Telix Pharmaceuticals — TLX591-CDx NDA submitted

Telix Pharmaceuticals (AU: TLX)

Last close As at 20/05/2024

6.94

−0.20 (−2.80%)

Market capitalisation

1,979m

More on this equity

Research: Healthcare

Telix Pharmaceuticals — TLX591-CDx NDA submitted

On 24 September 2020 Telix announced it had submitted its NDA to the FDA for approval of TLX591-CDx, its positron emission tomography (PET) imaging agent targeting prostate-specific membrane antigen (PSMA). The agency has a statutory 12 months to complete its assessment (two to accept the application and 10 to review). TLX591-CDx would be the company’s first approved product and it is in preparations to be ready to launch the product in 2021, which includes establishing distribution and supply-chain relationships.

Analyst avatar placeholder

Written by

Healthcare

Telix Pharmaceuticals

TLX591-CDx NDA submitted

Regulatory update

Healthcare equipment & services

28 September 2020

Price

A$1.70

Market cap

A$432m

US$0.66/A$

Net cash (A$m) at 30 June 2020

23.3

Shares in issue

253.9m

Free float

71%

Code

TLX

Primary exchange

ASX

Secondary exchange

OTCMKTS

Share price performance

%

1m

3m

12m

Abs

13.0

31.4

8.7

Rel (local)

16.5

26.8

20.6

52-week high/low

A$1.91

A$0.80

Business description

Telix Pharmaceuticals is a Melbourne-headquartered global biopharmaceutical company focused on the development of diagnostic and therapeutic products based on targeted radiopharmaceuticals or molecularly targeted radiation.

Next events

ZIRCON enrolled

Year-end 2020

TLX591 Phase III start

Q420

TLX591-CDx approval decision

Expected H121

Analyst

Nathaniel Calloway

+1 646 653 7036

Telix Pharmaceuticals is a research client of Edison Investment Research Limited

On 24 September 2020 Telix announced it had submitted its NDA to the FDA for approval of TLX591-CDx, its positron emission tomography (PET) imaging agent targeting prostate-specific membrane antigen (PSMA). The agency has a statutory 12 months to complete its assessment (two to accept the application and 10 to review). TLX591-CDx would be the company’s first approved product and it is in preparations to be ready to launch the product in 2021, which includes establishing distribution and supply-chain relationships.

Year end

Revenue (A$m)

PBT*
(A$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/18

10.3

(15.7)

(6.8)

0.0

N/A

N/A

12/19

15.2

(31.1)

(11.9)

0.0

N/A

N/A

12/20e

15.0

(29.9)

(11.8)

0.0

N/A

N/A

12/21e

97.8

54.5

21.7

0.0

7.8

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Clinical data package on over 600 patients

The company’s NDA includes data on over 600 patients from multiple clinical studies. This includes efficacy data from over 400 patients gathered by Memorial Sloan Kettering Cancer Center, as well as safety data on over 200 patients from a clinical study performed by Endocyte and Novartis, which used TLX591-CDx to screen patients for their PSMA targeted therapeutic. Additionally, the package includes independent data from the landmark proPSMA study (and other literature), which provides substantial evidence of the utility of PSMA PET imaging.

Getting ready for launch

In addition to the current application, the company also submitted an MAA in April 2020. Telix is preparing for the commercial launch of the product and has established distribution agreements with PharmaLogic and Cardinal Health. It recently expanded this footprint with a newly announced agreement with IRE Elit for distribution in France. Additionally, Telix has acquired a radiopharmaceutical manufacturing facility in Seneffe, Belgium, to support its European isotope supply requirements (as well as R&D needs).

Valuation: A$567m or A$2.23 per share

Our valuation remains unchanged at A$567m or A$2.23 per share. The company reported A$23.3m net cash at the end of Q220, which we assume will be sufficient to reach the approval decision for TLX591-CDx.

US marketing application submitted

The submission of the NDA in the US is a major milestone for Telix as it approaches the potential commercial launch of its first approved medical product. The product is currently available in the US and Europe for research use only and the company has seen steadily increasing sales in these channels, which we hope will translate to increased interest in the product if it is approved.

According to Telix’s press release, the application is being submitted ‘for the imaging of prostate cancer using PET’. We previously speculated over the precise indications for which the product would be submitted and, based on this language, we assume it has been submitted for the broadest label of simply ‘prostate imaging’, which would encompass any imaging need. This includes imaging after biochemical recurrence (which we consider to be the most well supported indication), as well as initial staging, and tracking drug response. We expect the agency to evaluate each of these scenarios and for it to be a matter of review. Our estimates conservatively include imaging after biochemical recurrence, but we may expand this later based on FDA feedback.

Both the current NDA and the previously submitted MAA are being made using a collection of prospective and retrospective clinical data. This includes a large data set (n>400) gathered by researchers at Memorial Sloan Kettering Cancer Center, as well as imaging data gathered in the VISION study (n>200) performed by Endocyte/Novartis to support approval of their product 177Lu-PSMA-617, a PSMA targeted radiotherapeutic similar to Telix’s therapeutic TLX591. Telix granted Endocyte access to the TLX591-CDx kit to screen patients for the study. Telix previously met with the FDA in a pre-NDA meeting in February 2020 and reported that ‘The FDA has provided detailed feedback on the clinical briefing package for the efficacy data, which the company expects to be able to satisfy, based on the planned submission dataset’. Moreover, no safety red flags were raised. The company has not released specific feedback on its discussions with European regulators, but we expect the process to be similar.

Telix has also been laying the groundwork to support the commercialisation of TLX591-CDx, including the necessary infrastructure and logistics. The company has previously signed distribution agreements with PharmaLogic and Cardinal Health. The last is significant because Cardinal is the largest distributor of nuclear medicine products in the US, with access to 80% or more of the US market (according to Telix). Telix also recently announced signing an agreement with IRE Elit for distribution in France.

Additionally, in April 2020 Telix announced it had completed the acquisition of a radiopharmaceutical manufacturing facility in Seneffe, Belgium, from Eckert & Ziegler Strahlen und Medizintechnik. The company stated that isotopes generated at this site will support the commercial sales of TLX591-CDx and TLX250-CDx in Europe following their launches, although it will not be limited to these products and will be able to supply a range of isotope needs. More generally, the acquisition will allow Telix to expand its R&D footprint.

Valuation

Our valuation remains unchanged at A$567m or A$2.23 per share. The current application does alter any of our assumptions, but we may reconsider the precise market for TLX591-CDx based on feedback from the FDA.

Exhibit 1: Valuation of Telix

 

Peak sales (US$m)

Likelihood (%)

rNPV (A$m)

rNPV/share (A$)

TLX250-CDx kidney cancer imaging:

80

85%

93.6

$0.37

TLX250 kidney cancer therapeutic:

500

20%

74.4

$0.29

TLX591-CDx prostate cancer imaging

180

80%

211.7

$0.83

TLX591 prostate cancer therapeutic:

1,090

20%

153.2

$0.60

TLX101 brain cancer therapeutic

510

10%

51.8

$0.20

SG&A

(41.0)

($0.16)

Portfolio total

543.6

$2.14

Net cash (Q220)

23.3

$0.09

Enterprise total

567.0

$2.23

Source: Telix reports, Edison Investment Research

Financials

Our financial forecasts remain unchanged. Telix reported A$23.3m in net cash at the end of Q220, which we assume will be sufficient to reach the approval decision for TLX591-CDx.

Exhibit 2: Financial summary

 

A$'000s

 

2018

2019

2020e

2021e

Year end 31 December

AASB

AASB

AASB

AASB

PROFIT & LOSS

Sales, royalties, milestones

195

3,485

3,630

97,773

Other (includes R&D tax rebate)

10,142

11,693

11,400

0

Revenue

 

 

10,337

15,178

15,030

97,773

R&D expenses

(18,692)

(21,162)

(21,750)

(21,250)

SG&A expenses

(9,150)

(15,800)

(16,274)

(16,762)

Other

0

0

0

0

EBITDA

 

 

(17,505)

(24,327)

(25,643)

59,761

Operating Profit (before amort. and except.)

 

(18,992)

(24,078)

(26,023)

58,692

Intangible Amortisation

0

(4,236)

(4,309)

(4,309)

Exceptionals

0

0

0

0

Operating Profit

(18,992)

(28,314)

(30,332)

54,383

Net Interest

304

(2,310)

446

79

Profit Before Tax (norm)

 

 

(15,714)

(31,122)

(29,886)

54,462

Profit Before Tax (reported)

 

 

(15,714)

(31,122)

(29,886)

54,462

Tax benefit

1,884

3,255

0

707

Profit After Tax (norm)

(13,830)

(27,867)

(29,886)

55,169

Profit After Tax (reported)

(13,830)

(27,867)

(29,886)

55,169

Average Number of Shares Outstanding (m)

202.1

233.4

253.5

253.8

EPS - normalised (c)

 

 

(6.84)

(11.94)

(11.79)

21.74

EPS - diluted (c)

 

 

(6.84)

(11.94)

(11.78)

21.21

Dividend per share (c)

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

40,852

43,928

43,062

38,155

Intangible Assets

39,451

41,948

37,638

33,329

Tangible Assets

226

1,899

5,341

4,744

Investments

1,175

82

82

82

Other

Current Assets

 

 

35,856

58,679

21,848

87,862

Stocks

643

542

446

446

Debtors

8,436

12,071

11,778

378

Cash

25,771

44,598

7,865

85,279

Other

1,007

1,468

1,759

1,759

Current Liabilities

 

 

(8,242)

(10,625)

(3,224)

(7,932)

Creditors

(6,893)

(9,218)

(181)

(4,889)

Short term borrowings

(1,133)

(490)

(489)

(489)

Other

(216)

(917)

(2,554)

(2,554)

Long Term Liabilities

 

 

(15,562)

(21,902)

(19,875)

(19,875)

Long term borrowings

(596)

(1,641)

(666)

(666)

Other long-term liabilities

(14,966)

(20,261)

(19,209)

(19,209)

Net Assets

 

 

52,904

70,080

41,810

98,211

CASH FLOW

Operating Cash Flow

 

 

(21,065)

(23,314)

(37,021)

77,099

Net Interest

316

(19)

446

79

Tax

0

0

0

707

Capex

0

(403)

(644)

(471)

Acquisitions/disposals

(2,693)

(65)

0

0

Equity Financing

0

43,890

419

0

Dividends

0

0

0

0

Other

0

0

(218)

0

Net Cash Flow

(23,442)

20,089

(37,018)

77,414

Opening net debt/(cash)

 

 

(48,414)

(24,042)

(42,467)

(6,710)

HP finance leases initiated

0

0

0

0

Other

(929)

(1,664)

1,261

0

Closing net debt/(cash)

 

 

(24,042)

(42,467)

(6,710)

(84,124)

Source: Telix, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Telix Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by Telix Pharmaceuticals. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for ‘wholesale clients’ within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are ‘wholesale clients’ for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a ‘personalised service’ and, to the extent that it contains any financial advice, is intended only as a ‘class service’ provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘FPO’) (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the ‘publishers' exclusion’ from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Telix Pharmaceuticals and prepared and issued by Edison, in consideration of a fee payable by Telix Pharmaceuticals. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for ‘wholesale clients’ within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are ‘wholesale clients’ for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a ‘personalised service’ and, to the extent that it contains any financial advice, is intended only as a ‘class service’ provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘FPO’) (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the ‘publishers' exclusion’ from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on Telix Pharmaceuticals

View All

Latest from the Healthcare sector

View All Healthcare content

Research: TMT

Ebiquity — Adapting to circumstance and opportunity

Ebiquity is set for a stronger H220, after a difficult H1 (£26.8m revenue; down 24% y-o-y) when some clients paused or cancelled their marketing activity due to COVID-19. Most of the H120 £1.4m operating loss should be recouped by the year-end. FY21 prospects are further lifted by new client wins, partly from Accenture’s withdrawal from media audit. Newly installed CEO Nick Waters (ex Dentsu) is developing his vision for Ebiquity as a data-driven media solutions provider, augmented with consultancy services. This will be expounded at a capital markets day on 10 November.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free