Overview

We are a clinical stage biopharmaceutical company focused on the discovery,development and commercialization of drugs for the treatment of cancer. We aredeveloping proprietary drugs independently and through research and developmentcollaborations. Our core objective is to leverage our proprietary phospholipiddrug conjugate (PDC) delivery platform to develop PDCs that are designed tospecifically target cancer cells and deliver improved efficacy and better safetyas a result of fewer off-target effects. Our PDC platform possesses thepotential for the discovery and development of the next generation ofcancer-targeting treatments, and we plan to develop PDCs both independently andthrough research and development collaborations. The COVID-19 pandemic hascreated uncertainties in the expected timelines for clinical stagebiopharmaceutical companies such as us, and because of such uncertainties, it isdifficult for us to accurately predict expected outcomes at this time. We havenot yet experienced any significant impacts as a result of the pandemic and havecontinued to enroll patients in our clinical trials. However, COVID-19 mayimpact our future ability to recruit patients for clinical trials, obtainadequate supply of CLR 131 and obtain additional financing.

Our lead PDC therapeutic, CLR 131 is a small-molecule PDC designed to providetargeted delivery of iodine-131 directly to cancer cells, while limitingexposure to healthy cells. We believe this profile differentiates CLR 131 frommany traditional on-market treatment options. CLR 131 is the company's leadproduct candidate and is currently being evaluated in a Phase 2 study inrelapsed/refractory (r/r) B-cell malignancies, including multiple myeloma (MM),chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL),lymphoplasmacytic lymphoma/Waldenstrom's macroglobulinemia (LPL/WM), marginalzone lymphoma (MZL), mantle cell lymphoma (MCL), and diffuse large B-celllymphoma (DLBCL).CLR 131 is also being evaluated in a Phase 1 dose escalationstudy in pediatric solid tumors and lymphoma. The U.S. Food and DrugAdministration ("FDA") granted CLR 131 Fast Track Designation for both r/r MMand r/r DLBCL and Orphan Drug Designation (ODD) of MM, LPL/WM, neuroblastoma,rhabdomyosarcoma, Ewing's sarcoma and osteosarcoma. CLR 131 was also grantedRare Pediatric Disease Designation (RPDD) for the treatment of neuroblastoma,rhabdomyosarcoma, Ewing's sarcoma and osteosarcoma. Most recently, the EuropeanCommission granted an ODD for r/r MM.

Our product pipeline also includes one preclinical PDC chemotherapeutic program(CLR 1900) and several partnered PDC assets. The CLR 1900 Series is beingtargeted for solid tumors with a payload that inhibits mitosis (cell division) avalidated pathway for treating cancers.

We have leveraged our PDC platform to establish four collaborations featuringfive unique payloads and mechanisms of action. Through research and developmentcollaborations, our strategy is to generate near-term capital, supplementinternal resources, gain access to novel molecules or payloads, accelerateproduct candidate development and broaden our proprietary and partnered productpipelines.

Our PDC platform provides selective delivery of a diverse range of oncologicpayloads to cancerous cells, whether a hematologic cancer or solid tumor, aprimary tumor, or a metastatic tumor and cancer stem cells. The PDC platform'smechanism of entry does not rely upon specific cell surface epitopes or antigensas are required by other targeted delivery platforms. Our PDC platform takesadvantage of a metabolic pathway utilized by all tumor cell types in all stagesof the tumor cycle. Tumor cells modify specific regions on the cell surface as aresult of the utilization of this metabolic pathway. Our PDCs bind to theseregions and directly enter the intracellular compartment. This mechanism allowsthe PDC molecules to accumulate over time, which enhances drug efficacy, and toavoid the specialized highly acidic cellular compartment known as lysosomes,which allows a PDC to deliver molecules that previously could not be delivered.Additionally, molecules targeting specific cell surface epitopes face challengesin completely eliminating a tumor because the targeted antigens are limited inthe total number on the cell surface, have longer cycling time frominternalization to being present on the cell surface again and available forbinding and are not present on all of the tumor cells in any cancer. This meansa subpopulation of tumor cells always exist that cannot be targeted by therapiestargeting specific surface epitopes. In addition to the benefits provided by themechanism of entry, PDCs offer the ability to conjugate payload molecules innumerous ways, thereby increasing the types of molecules selectively deliveredvia the PDC.

The PDC platform features include the capacity to link with almost any molecule,provide a significant increase in targeted oncologic payload delivery and theability to target all types of tumor cells. As a result, we believe that we cangenerate PDCs to treat a broad range of cancers with the potential to improvethe therapeutic index of oncologic drug payloads, enhance or maintain efficacywhile also reducing adverse events by minimizing drug delivery to healthy cells,and increasing delivery to cancerous cells and cancer stem cells.

We employ a drug discovery and development approach that allows us toefficiently design, research and advance drug candidates. Our iterative processallows us to rapidly and systematically produce multiple generations ofincrementally improved targeted drug candidates.

In June 2020, the European Medicines Agency (EMA) granted us Small andMedium-Sized Enterprise status by the EMA's Micro, Small and Medium-sizedEnterprise office. SME status allows us to participate in significant financialincentives that include a 90% to 100% EMA fee reduction for scientific advice,clinical study protocol design, endpoints and statistical considerations,quality inspections of facilities and fee waivers for selective EMA pre andpost-authorization regulatory filings, including orphan drug and PRIMEdesignations. We are also eligible to obtain EMA certification of quality andmanufacturing data prior to review of clinical data. Other financial incentivesinclude EMA-provided translational services of all regulatory documents requiredfor market authorization, further reducing the financial burden of the marketauthorization process.

A description of our PDC product candidates follows:

Our lead PDC therapeutic, CLR 131 is a small-molecule, PDC designed to providetargeted delivery of iodine-131 directly to cancer cells, while limitingexposure to healthy cells. We believe this profile differentiates CLR 131 frommany traditional on-market treatments and treatments in development. CLR 131 iscurrently being evaluated in a Phase 2 study in r/r B-cell lymphomas, and twoPhase 1 dose-escalating clinical studies, one in r/r MM and one in r/r pediatricsolid tumors and lymphoma. The initial Investigational New Drug (IND)application was accepted by the FDA in March 2014 with multiple INDs submittedsince that time. Initiated in March 2017, the primary goal of the Phase 2 studyis to assess the compound's efficacy in a broad range of hematologic cancers.The Phase 1 study is designed to assess the compound's safety and tolerabilityin patients with r/r MM (to determine maximum tolerated dose) and was initiatedin April 2015. The FDA previously accepted our IND application for a Phase 1open-label, dose escalating study to evaluate the safety and tolerability of asingle intravenous administration of CLR 131 in up to 30 children andadolescents with cancers including neuroblastoma, sarcomas, lymphomas (includingHodgkin's lymphoma) and malignant brain tumors. This study was initiated duringthe first quarter of 2019. These cancer types were selected for clinical,regulatory and commercial rationales, including the radiosensitive nature andcontinued unmet medical need in the r/r setting, and the rare diseasedeterminations made by the FDA based upon the current definition within theOrphan Drug Act.

In December 2014, the FDA granted ODD for CLR 131 for the treatment of MM.Multiple myeloma is an incurable cancer of the plasma cells and is the secondmost common form of hematologic cancers. In 2018, the FDA granted ODD and RPDDfor CLR 131 for the treatment of neuroblastoma, rhabdomyosarcoma, Ewing'ssarcoma and osteosarcoma. The FDA may award priority review vouchers to sponsorsof rare pediatric disease products that meet its specified criteria. The keycriteria to receiving a priority review voucher is that the disease beingtreated is life-threatening and that it primarily effects individuals under theage of 18. Under this program, a sponsor who receives an approval for a drug orbiologic for a rare pediatric disease can receive a priority review voucher thatcan be redeemed to receive a priority review of a subsequent marketingapplication for a different product. Additionally, these priority reviewvouchers can be exchanged or sold to other companies for them to use thevoucher. In May 2019, the FDA granted Fast Track designation for CLR 131 for thetreatment of multiple myeloma in July 2019 for the treatment of DLBCL, inSeptember, CLR 131 received Orphan Drug Designation from the European Union forMultiple Myeloma, and in January 2020, the FDA granted Orphan Drug Designationfor CLR 131 in lymphoplasmacytic lymphoma (LPL).

Phase 2 Study in Patients with r/r select B-cell Malignancies

In February 2020, we announced positive data from our Phase 2 CLOVER-1 study inpatients with relapsed/refractory B-cell lymphomas. Relapsed/Refractory MM andnon-Hodgkin lymphoma (NHL) patients were treated with three different doses(<50mCi, ~50mCi and ~75mCi total body dose (TBD). The <50mCi total body dose wasa deliberately planned sub-therapeutic dose. CLR 131 achieved the primaryendpoint for the study. Patients with r/r MM who received the highest dose ofCLR 131 showed a 42.8% overall response rate (ORR). Those who received ~50mCiTBD had a 26.3% ORR with a combined rate of 34.5% ORR (n=33) while maintaining awell-tolerated safety profile. Patients in the studies were elderly with amedian age of 70, and heavily pre-treated, with a median of five prior lines oftreatment (range: 3 to 17), which included immunomodulatory drugs, proteasomeinhibitors and CD38 antibodies for the majority of patients. Additionally, amajority of the patients (53%) were quad refractory or greater and 44% of alltreated multiple myeloma patients were triple class refractory. 100% of allevaluable patients (n=43) achieved clinical benefit (primary outcome measure) asdefined by having stable disease or better. 85.7% of multiple myeloma patientsreceiving the higher total body dose levels of CLR 131 experienced tumorreduction. The 75mCi TBD demonstrated positive activity in both high-riskpatients and triple class refractory patients with a 50% and 33% ORR,respectively.

Patients with r/r NHL who received ~50mCi TBD and the ~75mCi TBD had a 42% and43% ORR, respectively and a combined rate of 42%. These patients were alsoheavily pre-treated, having a median of three prior lines of treatment (range, 1to 9) with the majority of patients being refractory to rituximab and/oribrutinib. The patients had a median age of 70 with a range of 51 to 86. Allpatients had bone marrow involvement with an average of 23%. In addition tothese findings, subtype assessments were completed in the r/r B-cell NHLpatients. Patients with DLBCL demonstrated a 30% ORR with one patient achievinga complete response (CR), which continues at nearly 24 months post-treatment.The ORR for CLL/SLL/MZL patients was 33%. Current data from our Phase 2 CLOVER-1clinical study show that four LPL/WM patients demonstrated 100% ORR with onepatient achieving a CR which continues at nearly 27 months post-treatment. Thismay represent an important improvement in the treatment of relapsed/refractoryLPL/WM as we believe no approved or late-stage development treatments forsecond- and third-line patients have reported a CR. LPL/WM is a rare, indolentand incurable form of NHL that is composed of a patient population in need ofnew and better treatment options.

The most frequently reported adverse events in r/r MM patients were cytopenias,which followed a predictable course and timeline. The frequency of adverseevents have not increased as doses were increased and the profile of cytopeniasremains consistent. Importantly, these cytopenias have had a predictable patternto initiation, nadir and recovery and are treatable. The most common grade ?3events at the highest dose (75mCi TBD) were hematologic toxicities includingthrombocytopenia (65%), neutropenia (41%), leukopenia (30%), anemia (24%) andlymphopenia (35%). No patients experienced cardiotoxicities, neurologicaltoxicities, infusion site reactions, peripheral neuropathy, allergic reactions,cytokine release syndrome, keratopathy, renal toxicities, or changes in liverenzymes. The safety and tolerability profile in patients with r/r NHL wassimilar to r/r MM patients except for fewer cytopenias of any grade. Based uponCLR 131 being well tolerated across all dose groups and the observed responserate, especially in difficult to treat patients such as high risk and tripleclass refractory or penta-refractory, and corroborating data showing thepotential to further improve upon current ORRs and durability of thoseresponses, the study has been expanded to test a two-cycle dosing optimizationregimen of CLR 131.

In July 2016, we were awarded a $2,000,000National Cancer Institute (NCI)Fast-Track Small Business Innovation Research grant to further advance theclinical development of CLR 131. The funds are supporting the Phase 2 studyinitiated in March 2017 to define the clinical benefits of CLR 131 in r/r MM andother niche hematologic malignancies with unmet clinical need. These nichehematologic malignancies include Chronic Lymphocytic Leukemia, Small LymphocyticLymphoma, Marginal Zone Lymphoma, Lymphoplasmacytic Lymphoma and DLBCL. Thestudy is being conducted in approximately 10 U.S. cancer centers in patientswith orphan-designated relapse or refractory hematologic cancers. The study'sprimary endpoint is clinical benefit response (CBR), with additional endpointsof ORR, progression free survival (PFS,) median Overall Survival (mOS) and othermarkers of efficacy following a single 25.0 mCi/m2 dose of CLR 131, with theoption for a second 25.0 mCi/m2dose approximately 75-180 days later. Based onthe performance results from Cohort 5 of our Phase 1 study in patients with r/rMM, reviewed below, we have modified the dosing regimen of this study to afractionated dose of 15.625 mCi/m2 administered on day 1 and day 8.

In May 2020, we announced that the FDA granted Fast Track Designation for CLR131 in LPL/WM in patients having received two prior treatment regimens or more.

Phase 1 Study in Patients with r/r Multiple Myeloma

In February 2020, we announced the successful completion of our Phase 1 doseescalation study. Data from the study demonstrated that CLR 131 was safe andtolerated at total body dose of approximately 90mCi in r/r MM. The Phase 1multicenter, open-label, dose-escalation study was designed to evaluate thesafety and tolerability of CLR 131 administered as a 30-minute I.V. infusion,either as a single bolus dose or as two fractionated doses. The r/r multiplemyeloma patients in this study received single cycle doses ranging fromapproximately 20mCi to 90mCi total body dose. To date, an independent DataMonitoring Committee determined that all doses have been safe and well-toleratedby patients.

CLR 131 in combination with dexamethasone is currently under investigation inadult patients with r/r MM. Patients must have been refractory to or relapsedfrom at least one proteasome inhibitor and at least one immunomodulatory agent.The clinical study is a standard three-plus-three dose escalation safety studyto determine the maximum tolerable dose. Multiple myeloma is an incurable cancerof the plasma cells and is the second most common form of hematologic cancers.Secondary objectives include the evaluation of therapeutic activity by assessingsurrogate efficacy markers, which include M protein, free light chain (FLC), PFSand OS. All patients have been heavily pretreated with an average of five priorlines of therapy. CLR 131 was deemed by an Independent Data Monitoring Committee(IDMC) to be safe and tolerable up to its planned maximum single, bolus dose of31.25 mCi/m2. The four single dose cohorts examined were: 12.5 mCi/m2(~25mCiTBD), 18.75 mCi/m2 (~37.5mCi TBD), 25 mCi/m2(~50mCi TBD), and 31.25mCi/m2(~62.5mCi TBD), all in combination with low dose dexamethasone (40 mgweekly). Of the five patients in the first cohort, four achieved stable diseaseand one patient progressed at Day 15 after administration and was taken off thestudy. Of the five patients admitted to the second cohort, all five achievedstable disease however one patient progressed at Day 41 after administration andwas taken off the study. Four patients were enrolled to the third cohort and allachieved stable disease. In September 2017, we announced results for cohort 4,showing that a single infusion up to 30-minutes of 31.25mCi/m2 of CLR 131 wassafe and tolerated by the three patients in the cohort. Additionally, all threepatients experienced CBR with one patient achieving a partial response (PR). Weuse the International Myeloma Working Group (IMWG) definitions of response,which involve monitoring the surrogate markers of efficacy, M protein and FLC.The IMWG defines a PR as a greater than or equal to 50% decrease in FLC levels(for patients in whom M protein is unmeasurable) or 50% or greater decrease in Mprotein. The patient experiencing a PR had an 82% reduction in FLC. This patientdid not produce M protein, had received seven prior lines of treatment includingradiation, stem cell transplantation and multiple triple combination treatmentsincluding one with daratumumab that was not tolerated. One patient experiencingstable disease attained a 44% reduction in M protein. In January 2019, weannounced that the pooled mOS data from the first four cohorts was 22.0 months.In late 2018, we modified this study to evaluate a fractionated dosing strategyto potentially increase efficacy and decrease adverse events.

Following the determination that all prior dosing cohorts were safe andtolerated, we initiated a cohort 7 utilizing a 40mCi/m2 fractionated doseadministered 20mCi/m2 (~40mCi TBD) on days 1 and day 8. Cohort 7 was the highestpre-planned dose cohort and subjects have completed the evaluation period. Finalstudy report and study close-out will be completed later this year.

In May 2019, we announced that the FDA granted Fast Track Designation for CLR131 in fourth line or later r/r MM. CLR 131 is our small-moleculeradiotherapeutic PDC designed to deliver cytotoxic radiation directly andselectively to cancer cells and cancer stem cells. It is currently beingevaluated in our ongoing CLOVER-1 Phase 2 clinical study in patients withrelapsed or refractory multiple myeloma and other select B-cell lymphomas.

Phase 1 Study in r/r Pediatric Patients with select Solid tumors, Lymphomas andMalignant Brain Tumors

In December 2017 the Division of Oncology at the FDA accepted our IND and studydesign for the Phase 1 study of CLR 131 in children and adolescents with selectrare and orphan designated cancers. This study was initiated during the firstquarter of 2019. In December 2017, we filed an IND application for r/r pediatricpatients with select solid tumors, lymphomas and malignant brain tumors. ThePhase 1 clinical study of CLR 131 is an open-label, sequential-group,dose-escalation study evaluating the safety and tolerability of intravenousadministration of CLR 131 in up to 30 children and adolescents with cancersincluding neuroblastoma, sarcomas, lymphomas (including Hodgkin's lymphoma) andmalignant brain tumors. Secondary objectives of the study are to identify therecommended Phase 2 dose of CLR 131 and to determine preliminary antitumoractivity (treatment response) of CLR 131 in children and adolescents. In 2018,the FDA granted OD and RPDD for CLR 131 for the treatment of neuroblastoma,rhabdomyosarcoma, Ewing's sarcoma and osteosarcoma. Should any of theseindications reach approval, the RPDD would enable us to receive a priorityreview voucher. Priority review vouchers can be used by the sponsor to receivepriority review for a future New Drug Application ("NDA") or Biologic LicenseApplication ("BLA") submission, which would reduce the FDA review time from 12months to six months. Currently, these vouchers can also be transferred or soldto another entity.

Phase 1 Study in r/r Head and Neck Cancer

In August 2016, the University of Wisconsin Carbone Cancer Center ("UWCCC") wasawarded a five-year Specialized Programs of Research Excellence ("SPORE") grantof $12,000,000 from the National Cancer Institute and the National Institute ofDental and Craniofacial Research to improve treatments and outcomes for head andneck cancer, HNC, patients. HNC is the sixth most common cancer across the worldwith approximately 56,000 new patients diagnosed every year in the U.S. As a keycomponent of this grant, the UWCCC researchers completed testing of CLR 131 invarious animal HNC models and initiated the first human clinical trial enrollingup to 30 patients combining CLR 131 and external beam radiation with recurrentHNC in Q4 2019. This clinical trial was suspended due to the COVID-19 pandemicbut has now been reopened for enrolment.

We believe our PDC platform has potential to provide targeted delivery of adiverse range of oncologic payloads, as exemplified by the product candidateslisted below, that may result in improvements upon current standard of care("SOC") for the treatment of a broad range of human cancers:

Research and development expense. Research and development expense consist ofcosts incurred in identifying, developing and testing, and manufacturing productcandidates, which primarily include salaries and related expenses for personnel,cost of manufacturing materials and contract manufacturing fees paid to contractmanufacturers and contract research organizations, fees paid to medicalinstitutions for clinical trials, and costs to secure intellectual property. TheCompany analyzes its research and development expenses based on four categoriesas follows: clinical project costs, preclinical project costs, manufacturing andrelated costs, and general research and development costs that are not allocatedto the functional project costs, including personnel costs, facility costs,related overhead costs and patent costs.

General and administrative expense. General and administrative expense consistsprimarily of salaries and other related costs for personnel in executive,finance and administrative functions. Other costs include insurance, costs forpublic company activities, investor relations, directors' fees and professionalfees for legal and accounting services.

Three Months Ended June 30, 2020 and 2019

Research and Development. Research and development expense for the three monthsended June 30, 2020 was approximately $2,465,000 compared to approximately$1,810,000 for the three months ended June 30, 2019.

The following table is an approximate comparison summary of research anddevelopment costs for the three months ended June 30, 2020 and June 30, 2019:

General research and development costs 1,018,000 384,000 634,000

The overall increase in research and development expense of $655,000, or 36%,was primarily a result of increased general research and development costsresulting from increased personnel related costs and in clinical project costs.Manufacturing and related costs decreased due to a decrease in materialsproduction processes and related costs. Pre-clinical study costs were relativelyconsistent.

General and administrative. General and administrative expense for the threemonths ended June 30, 2020 was approximately $1,157,000, compared toapproximately $1,391,000 in the three months ended June 30, 2019. The decreaseof approximately $234,000, or 17%, was primarily a result of lower stock-basedcompensation expense.

Six Months Ended June 30, 2020 and 2019

Research and Development. Research and development expense for the six monthsended June 30, 2020 was approximately $5,082,000 compared to approximately$4,118,000 for the six months ended June 30, 2019.

The following table is a comparison summary of research and development costsfor the six months ended June 30, 2020 and June 30, 2019:

General research and development costs 1,779,000 914,000 865,000

The overall increase in research and development expense of approximately$964,000, or 23%, was primarily a result of increased general research anddevelopment costs resulting from increased personnel related costs and inclinical project costs. Manufacturing and related costs decreased due to adecrease in materials production processes and related costs. Pre-clinical studycosts were relatively consistent.

General and Administrative. General and administrative expense for the sixmonths ended June 30, 2020 was approximately $2,499,000, compared toapproximately $2,712,000 in the six months ended June 30, 2019. The decrease ofapproximately $213,000, or 8%, was primarily a result of lower stock-basedcompensation expense.

Liquidity and Capital Resources

As of June 30, 2020, we had cash and cash equivalents of approximately$22,450,000 compared to $10,615,000 as of December 31, 2019. This increase wasdue primarily to the approximately $18,300,000 of net proceeds received inconnection with the June 5, 2020 public offering. Net cash used in operatingactivities during the six months ended June 30, 2020 was approximately$6,562,000.

Our cash requirements have historically been for our research and developmentactivities, finance and administrative costs, capital expenditures and overallworking capital. We have experienced negative operating cash flows sinceinception and have funded our operations primarily from sales of common stockand other securities. As of June 30, 2020, we had an accumulated deficit ofapproximately $119,251,000.

We believe that the cash balance is adequate to fund our basic budgetedoperations for at least 12 months from the filing of these financial statements.However, our future results of operations involve significant risks anduncertainties. Our ability to execute our operating plan beyond that timedepends on our ability to obtain additional funding via the sale of equityand/or debt securities, a strategic transaction or otherwise. We plan toactively pursue all available financing alternatives; however, there can be noassurance that we will obtain the necessary funding. Other than theuncertainties regarding our ability to obtain additional funding, there arecurrently no known trends, demands, commitments, events or uncertainties thatare likely to materially affect our liquidity. Because we have had recurringlosses and negative cash flows from operating activities, and in light of ourexpected expenditures, the report of our independent auditors with respect tothe financial statements as of December 31, 2019 and for the year ended December31, 2019 contains an explanatory paragraph as to the potential inability tocontinue as a going concern. This opinion indicated at that time, thatsubstantial doubt existed regarding our ability to remain in business.

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