In todays AFR

JPMorgan shops $226m delta placement block for Telix notes deal

Fund managers were being offered $US150 million ($226 million) worth of shares in cancer treatment hopeful Telix Pharmaceuticals after Tuesday’s close, as JPMorgan got going on the delta placement leg of a $600 million convertible notes deal in lieu of an abandoned Nasdaq listing.

Terms sent to potential investors show Telix shares were being offered under a variable price book build at $18.60 a share to $19.60. That represented a 3.5 per cent to 8.4 per cent discount to the last close. The book was due to shut at 7:30pm.

The five-year convertible notes would be due around end of July 2029, and pay a coupon of 2 per cent to 2.75 per annum. The notes would convert at a 30 per cent to 35 per cent premium to the level at which Tuesday’s delta placement clears. The investors also have a put option at the end of the third year.

Telix told shareholders it would use the notes’ proceeds to push ahead with key clinical development programs. It would also provide the company with dry powder to chase strategically significant M&A transactions.

The convertible notes deal comes after Telix, on June 14, abandoned a Nasdaq listing – which would have seen it raise $US200 million – after investors demanded heavy discounts.

In January, Telix chief executive Christian Behrenbruch spoke at JPMorgan’s healthcare conference in San Francisco. Behrenbruch told investors it had fielded strong interest from healthcare and biotech funds, but had decided to walk away from the US listing after refusing to cave on pricing.

It is capitalised at $6.6 billion on the ASX, after gaining 101.49 per cent year-to-date.

DISC: Held in RL & SM

Summary:

Q1 2024 financial performance: The Company reports unaudited total revenue of US$114.9M1 (AU$175.0M) an increase of 18% on the prior quarter (US$97.1M2 or AU$148.1M).

Revenue was primarily generated from sales of Telix’s prostate cancer imaging product Illuccix®.

U.S. revenue grew by 18% to US$111.8M (US$95.1M in Q4 2023), compared to 11% growth between Q3 2023 and Q4 2023.

Dr Christian Behrenbruch, Managing Director and Group CEO of Telix, commented, “The continued, consistent growth of our precision diagnostics business is further evidence of an effective market growth strategy for our prostate cancer franchise.

The dual benefit of an early revenue stream, and the ability to fund our late-stage therapeutic programs ensures we are on track to achieve major milestones in 2024 including the progression of three drug approval submissions in the U.S. and the international expansion of our Phase III ProstACT GLOBAL therapy trial in prostate cancer, subject to requisite regulatory approvals.

“The recently closed acquisitions of ARTMS, Inc. (ARTMS) and IsoTherapeutics Group, LLC (IsoTherapeutics) enhance the vertical integration of our business and differentiate Telix as a leading independent radiopharmaceutical company worldwide by adding manufacturing capabilities and facilities, and isotope production technologies to the Telix Group of companies.” 

Full year 2024 outlook and guidance:

Telix reaffirms guidance provided on 22 February 2024 for full year revenue expected to be in the range of US$445M to $465M (AU$675M to $705M at current exchange rates), representing an approximate 35-40% increase versus 2023.

The Company also reaffirms guidance that research and development (R&D) investment is expected to increase by 40-50% for full year 2024 (compared with 2023) including external and internal costs funded by operating cash flow and broadly in line with revenue growth.

The news about Lantheus beating consensus guidance recently to become the leading provider of radiopharmaceuticals prompted me to write another straw on Telix and its closest competitor even though I wanted to avoid it and look at something else.

In summary, Telix has a lot of ground to cover despite doing lots of work laying down the foundations.

However, I recall Christian said in one earnings call their high priority market was the EU and so they are on the back foot in North America.

Going through their website and past slides, it appears that Lantheus has a slightly different pipeline to Telix with exception to PSMA imaging and therapy. These include neuro-endocrine tumours and imaging for cardiology (myocardial perfusion). Also they have a product called Definitiv which is an agent that enhances sensitivity of echocardiograms (so to speak).

There's no mention about Renal Cancer which Telix is also working on.

In addition, Lantheus is working on a imaging agent for Alzheimers disease called MK-6240. Could this be a compliment or a concern for Cogstate?

Pretty solid board and they communicate clearly throughout the call

Lantheus has lots of irons in the fire and a real "Jack of all trades" with proven revenue numbers.

Could explain the weakness in Telix and, to some extent, Cogstate in the last few days.

[Held Telix and Cogstate but not Lantheus (I wish!)]

Telix presentation with Grand Pharma

https://vimeo.com/819362124?embedded=true&source=vimeo_logo&owner=91637993

For those that are still struggling with the value proposition, fast forward to 6:30 where the CEO explains in simple terms how the technology works although obviously there is much more going under the bonnet.

I think alot of us struggle to understand what the products such as Illucix does and still conclude this is high risk, although money is now starting to flow through.

I'm starting to understand Telix better than when I first got here under $6 so was a leap of faith at the very start especially when you get first hand evidence of a family member being diagnosed with cancer.

But I have to admit this was a real test of conviction with the CEO selling before the entry into the ASX200 (I imagine the selling was because this was to satisfy the turnover requirement to enter the 200 and get other instos on board) which usually would be a orange flag for me and prompt me to sell, the capital raise being cancelled and the EU application having to be resubmitted.

[held]

@edgescape it looks like a risky but potentially high reward tradeoff for Telix. From what I understand from the press release olaratumab does not work as a therapeutic/treatment agent in the trials it has been used so far. However it has high specificity for targeting certain types of cancers (they think). Telix is planning to use this specificity to diagnose soft tissue sarcomas and provide more targeted radiation as they apparently are more radiation sensitive. There may be the possibiltity of combining it as a part diagnostic and part therapeutic drug, but I imagine this is what the 'further development' part means.

My takeaway is this is very early stage pre-clinical theoretical research. I imagine they had to pay out a lot of money as if they succeed they will likely be able to charge a very large amount for their repurposed olaratumab. Rare cancer treatment is often hundreds of times more expensive than 'standard' therapy. So either they are very confident or over-confident, not sure which!

Full disclosure I own shares IRL but see it as a very risky investment and am hanging in for the long haul.

FDA Extends New Drug Application Review Period for Illuccix

Melbourne (Australia) and Indianapolis, IN (U.S.A.) – 23 September 2021.

Telix Pharmaceuticals Limited (ASX: TLX, Telix, the Company) today announces that the U.S. Food and Drug Administration (‘FDA’, the ‘Agency’) has extended the review period for the Company’s New Drug Application (NDA) for its prostate cancer imaging investigational product Illuccix® (TLX591-CDx, kit for the preparation of 68Ga-PSMA-11 injection) by three months.

The revised target Prescription Drug User Fee Act (PDUFA) goal date of 23 December 2021 will allow the FDA to review and consider further manufacturing-related information submitted by the Company and conclude the label review. This is a standard review extension period.

Telix attended a late-cycle review meeting with the FDA on the 17 June 2021. During the meeting, the FDA indicated that there were no outstanding substantive manufacturing or clinical review issues with Telix’s submission. 1 However, the Company’s Pre-Authorisation Inspection (PAI) fell subsequent to the late-cycle review meeting and raised a well-defined set of manufacturing-related observations. The Company has fully responded to those observations and the FDA is currently reviewing.

Telix CEO Dr Christian Behrenbruch stated, “The timing of our PAI relative to the late-cycle review meeting meant that additional review time was needed to address manufacturing-related observations. This has pressured the FDA’s initial PDUFA review timeline and hence the Company has incurred this time extension. The final part of the NDA process is the label review, which we consider to be a straightforward matter, given the precedent of PSMA-PET imaging agents in the market and the clear adoption of PSMA PET in clinical practice guidelines. The FDA has not requested additional safety or clinical data. We look forward to being in a position to bring to patients in the US access to this flexible, highly specific and sensitive imaging tool for the detection of prostate cancer.”

DISC: Held in SM & RL