Ann: Telix Urology Innovation Showcase, page-28

TLX Day: PSMA Imaging Use Cases Increasing; RadioTx Significant Growth Driver

Takeaways from TLX’s investor day incl: 1) strong growth expectations for radioDx/Tx driven primarily by radioTx uptake, as well as increasing imaging use; 2) TLX591 177Lu antibody Tx is differentiated; KOL sees use cases for both antibody and small mol (Pluvicto, PNT-2002) with market supporting multiple assets; 3) increasing radioDx/Tx among big pharma companies, which we think positions TLX and LNTH as takeout targets.

TLX portrayed a bullish tone on the radioDx/Tx market calling for 19% annual growth through 2031 with the TAM reaching $35B.Key growth drivers include increased use of radioDx imaging (~20mm US procedures/yr), the entrance of new therapeutics, and increased investment/M&A activity. TLX expects Tx will be the fastest growing portion of the market with an implied CAGR of ~40%.We expect these trends will also be positive for LNTH Pylarify given its market leadership position in PSMA PET imaging and leverage to radioTx via PNT-2002.TLX management sees a pathway for scans/patient/yr to increase from ~1.5 today to 3-4 in a few years. This is in line with our channel checks. TLX also aims to expand the Illuccix use case to monitor active surveillance, aid in biopsy, surgical, and radiation planning, in addition to ongoing disease assessment/mgmt.TLX's Lightpoint Medical acquisition provides exposure to PSMA-guided surgery.Despite increased competition in the PSMA PET imaging market, TLX noted pricing remains stable.While TLX acknowledged increasing scans/patient into these incremental use cases could require price cuts vs current levels, management expects volume increases to more than offset any price concessions. As it relates to radiopharma infrastructure, TLX called out increasing investment among distribution partners to support growing demand for PSMA PET imaging.Currently, centers are flexing up capacity via longer hours to accommodate demand, supported by imaging profitability and radioTx. Management also called out the emergence of standalone Theranostic Centers, which have stepped up to capitalize on the outsized demand. TLX also noted increased investment in more PET/CT scanners, as well as technological advances, which are reducing scan times and improving throughput. TLX called out Ga-68 as having 6x less non-specific bone uptake than F-18, which leads to follow-up bone scans to confirm/deny F-18 false positives. TLX also noted Ga-68 is better at highlighting pelvic lymph nodes and more reliable at identifying PSMA-positive lesions, with a 91% true positive rate. Our channel checks suggest both Ga-68 and F-18 provide good results. Additionally, our checks consistently reiterate product availability and supply chain reliability as the number one factor for adoption.LNTH Pylarify has achieved 75% market share due to its proven supply chain and manufacturing capabilities. We note TLX highlighted >200 points of US distribution and its ability to supply all 50 states. TLX591 will compete with NVS Pluvicto, PNT-2002, and Curium's 177Lu-PSMA-I&T in prostate cancer.TLX591, as an antibody-directed radioTx, is differentiated from these other three players, which use a small molecule ligand. Dr. Tagawa (on-site KOL) noted antibody-related advantages vs small mol incl less off-target radiation leading to reduced side effect potential, as well as a shorter dosing regimen (2 doses vs 4-6 for small mol) given longer circulation time.Dr. Tagawa sees uses cases for both antibody and small mol Tx with antibody better positioned for pts with small vol disease and mets in areas with lower PSMA expression.