Telix Pharmaceuticals Limited (TLX) Earnings Call Transcript & Summary

Great. Well, thank you, everyone, for joining our fireside chat with Telix. My name is David Dai. I'm one of the biotech analysts here at UBS. [Operator Instructions] In the meantime, I'd love to introduce Kevin Richardson here, the CEO of Precision Medicine of Telix. It's a great pleasure to have you, Kevin.

Yes. Great to be here. Thanks for inviting us.

Excellent. Great. So Kevin, starting just can you provide a quick high-level overview of Telix, including both your diagnostics and also therapeutic platforms?

Sure. Yes, excited to. As you know, we're really one of the few pure-play radiopharmaceutical companies that really focus on 2 platforms that work really well together, the diagnostic platform, which we've initially launched Illuccix and now Gozellix into and, of course, have several others in the diagnostic space. We platform that technology with a corresponding or pair -- a therapeutic pair on the therapeutic side with our 591 therapy, 101 and 250 therapy. And then one of the unique differences around Telix and the rest of our colleagues out there is really around our TMF solutions as well, which really brings together our ability to supply -- we call it our strategy is from the isotope to scanner or isotope to injection room so that we can supply that all the way through the supply chain system. We've done -- we've demonstrated that really around some of our most recent acquisitions around ITG, some real brain power and property down in Houston as well as Optimal Tracers in California; Seneffe in Brussels, Belgium. And then one of our latest ones is RLS that really brings together really the power of really regional manufacturing all the way through last-mile delivery to our customer base. So really making sure that we own all parts of that is important to the overall strategy of Telix that we've been laying out over the last couple of years. And then you've been able to kind of see that as we've made these acquisitions to really manage that strategy to really be a one-stop shop from isotope all the way to the injection room.

What about your therapeutic business there? Can you tell a little bit more about that?

Sure. The therapeutic business is really anchored right now around our 591 therapy and our antibody approach. As you know, we've finished our Part 1. We're waiting to move into Part 2. We haven't given really an update on when we're going to give that news yet. But in -- outside the U.S., we've moved into recruiting Part 2. So really excited around our 591 therapy. And then the 250 therapy around clear cell renal cell carcinoma and 101 is really moving forward well, and we have updates on that as of the last quarterly results. So it's a big part of the way that we look at the market is that we are not a diagnostic company. We are a therapeutic company that is really leading the way with our diagnostic business. There's a couple of ways that that's really important is that the diagnostic business is really building key relationships with payers around the world. It's building key relationships with regulatory bodies around the world. And most importantly, it's building relationships that we believe we'll be able to capitalize on in the customer base. So we're in thousands of accounts around the U.S., and it's really important that we build that nuclear med, that urology and ultimately, that medical oncology relationship so that when we develop and launch and go to market and start to commercialize the therapeutic, we have that relationship in hand. And we'll have multiple diagnostics along the way with that. So we'll have great payer relationships as we go into that process as we -- even now with Gozellix, we're diving deeper into some of the commercial payers as we continue to build this database relationship with payers.

Got it. That's really helpful overview. So let's focus on the prostate cancer diagnostic business, which is the precision medicine and your lead program, the commercial program is Illuccix. And over -- in the last quarter sales, we saw sort of like flat $155 million versus $154 million in the second quarter, but we did see volume growth grew about 3% quarter-over-quarter. Can you just maybe share us -- share with us some of the dynamics you're seeing? And what are you seeing in terms of the ramp and adoption of Illuccix despite TPT pass-through expiration?

Sure. So we were really extremely pleased with Q3 2025. As you know, Illuccix lost pass-through in the start of the third quarter. So it was a pretty even playing field for a little bit. I'd say even in the status of now, quite uneven when you know that by that time, Gozellix had been approved, HCPCS code had been established, and then we were just waiting on a transitional pass-through approval from CMS. So we were quite pleased with Q3 results, understanding all those dynamics at play. And we're quite pragmatic about our approach to commercialization. So as things evolve in the strategy, like we had planned for this event, we had planned for transitional pass-through, but the tactical execution of that kind of has to wait until those milestones are realized. So as we think about Illuccix kind of managing through Q3 and our sales and marketing team's ability to not only hold on to that business but grow it on a unit basis was really important. So really managing a simply put strategy of going deep into accounts that we have already established with Illuccix. So either getting more patients into those accounts that use us mostly exclusively as well as going deep into the market share split accounts where they might use two different PSMA agents up to and including more of a wide strategy, how do we bring on new scanners that are coming in and/or competitive accounts. So managing that in a very dynamic marketplace takes a real dogmatic approach and disciplined approach to the way we commercialize. And so I would kind of relate that to the modular approach that our customer service or customer-facing team really approaches. We center everything around that relationship at the Territory Manager level. And then we surround that territory manager with subject matter experts to help facilitate the conversion or the deep strategy from a market development team that really focuses on going deep into accounts and really working with the local referrers to drive more patients into that, educating referrers on the power of PSMA Illuccix. And believe it or not, there's still a lot of value in that, while PSMA has experienced a massive growth streak over the past 3 years, we still get urologists that refer for bone scans that we have to reeducate. I personally have experienced that with friends around from California to Phoenix to New Jersey, where they are looking for a place to get a PSMA scan because the urologists didn't refer that. So we have work to do in that, and that's that last little 10%, 20% of the penetration of the TAM that we're looking for is the way it's defined today. And then when you really think about the market development going deep, then we've got the -- once we get an account converted, they need to make sure that the scanners are set up right. So we have a medical imaging specialist that comes in and makes sure the scanner is ready for a gallium scan and the customers know how to read and the differences between the two. We believe that Gallium has higher inter-reader agreement, better clinical accuracy. And to do that, we want to make sure the scanner set up for that promise to be fulfilled. And then if -- once you switch to a new product, it's a little bit different of a process. So we want to make sure that our reimbursement specialists are there, our field market access people to make sure that the paperwork is done correctly and everything is smooth with the reimbursement. And then finally, if you really want to understand at a deeper level around the clinical science of inter-reader agreement and indeterminate bone lesions and how to really differentiate the two products in that conversion, then a big part of that is our medical team, our medical affairs, medical science liaisons. They're subject matter experts specifically on the difference between gallium and F-18, of course. And they play a big part of being able to help peer-to-peer differentiate the two products. So it's a real customer-centric customer-facing approach that we call it, it's a modular approach that requires a disciplined approach from the TAM and then to manage all that value in the Telix future pipeline as we educate customers on that to manage that value so that price really isn't the reason that they choose Telix or not. It's the value proposition that Telix brings as a company and as an individual function that's solving some of their problems.

Got it. Got it. It's exciting to hear that not just price, but also many different factors at play, right, that really helps drive growth of Illuccix in many different markets. Now excitingly, with respect to the new drug that just recently got approved, Gozellix, right? And those TPT pass-through. And what we saw in the third quarter was that you actually increased the guidance, right, from $770 million to $800 million to $820 million, right, top line side of things. So this means that you're seeing some numbers from Gozellix launch perspective. So just help us understand, Kevin, what are some of the things you're seeing on the momentum of this Gozellix launch so far heading into the fourth quarter, especially after the TPT approval.

Yes. Sure. Well, we started the Gozellix story 3 years ago. And so there's a lot of things that have changed in the past 3 years in terms of reimbursement and the market and why we wanted to bring Gozellix in. So Gozellix is a true innovative product. We brought it in as a part of life cycle management, really focused on being able to reach not only urban and suburban areas, but more rural areas. So the focus on Gozellix development and the true innovation was around the stability of shelf life. How long can we keep the isotope on the molecule and get it to where we want it to go so that you don't have indeterminate bone lesions, you don't have separations. And so it was a big part of the strategy. But part of what that enabled us 3 years ago as we started was to understand then if something came off transitional pass-through, it went straight into a bundled package, right? So we knew that we needed to truly innovate in order to ensure a HCPCS code. And so it wasn't really about a matter of expanding production capacity or anything like that on a cyclotron. That's more about -- it's not about the efficacies reached and the economies reached and increasing the capacity size. It's about how far we can go with the product to really reach the full potential of the TAM. So we started that 3 years ago. And as we edge towards that, CMS changed a bit, right? They came out with MAC pricing. And so we were able to manage then our strategy and tactics based on what the scenario would be at launch if it were under MAC pricing and assuming that we did or didn't get reimbursement pass-through. So once we got a HCPCS code, well, then transitional pass-through was just a little bit closer. So we were able to tighten up our tactical plan on how we were going to execute that. And so all of that was a part of a very disciplined approach that started 3 years ago as we honed in on what would be October 1, 2025. Now with all the splashiness going on at one end of the market, if you will, around pricing and kind of the F-18 battles, we tried to keep our eyes on the prize, if you will, which was maintain a dogmatic approach to pricing and a dogmatic approach to the execution of both our deep and wide strategy, where we were going to go get more patients, where we were going to take share and where we're going to open up completely new accounts. And that was an important part of that as we got closer. So now we got HCPCS sometime in early September. We were notified about CMS in late September, really a week before. So in the world today in hospitals, as you know, there's just some issues around pricing committees and things like that. So we're incredibly excited about the progress we're making. We're excited about our Q3 results. So once we saw our Q3 results in the midst of all that splashiness, we were able to raise guidance and what we thought was appropriate for our progression and our progressive move from Illuccix and Illuccix split accounts to what would look like to be more Gozellix-only accounts kind of moving forward. Remember, HOPS accounts are a real target for that and -- because of their CMS reimbursement, but they too have different payers inside of a single HOPS. It's not just CMS. So really managing that mix has been an important part of that progressive planning process. The more data that CMS gives us that's more accurate and actual, then we can quit speculating and start driving through the scenario plan that we built for that. And that's really where we are right now today. So we're in the middle of that tactical execution, and we feel very comfortable with the progress we've made and excited enough about that progress to raise guidance. And then, of course, we haven't given guidance for 2026 yet. But as we see progress in, you'll see that in the first quarter, and we'll be happy, and we've been pretty accurate with our guidance so far. So happy to talk more about that in the first quarter.

Absolutely. Looking forward to that. Just -- anything you can share on the -- after TPT was approved October 1 so far, it's November, anything you can share around how the launch for Gozellix looks like so far? Any kind of physician feedback you're hearing from physicians on clinical and logistics aspects of Gozellix?

Yes, sure. No, like I said, it's progressing according to plan, and we feel comfortable with that. Again, there are pricing and new product review committees that we are in big accounts, which these are HOPS accounts that we have to kind of manage through. But the feedback of the first cases that we've done are great, fantastic deliverability of the product through our radiopharm partners and our own radiopharm RLS has been a significant improvement in terms of just their ability to manage multiple doses and manage the operations inside. We are continuing to work on what we call our distant pet strategy. Those accounts are a lot -- a little more slower to come to market because of their sensitivity to reimbursement. They're smaller hospitals or more rural. So we're working through those issues as we start reaching further and start reaching the promise of Gozellix outside. So the promise of Gozellix in urban and suburban areas is flexibility, reliability and delivery, more timeliness of dosing and you're not as worried about -- you can get a dose there earlier in more metropolitan areas because you can deliver more gallium quickly. And then in the more rural areas, we can just go further, and we'll continue to start driving into that. So I think from a progression standpoint, there's been a lot of work done previously, and now we're just tactically executing that through our sales and customer-focusing team. So very happy.

Got it. Got it. And you mentioned about that 10% to 15% of potential market that Gozellix could potentially enter. How has that been so far?

Well, I think it's progressing as well. Like I said, that's more of a price -- it's not a price-sensitive market. It's a reimbursement-sensitive market because they are so small that this is a big expenditure as a percentage of what they do. So we're working through those details now on their pricing committees, and they were waiting for transitional pass-through. So that's progressing. As we look into Q1 and beyond, we will give guidance based on PSMA and not really the split between Gozellix and Illuccix, but we are very positive about how the progress of the uptake has been and the physician feedback has been great in terms of the deliverability and really the image itself has been very well accepted and adopted.

Got it. Great. And then moving on, you have this Phase III trial called BiPASS, which is going to -- going after patients with prostate cancer diagnosis. Can you talk a little more about this trial? And how do you think you're able to use this trial to expand the market logistics for that?

Sure. Yes, we were excited about BiPASS. And me as a man, I am very excited about BiPASS because of what the alternative really is, right? -- that the alternative right now is a pretty invasive procedure with a probe that is anchored in the anus and then a template biopsy is delivered 12 to 40x. So it's quite invasive for what that looks like. And I would say that PSMA can improve on the sensitivity and specificity of that as well as the adoption. There's 800,000 to 1 million biopsies a year in the U.S. and about 20% of men say no. They say no because of how invasive the biopsy is and some of the side effects of that biopsy. So the number of biopsy itself in PI-RADS 1 through 4 is that kind of adoptable market piece that we're looking at around that 800,000. So if you look at an existing TAM that's mostly BCR at this point of about 600,000 plus then you can see it more than doubles that available market to us and really changes where PSMA sits in the patient journey. So instead of taking it from a staging or a biochemical reoccurrence after definitive therapy, it puts you prior to definitive therapy. So we start looking at gallium scans in terms of serial play, right? You get it at the diagnosis, you get it after the definitive therapy for maybe a response to the therapy and what that may look like kind of along the way can give us multiple times that they'll want to use a gallium scan. So we see it as an amazing patient benefit and more than doubling of the market in a step change with a positive trial. And then we see that we can continue the BiPASS trial and really move into the other section of PI-RADS 5 and really kind of paint that whole picture with the PSMA scan. So the way we position it is that it gives the patient the one and done or none and done just based on how positive or negative they are on the scan. So either one biopsy just will be more precision. It would be right where the tumor is, and you don't have to do a template to figure out where it is because you know right where it is up to they get a clean PSMA scan with high predictive value. So they're good to go. And as you know, there's a lot of anxiety around getting that PI-RADS scan and really understanding where you're going to get a Gleason score because those two together give you really a risk stratification of metastatic disease, how aggressive is this and/or is it metastatic. And so the ability with BiPASS upfront to alleviate some of that and give them clinical decision-making power early in the process is going to be really important.

Got it. That's really helpful. And so on that front, anything you can say in terms of data expectations or when should we be expecting completion of the trial? When do we actually think we actually see any data coming out of it?

Sure. No, it's an interesting question, and we're all kind of curious about that, but we haven't disclosed anything on that yet. We have disclosed that we've done our first patients in Australia. We're finalizing everything with the FDA now. We've got sites registered and lined up. They're just about to start recruiting, and we'll announce that as soon as we get that first patient in the U.S. Remember, the follow-up on a diagnostic trial is not like it is on a therapeutic trial. So we're seeing pretty quick recruitment in Australia. I mean if you -- imagine, if you will, you've got a patient, it's really an intent to treat -- it's an intent to biopsy trial. Meaning that if you see clinical indication in a patient that you want to biopsy of them, then they qualify for BiPASS biopsy. It's typically a rising or a high PSA and a PI-RADS 1 through 4, and then they would be indicated for a biopsy. So they're simply just adding on a PSMA scan, which will give them more information. So we see it as a pretty fast recruiting trial. I mean, still to be seen, but we're seeing good uptick in the trial in Australia right now as we kicked it off. So we -- hopefully, we'll be able to give some more guidance in Q1 once we get the U.S. space going as well.

Got it. That's helpful. Great. And moving on to your other diagnostic programs, Pixclara and Zircaix, maybe focus on Zircaix, so far. Now we've recently seen that the program is actually recently being included in a number of guidelines, including SNMMI-I, EANM, ACNM. So could you talk about the importance of the inclusion of Zircaix in those guidelines?