Telix Pharmaceuticals Limited - Investor Briefing: Asia Strategy 3rd November 2020
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Telix Pharmaceuticals Limited Investor Briefing: Asia Strategy 3rd November 2020
Disclaimer The information contained in this presentation is not intended to be an offer for subscription, invitation or recommendation with respect to shares of Telix Pharmaceuticals Limited (“Telix”) in any jurisdiction, including the United States. No representation or warranty, express or implied, is made in relation to the accuracy or completeness of the information contained in this document or opinions expressed in the course of this presentation. The information contained in this presentation is subject to change without notification. This presentation may contain forward-looking statements which can be identified by the use of words such as “may”, “should”, “will”, “expect”, “anticipate”, “believe”, “estimate”, “intend”, “scheduled” or “continue” or similar expressions. Any forward-looking statements contained in this presentation are subject to significant risks, uncertainties, assumptions, contingencies and other factors (many of which are outside the control of, and unknown to Telix, and its directors, officers, employees, agents or associates), which may cause the actual results or performance to be materially different from any future result so performed, expressed or implied by such forward-looking statements. There can be no assurance or guarantee that actual outcomes will not differ materially from these statements. The data and results pertaining to clinical subjects used in this presentation are illustrative of medical conditions and outcomes associated with potential applications of Telix’s product pipeline. Actual results from clinical trials may vary from those shown. None of the products or potential products described in this presentation have received a marketing authorization in any jurisdiction. Telix Pharmaceuticals Limited (ASX: TLX) 2
Executive summary
• A key 2021 Telix objective is to build an Asian commercial presence
• Central to this objective is establishment of a long-term partnership with China
Grand Pharma (CGP), granting exclusive rights to Telix’s diagnostic and
therapeutic MTR products for Greater China1
• Partnership represents >$A400M in value to Telix, plus royalties on product sales
over the life of the partnership
• Immediate cash injection of A$70M from up-front prepayment (A$35M) and
strategic equity investment in Telix (A$35M)
• New cash, plus existing capital provides Telix with sufficient capital to meet
✓ Clinical development costs in 2021 & 2022 2
✓ Global commercial launch of TLX591-CDx & TLX250-CDx (prostate & kidney imaging) 3
✓ Working capital needs
Notes: 1. Mainland China, Hong Kong SAR, Macau SAR, Taiwan
2. Subject to final FDA feedback on trial sizing for ProstACT Ph3 study and timely commencement of revenues from product launch of TLX591-CDx in the US/EU
3. Subject to approvals in the relevant jurisdictions. None of Telix’s products have attained a marketing authorisation in any country.
Telix Pharmaceuticals Limited (ASX: TLX) 3
In 2021, Telix will push into Asia, extending global reach
2021
CN, HK, MO, TW, KR, SG
China partnership
2020
BR, EG, ZA, UAE, IN,
RUS, MEX, CH South Korea commercial partner (in progress)
2019 Singapore manufacturing / logistics and
HSA engagement for core product portfolio
CA, TR
Additional Australian manufacturing / partners
for regional distribution
2017 / 2018
✓ Telix is clinically active in 25 countries
✓ Academic collaborations in 12 countries
✓ Manufacturing operations in 9 countries
Telix Pharmaceuticals Limited (ASX: TLX) 4
Asia is a growing market for nuclear medicine Nuclear medicine has a great deal of potential in key Asian markets because cancer is more commonly diagnosed late (metastatic) and is highly cost-effective Challenges • Isotope supply chain is less developed than rest of world • Regulators less familiar with nuclear medicine products • Price sensitive market Opportunities • Enormous patient volume, scope for unique indications • Telix’s portfolio is highly differentiated, suited to the Asian market in terms of cost and production characteristics • Early commercial entrants can impact clinical adoption Telix Pharmaceuticals Limited (ASX: TLX) 5
Telix’s solutions are particularly cost-effective versus competition
Telix (TLX591) Competitor (PSMA-617)
• Targets PSMA1 • Targets PSMA
• Targeting agent: antibody • Targeting agent: small molecule
• Isotope: 177Lu (lutetium) • Isotope: 177Lu (lutetium)
• Slow / cumulative irradiation of tumour • Rapid urinary excretion, requires many
over ~5 days doses to deliver effective tumour irradiation
• Off-target toxicity: haematologic • Off-target toxicity: exocrine glands, renal
• Typical course of administration: • Typical course of administration:
2 x 3.5 GBq (2 weeks total) 4 – 6 x 7 GBq (6 months treatment)
Telix’s cost of goods is ~20% of the competition, requires significantly fewer hospital
visits and ‘cold kit’ format is highly suited to local (low cost) preparation
Notes: 1. PSMA = Prostate-Specific Membrane Antigen
Telix Pharmaceuticals Limited (ASX: TLX) 6
Telix’s product portfolio is aligned with Asian market needs
No patient left behind…
TLX591-CDx (68Ga-PSMA) TLX599-CDx (99Tc-PSMA)
• Imaging of prostate cancer with • Imaging of prostate cancer with
Positron Emission Tomography Single Photon Emission
(PET) Computed Tomography
(SPECT)
• Access to PET is still relatively
limited in Asia outside of major • SPECT cameras are abundant in
metropolitan areas Asia, including in regional
hospitals
• High growth expected over the
next decade but penetration is still • Isotope (99Tc) supply chain is very
10-20% that of SPECT inexpensive and well established
in Asian countries
• Generally a more expensive
imaging modality (CapEx, • Inexpensive PSMA imaging will
isotopes, clinical footprint) drive PSMA therapy adoption
68Ga-PSMA (left) versus 99mTc-PSMA (right) in the same patient.1
Notes: 1. Courtesy: Instituto Nacional De Investigaciones Nucleares (ININ), Mexico
Telix Pharmaceuticals Limited (ASX: TLX) 7
Telix’s partner China Grand Pharma and Healthcare Holdings (CGP)
• Rapidly growing HKSE-listed (512.HK) diversified pharmaceutical company
with market cap of ~HK$23B (~A$4.2B) and revenues of ~HK$6.5B
(~A$1.2B)1
• Business activity: R&D, manufacturing, sales of pharmaceutical products,
advanced medical devices, specialized pharmaceutical ingredients,
biotechnology products and nutritional products
• Structured into four segments: innovative medicines and devices, branded
drugs, pharmaceutical ingredients and nutritional products
• Radioactive product experience: through acquisition of Sirtex with private
equity partner CDH Genetech. CGP holds 49% equity interest in Sirtex
• Regulatory experience: Successfully obtained NMPA2 approval of New Drug
Application filing for SIR-Spheres® (August 2020)
Notes: 1. Estimated full year results based on published half-year 2020 results.
2. National Medical Products Administration of Peoples’ Republic of China.
Telix Pharmaceuticals Limited (ASX: TLX) 8
The Telix – China Grand Pharma transaction comprises three parts
✓ TLX250-CDx (renal cancer)
1. Diagnostic products ✓ TLX591-CDx (prostate cancer PET)
commercial agreement ✓ TLX599-CDx (prostate cancer SPECT)
2. Therapeutic products ✓ TLX101 (glioblastoma)
co-development and ✓ TLX250 (renal cancer)
licencing agreement ✓ TLX591 (prostate cancer)
✓ US$25M (~A$35M) equity investment
3. Strategic equity investment at A$1.69 per share, representing a
7.62% shareholding in Telix
Telix Pharmaceuticals Limited (ASX: TLX) 9
Transaction part 1: Diagnostic products
• Territory: Mainland China, Hong Kong SAR, Macau SAR, Taiwan
✓ TLX250-CDx (renal cancer imaging)
✓ TLX591-CDx (prostate cancer PET imaging)
✓ TLX599-CDx (prostate cancer SPECT imaging)
• CGP is exclusive sales, marketing and distribution partner in Territory
• CGP has responsibility for obtaining regulatory approvals in the Territory
• Telix has responsibility to provide clinical and regulatory package
to support application for marketing authorisations
• Telix revenue based on volume-based transfer pricing for each product
• Minimums to maintain exclusivity
• Includes indication expansions, 18 month ROFN1 for new diagnostic products
• 15-year agreement, with 5-year renewal terms
Notes: 1. ROFN = Right of First Negotiation
Telix Pharmaceuticals Limited (ASX: TLX) 10Transaction part 2: Therapeutic products
• Territory: Mainland China, Hong Kong SAR, Macau SAR, Taiwan
✓ TLX101 (glioblastoma therapy)
✓ TLX250 (renal cancer therapy)
✓ TLX591 (prostate cancer therapy)
• CGP is exclusive sales, marketing and distribution partner in the Territory
• CGP has responsibility for obtaining regulatory approval in the Territory, including
further clinical trials if required, with Telix’s support (RoW data, manufacturing)
• CGP to pay US$225M (~A$315M) in regulatory and commercial milestones
• CGP to pay US$25M (~A$35M) non-refundable prepayment, credited to milestones
• CGP commitment of up to US$65M (~A$90M) in clinical development costs to
support product approval in Territory, in concert with Telix global trials
• Royalties on a product-by-product basis for 10 years from first commercial sale,
including additional indications. Eighteen month ROFN on new therapeutic products
Telix Pharmaceuticals Limited (ASX: TLX) 11Transaction part 3: Strategic equity investment • CGP will make a simultaneous one-time strategic equity investment of US$25M (~AU$35M) in Telix • 20,947,181 fully paid ordinary Telix shares representing a post-issue holding by CGP of 7.62% • Shares issued at a price of A$1.69, based on 10-day VWAP up to and including 28th October 2020 • Shares issued to CGP subject to a holding lock, cannot to be traded for 12 months from date of issue • CGP also subject to a standstill provision, cannot trade Telix shares for 12 months Equity / milestone payment (total ~$A70M), expected 2020 year-end balance sheet of ~A$20M and 2020 R&D tax credit, means Telix will have ~A$100M of financial capacity in 2021 to meet clinical and operational needs, including Ph3 prostate cancer therapy study (ProstACT)1 Notes: 1. Subject to final trial design and approval from the FDA Telix Pharmaceuticals Limited (ASX: TLX) 12
Operational impact on Telix
• Significant execution obligations under the Telix – CGP agreements for
both parties
• Mutual goal of alignment of Telix’s global trials (e.g. ProstACT) with CGP-
led clinical trial activity in China
• Will require investment in additional Telix people to service the partnership
in China, in addition to other Asian region activity planned for 2021 / 2022
• Modest additional budgetary impact in 2021
✓ ~A $3M in additional operating costs, including commercial and development support
personnel, additional data collection to meet regulator standards in the various
jurisdictions, and intellectual property costs
✓ Similar expenditure likely in 2022 – 2023 to support initial product approvals
• Telix expects to operationalize existing Singapore subsidiary as a regional
base for manufacturing / logistics
Telix Pharmaceuticals Limited (ASX: TLX) 13Summary • Asia is an important regional focus for Telix in 2021 • The Telix – CGP transaction represents a significant partnership that will deliver Telix’s diagnostic and therapeutic products to Chinese patients • CGP is an excellent China partner for Telix, with a clear commitment and track record in oncology product development, including the development of radioactive products (via Sirtex acquisition) • CGP equity investment and up-front milestone payment injects ~$A70M of capital into Telix • Existing balance sheet, accrued 2020 R&D tax credit and proceeds from the CGP transaction deliver ~$A100m of financial capacity for 2021 / 2022 Telix Pharmaceuticals Limited (ASX: TLX) 14
telixpharma.com
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