Telix Pharmaceuticals' Sales Up 46% with 12th Acquisition Announced

By Mark Pachacz Posted on January 25th, 2025

For the December quarter, Telix Pharmaceuticals (TLX: $27.53) achieved revenue of $218 million, mostly from sales of its first product Illuccix, an in vivo diagnostic for prostate cancer. On an annualized basis, that equates to $872 million.

Sales in the quarter were up 46% over the PCP and a 5% increase over the September quarter. In the September quarter sales increased by 9% over the June quarter, indicating a slowing in growth.

The company also announced its 12 antibody drug assets from ImaginAb. ImaginAb is working with small antibody fragments with four preclinical/discovery programs. The rational for the acquisition is that smaller antibodies can still achieve high specificity for tumour binding, but faster clearance from the body to reduce radiation on healthy tissue.

The acquisition also comes with a research facility in California and staff with expertise in protein engineering and radiopharmaceutical product development.

Lantheus Holdings is the closest comparable with Telix and a direct competitor. It markets a similar prostate cancer diagnostic, Pylarify. Latheus has a market value of US$6.8 billion, and trades on a Price-Sales ratio of 4.5 times, based on its September quarter revenue. By comparison Telix trades on a Price-Sales ratio of 10.5 times.

Comparison with Lantheus Holdings

Whilst Telix sales continue in a growth phase, Lantheus' sales fell 4% in the September quarter last year from the June quarter. As a result its share price dropped by around 15%. Net sales of Pylarify fell by 5%. Pylarify makes up around 70% of Lantheus' sales. It also sells Xenon-133 for lung imaging, which Cyclopharm (CYC: $2.36) is seeking to displace in the US with Technegas.

Lantheus has stated that it expects the prostate cancer diagnostic market to increase from US$2 billion to US$3 billion by 2029 in the US.

Lantheus received approval for its prostate cancer diagnostic in Europe in mid-2023 (called Pylclari rather than Pylarify). Telix announced that it received European approval for Illuccix in Europe last week.

Both Lantheus and Telix have substantial clinical pipelines, in both diagnostics and therapeutics. However Telix has been more active in acquisitions. (See tables)

This month Lantheus announced it would acquire Life Molecular Imaging for its beta amyloid PET imaging agent Neuraceq. The acquisition price is US$400 million. Neuraceq generated revenue of US$64 million in the 12 months to the end of September 2024. The volume of commercial sales of this product increased by 117% in that year to 8653 units, driven by the approval of Leqembi (Biogen/Eisai) for the treatment Alzheimer's disease.

In 2024 Lantheus licensed an early-stage radiopharmaceutical drug candidate, RM2, for an upfront payment of US$35 million, from Life Molecular Imaging (owned by Life Healthcare Group in South Africa). RM2 targets GRPR for patients with prostate cancer where PSMA targeting is not suitable.

In June last year, Lantheus also announced a licensing deal with ASX-listed Radiopharm Theranostics (RAD: $0.027) as well as a $7.5 million equity investment in Radiopharm. The two early stage assets are a nanobody targeting TROP2 and a monoclonal antibody targeting LRRC15. Radiopharm also recently signed a development agreement to assist Lantheus in conducting clinical studies in Australia, initially for a Phase I imaging study.

Remarkable Growth in Alzheimer's Diagnostics

In its presentation on the LMI acquisition, Lantheus stated that remarkable growth is to be expected in the area of Alzheimer's disease diagnosis. Not only has Lantheus in-licensed the Neuraceq beta amyloid imaging product, but also a diagnostic in Phase III for PET tau imaging, which the company says will be complementary to its own Phase III tau imaging program. LMI also has a Phase III imaging agent for cardiac amyloidosis.

Leqembi is forecast by Eisai to achieve sales of US$360 million in the 12 months to the end of March this year. Eisai has recently filed an application for a subcutaneous (at-home) delivery of the therapy, for weekly maintenance dosing, which should see the uptake of that therapy increase substantially. The FDA is expected to decide on that application by the end of August.

PET scans for beta amyloid imaging are used to identify patients with Alzheimer's disease prior to treatment.

Summary

A key milestone for this year for Telix will be the potential approval of the company's next product, Zircaix, for the in vivo imaging of kidney cancers. That product was filed for approval with the FDA at the end of last year, following a small issue with its previous submission in June last year. The application may be eligible for priority review, with a PDUFA date to be issued by the end of next month.

Telix is anticipating launching the product this year in the US, with the market anticipated to also be significant. The point of difference here with Illuccix is that Telix will not initially have competitors. Another positive feature is the Telix has established the distribution infrastructure in the US.

Telix is capitalized at $9.2 billion. Currently its revenue from Illuccix funds its development pipeline.

Bioshares recommendation: Hold

Disclaimer:
Information contained in this newsletter is not a complete analysis of every material fact respecting any company, industry or security. The opinions and estimates herein expressed represent the current judgement of the publisher and are subject to change. Blake Industry and Market Analysis Pty Ltd (BIMA) and any of their associates, officers or staff may have interests in securities referred to herein (Corporations Law s.849). Details contained herein have been prepared for general circulation and do not have regard to any person’s or company’s investment objectives, financial situation and particular needs. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in this document without consulting their investment adviser (Corporations Law s.851). The persons involved in or responsible for the preparation and publication of this report believe the information herein is accurate but no warranty of accuracy is given and persons seeking to rely on information provided herein should make their own independent enquiries. Details contained herein have been issued on the basis they are only for the particular person or company to whom they have been provided by Blake Industry and Market Analysis Pty Ltd. The Directors and/or associates declare interests in the following ASX Healthcare and Biotechnology sector securities: Analyst MP: 1AD, ACR, AVR, CGS, CUV, CYC, DXB, IMM, LBT, MX1, OPT, NEU, PAB, PXS,RNO,SOM. These interests can change at any time and are not additional recommendations. Holdings in stocks valued at less than $100 are not disclosed.

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Telix Pharmaceuticals' Sales Up 46% with 12th Acquisition Announced

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