futility evaluation of the first 10 patients in April 2022[108] CLOVER-1: Phase 2 Study in Select B-Cell Malignancies - The CLOVER-1 study arms for CLL/SLL, LPL/WM, MZL, MCL, and DLBCL are closed, with further evaluation in r/r MM patients ongoing in the Phase 2b study[109][102] - The study received a $2 million NCI Fast-Track Small Business Innovation Research grant to advance clinical development in r/r MM and other niche hematologic malignancies[110] - Adverse events in CLOVER-1 included fatigue (39%) and cytopenias (thrombocytopenia 75%, anemia 61%, neutropenia 54%, leukopenia 51%, lymphopenia 25%)[111] Phase 2a Study: Patients with r/r Waldenstrom's Macroglobulinemia Cohort - The r/r WM cohort of the Phase 2a CLOVER-1 study showed a 100% overall response rate (ORR) and 83.3% major response rate in 6 patients, with one complete response lasting nearly 27 months[112] - Median treatment-free survival (TFS) and duration of response (DOR) have not been reached, with an average treatment TFS/TFR of 330 days[112] Phase 2a Study: Patients with r/r Multiple Myeloma Cohort - A 40% overall response rate (ORR) was observed in triple-class refractory MM patients receiving 60 mCi or greater total body dose (TBD) of iopofosine[114] - Patients were heavily pre-treated, with an average of nine prior multi-drug regimens[114] - The most common treatment-emergent adverse events were cytopenias (thrombocytopenia, neutropenia, anemia)[114] Phase 2a: Patients with r/r non-Hodgkin's lymphoma Cohort - r/r NHL patients receiving <60mCi TBD and >60mCi TBD had ORRs of 42% and 43% respectively, with a combined rate of 42%[115] - Patients were heavily pre-treated (median of three prior lines) and refractory to rituximab and/or ibrutinib[115] - The most common grade ≥3 events at the highest dose (75mCi TBD) were hematologic toxicities including thrombocytopenia (65%), neutropenia (41%), leukopenia (30%), anemia (24%), and lymphopenia (35%)[117] Phase 1 Study in Patients with r/r Multiple Myeloma - The Phase 1 dose escalation study of iopofosine in r/r MM successfully completed, showing tolerability up to approximately 95mCi TBD[119][122] - Pooled median overall survival (mOS) data from the first four cohorts was 22.0 months[121] - In a subset of 5 quad/penta drug refractory patients, efficacy increased, demonstrating an ORR of 80% and CBR of 100%[124] CLOVER 2: Phase 1 Study in r/r Pediatric Patients with select Solid tumors, Lymphomas and Malignant Brain Tumors - The CLOVER 2 Phase 1 study is an open-label, dose-escalation study evaluating iopofosine in children and adolescents with r/r cancers[126] - Clinical data confirmed iopofosine crosses the blood-brain barrier and showed disease control in heavily pretreated ependymoma patients[127] - The company may be eligible for a Priority Review Voucher (PRV) if iopofosine is approved for neuroblastoma, rhabdomyosarcoma, Ewing's sarcoma, or osteosarcoma, with the program extended through September 2026[128] Phase 1 Study in r/r Head and Neck Cancer - A Phase 1 study combining iopofosine with external beam radiation treatment (EBRT) for recurrent head and neck cancer (HNC) patients is ongoing, with preliminary data suggesting safety and tolerability[129] - The reduction in EBRT amount or fractions has the potential to diminish associated adverse events[129] Preclinical Pipeline - CLR 1900 Series is an internally developed PDC program leveraging a novel small molecule cytotoxic compound targeting mitosis inhibition for solid tumors[131] - CLR 2000 Series is a collaboration with Avicenna Oncology to design PDCs using Avicenna's cytotoxic payload, demonstrating improved safety, efficacy, and tissue distribution in animal models[132] - CLR 12120 Series is an alpha emitting radio-conjugate program in collaboration with Orano Med, which successfully demonstrated significant tumor volume reduction in animal models[133] - Expanded collaborations with IntoCell Inc. and LegoChemBio aim to create next-generation PDC therapeutics using novel linker chemistry and drug conjugate linker-toxin platforms[134] Results of Operations Three Months Ended June 30, 2022 and 2021 Research and Development | R&D Expense Category (3 Months Ended June 30) | 2022 | 2021 | Variance | | :-------------------------------------------- | :------------ | :------------ | :------------ | | Clinical project costs | $2,454,000 | $3,620,000 | $(1,166,000) | | Manufacturing and related costs | $1,353,000 | $651,000 | $702,000 | | Preclinical project costs | $120,000 | $11,000 | $109,000 | | General research and development costs | $572,000 | $346,000 | $226,000 | | Total Research and Development | $4,499,000 | $4,628,000 | $(129,000) | - The overall decrease in R&D expense of approximately $129,000 (3%) was primarily due to reduced clinical project costs of $1,166,000, partially offset by increases in manufacturing, preclinical, and general R&D costs[141] General and administrative | G&A Expense (3 Months Ended June 30) | 2022 | 2021 | Variance | Change (%) | | :----------------------------------- | :----------- | :----------- | :----------- | :--------- | | General and administrative expense | $2,937,000 | $1,401,000 | $1,536,000 | 110% | - The increase in general and administrative expense was primarily driven by increased professional fees, personnel costs (including stock-based compensation), and travel[142] Six Months Ended June 30, 2022 and 2021 Research and Development | R&D Expense Category (6 Months Ended June 30) | 2022 | 2021 | Variance | | :-------------------------------------------- | :------------ | :------------ | :------------ | | Clinical project costs | $3,916,000 | $7,291,000 | $(3,375,000) | | Manufacturing and related costs | $2,268,000 | $1,157,000 | $1,111,000 | | Preclinical project costs | $180,000 | $19,000 | $161,000 | | General research and development costs | $2,022,000 | $794,000 | $1,228,000 | | Total Research and Development | $8,386,000 | $9,261,000 | $(875,000) | - The overall decrease in R&D expense of approximately $875,000 (9%) was primarily due to reduced clinical project costs of $3,375,000, partially offset by increases in manufacturing, preclinical, and general R&D costs[144] General and administrative | G&A Expense (6 Months Ended June 30) | 2022 | 2021 | Variance | Change (%) | | :----------------------------------- | :----------- | :----------- | :----------- | :--------- | | General and administrative expense | $5,190,000 | $3,127,000 | $2,828,000 | 66% | - The increase in general and administrative expense was primarily driven by increased professional fees and personnel costs, including stock-based compensation expense and travel[145] Liquidity and Capital Resources | Metric | June 30, 2022 | Dec 31, 2021 | Change (Absolute) | Change (%) | | :--------------------------- | :------------ | :----------- | :---------------- | :--------- | | Cash and cash equivalents | $24,806,000 | $35,704,000 | $(10,898,000) | -30.52% | - Net cash used in operating activities for the six months ended June 30, 2022, was approximately $10.8 million[147] - The company has an accumulated deficit of approximately $164.5 million as of June 30, 2022, and expects current cash to fund operations into Q3 2023, but requires additional funding, raising substantial doubt about its going concern ability[148][149] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Cellectar Biosciences, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide disclosures about market risk[150] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2022. No significant changes in internal control over financial reporting were identified during the quarter, though the company acknowledges inherent limitations in any control system - Management concluded that disclosure controls and procedures were effective as of June 30, 2022[151] - No significant changes in internal control over financial reporting were identified during the quarter ended June 30, 2022[152][153] - Any system of controls has inherent limitations, providing only reasonable assurance, and is subject to human error and fraud risk[154] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company filed a lawsuit against a former director and former employee, alleging breach of contractual and fiduciary duties by diverting intellectual property. The company is seeking monetary damages, injunctive relief, and attorneys' fees - Cellectar filed a lawsuit against former director Dr. Jamey Weichert and former employee Dr. Anatoly Pinchuk for allegedly diverting intellectual property[157] - The disputed intellectual property, while not directly affecting current clinical studies, may enhance future research, development, and commercialization[157] Item 1A. Risk Factors This section refers readers to the Risk Factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021, for a comprehensive understanding of factors that could materially adversely affect the business and equity securities - Readers are directed to the Risk Factors section in the 2021 Form 10-K for a detailed discussion of factors that could materially adversely affect the business and equity securities[158] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[159] Item 3. Default Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[160] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[161] Item 5. Other Information There is no other information to report for the period - No other information was reported[162] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including a Certificate of Amendment to the Certificate of Incorporation, certifications from the CEO and CFO, and interactive data files - Exhibits include a Certificate of Amendment to the Certificate of Incorporation (8-K filed July 21, 2022), CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and Interactive Data Files[165][166][167]