Telix Pharmaceuticals’ Pipeline Full Of Promise

Small Caps | Mar 21 2023

Following FY22 results for Telix Pharmaceuticals brokers remain Buy-rated in light of an extensive pipeline of new products under development.

-Brokers retain bullish commentary on Telix Pharmaceuticals 
-Jarden expects positive operational cash flows from the end of 2023
-Revenue of $156m for Illuccix in the nine months since launch
-De-risked valuations by Wilsons and Jarden

By Mark Woodruff

Telix Pharmaceuticals ((TLX)) released "transformative" FY22 results following approval of the company’s “ground breaking” Illuccix drug in late-2021.

Bell Potter formed this view early this month and noted the company has numerous opportunities over the next decade in the area of radiopharmaceuticals, which are used in the imaging and personalised treatment for a range of cancers.

While radiopharmaceuticals are not new to oncology, the broker explains the field has expanded rapidly over the last ten years due to improved funding.

Illuccix is the first prostate cancer imaging agent of its kind designed for commercial application to use the radioisotope Gallium-68. The agent is used to image metastatic castrate resistant prostate cancer (mCRPC).

In the first nine months since the launch of Illuccix in April 2022, revenues have exceeded $156m.

Telix has received global regulatory approvals for Illuccix from the Australian Therapeutic Goods Administration (TGA), the US Food and Drug Administration (FDA) and Health Canada.

For FY22, the company reported a loss of -$104m, which was higher than Wilsons’ forecast of -$78m due to a higher tax expense and a lower-than-expected level for other income. The company closed out FY22 with $116m in cash and negligible debt.

For the first time since the Illuccix launch, noted Jarden, Telix achieved positive operational cash inflows of $1.6m in the fourth quarter of FY22 compared to an outflow of -$5.3m in the prior quarter. Whilst encouraging, the positive inflows are unsustainable until the end of 2023, suggests this broker, as Telix ramps up its current R&D spend.

The promise of Illuccic revenues underpinned the $175m capital raise back in January 2022, which accelerated product development and helped fund the launch of Illuccix in the US, where it is partnered with radiopharmaceutical giant Cardinal Health and PharmaLogic.

Due to new information on growth rates and share stability for the prostate-specific membrane antigen (PSMA) market, Wilsons recently increased its FY23 and FY24 Illuccix sales forecasts to US$350m and US$395m, respectively.

Apart from Illuccix, Telix has an extensive pipeline of new products in development aiming to address significant unmet medical need in renal (kidney), brain (glioblastoma) and hematologic cancers (bone marrow conditioning), as well as a range of immunologic and rare diseases.

The pipeline 

Wilsons expects TLX250-CDx (for the treatment of renal cancers) will be the second drug to market, with approval by early 2024. The drug is used for treatment of clear cell renal cell cancer (ccRCC), the most common type of kidney cancer in adults.

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