Cellectar Biosciences

Kurta Law is investigating investor losses on shares of Cellectar Biosciences (CLRB) stock. Brokerage firms should have informed investors about the significant risks disclosed in Cellectar Biosciences’ prospectus before recommending the stock.

Regulation Best Interest requires brokers to only recommend investments that are suitable for their clients’ risk profiles. If you lost money as a result of an unsuitable investment recommendation, you may be able to recover your losses through FINRA arbitration. Contact a securities attorney with your concerns at (877) 600-0098 or by emailing info@kurtalawfirm.com.

What is Cellectar Biosciences?

According to the prospectus, Cellectar Biosciences (CLRB for common stock, CLRBW for warrants) develops a proprietary technology, the phospholipid ether (PLE) delivery platform, designed to image and treat cancer. The platform delivers agents (product candidates) directly to cancer cells by exploiting the fact that cancer cells have more lipid rafts in their membranes than non-cancer cells.

According to its prospectus, the company’s product candidates consist of the following:

• I-124-CLR1404, a positron emission tomography (PET) imaging agent designed to selectively detect cancerous tumors and metastases.
• I-131-CLR1404, a molecular radiotherapeutic that targets and kills cancer cells with radiation.
• CLR1502, a preclinical “non-radioactive optical imaging agent” for imaging tumors.

Cellectar Biosciences was previously Novelos Therapeutics, Inc., and was acquired by Cellectar, Inc. on April 8, 2011.

What are the Risks Associated with Cellectar Biosciences?

As a development-stage biotechnology company, Cellectar Biosciences is a high-risk investment. Its prospectus states that the company has “incurred net losses and negative cash flows since inception,” has “no product revenues,” and “[does] not expect to have any products on the market for several years.”

Further, the independent registered public accounting firm that audited the company’s 2013 financial statements expressed “substantial doubt about [its] ability to continue as a going concern.”

Outcome of Clinical Trials

Clinical trials are time-consuming and expensive and may yield unpredictable results. For example, the prospectus notes that “unexpected side effects or other safety risks” could compromise Cellectar Biosciences’ ability to receive approval for its product candidates.

Since the company’s “success depends solely on the successful commercialization of some or all” of its product candidates, setbacks in clinical trials could seriously impact the company’s prospects.

Even if these products receive regulatory approval, the company may still struggle to manufacture, market, and distribute them or to achieve market acceptance.

Reliance on Orphan Drug Designation

Orphan drug designation provides marketing exclusivity and other benefits intended to support the development of drugs that treat rare diseases. One of these benefits is up to seven years of marketing exclusivity, which prevents competition from other companies.

Cellectar Biosciences states that it “expect[s] to rely heavily on orphan drug status” as an advantage in commercializing its products, but that the benefits of this status are not guaranteed. Further, competitors’ products may also receive orphan drug designation and be approved for marketing exclusivity instead.

Uncertain Stock Price

The prospectus states that the company’s stock price has fluctuated in the past and that it can be “significantly affected” by influences such as the following:

• Regulatory developments in the healthcare industry
• Biopharmaceutical market conditions and the impact of new industry announcements and press releases
• The company’s ability to maintain a listing on the Nasdaq Capital Market or other national securities exchanges

Investors could experience substantial losses as a result of future price fluctuations.

Potential Delisting from Nasdaq

As stated in the prospectus, Cellectar Biosciences has been a penny stock in the past. Penny stocks trade for less than $5.00 per share and tend to be volatile, requiring brokers to supply investors with certain disclosures about their risks.

The prospectus states that its stock may return to penny stock status if its price falls below $5.00 per share or it gets delisted from Nasdaq.

Nasdaq requires listed stocks to trade for at least $1.00 per share or face delisting. In 2014, Cellectar Biosciences effected a 1-for-20 reverse stock split in order to raise their share price to meet this requirement.

However, the prospectus states that “there can be no assurance” that the company will be able to maintain compliance with Nasdaq listing standards. In fact, the company effected another reverse stock split in 2022, following a 2021 compliance extension from Nasdaq.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm. 

What Can I Do If I Suffered Losses?

If you lost money on your shares of Cellectar Biosciences, our experienced securities attorneys may be able to help. Our attorneys have a proven track record when it comes to achieving fair settlements in cases of unsuitable investment recommendations. Call (877) 600-0098 or email info@kurtalawfirm.com.