Our performance, strategy and future prospects

Financial review

Financial highlights$502.5MTotal Group revenue
Up $342.4M from 2022 reflects a full year of commercial sales of Illuccix®$5.2MNet profit after tax
Significantly improved from $104.1M loss in 2022$23.9MOperating cash inflow
Substantial improvement from an outflow of $64.0M in 2022$58.4MAdjusted EBITDA
Up $126.2M from a $67.8M loss in 2022, reflects the strength of the commercial business

Our operational results

Telix delivers inaugural full year profit, as revenue exceeds $0.5 billion

Revenue was $502.5 million for the year ended 31 December 2023, an increase of $342.4 million, or 214%, compared to $160.1 million for the year ended 31 December 2022. The majority of this revenue was from sales of Illuccix® in the U.S. in its second year of commercial sales.

Gross margin steadily improved during the year to end at 63% for 2023 (up from 59% in 2022), reflecting optimised manufacturing and distribution costs.

Reported inaugural full year profit after tax attributable to Telix shareholders was $5.2 million, compared to a net loss of $104.1 million in 2022. This profit demonstrates the ability to build a sustainable business while investing for growth and pipeline development of late-stage assets.

The Group generated cash from operating activities of $23.9 million, a substantial improvement from an outflow of $64.0 million in 2022. This includes $16.3 million paid to previous shareholders of Advanced Nuclear Medicine Ingredients SA (ANMI).

Adjusted earnings before, interest, tax, depreciation and amortisation (Adjusted EBITDA) of $58.4 million, improved by $126.2 million compared to a loss of $67.8 million, in the prior year. 

Total revenue and gross margin by half-year

Commercial

2023

% of revenue

2022

% of revenue

$M

$M

Revenue (product)

497.1

156.4

Cost of sales

(188.2)

(65.2)

Gross profit

308.9

62%

91.2

58%

Research and development costs

(0.3)

(0%)

(0.7)

(0%)

Selling and marketing expenses

(54.4)

(11%)

(37.8)

(24%)

General and administration costs

(36.1)

(7%)

(17.7)

(11%)

Other losses (net)

(0.9)

(0%)

(0.8)

(1%)

Operating profit

217.2

44%

34.2

22%

Group adjusted EBITDAR

180.9

8.2

Maturation of cost base delivering higher margins

U.S. sales from Illuccix® the main driver with a 218% increase in revenue compared to 2022, reflecting a full year of commercial sales and continued growth in sales and market share gains. Average daily demand for doses continued to grow throughout 2023.

Gross margin steadily improved during the year to end at 62% for 2023 (up from 58% in 2022), reflecting optimised manufacturing and distribution costs.

Sales and marketing expenses were $54.4 million for the year ended 31 December 2023, an increase of $16.6 million, or 44%, compared to $37.8 million for the year ended 31 December 2022. This increase was primarily driven by increased investment in promotional marketing programs and salesforce operations, effectively deployed to drive higher sales volumes of Illuccix®. Selling and marketing expenses continue to reduce as a percentage of revenue, indicative of revenue growth exceeding cost base growth and expenditure control.

General and administration costs were $36.1 million for the year ended 31 December 2023, an increase of $18.4 million, or 104%, compared to $17.7 million for the year ended 31 December 2022. This increase was primarily driven by an increase in infrastructure to support the expansion of services assisting commercial operations in each region.

Operating profit margin (operating profit as a percentage of revenue) improved by 22% reflecting the strength of the commercial business.

Group adjusted earnings before interest, tax, depreciation, amortisation and research and development (Adjusted EBITDAR) was $180.9 million, improved significantly, from $8.2 million in 2022. This metric demonstrates the profitability of the commercial organisation and strong revenue growth from Illuccix® during the period. 

Profit/(loss) before tax and Adjusted EBITDAR by half-year

Product development

Projects

2023

% of total

2022

% of total

$M

$M

Late-stage diagnostics

53.9

42%

29.0

36%

Therapeutics and other assets

32.4

25%

27.9

35%

Total external R&D

86.3

56.9

Employment costs

32.1

25%

19.2

24%

General and administration costs

10.1

8%

4.2

5%

Total R&D expenditure

128.5

80.3

Preparing for marketing launch of two new products in 2024

R&D investment during 2023 was in line with plan and was predominantly focused on preparation for commercial launch of late-stage diagnostic assets (Zircaix™2 and Pixclara™2) including commercial manufacturing process qualification and validation, preparation of U.S. FDA filings and commercial launch plans and early access programs. R&D was also directed towards clinical manufacturing for a late-stage therapeutic asset to progress the ProstACT GLOBAL trial.

Total investment in R&D was $128.5 million for the year ended 31 December 2023, an increase of $48.2 million, or 60%, compared to $80.3 million for the year ended 31 December 2022. Approximately 42% of R&D expenses was directed towards delivering two new diagnostic assets.

Investment in late-stage diagnostic assets was $53.9 million (2022: $29.0 million), comprising:

Overall investment in therapeutics and other assets totalled $32.4 million (2022: $27.9 million) This included, late-stage therapeutic asset investment directed towards clinical manufacturing ($11.2 million) and progressing the ProstACT GLOBAL trial ($2.1 million).

Employment and general and administration costs reflect increased activity in our late-stage assets.

2023 R&D investment
2022 R&D investment

Cash balance and activities

Cash and cash equivalents of $123.2 million as at 31 December 2023 (2022: $116.3 million) with five consecutive quarters of positive net operating cash flow delivered. As a result of these consecutive quarterly operating cash inflows, the Group is not required by the ASX to lodge quarterly cash flow and activities reports under Listing Rules 4.7B and 4.7C1.

Closing cash bridge

Operating activities

Net cash generated from operating activities was $23.9 million (2022: net cash used in operating activities of $64.0 million). The primary sources of cash from operating activities were collections from sales of Illuccix® of $463.7 million (2022: $124.1 million). The improved customer receipts reflect sales growth and sound debtor management during the year.

The primary uses of cash in operating activities were payments to suppliers and employees of $414.1 million (2022: $204.3 million), including manufacturing and R&D expenditures, selling and marketing efforts for Illuccix®, employee costs and income taxes paid (primarily in the U.S.) of $10.3 million (2022: $2.3 million). Operating cash outflows also included a $16.3 million contingent consideration payment to former ANMI shareholders and a $5.9 million payment for the FDA filing fee paid on submission of the BLA for TLX250-CDx (Zircaix™2).

Investing activities

Net cash used in investing activities of $25.5 million (2022: $17.0 million) comprised payments totalling:

Financing Activities

Net cash provided by financing activities totalled $10.2 million (2022: $175.0 million) comprising $6.6 million (2022: $173.2 million) received from the issuance of new ordinary shares, including on the exercise of options previously granted to employees, proceeds received from borrowings of $5.8 million (2022: $3.0 million) related to the loan facilities provided for the construction of TMS and $2.2 million (2022: $1.3 million) paid for lease liabilities.

Business performance

We have articulated a clear growth strategy to benefit patients and shareholders. We are achieving this strategy through advancing our therapeutic and diagnostic (theranostic) portfolio of commercial and clinical stage products and associated medical devices, strong supply chain and manufacturing, and continued innovation. Our key focus areas and progress in 2023 are outlined below.

Growth strategyFocus areasProgress in 2023Grow Illuccix® revenue globally

Focus on driving adoption and increasing market share of Illuccix® in our commercial markets, including the U.S.

Expand into new geographies through submission of new product marketing applications

  • Illuccix® global revenue $496.2 million up 218% on 20221

  • U.S. indication expanded to include patient selection for PSMA-directed radioligand therapy2

  • commercial launch in Canada3

  • marketing authorisation applications submitted in the European Union and United Kingdom4

  • pivotal Phase III registration study in China intended to bridge to FDA approval of Illuccix®: Surpassed 50% enrolment,5 and

  • pre-NDA meeting with the Pharmaceuticals and Medical Devices Agency (PMDA) in preparation towards regulatory filing in Japan.6

Commercialise the diagnostic portfolio

Advance regulatory filings for two additional diagnostic imaging agents

TLX250-CDx (Zircaix™7) for PET imaging of ccRCC

  • rolling BLA submission commenced with the FDA8

  • first patients dosed in named patient and expanded access programs (NPP/EAP) in Europe9 and the U.S.,10 and

  • ZIRDOSE-CP Phase I dosimetry study in China: Completed enrolment.11

TLX101-CDx (Pixclara™) for glioma (brain cancer) imaging

  • NDA being prepared, and

  • preparing to open U.S. EAP.

Advance the therapeutic pipeline (continued)

Deliver on clinical milestones across core therapy programs in prostate, kidney, glioma (brain) and haematologic (blood) cancers/bone marrow conditioning

PSMA

  • ProstACT GLOBAL Phase III study of TLX591: First patient dosed in Australia12

  • ProstACT SELECT Phase I study of TLX591 in prostate cancer: Positive interim readout confirmed favourable safety profile and clinical advantages of two dose regimen, and

  • CUPID Phase I study of TLX592 (investigational TAT): Target enrolment complete.

CAIX

  • STARBURST Phase II study of TLX250-CDx, exploring theranostic utility across a range of solid tumours: First patient dosed13

  • OPALESCENCE (Ph II) and PERTINENCE (Ph I) IITs in breast and bladder cancer, respectively: Completed enrolment; positive top-line data presented for OPALESCENCE14

  • STARSTRUCK Phase Ib study of TLX250 therapy in combination with peposertib in CAIX-expressing solid tumours: First patient cohort enrolled,15 and

  • STARLITE-1 and STARLITE-2 Phase II IITs of TLX250 in combination with immunotherapy: Continuing to dose patients.

Glioma (LAT1 and LAT2)

  • IPAX-2 Phase I study of TLX101 in front-line setting: second patient cohort enrolled

  • IPAX-Linz Phase II IIT of TLX101 therapy in refractory setting continuing to dose patients

  • IPAX-China Phase I study of TLX101 therapy approved by Chinese National Medical Products Administration,16 and

  • preparing global label-indicating study for TLX101.

BMC and STS (CD66, PDGFRα)

  • TLX66 Phase II IIT in paediatric leukaemia active, screening patients, and

  • preclinical validation completed for TLX300,17 ethics application submitted to commence a Phase I trial in STS.

Strengthen global supply chain and manufacturing

Protect and enhance our ability to service patients in all global markets and further develop production expertise through in-house manufacturing

  • Telix Manufacturing Solutions (TMS): Stage one buildout complete,18 and

  • Optimal Tracers: Business integration and onboarding complete.

Expand the future pipeline

Leverage our expertise to identify, evaluate and develop novel targets, clinical applications and manufacturing technologies to build the future pipeline

  • Acquisition of Dedicaid GmbH19

  • Acquisition of Lightpoint Medical's SENSEI® (RGS) business

  • Telix AI 510(k) premarket submission to FDA progressed

  • Agreement to acquire QSAM Biosciences Inc. and its lead asset, Samarium-153-DOTMP,20 and

  • Strategic investment to support expanded collaboration with Mauna Kea.

Forward strategy and operational targets

The global radiopharmaceutical industry is undergoing a period of transformative growth with theranostics emerging as a key pillar in the armamentarium of oncology treatment.1 We believe that with increasing integration of nuclear medicine and traditional oncology clinical practice, radiopharmaceuticals will become a core component of the multi-disciplinary approach to cancer treatment with a proportionate benefit to patients.

To address this, our therapeutic radiopharmaceutical platform harnesses the power of radioactive isotopes combined with targeting agents to deliver targeted radiation directly to the tumour site. These therapies have the potential to be efficacious as stand-alone treatments or as complements to existing treatment modalities to address areas of high unmet medical need.

Each therapeutic is paired with a diagnostic imaging agent, this underpins the theranostic approach whereby two conjugates are used to target the same cell-surface receptor, one for detection, localisation or staging, and the other for selective destruction of target cancer cells. When used in tandem to plan and execute treatment, and then to assess response and monitor for progression, this approach allows the delivery of truly personalised therapy to patients.

Our strategy is to launch innovative imaging agents in our core disease areas in order to finance and prepare the market for our late-stage therapeutic assets as well as our earlier-stage next-generation radiopharmaceuticals. This strategy is underpinned by a vertically integrated approach to supply and manufacturing and supported by a first-class commercial organisation ensuring global patient access to our products.

The key elements of our strategy:

Grow our commercial footprint in urology

Our first commercial product, Illuccix®, has provided an important entry point into the field of urology through our specialised field force. We intend to broaden our commercial footprint in urology by:

We also intend to develop an AI solution for reader and clinical decision-making support and RGS probes and tracers. We believe this offering will enable our field force to support healthcare practitioners with products spanning across the patient journey.

Invest to commercialise our late-stage pipeline of therapeutic product candidates

We aim to build both breadth and depth in oncology and to address areas of significant unmet medical need, both for large oncology indications such as prostate cancer and kidney cancer, as well as rare oncology applications such as glioma. This is based on a target selection process that is aligned with our expertise in radiation biology.

We intend to advance TLX591, TLX250 and TLX101 late-stage clinical trials for the treatment of prostate cancer, kidney cancer and gliomas, respectively.

We are currently evaluating TLX591 in our ProstACT GLOBAL trial in patients with advanced prostate cancer. We believe that TLX591 is the most advanced rADC in this disease area and has potential to be the first approved rADC for the treatment of advanced prostate cancer. Our clinical data suggests that our targeting approach could enable high on-target PSMA tumour-binding with low rates of off-target organ exposure and with a potentially favourable safety profile.

We are also advancing TLX250 and TLX101 into late-stage clinical trials for the treatment of kidney cancer and glioblastoma, respectively. We believe that each of our product candidates is currently the most advanced systemic radiotherapy in its respective indication. We are continuing to initiate earlier-stage clinical trials of our therapeutic product candidates as monotherapies and in combinations, including of TLX300 for the treatment of STS, and TLX250 in combination with peposertib, a Merck KGaA DNA-PK inhibitor, for the treatment of CAIX-expressing solid tumours (including ccRCC). We believe that these trials provide opportunities to generate further clinical data and demonstrate the differentiated positioning of our clinical product candidates.

Advance and augment our pipeline and progress development of next generation radiopharmaceuticals

We have established a track-record in identifying validated clinical product candidates that can be optimised as radiopharmaceutical therapies to develop them through to commercial products. We are leveraging this capability to expand our pipeline with next-generation radiopharmaceuticals, particularly targeted alpha-emitting therapies, through business development, as well as internal R&D programs and collaborations. These efforts focus on product candidates with a validated clinical rationale, a scientific profile to support efficacy as a radiopharmaceutical, and which are complementary to our existing pipeline.

Through our existing clinical programs and dedicated research facilities in the U.S. and Europe, we are focused on the development of alpha therapy candidates as a future pipeline expansion opportunity, and on building supply and manufacturing capabilities required to support an eventual commercial launch.

Vertically integrate manufacturing and supply chain activities

Radiopharmaceutical companies have particularly onerous manufacturing, supply chain, distribution and logistical requirements due to products typically having a short shelf-life and the need to be manufactured in proximity to the patient. Radiopharmaceuticals begin to decay as soon as they are produced and are stable for hours to days.

Since inception, we have invested in our supply and manufacturing, and distribution capabilities, working with industry-leading partners. This has underpinned the successful commercialisation of Illuccix® and delivery of multiple clinical studies, including international multi-centre studies. We have also opened our first scale-up manufacturing and R&D facility in Belgium and acquired the Optimal Tracers platform (Sacramento, California) for early-stage radiochemistry process development and clinical dose supply.

We continue to invest in this area with the goal of completing the vertical integration of our business, adding manufacturing and process development as a core capability, and continuing to build on our production capabilities, both in-house and through partners, to ensure a high level of control and redundancy in our supply chain. We believe this is an essential foundation for long-term commercial success across the breadth of our product pipeline.

The future prospects of our growth and operational targets depend on:

More information relating to the factors that could affect our growth and operational targets is provided in the Managing risk section of this Annual Report.

  1. Telix ASX disclosure 18 December 2023.
  2. Trade name subject to final regulatory approval.
  3. Includes pre-commercial sales from investigational, clinical trial, magisterial and compassionate use in accordance with local laws and regulations (not as a commercial diagnostic imaging product sold for routine clinical practice).
  4. Telix ASX disclosure 16 March 2023.
  5. Telix media release 2 May 2023.
  6. Telix ASX disclosure 3 April 2023.
  7. ClinicalTrials.gov ID: NCT05847348.
  8. Telix ASX disclosure 18 October 2023.
  9. Trade name subject to final regulatory approval.
  10. Telix ASX disclosure 19 December 2023.
  11. Telix media release 4 December 2023.
  12. Telix media release 11 December 2023. ClinicalTrials.gov ID: NCT06090331.
  13. ClinicalTrials.gov ID: NCT05861778.
  14. Telix ASX disclosure 13 November 2023. ClinicalTrials.gov ID: NCT04876651.
  15. Telix ASX disclosure 19 June 2023. ClinicalTrials.gov ID: NCT05563272.
  16. Telix media release 7 December 2023.
  17. Telix media release 18 October 2023.
  18. Telix media release 11 April 2023.
  19. Telix ASX disclosure 17 April 2023.
  20. Telix media release 8 June 2023.
  21. Telix ASX disclosure 27 April 2023.
  22. Telix ASX disclosure 8 February 2024.
  23. Vu et al. ANZ Journal of Surgery. 2022.
  24. Trade name subject to regulatory approval.