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Published to the market and investors on 16^th August 2018 @ 8.56am (London time).

Actinium Pharmaceuticals Inc (ATNM-US): Opening the door to transplant therapy
Recommendation: OUTPERFORM
Target Price: USD$ 4.00
Current Price: USD$c 0.62 (cob on 15th August 2018)

KEY TAKEAWAY

The positive outcome from the data monitoring committee reflects the good progress being made by Actinium's lead product Iomab-B in the SIERRA pivotal trial in relapsed / refractory acute myeloid leukaemia ("R / R AML"). On schedule to deliver top-line data in H2/2019E, Iomab-B looks set to open the door to potentially curative stem cell therapy in a large cohort of patients with otherwise limited effective treatment options. First phase II data from Actinium's Actimab programme should provide a further near-term catalyst in H2/2018E. We reiterate and maintain our OUTPERFORM recommendation and TP of $4.00 / share as detailed in our initiation report of April 2018.

Opening the door to a cure - One of a few potentially curative cancer therapies, human stem cell transplant currently requires harsh patient conditioning which can itself be deadly to the frail or the elderly. Actinium's Iomab-B radiotherapy promises effective conditioning, opening the door to more HSCT based 'cures'.

Strong proof-of-principle - The higher than expected failure rate in the control arm and increased cross-over into Iomab-B therapy apparent in the SIERRA trial perhaps reflects the inadequacy of the multiple regimens currently used to treat R / R AML, Iomab-B has been used in over 500 patients, shown to induce 100% remission and allow successful bone marrow graft in an elderly R / R AML population. We are optimistic for a positive readout for the trial during 2019E.

Growing interest from transplant community - The 16 centres currently involved in the SIERRA AML trail already account for over 35% of US human stem cell transplant volume. The company indicates that the trial is already generating interest from other major centres in the US and worldwide. With 50 centres accounting for around 80% of the US transplant volume, this is a concentrated market and we estimate a $600m opportunity.

Phase II readout for Actimab expected Q3 - While effective for a range of blood cancers, toxin-loaded CD33-targeted therapies are dogged by toxicity. With established proof-of-concept for safer CD33 therapy, phase II studies on Actinium's second Actimab positron radiopharmaceutical should read out in H2/2018E; providing a near term catalyst and potential basis for large pharma partnering.

Significant upside - The prospect of significant clinical news flow from Actimab in H2/2018E and pivotal readout on Iomab-B suggests significant upside from current levels. As detailed in our initiation report of April 2018, our valuation suggests that Actinium still remains fundamentally undervalued at current levels. Our analysis indicates a current fair value of $2.6 share rising to $5.0 / share on the back of positive phase 2 data in H2/2018E. We reiterate and maintain our OUTPERFORM recommendation and target price of $4.0 /share.

Kind regards,

Dr. Chris Redhead | Analyst
goetzpartners Healthcare Research Team | Research Team

goetzpartners securities Limited

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T +44 (0) 203 859 7725 | chris.redhead@goetzpartners.com / healthcareresearch@goetzpartners.com

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