Christian BehrenbruchCo-Founder, MD, Group CEO & Executive...

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:30:21

We do believe that bringing molecular imaging into the OR is an important thing to do. I was grateful, and I promise you that it wasn't a prompted -- a transplant of information. But when Scott said, we can take a more expansive view of what a therapeutic intervention is when we talk about theranostics, that's something that we really believe in passionately. And for those of you who are not day-to-day in nuclear medicine, that is not a straightforward conversation right now. There are some people in the industry that believe that theranostics are -- see it treated radiopharmaceutical and don't necessarily subscribe to the idea that molecular imaging can have a wider role. I think that it's -- you've heard multiple examples today of where improving surgical outcomes can be a real-world achievement. And that's going to get traction for some of these technologies from a payer perspective early on. Clearly, we have our therapeutic pipelines. And then, not just to think about our pipeline through a monotherapeutic lens, but where does it fit into the wider spectrum of pharmaceutical interventions? And again, that comes back to my opening slide. For this whole field to be disruptive, it's got to be embraced by medical oncology, and it's got to integrate with all of these other standards of care. That is why when you look at our clinical trial programs, you will not see a single head-to-head study between a nuclear medicine agent and an existing standard of care because that's not our corporate objective.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:31:45

Our corporate objective is to integrate and to bring the benefits of nuclear medicine as a partnership specialty into medical oncology, that's just a fundamental part of our strategy. By the way, we think that that's the strategy that's going to make Telix that sort of cornerstone partner opportunity for somebody bigger that really wants to get into nuclear medicine. That's the fundamental ethos that we think is important to support that possibility for the company in the future. But what's really neat is that if you subscribe to the fact that there is interplay between these kind of 4 pillars of research, there's some profound outcomes that are going to take place over the next, let's say, 4 to 5 years. Image-guided interventions like with a gamma probe or with a fluorescent agent, that's going to become standard operating procedure, if you'll pardon the pun. We do believe that personalized dosimetry is going to matter. If we really want to use these therapeutic agents in different stages of disease burden, we've got to tailor the dose for the patient. We can't just give a one-size-fits-all dose. And as we understand how the current approved agents are being used out in the field, this is manifestly evident.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:32:56

If you want the best patient outcome, you need to tailor the dosing regimen for the patient. It's not going to be an easy journey to undertake, but it's going to be a clinically vital one to achieve. Patient response assessment, super important; prediction, even better. I think CA9 is going to turn out to be one of the most exciting areas because we know that if you're a high CA9 positive, don't say that 3x quickly, CA9-positive tumor, you're going to have a higher resistance to immunotherapy. So then the question is, what are you going to do to prime that patient first? That's a really -- I mean that's just a blue sky for us. And so I envisage Colin's STARBURST trial is a kind of LOXO style; one day, we'll treat CA9-positive cancers. We won't choose a particular cancer. We'll use an imaging biomarker to select first. And I think that's just a massive opportunity. So as you can see, there's some really exciting research areas that I think are clinically transformative. And they only come out if you're willing to tackle those what appear to be distinct and disparate research areas, but actually have a ton of overlap. So I feel compelled to share that because sometimes our R&D strategy does appear a little bit disjointed, but I can assure you, there's method in the madness.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:34:23

And hopefully, the clinical data will speak to that over time. And in fact, it's -- I'm not going to rehash one of Colin's slides, but if you take that very abstract vision and then you teleport it into what are the clinical trials that are happening today, we are collecting this data. So I think that I'm going to be able to stand in front of you, Colin is going to be able to stand in front of you in the next 12 to 18 months and say, this is how the clinical data is supporting that vision for the company. And I think it's an immensely exciting area. And I think we can all take, as a company, a lot of gratification from the fact that we may not be doing fundamental drug discovery, it's not really the thing that we do. But some of the clinical concepts that we are exploring are so new and so massive if we get even 1 or 2 of these things right. So I think there's just a ton of -- there's an abundance of opportunity in our pipeline. I do want to briefly address Lightpoint. I'm not going to talk too much about it today. It was that, frankly, with all acquisitions, it's touch and go, whether you get it done in time. For a certain point in time, and it was just coincidence that it landed this week.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:35:31

We've obviously got the Society of Nuclear Medicine Meeting coming up, so we were motivated to get it done, but you can never tell for sure. But this is a -- this is to address an elephant in the room of Illuccix, which is currently the indication for Illuccix, the main 2 indications, [ bookend ] prostatectomy. So we want to really have that special relationship with a key stakeholder of Illuccix, which is the urologist. We need to have things that can go into the operating theater. And we want to make it so that when a urologist goes in to do a prostatectomy or 1 day, maybe even pelvic lymph node dissection as a more routine pathway that, that person is going to say, "Hey, where is my Illuccix scan? And where is my PSMA-guided intervention?" and to have the confidence that those more complicated surgeries are going to get dealt with well. If you've ever tried to get a meeting with a urologist, it's hard because they're normally in the OR. I need to find ways to go into the OR to build that relationship. That's what Lightpoint is about. So I think it's a really exciting acquisition. It's not a distraction from a pharmaceutical strategy. If you really believe, as Scott mentioned, that these therapeutics are going to go into very early line settings as an adjunct modality to surgery, you've got to be able to quantify that PSMA effect in the operating theater.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:36:52

We might even one day deliver drugs in an adjuvant setting in the operating theater, that's happening in other parts of oncology, right? So surgery is not just taking out. surgery can also be delivering a localized adjunct therapy as well. So there's just, again, so much potential in this. So anyway, that concludes our session today, and we're going to bring the management team up now to be in front of you to take any questions that you may have. I hope that somebody else other than the 3 analysts that keep asking the same questions, will ask questions, but they're pretty good questions, too, so I don't really mind. But these are the major catalysts that we have for this year. We're making good progress on achieving those catalysts. Drug development is not a perfect science, but I think we're executing pretty well to plan. We are still planning to submit 2 more drug approvals this year. So there's a lot of people -- whilst we're here with you in New York, there's a lot of people that are working very hard to deliver on those corporate objectives, but the floor is open, and we're here to answer any questions you may have. So thank you in advance for your questions and for your time today.

Steven Wheen

Analyst

02:38:18

Thanks for your time today, team, and appreciate the presentation so far. This is just a minor one to you, Tom. I think you made a comment, rewinding back to your presentation, that you don't even need to adjust minimally with the sales model to distribute 250-CDx. Can you give us a little bit of like clarity of what that means? Is that more feet on the ground? Is it different relationships? What does that actually entail?

Thomas Fromm

02:38:46

Yes, it's a great question. It's a small increase. We predict about a 20% increase to our salesforce. And the great thing about our current salesforce is the call point is the same. So we're just going to expand in a couple of big metropolitan areas where we might need that headcount. But the great thing is we have the urology call point, they're already in. And then in the new [ bed ] call point, we're already there. So it's a minimal investment, we see about 20%.

Boris Peaker

Analyst

02:39:19

Boris Peaker from Cowen. I guess two questions on TLX250. What should we be expecting in the label specifically in terms of patient -- the patients that will be targeting for this drug? And also, your thoughts on kind of first-year commercial adoption, is it going to be a slow ramp? Or how should we be kind of modeling that out?

Colin Hayward

Group Chief Medical Officer

02:39:42

Let me take the label discussion initially. We're relatively focused in our label because we have a breakthrough designation with 250-CDx. So that is about characterization of renal masses as clear cell or non-renal -- or non-clear cell renal cancer. And that goes along with all the advantages of having the breakthrough therapy. So I think there will also be potential to have discussions around active surveillance because that's characterization of the renal mass for sure. And then, as we know that a lot of imaging is used off-label anyway, and we've heard today how surgeons, oncologists are excited to use it beyond those areas as well, so potential staging metastatic setting and so on and so forth. So that's the label. I'll hand over to the commercial team for the commercial aspects.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:40:31

Do you want to talk about ramp? I can do it. Well, I think that given Kevin's team has established the relationship with the customer that's going to use this, I mean I think from what we've seen on inbound interest on the back of the ZIRCON trial, people are waiting for this. So I think there's a natural sponge effect, I guess, it's a terrible descriptor, but I really do think that we're not going to have to push the door very hard to get people to start adopting. And we've had -- and actually, I think Scott said it really nicely when he stood up that we've gone through a lot with PSMA in terms of the payer dynamics, the insurance process. There's a whole mechanism of action there around the commercial dynamics of PSMA that serves us really well, going into CA9. Now we've learned some hard lessons. We know that we've got to set up the market access teams. We know that when we go into a -- maybe you want to talk about it, but when we go into a customer site, we've got to hold in the hands of the customer.

Kevin Richardson

Chief Executive Officer of Telix Americas

02:41:36

Yes. I think the question is -- just kind of pulling the two questions together, it's really about the density that we think we need in terms of these major markets as we call on the single urologist, right? It's still the same urologist group that's calling on that. So when we're in there, there's a synergy effect of being able to combine both products. And that actually makes us more valuable. We're solving more problems for the same urology group. And then we've talked a lot -- in my talk, I tried to go through the breadth-and-depth example of what we've got in the field from a cross-functional support. So that's very focused in the urology group right now. And we understand that market. We understand that scan. Our medical support team understands all the scanners that are in the market. And we are able to change isotopes easy to make sure the scans have the highest quality. So what you're -- what we're going to get is the synergistic effect that we've seen in many other companies that commercially we've been part of, is that you start selling the portfolio, the reason and the value.

Kevin Richardson

Chief Executive Officer of Telix Americas

02:42:34

And as you do that and you think about this from an imaging standpoint, the [ see-it ] part and then the treated part, we just become more valuable to them as we go. So the ramp, to Tom's point, is incremental because we're looking for density in major markets, and then we still got great coverage out in the more rural. There was a comment earlier about how we're going to access those? But in our Illuccix platform, that's one of our value propositions, is that we can take the Illuccix to those markets and still treat those patients. And so we're going to have those relationships out there because we have 200 points of distribution where we have relationships, and that local knowledge would let us -- allow us to really execute on that. So it's synergistic in the [ ramp ].

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:43:20

Yes. And also, I mean, everyone thinks that, well, people have been talking about PSMA for a long time, so that's a pent-up. I mean there's a decade of evidence. Nuclear medicine is not a fast-moving field because it's typically been underinvested and so -- I mean by the time -- I mean, the first somatostatin therapies were done in the late 60s. I mean -- and now we have [indiscernible], right? So there's a long gestation period, but it's important to understand that CA9 is one of those targets that's been on radar in this community for a long time. In my personal opinion, Redectane, which was the I-124 variant of girentuximab, which many of you even remember, that should have been approved. I mean it wasn't, and there was a technical reason why it wasn't approved, and that's reasonable. But nonetheless, we took that [ aspect ], we improved it. We've made it significantly -- the chemistry and the radiochemistry significantly better. The commercial parameters around the product are significantly better. The clinical parameters, no thyroid blocking, lower-radiation dose. All of those good things that came from making a zirconium-based product, we've really addressed the target product profile of the asset.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:44:33

And we're going the door to a stakeholder that wanted that product approved, frankly, in 2015, 2016. When I started the company, I mean, I've had a long association with CA9 and with girentuximab. And actually, Memorial Sloan Kettering and Cornell were key development sites for those assets. When we decided that we would pursue a confirmatory study with a kind of revised product, I mean we've got dozens of letters and support from really senior figures in the renal cancer field. And I think that's one of the reasons why we have such a vibrant clinical program. People want it. They understand the importance of the target. Everyone understands there's a genotype-to-phenotype relationship with CA9 and clear cell renal cancer that's unique. That's why the positive predictive value is so high. If you have clear cell, VHL mutation, you will have overexpression of CA9, that's it. It's a one-to-one relationship. So I think we're pushing the door open on a target that people really understand well. And I think that's what will make the adoption rate very high.

Michael Sarcone

Analyst

02:45:46

Mike Sarcone from Jefferies. Just had a question or two on -- you talked about expanding the use of Illuccix to active surveillance and then planning for biopsy, radiation and surgery. Can you just talk about the pathway that you see to getting there? Does that entail showing more clinical evidence? What do you expect the reaction from payers to be as docs are ramping up the use of scans? Would just love to hear about your commercial plan for getting there and maybe even timing as to when you think that could play a more meaningful role for Illuccix.

Colin Hayward

Group Chief Medical Officer

02:46:22

Sure. Maybe I'll start off with the indication section, then talk about the health economics and the different commercialization aspects. So really, we see certainly in imaging, there's a number of routes to increasing the utilization. That's our own studies that then potentially can progress to formal indications, but we know a lot of imaging comes through guidelines and through practical data usage as well. So it's really a sort of a 3-pronged approach to develop all of those areas in terms of our own potential indications, but also guidelines and then established use cases, data cases, publication cases that show the utility. In terms of the health economic arguments, and again, it's about coming away from this being just a one-point-in-time diagnostic. My sense right now is given the prevalent population is biochemical recurrence and the smaller incident population is newly diagnosed patients, most of the people are getting it as their first time presenting for whichever reason in the biochemical recurrence population. As we see the market establish and continue to grow over time, we'll be able to demarcate precisely where these use cases are being used the most. I suspect it's going to evolve pretty rapidly. But maybe I can hand over to the commercial team to talk about that evolution.

Kevin Richardson

Chief Executive Officer of Telix Americas

02:47:42

Yes. I'll use the term medical necessity in the way that introducing the market is typically by indication. But anytime you get a technology like PSMA gallium, physicians start using it where they see medical necessity. So that takes care of the health economics question. And then they begin using it in the academic centers first as they expand the use of this medical necessity. And that's where you see guidelines like AUA came out with expert opinion. And there are really 2 big use cases that we're talking about, that we'll start working with both clinically and commercially to start expanding on that and letting the market understand where the experts kind of see the use of PSMA. I mean it's been a year, 1.5 years since it's been commercially available, and you're ardent to see smart people like you saw on stage today, thinking of other ways to use the product. And you'll continue to see that expand as they deem something medically necessary.

Mary Jessel

02:48:40

Can I add on to that? Actually, that's a wonderful point. I think when Dr. Tagawa mentioned the PSMA imaging expansion of that, and you can see it that it's going from beginning from patient journey all the way to the end with [ med onc ]. And so our PSMA is touching at not only the urologists in nuclear medicine and then all the way through to medical oncology, but also in between. And if you see the real-world evidence around the prescribing behaviors, you can see it being used as treatment planning for surgical margins. You can also see it in radiation oncologists that they want to direct the radiation for PSMA targeted, so that you don't have to [ irradiate ] the whole prostate. So we actually are seeing that. And in the guidelines, actually, the -- what Kevin is mentioning is that they just came out with SUO, mentioning that they recommend and acknowledge PSMA-PET for periodic scanning every 6 to 12 months for suspected disease and spread and then also for periodic scanning for those that don't advance on disease in the mCRPC space. So you can see that the guidelines are really seeing the significance of PSMA-PET, and you can see that physicians are using it in the clinical practice where that necessity is needed.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:50:04

Yes. And then maybe we shouldn't underestimate the impact as well of, I mean, a big pharma and all of these really important Phase III trials that are coming out, and there are multiple where PSMA, for the first time, is actually being used as a proper volumetric tool. If you think about it through all the generations of tweaks and changes around RECIST criteria and how truthfully, how minimally quantitative that approach is or how under quantitative that is to see something like this come along and just rapidly make it into a significant measurement tool for looking at systemic disease progression, I think that's really tantalizing kind of indicator of what can happen. I just -- again, not to oversell it, but I really feel that our commitment to delivering these imaging modalities globally, it just puts us in a very strong position. We don't tend to put out a slide, right, with all of the pharma logos all tiled across it, like it doesn't serve us well to do that particularly. But I can tell you that if a partner wants a dose of Illuccix in a hospital in Shanghai or in Osaka or in Sao Paulo, I mean we can deliver that to you tomorrow, it's there.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:51:25

And I think that that's a really strong opportunity. It's a unique opportunity for Telix. We had the great privilege of supporting the VISION trial. We are a key source of imaging in the VISION trial. We had to deliver that in a lot of different countries, which we did, I think, very well. And so that's given us the credibility to be a partner and to deliver mission-critical imaging in those very large global multicenter trials. So that's going to absolutely impact the way that physicians think about the longitudinal use of these agents. And by the way, the same thing is going to happen with CA9. Once we get approval, once it's out there and it's readily available, now we have a -- I think a lot of literature that shows that this is a prognostic biomarker, you have a high CA9 expression, you're going to have -- you're going to be less disposed to immunotherapy. And so we're going to see that used as a tool more and more. And I think just the imaging alone will have an impact on trial design for better objective complete response. So that's -- I mean that alone is exciting, let alone the therapeutic pieces that are coming in behind.

David Oh

Analyst

02:52:39

This is David Oh with TimesSquare Capital. I'm just wondering whether you could talk a little bit about how you're thinking about pricing strategy in the U.S. and ex-U.S.? And kind of along with that, whether you've tried quantifying overall cost savings, if any, in both the U.S. and non-U.S. markets, maybe that's something that helps accelerate acceptance, adoption, commercialization?

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:53:02

I'll talk about global, and then I'll hand it over, maybe, to the U.S. team. I mean, we have a global pricing committee. We start with a pharmacoeconomic model, which is based on the consensus standard of care. For prostate and renal cancer, the U.S. is fairly similar to most of the major markets. Clearly, in Europe, we have some different reimbursement kind of landscape, which is -- does result in a more price-sensitive market. So there's like two issues, right? One is the pharmacoeconomic advantage or the benefit of the product. The second is what is the reimbursement kind of policy around it. And certainly, in Europe, we see a more diminished appetite to pay. Although I have to say, that's changing as well. There are quite a lot of reimbursement working groups now that really understand that if there isn't the ability to pay for innovation, innovation won't happen, right? So I think that generally, there's a trend in the right direction and an understanding that if we can properly diagnose and stage patients, that has a big downstream cost benefit to healthcare systems. So I think that's a positive global trend. I think for the U.S., I mean, we have a pretty clear understanding of what the cost savings are to the healthcare system when we bring these products in line. I mean you want to sort of elaborate?

Kevin Richardson

Chief Executive Officer of Telix Americas

02:54:30

Yes, we feel like the pricing in the U.S. is pretty stable. And we see that it's bringing way more benefit to the system as a whole than the cost of acquisition right now. And then, we really see that from a strategic account standpoint and integrated delivery network standpoint. And remember, those are like franchises. If you're not familiar, integrated delivery networks are like franchise hospitals. There's anywhere from 2 to 20 hospitals that work together in an integrated delivery network. And we'll work with them to manage that from a pricing perspective, some, but we don't see a lot of downward pressure on pricing right now.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:55:12

Yes. And I think longer term, and everyone's aware of pass-through. That's a dynamic that's kind of front and center of the industry right now, but it's also -- it's a double-edged sword. If we really believe that, to your question before, PSMA imaging could go from 300,000, 350,000 scans a year to, let's say, 1.5 scans per patient, on an incidence basis, to 10 scans, just for hypothetical conversational purposes, that's not going to happen without a shift in price. So there's going to be a volume price trade-off there. And actually, we plan for that. That's in our business growth strategy.

Kevin Richardson

Chief Executive Officer of Telix Americas

02:55:56

And remember, not the whole market is under pass-through. There's still VAs, there's 340B pricing as well as commercial payers. And then the independent centers, because we're such a broad network and we provide out in the suburban and the rural areas, there's a lot of self-standing centers, too, that are reimbursed differently under Commercial and Medicare. So we feel pretty comfortable that the upward pressure on doses and on scans and the downward pressure on pricing because of that to get to that larger market that Chris is talking about, is manageable.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:56:32

We don't really break down typically our R&D spend, but for discussion purposes, I mean it's public domain information, but about 25% to 30% of our R&D budget is actually in life cycle management of our commercial products. So Illuccix is generation 1, and it's evident in our pipeline. We've got other things coming down the pathway that will enable us to come to market with fresh product ideas. So we have a very long-term category commitment to being a leader in prostate imaging. So it's an exciting field to be in.

Unknown Attendee

02:57:14

[ Sam Berdowski ] from Truist Securities. Thanks for that color on the market. That was really helpful. Christian, you sort of throw out a theoretical scans per patient through their lifetime. Is that -- where do we think realistically that could go over the next maybe 3 to 5 years and maybe over the long term? And where do guidelines sit today in terms of supporting that? And then, very early days here, but another competitive F-18 agent on the market or soon to be on the market. Any thoughts on that? Or anything early you're seeing from that?

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:57:48

Yes. I mean I don't mind it's maybe starting it, and if anyone wants to chime in. I mean I think that I don't have a forecast for you. I don't have a crystal ball on how many scans per patient we're going to get to. What I do know is that if we don't invest in the clinical studies to elucidate it, it's not just going to happen. So we invest in clinical trials. We support -- Mary's team supports a lot of investigator-led studies. By the way, that's, I think, a good industry-wide phenomenon. To some extent, all experience with PSMA imaging is a good thing. So we do kind of embrace that. I mean obviously, we want everyone to use Illuccix, but we're also kind of happy to see progress being made, overall, with PSMA. And then, I think those really large therapeutic studies that are using PSMA longitudinally, by the way, including our own, right? ProstACT GLOBAL uses -- makes extensive use of PSMA imaging.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

02:58:44

I think that those are all opportunities to get to that point of expansion. So I do believe -- I don't have the exact number for you, but I do believe -- I mean, we have an internal number, but not an external number. I do believe that in sort of the 4- to 5-year period, it will be typical that a patient will at least get 3 or 4 scans. And in some markets, like in Australia already, it's already established. You get 3 scans if you want it. So I think that there's -- I mean, do you want to add something to that, Mary?

Mary Jessel

02:59:12

No, I mean, you can clearly see from the excitement around PSMA utility at ASCO a couple of weeks ago, [ FNMI ] this week, all the abstracts that are being presented are a lot around PSMA with response to therapy, using it for outside of prostate in different tumors, you have it in serial scanning and in combination and -- so you can see the explosion of excitement. And speaking to the guidelines, you have the major guidelines just last year across the globe, [ FNMI, EA&M, EA&O ], a few of the SUO as well, all of them having a consensus around PSMA-PET and have recognized it and included in their guidelines. I think you can see the evolution now with even [ FNMI ] and NCCN, [ EA&M ] coming together, having a more consensus language around having it preferred over conventional imaging, recognizing it as superior in micrometastatic disease and detection as well as now SUO came out this year seeing periodic scanning, recommending that and also for patient selection, [ FNMI ] and NCCN. There's a lot of Ns and Ms. But clearly, you can see that you have a collection of a lot of guidelines, and societies that have come together across the world, recognizing PSMA-PET.

Kevin Richardson

Chief Executive Officer of Telix Americas

03:00:48

Yes. My only add is that, that was really quick from first commercial use, right? So to see the excitement in AUA to update with expert opinion, the next step would be to take it into the guidelines itself, and that's all happened in the first year or so of launch. So it goes back to what they're deeming as medical necessity. Many times, industry puts great products out there with an idea of how it's going to work and how it's going to fit. And then when you broadly get it adopted, then you get a lot more smart people thinking about, "Wow, this would be advantage in." And so you get that practice-of-medicine effect, where they start seeing medical necessity in other areas. And so that's what we've seen really quickly, and it's really encouraging to really kind of talk to Chris's number about what will be typical in 2 years from now, couldn't have been imagined a couple of years ago when we didn't really understand the broad commercial adoption of the products.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:01:43

And also, just the good news is there's a ton of investment now in scanner capacity. We're seeing higher -- I mean, the waiting list for scanners is pretty long because there's so many under order. We're also seeing an interesting -- and I've been in the nuclear medicine industry since 1997 and started my life in the capital equipment side of things, where it was always a battle between GE, Siemens and, to a lesser extent, Philips and Toshiba. And it was always kind of the Germans versus the Americans, and you never got fired for buying GE. But the Siemens guys always did it slightly better. Now we're seeing really crazy market in versions, where the Chinese have developed the most incredibly innovative whole-body scanners because you got to have an imaging center that's doing 100 patients a day. And that technology is now coming here in the form of things like the [ microexplorer ]. Of course, Siemens has responded with their Quadra system. But now, you're seeing super high capacity scanners at an amazing price point per patient scan coming in the door, and that's just revolutionizing the capacity of the industry. By the way, it also really helps us because the amount of localized production of gallium-based pharmaceuticals that we can deliver in that kind of scanning environment is just super productive for the site.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:03:05

So it's a really interesting time. I do want to address your question about -- I think you were alluding to the Blue Earth, the entrant. Look, I think when this field started, everybody -- and it's sort of a natural evolution of clinical understanding, everybody treats a product class like it's kind of a homogenous class. And then over time, performance and understanding of things improves. So I think, at face value, and it was a really positive thing when the guidelines came out, pretty equivocal, it was all about PSMA. And I actually think it's great that patients have multiple options available. That's what's going to drive the field. That's what's going to make this a routine part of much more extensive patient care. So I actually think multiple vendors in the market is a good thing, broadly speaking. And by the way, there's no competition. It means there's nothing worth doing. So I mean, that, in and of itself, is a positive dynamic. But I do believe, and I want to be very clear about this and very careful, we don't talk about Illuccix versus our competitor, right? We talk about F-18 versus gallium? That's not a product, that's an isotope. Okay? So -- and what we're seeing now is the separation and clinical performance between PSMA-targeting agents based on F-18 and those based on gallium.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:04:27

And the fundamental issue is false positive rates. When you have a bulk of F-18-based radiopharmaceutical and you have radiolysis and you get free F-18, you get -- as a side effect, you get a bone scan. And that is no longer a targeted imaging agent. That's a targeting imaging agent, plus a bone scan. And readers need to be aware of that. And if they understand it and they know how to read it, it may not be a problem. But it can also lead to patient overtreatment because if you can't verify that a false positive is a false positive, the standard of care guidelines say you're going to get 3 years of hormone therapy and targeted radiation. So that needs to be understood. And that is being clearly elucidated in the guidelines. It's already come out for the radiohybrid for the Blue Earth product. And it's a significant clinical issue, and it can't be swept under the carpet. So my personal view is that not all PSMAs are created equal and that the customer base that we all have to interact with every day is super sophisticated. They understand sensitivity and specificity and false positive rates. And they will select what they will deem the best product for delivering a patient outcome.

Mary Jessel

03:05:50

And there's data to support that. I think now that we have more products in the market, you see a lot of publications culminating coming to light. You have guidelines calling out certain specific F-18 products for their benign uptake, bone-specific uptake. You have some recent publications that were presented at ASCO that showed higher benign, indetermined bone uptake as well as large prospective papers and retrospective papers now coming to light. So there's quite a bit of conversion evidence to support that.

Colin Hayward

Group Chief Medical Officer

03:06:28

Yes. I think it's also just going to add to the ZIRCON study, I think it makes the path forward for that at very nice -- because you've got a potential study in those other studies that haven't met their primary endpoints, have extremely high inter-reader variability and then contextualize that with the ZIRCON study that has a specificity and sensitivity above 85% and an over 90% inter-reader agreement. I think that contextualizes ZIRCON study very nicely as well.

Ted Stephens

03:07:00

Just one additional point, as it is F-18 based, we anticipate the same scheduling and challenges that you see with centrally produced isotope today. And our ability to deliver doses to customers throughout the country on time and allow them the ultimate scheduling flexibility will continue to be an advantage.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:07:21

Yes, I think, that's a great point. Like a lot of our customers, to your point, have bought into the idea that a nuclear pharmacy-based solution is really is beneficial to them. And that doesn't go away with another entrant to the market. So -- and look, frankly speaking, we know that there's -- it's going to be product #5. We know who that's going to be. We know who product #6 is going to be. I think that good competitive business dynamic dictates. If you're the fifth or the sixth or the seventh person in the market, it's a diminishing return. And we're now getting into a penetrated market environment. So it's going to be established players with a track record of delivery and a good-quality product that's got clinical validation behind it, those are the players that are going to blossom. And I frankly think that's 2, 3. It's not more than that.

Unknown Analyst

Analyst

03:08:21

A question for Tom. There's lots of discussion there around product differentiation. How would you describe the markets, the urologists on the [ call piece ], their knowledge of that, you see it every day? And...

Thomas Fromm

03:08:36

Yes. Good question. I think it's the education that our team's doing daily. And it's really the education of the urologists more about our products. We talked earlier about availability and differentiation clinically. And those really are two main parts daily that our team is out there. What's great about our team that we hired is that's the background they have. They know how to educate the different specialties, and they have that urology background. We also have a team of nuke med techs well. So one thing we haven't talked yet about, but we have all these different specialties that can do that education and cover all those physicians.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:09:15

But I mean just to be clear, from a compliance perspective, we can't do competitive product positioning. But I think the first time we've ever seen something really phenomenologically strange is urologists turning up, urologic oncologist turning up to nuclear medicine in radiology meetings, right? Like standing room only at PSMA forms did not come from nuclear medicine. It came from the customer of nuclear medicine turning up to really understand. So those publications and those conference papers, they're high impact. We don't need to sit down and feed a lot of publications to our customers. They're at the conferences. They want to learn. They want to understand. It's out there. A new paper comes out, you go and have a meeting with a KOL on the urologic oncology side. They're like, "Did you see that paper? ".

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:10:03

We don't have to highlight nuclear medicine and radiology there. Like this is practice-changing for me. I'm going to go out, I'm going to seek the information. I'm going to be aware of what's happening in the field. So it is an education process. We have a great team's, but it's -- we also have to be honest with you, it's kind of a shallow education process. They kind of know where to look. And by the way, the practice guidelines, they really do reflect the moving art of the field extremely well, as Mary pointed out. So you know what, we don't have to do anything more as a company than just talk to the practice guidelines. And that's what we've typically -- well, that's what we're required to do, frankly.

Kevin Richardson

Chief Executive Officer of Telix Americas

03:10:40

Yes. They have been very interested in basically going from black and white to the color PET CT that they're seeing under -- they'd see versus in MRI or CT or something like that. So they are interested and more interested in the diagnosis piece than just ordering the dose and letting the read come back to them with what they needed to do. They actually are, to Chris' point, getting it more involved and interested in what that really looks like and then how they approach their surgical considerations the way Dr. Tagawa has talked about.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:11:14

And urologists love technology. They love toys. I mean, look at what they do every single day. I would go so far as to say, they're not even just interested in going black and white to color. They're like they want to go from plasma to OLED. And so yes, they're highly engaged. It is an easy conversation.

Unknown Analyst

Analyst

03:11:31

It's the same [ Alice ] asking a different question.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:11:41

You ask good questions, [ Maggie ], so fire away.

Unknown Analyst

Analyst

03:11:44

It's very encouraging to see from the recent Cardinal Health on Investor Day that they are committed into expanding capacity and have further investments into the center for theranostics advancements segment. I appreciate that today is not an Investor Day for Cardinal Health, but could you talk more generally as to the level of commitment and investment you have seen from the industry participants on the nuclear medicine infrastructure?

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:12:14

Do you want to take that?

Kevin Richardson

Chief Executive Officer of Telix Americas

03:12:17

Yes, sure. I mean there is a high level of interest as these radiopharmacy partners, and again, talking about 2 of the best, 2 or 3 that we really deal with, they have invested heavily in the infrastructure to support the growth in what we're calling theranostics from a radioisotope perspective. So we see a lot of investment. In fact, I think Cardinal actually re-upped their, really, commitment to our business, we think, in terms of their increased investment in R&D over the next couple of years in that investor presentation. So we see a high level of interest. They see it as a high-growth target and high margin for them as well in terms of what they're doing compared to their typical radioisotope business.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:13:03

I mean, just strategically, we are highly committed to the nuclear pharmacy model. We think that -- I always make this joke, right? You're having your Friday gin and tonic, okay? We're here in New York. So do you, a, call your friend in Los Angeles and have them make a brick of ice and then fly it across in time for your 5:00 drink, so it's melted down to the correct size you drop in your glass? Or do you; b, go into the next room and pop an ice cube of your freezer, right? That is really the difference of the nuclear pharmacy model. And the way that the nuclear pharmacy standards are evolving with USP 823, there is the facility there for us to dispense a wide variety of products. And so we just see that localized delivery model is really powerful. We are committed to it. Cardinal and Pharmalogic and Jubilant and RLS and all of the great organizations that our team works with every day, they see the pipeline of products that we have coming down the pathway and our commitment to that nuclear pharmacy model.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:14:10

And I think it's got a real longevity in the relationship. And frankly, I mean we love working with these people. They're super talented. Their sales teams are highly motivated. We work together very closely. It's a very effective partnership. And I would say that if you really look at what we've built, what Kevin's built -- I had very little to do with it actually, but if you look at what Kevin has built in terms of the sales and marketing infrastructure and then you layer our partnerships around that, we have, by far, the largest team out there telling the story about the [ space ], like by far the largest team. So that bodes well for the growth of our business, I think.

Kevin Richardson

Chief Executive Officer of Telix Americas

03:14:52

Yes. I think Tom commented on that on how it really enhances our -- and extends our sales and marketing reach. When we really think about the metropolitan areas, the suburban areas and the more rural, I mean, patients want to be scanned and treated where they live. And so that really extends that. So the local knowledge from our -- and value in the motivation of our independent pharmacies that we use, to more regional, to the more national, all of that just kind of layers in as an extension of our information and our ability to really reach our customers where they are and the patients that they serve. So it's an incredible value when we specifically talk about PSMA, Illuccix in imaging.

Christian Behrenbruch

Co-Founder, MD, Group CEO & Executive Director

03:15:32

Yes. Good point. Got one more.