Company Overview: Telix Pharmaceuticals Limited is an Australia-based biopharmaceutical company. The Company is focused on development and commercialization of diagnostic and therapeutic products based on radiopharmaceuticals, or molecularly-targeted radiation (MTR). MTR is a novel therapeutic approach that selectively delivers radiation to cells that exhibit certain molecular profiles or targets that may be indicative of cancer. The Company's MTR products such as TLX-250 diagnosis and treatment of renal (kidney), TLX-591 treatment of metastatic castrate-resistant prostate cancer, and TLX-101 treatment of glioblastoma (brain cancer).


TLX Details

Telix is an Australian biopharmaceutical company focused on the development of diagnostic and therapeutic products based on targeted radiopharmaceuticals or molecularly-targeted radiation (MTR). The Company is developing an advanced portfolio of oncology products that address significant unmet medical need in renal, prostate and brain (glioblastoma) cancer. The agreement with French National Institute of Health and Medical Research will help catering to funding requirements to develop sufficient staff and facility, and provide time to conduct a number of studies over a two-year period, including preparation for pilot clinical studies in the nuclear medicine department of University Hospital of Nantes. Further, several key academic relationships were formed for expansion and new clinical application areas. The group generally focuses on the US and European markets as its frontline markets but with Japan’s emerging environment and Japanese Government’s focus on cost-effective therapies for treating cancer, TLX is viewing Japan as the largest single market for TLX products, after the US. Telix tailored products thus aim to leverage from the rising aging population and need for cost-effective cancer therapies.
 

Working of a molecularly targeted radiation (Source: Company Reports)

Third Quarter (2018) Update: The Company released its Report for March 2018 Quarter and reported net cash outflows from operating activities in the quarter of $2.111 million and cash reserves of $46.583 million at the end of the quarter. On the other hand, net cash outflows from operating activities for the December 2017 quarter were $1.685 million and cash reserves amounted to $46.853 million. It marked the commencement of a clinical collaboration with Radboud University Medical Centre, laying the foundation for the completion of product development of ⁸⁹Zr-Girentuximab for renal cancer patients. It also submitted a Drug Master File (DMF) to the US FDA for a sterile kit used in the preparation of ⁶⁸Ga-PSMA-11, as an important milestone towards product approval for the prostate imaging agent. The DMF is held by Kyzeo Imaging LLC, a joint-venture between Telix Pharmaceuticals (US) Inc. and ANMI SA.  Kyzeo additionally entered into a contract with Endocyte in relation to providing imaging technology for Endocyte’s phase III trial of 177Lu-PSMA-617 (the “VISION” trial). It also marked the commencement of a research partnership with the French National Institute of Health and Medical Research (INSERM) and the Accelerator for Research in Radiochemistry and Oncology at Nantes Atlantic (ARRONAX).


Estimated Cash Flows for the next Quarter (Source: Company Reports)

Key Achievements: Telix is developing targeted radiopharmaceuticals, also referred to as “molecularly-targeted radiation” and bases its work on the molecularly-targeted radiation as a novel therapeutic approach that selectively delivers radiation to cells in the body exhibiting certain molecular profiles that may be indicative of cancer. Telix completed its initial public offering in November 2017. The primary driver behind the decision to list was to be able to develop an extensive pipeline of in-licensed, acquired and company-originated intellectual property (IP) focused on three major disease areas; TLX-250 (for the diagnosis and treatment of renal cancer), TLX-591 (for the treatment of prostate cancer) and TLX-101 (for the treatment of glioblastoma, or brain cancer). Since the IPO, the Company has initiated a significant number of manufacturing and clinical activities aimed at unlocking the clinical and commercial value of the Company’s pipeline. It executed a manufacturing partnership with JFE Engineering Corporation, a company with extensive expertise in the installation of cyclotron infrastructure and radiopharmaceutical manufacturing in Japan. It also executed a collaboration with Memorial Sloan Kettering Cancer Centre (MSK) which will see MSK use TLX-250 as a tool to better manage treatment of patients with metastatic clear cell renal cell cancer (ccRCC). TLX has also selected US-based Goodwin Biotechnology, Inc. for optimizing the process for cGMP manufacturing for TLX-250.

Partnership with French National Institute of Health and Medical Research: The Group announced a research partnership with the French National Institute of Health and Medical Research (Institut national de la santé et de la recherche médicale or “INSERM”) and the “Accelerator for Research in Radiochemistry and Oncology at Nantes Atlantic” (ARRONAX). INSERM is a leading translational research organization with a strong track record of industry engagement and technology development to benefit human health. ARRONAX is a unique cyclotron (particle accelerator) facility and a world-leader in the production of a certain novel radioactive isotopes 211At (astatine). Under the research partnership, Telix will explore the feasibility of using several of its clinical targeting agents with astatine. Astatine is an “alpha emitter”, a very high-energy radionuclide that is capable of significantly altering the tumour microenvironment when attached to a molecular targeting agent that is specific for cancer cells.


Advanced pipeline of clinical programs (Source: Company Reports)

Contract with Endocyte, Inc: Telix has entered into a material contract with Endocyte, Inc. (NASDAQ: ECYT). Under the terms of the agreement, Kyzeo will grant Endocyte access to the Drug Master File (“DMF”) for ⁶⁸Ga-PSMA-11 kit (“Kit”) and will provide sufficient Kits on a collaborative basis. This will provide Endocyte an additional kit-based option for the labelling of PSMA-11, one of the imaging modalities used in the VISION trial for patient selection. The agreement includes industry-standard pharmacovigilance and product safety reporting provisions. The Endocyte VISION trial is an international, prospective, open-label, multicentre, randomised phase III study of 177Lu-PSMA-617 for the treatment of patients with progressive prostate specific membrane antigen (PSMA)-positive metastatic castration-resistant prostate cancer (mCRPC), who have received at least one novel androgen axis drug (NAAD) and at least one taxane regimen.


Telix Indicative timetable for TLX-250t (Source: Company Reports)

Outlook: The Company is also growing a world-class product development, clinical and business development team, both in Australia and internationally, with the ability to deliver its unique technology to patients. For its lead program, TLX-250 imaging in renal cancer, the Group was able to file its first IMPD or clinical trial “application” to EMA before Christmas and is awaiting the first patients into the Phase III bridging study. Its prostate program TLX-591 also continues to progress well. Lastly, its brain cancer program TLX-101 was proceeding to final manufacturing validation after about 6-8 weeks of delay with its contract manufacturer, but it is back on track and expects to have further updates by end of May, consistent with prior market communication.

Stock Performance: In a recent media interview, CEO, Dr Christian Behrenbruch, has highlighted that the company is expected to start generating first revenues from some of its programs, over the next 12 months, and will find support from clinical milestones and commercial data points. The founders and directors of Telix believe that radiopharmaceuticals have a much larger role to play in cancer care. Upon completion of its IPO, the Group launched into manufacturing, clinical and business development activities with a full head of steam, very much enabled by both financial and human capital. Over the next 12 months, one can expect to see further evidence of its progress through regular clinical program updates, business development and partnership-related news flow. One of the benefits of developing a late-stage pipeline is that there is plenty to tell shareholders and it will continue to do its utmost to provide transparent and meaningful progress updates. It is in the process of overhauling its communication tools, such as the company website, which should enable it to do a more effective job of communicating progress. The agreement with INSERM will also help in accessing a portfolio of intellectual property that has been developed within the Nantes cluster that may lead to new products and indications for Telix therapeutic pipeline. Since the start of the year, the share price was up by 0.77 per cent, followed by an increase of 31 per cent in last three months. The share price was up by 6.87 per cent as on 11 May 2018 as the group seems to be gaining attention as a potential biotech M&A target by some market experts. After looking at the overall performance and initiatives undertaken by the Group, we give a “Speculative Buy” recommendation at the current market price of $0.700.
 

TLX Daily Chart (Source: Thomson Reuters)

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