Dr Boreham’s Crucible: Telix Pharmaceuticals

Small Caps | Aug 22 2022

Telix Pharmaceuticals' prostate cancer imaging product Illucix is quickly conquering the USA, but management at the firm has (much) higher ambitions.

ASX Code: ((TLX))

Market cap: $2.02bn

Shares on issue: 312,916,341

Chief executive officer: Dr Christian Behrenbruch

Board: Kevin McCann (chair), Dr Behrenbruch, Dr Andreas Kluge (co-founder), Dr Mark Nelson, Oliver Buck, Jann Skinner, Tiffany Olson

Financials (six months to June 30, 2022): revenue $24.05m (up $21.1m), loss -$70.6m (up 111%), cash of $122.6m

Major shareholders: Gnosis Verwaltungsgesellschaft (Dr Kluge) 7.39%, Elk River Holdings (Dr Behrenbruch) 7.2%, Grand Decade (China Grand Pharmaceuticals)* 3.49%

* Last week China Grand disposed of 10m shares, or 47.7% of its holding

By Tim Boreham

To those unfamiliar with nuclear medicine - and we would hazard a guess that’s 99.9999% of the population (recurring) - one isotope sounds pretty much like the other.

Cancer radiotherapy dates back more than a century and English radiotherapist Frederick Soddy ‘discovered’ isotopes - radioactive versions of an element - in 1913.

So, to layfolk it seems puzzling that Telix Pharmaceuticals has made such a splash entering the US market with a new isotope for prostate imaging, called Illuccix.

In its early days since approval, Illuccix is selling its pants off, even though there’s one established competitor in the market and another in the offing.

Improved efficacy aside, Telix chief and co-founder Dr Chris Behrenbruch says it’s all about more convenient access to the invisible, short-lived rays.

While rival isotopes are produced in costly cyclotrons, Telix’s can be generated at any of the 150 or so ‘nuclear pharmacies’ scattered across the US (including in hospitals and cancer centres).

“You make it when you need it,” Dr Behrenbruch says.

“[Fast food outlet] Subway is successful because it’s on every street corner. We’re on every corner, which is really important when you are talking about a product with a couple of hours street life.”

In any event, Illuccix has captured a foot-long market share, having only been launched in the US in early May.

Telix is now eyeing broader geographies, as well as its follow-up isotope to detect renal cancer.

Beyond that, Telix is developing therapeutic - as opposed to diagnostic - products and is confident of having a glioblastoma treatment to market in about three years’ time.

History

Telix is developing both imaging (diagnostic) and cancer therapies on its molecularly targeted radiation (MTR) platform.

A relatively new discipline, molecularly targeted radiation allows radioactive isotopes to be delivered to biological targets expressed by the cancers. As a result, healthy cells are not irradiated in the process.

Telix was founded in November 2015 by Dr Behrenbruch and Dr Andreas Kluge.

Telix listed in November 2017 after raising $50m at 65 cents apiece. Dr Kluge founded the Dresden-based radio-pharmaceutical outfit Therapeia, acquired by Telix for a nominal cash sum and the assumption of about $1m of debt.

Dr Behrenbruch was also the executive director of Factor Therapeutics, which is now known as Dominion Minerals and fossicks for lime and lithium in the US.

‘Nuff said.

He was also on the board of Amplia Therapeutics.

Chief business officer Dr David Cade joined Telix in October 2019, having been chief medical officer at Cochlear. Before that, he held senior roles at targeted radiation house Sirtex Medical.

Based in Melbourne, Dr Behrenbruch has been running the US operations for several months, but hopes to revert to his normal duties after the company recently appointed a “cracking” new Americas head, Kevin Richardson.

Making it big in the USA …

Telix’s breakthrough moment came in mid-December last year when the US Food and Drug Administration (FDA) approved Illuccix for prostate cancer imaging.

Australia’s Therapeutic Goods Administration (TGA) approved the product in early November, so we would like to think the FDA bigwigs took their cue from their antipodean colleagues.

Technically, Illuccix is a kit for preparing gallium-68 gozetotide - more commonly known as a PSMA-11 injection - for positron emission tomography (PET) scans.


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