TelixPharma: Prostate Cancer Treatments Could Lead To Increased...

TelixPharma: Prostate Cancer Treatments Could Lead To Increased Value | SeekingAlpha

TelixPharma Stock: Prostate Cancer Treatments Could Lead To Increased Value

Jun.18, 2024 1:48 PM ETTelix Pharmaceuticals Limited(TLX) Stock, TLPPF StockNVS, NVSEF, TLPFY1 Like

Terry Chrisomalis

Investing Group Leader

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Summary

• Telix Pharmaceuticals' product revenues in full-year 2023 were $502.5 million, which was an increase of 214% from 2022 with revenues of only $160.1 million.
• TLX591 + best SOC is being used to treat patients with metastatic castration-resistant prostate cancer in the ongoing phase 3 ProstACT GLOBAL study; Interim data expected Q1 of 2025.
• TLX592 was already tested in phase 1 CUPID study for patients with prostate cancer; A phase 1/2 study for this program is expected to start in the 2nd half of 2024.
• The global prostate cancer market size is anticipated to reach $13.71 billion by 2033.
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Telix Pharma Overview

TelixPharmaceuticals Limited (OTCPK:TLPPF, TLX) has already done well to advance a diagnostic for patients with Illucix diagnostic, which was approved by the FDA to help infer patients with PSMA prostate cancer. The company's revenue hasincreased considerably higher in 2024 to $502.5 million because of thisdiagnostic. Especially, when you consider that revenue had increased by as muchas 214% from 2022.

Not onlythat, but there are two other diagnostic imaging product launches expected in2024, which are Zircaix and Pixclara. The truth is that Illucix had a chance toachieve better sales, and this would be through two possible territoryexpansion opportunities. The first of which would be with a European approvaldecision of Illucix expected in the 1st half of 2024. Plus, there is also thecompletion of a phase 3 Chinese bridging study, expected to conclude in the 2nd half of 2024.

If all goeswell with this late-stage study, then this diagnostic could be expanded toChina. More importantly, I believe it is important to focus on the twotreatments it is developing for metastatic castration-resistant prostate cancer[mCRPC]. The first of which is a radio antibody-drug conjugate [rADC] directedat PSMA known as TLX591 [ ¹⁷⁷Lu rosopatamab tetraxetan] for the treatment of this patient population. It is being explored in the ongoing phase 3 ProstACT GLOBAL study, and interim data from it is expected in Q1 of 2025.

The secondcandidate of which is known as TLX592 [ ⁶⁴Cu/²²⁵Ac-RADmAb], which is a targeted alpha therapy [TAT] based on the company's RADmAb engineered antibody technology. This candidate had already been explored in the phase 1 CUPID study and data is supportive of advancing this product to the next stage of clinical testing, which is a phase 1/2 study in the 2nd half of 2024. With it already producing revenues with diagnostic products, plus the ability to expand to targeting prostate cancer with radioimmunotherapies, I believe that investors could benefit with any potential gains made.

TLX591 For The Treatment Of Patients WithMetastatic Castration-Resistant Prostate Cancer

The firstand what I believe to be the most important clinical product in Telix'spipeline would be the development of TLX591, which is a radio antibody-drugconjugate [rADC] for the treatment of patients with metastaticcastration-resistant prostate cancer. It is currently being explored in thephase 3 ProstACT GLOBAL study for the treatment of this patient population.

Beforegoing over this late-stage study, plus any catalysts to come out of thisprogram, I believe that it is first important to go over what metastaticcastration-resistant prostate cancer is and what the possible marketopportunity could be. Prostate cancer is a type of cancer that, as the name suggests, occurs when cancerous cells form in the prostate gland of a patient. If the cancer remains localized, then active surveillance can be utilized and this is where the cancer itself is monitored. However, there are instances when the cancer spreads to other parts of the body and this is referred to as it being metastasized. For these patients, either surgery or radiation is to be used to treat the cancer.

There areseveral symptoms that patients with prostate cancer experience, and they are asfollows:

• Painful urination
• Pain when urinating
• Blood in urine or semen
• Urine stream that's weak.

The globalprostate cancer market size is anticipated to reach $13.71billion by 2033. What does the term "Castration-resistant" refer to for this cancer? What this term indicates is that a patient's prostate cancer continues to spread despite being treated with androgen deprivation therapy [ADT]. The goal of ADTs is to block or suppress the production of hormones, which is further allowing the growth of the cancer. By deploying this therapy, it is supposed to halt the cancer from growing/spreading. However, such therapies are not successful, thus a drug like TLX591 could be used to help treated these patients as a targeted radio antibody-drug conjugate [rADC]. If the market opportunity noted above is that large, how much can a drug like this which targets mCRPC go after? From what I have found, it is said that an estimated 10% to 50% of cases progress to mCRPC within 3 years of diagnosis.

To see ifTLX591 can help treat these patients with mCRPC, it is testing it out in theongoing phase 3 ProstACT GLOBAL study. This trial is expected to recruit up to 387 patients who are to be randomized 2:1 to receive either of the following doses:

• Group A - Two single intravenous injections of 76 mCi of TLX591 given 14 days apart + best Standard of care [SOC]
• Group B - SOC only, being enzalutamide or abiraterone [+ prednisone/prednisolone] or docetaxel

One keyaspect of this company, in terms of targeting these mCRPC patients, is for themto have high levels of the PSMA biomarker. This where the help of a diagnosticimaging agent like Illucix comes in to play, which is to be used to see if thepatient being screened can actually respond to this therapy. Another thing toconsider is that these patients should have at least already received one lineof prior taxane therapy or have refused or been found ineligible to receive it.The goal of this late-stage trial is to look at targeting 1st-line and 2nd-linemCRPC patients.

Having saidthat, the use of TLX591 was used together with SOC in another phase 1 study,known as ProstACTSelect. This trial tested out such a treatment regimen to determine if this should be used to move on to the next stage of clinical testing. This is precisely what was noted when Telix released data from this phase 1 study. It was noted that patients given TLX591 + best SOC achieved a radiographicprogression-free survival [rPFS] rate of8.8 months.

Having saidall of this, there is a major catalyst opportunity for investors to lookforward to in the early part of next year. It is expected that, interim resultsfrom the phase 3 ProstACT GLOBAL trial using TLX591 + best SOC for thetreatment of patients with mCRPC, will be released in Q1 of 2025.

TLX592 For The Treatment Of Patients With ProstateCancer

The othercandidate in the pipeline that Telix Pharmaceuticals is advancing is acandidate known as TLX592, which is a targeted alpha therapy. This utilizes adifferent mechanism of action compared to TLX591 and provides another shot ongoal in being able to target prostate cancer. The use of this candidate isbeing tested in the ongoing phase 1 CUPID study. It is still a PSMA-targeting clinical product, but was built using its proprietary RADmAb engineered antibody technology.

Theimportance of using such a product is to do what other current SOC monoclonalantibodies do currently, but with improved capabilities. TLX592 providesaccelerated blood clearance and reduces bone marrow residence time compared tocurrent mAbs. It does all this to improve safety, while at the same time havingbetter target selectivity and retention. Why is it important for such an alphatargeted therapy to be so selective? That's because such a therapy is highlytoxic for healthy tissue of a patient. In the case of patients with prostatecancer, you don't want to harm healthy tissue or cause other off-targettargeting effects.

Forinstance, you don't want renal toxicity to occur. Plus, you also don't want theexocrine gland uptake that typically occurs with PSMA-targeting small moleculedrugs. With this point, salivary glands have huge uptake of a radioligandtherapy targeting PSMA. This therapy was designed to avoid this and otheroff-target effects.

The bestpart of all is that radioligand therapy [RLT] has been shown to work in a phase3 study by Novartis (NVS), which could be a competitor at some point. This big pharma tested the use of its RLT Pluvicto + best SOC to work in being able to treat PSMA-positive mCRPC patients in the phase 3 VISION study. The bottom-line is that patients who took the Pluvicto combination treatment had achieved a 38% reduction inthe risk of death [median overall-survival benefit of 4 months] compared to SOC alone. In terms of reduction in the risk of radiographic disease progression or death, this was 60% [median rPFS benefit of 5 months compared to best SOC]. The point here is that the use of RLT in targeting PSMA-positive mCRPC patients, is somewhat a proven model. The wait now is to see if a phase 2 study to be initiated in the 2nd half of 2024 with TLX592 achieves a similar or superior outcome over this and other RLTs being developed.

Telix Financials

The companyis already marketing Illucix as an imaging diagnostic and producing revenuesfrom it. It was able to generate $502.5 million for full-year 2023, which was agrowth of 214% increase from the $1601 million generated in 2022. As ofDecember 31st, 2023, it had $224.8 million in cash assets.

Its cash burn is roughly $21.8 million per quarter. It is likely going to need to raise additional cash in the coming months. What makes me say that? That's because in its filing, it states that it believes its cash on hand provides enough cash runway to fund its operations for at least the next 12 months. This means it is going to need to start looking at ways to raise additional cash soon enough.

With somedata expected in the latter part of 2024, it is quite possible that it couldraise cash then if the study turns out to be good. It was going to do an IPO,but chose against doing so at the moment. It could change its mind at a latertime, but meanwhile it filed a RegistrationWithdrawal Request with the SEC.

Risks To Business

There areseveral risks that investors should be aware of before investing in TelixPharmaceuticals. The first risk to consider would be regarding sales of its ongoing diagnostic business with Illucix and a few others. That's because even though a 214% increase in sales was noted from 2022 to 2023, a similar outcome won't be achieved for the yeas of 2023 to 2024 upon release of the financial report.

A second risk to consider would be regarding the use of TLX591 + best SOC to treat patients with metastatic castration-resistant prostate cancer [mCRPC] in the ongoing phase 3 ProstACT GLOBAL study. There is no assurance that positive data from this late-stage trial will be achieved, nor that the primary endpoint of rPFS will be met with statistical significance versus SOC alone.

A third risk to consider would be in terms of developing targeted alpha therapy TLX592 for the treatment of patients with mCRPC in the soon-to-be initiated phase 1/2 study. Even though initial proof-of-concept was established using this drug to treat these patients, there is no assurance that this other study to be initiated in the latter part of this year will turn out to be positive. Another risk to consider is that this uses the company's proprietary RADmAb engineered antibody technology. There is no guarantee that this technology will perform well in being able to treat these patients with mCRPC.

A fourth risk to consider would be regarding this company advancing radioimmunotherapies for the treatment of patients with cancer. That's because there are plenty of other competitors who have either received regulatory approval for a radioligand therapy [RLT] like Novartis with Pluvicto or are in the process of advancing another therapy of this type in the clinic. Even if Telix eventually does receive regulatory approval of either TLX591 or TLX592 for the treatment of patients with mCRPC, there is no assurance that either of these will do well against other RLTs. Nor that, these clinical products could compete against other approved therapies to treat this specific patient population.

The fifth and final risk to consider would be regarding the financial position that this company is in. That's because it states that it believes that it only has enough cash on hand to fund its operations for at least the next 12 months. This means it is likely going to need to raise additional funds in the coming months. Again, highly likely that it will raise cash if it achieves positive data from one of its clinical studies or other positive news development.

Conclusion

TelixPharmaceuticals has done well to advance a few radioimmunotherapies in itspipeline for the treatment of patients with mCRPC. One study is deployingTLX591 which is a rADC and then the other study is using TLX592 which is usinga targeted alpha therapy.

The globalprostate cancer market size is anticipated to reach $13.71 billion by 2033.This is a huge market opportunity. Thus, if it can get this drug to market,then it could possibly generate plenty of revenues.

A goodthing about this company is that it is already producing revenues with the saleof its prostate cancer diagnostic Illucix. It had been able to generate as muchas $502.5 million in sales in 2023, which brought revenue growth of 214%. IfTelix Pharmaceuticals Limited can achieve a similar or superior growthpercentage number for full-year 2024, then it will be on a good trajectory toachieve higher sales in the coming years.

Editor'sNote: This article discusses one or more securities that do not trade on amajor U.S. exchange. Please be aware of the risks associated with these stocks.