Directors' report, including the Remuneration report

This Directors' report is presented by the Board of Directors of Telix Pharmaceuticals Limited, together with the Group’s Financial report, for the financial year ended 31 December 2024.

Directors

At the date of this report, the Directors in office are:

• H Kevin McCann – appointed 17 September 2017

• Christian Behrenbruch – appointed 3 January 2017

• Mark Nelson – appointed 17 September 2017

• Tiffany Olson – appointed 31 March 2022

• Jann Skinner – appointed 19 June 2018

Information about Directors’ qualifications, skills and experience, specific Telix responsibilities, and other external appointments is outlined in the Governance section of this Annual Report.

Andreas Kluge, Telix co-founder and Non-Executive Director, retired from the Board on 17 October 2024.

Meetings and attendance

The following table documents Directors’ meetings, including meetings of standing Board Committees, held during the financial year ended 31 December 2024, and the number of meetings attended by each Director. All Directors are welcome to attend Committee meetings even if they are not members.

Directors' interests in the securities of Telix

The relevant interests of each Director in the share capital of Telix as at the date of this report are as follows:

Details are set out in the Remuneration report of this Annual Report.

Company Secretary

Ms. Genevieve Ryan (BSc (Hons), LLB (Hons) (Monash), FGIA, FCG) was appointed Company Secretary effective 5 December 2022.  She has over 19 years’ experience in legal and governance roles, including with ASX-200 companies. Previously, she was General Counsel – Governance, Corporate and Commercial at Orora Limited. Ms. Ryan has also been Senior Legal Counsel and Alternate Company Secretary at Australian Pharmaceutical Industries Limited (acquired by Wesfarmers Limited). Ms. Ryan began her career as a lawyer with law firm Ashurst (formerly Blake Dawson) and is a Fellow of the Governance Institute of Australia.

Principal activities of the Company in the year under review

Telix’s principal activities during the year were directed to further advancing our standing as a globally recognized theranostics company through executing on our strategy across four strategic pillars:

• Delivering our late-stage therapeutic pipeline: development of TLX591 (for prostate cancer), TLX250 (for kidney and other CAIX-expressing cancers), TLX101 (for glioblastoma) and TLX66 (for hematologic cancers).

• Building the next generation of radiopharmaceuticals: development of TLX592 (TAT for prostate cancer), TLX252 (TAT for kidney and other CAIX-expressing cancers), TLX102 (TAT for glioblastoma), TLX300 (TAT for STS), and TLX090 (bone seeking agent for bone metastases and pain palliation).

• Growing our industry leading precision medicine business: development and commercialization of Illuccix® (focus on additional markets and indications), TLX007-CDx (Gozellix¹), TLX250-CDx (Zircaix¹) and TLX101-CDx (Pixclara¹)

• Expanding our global infrastructure for product delivery: grow manufacturing footprint and capabilities across North America, Europe and Australia.

Review of operations, likely developments and expected results

A review of the Group’s operations for the financial year ended 31 December 2024, together with Telix’s business strategies and prospects for future years, can be found in the operating and financial review section of this Annual Report. Certain information regarding developments in operations in future years and expected results is excluded, to the extent permitted by law, on the basis that such information relates to the impending developments or matters in the course of negotiation and disclosure would likely result in unreasonable material prejudice to the Group. 

Telix discloses its financial performance by operating segments. The Group’s operating segments represent components of the Group that engage in distinct business activities. This provides the most meaningful insight into the nature and financial outcomes of Telix’s activities and is consistent with the way in which the MD & CEO monitors and assesses business performance and resource allocation decisions.  Further details on Telix’s segment reporting can be found in Note 3 of the Financial report.

State of affairs

There have been no significant changes in the state of affairs of the Group during the financial year ended 31 December 2024 other than as disclosed in this Annual Report.

Events subsequent to the end of the financial year

Acquisition of RLS (USA), Inc.

On 28 January 2025 Telix completed the acquisition of RLS (USA), Inc. (RLS), a radiopharmacy network distributing PET, SPECT and therapeutic radiopharmaceuticals. The acquisition of RLS is aligned to Telix’s investment strategy around vertically integrated supply chain, manufacturing, and distribution, further enabling the delivery of future clinical and commercial radiopharmaceutical products.

The total upfront consideration was US$230 million paid in cash. A further US$20 million is payable in cash, contingent on achievement of certain milestones related to demonstration of accretive financial and operational performance during the four-quarters following closing. Refer to note 39.1 for a provisional purchase price allocation.

Acquisition of assets from ImaginAb, Inc. (ImaginAb)

On 30 January 2025, Telix completed the acquisition of a pipeline of next-generation therapeutic candidates, proprietary novel biologics technology platform, and a protein engineering and discovery research facility from ImaginAb.

The purchase price for the transaction is US$45 million comprised US$10 million in cash and US$31 million in equity at closing, and a deferred payment of up to US$4 million in equity at the conclusion of a 15-month indemnity period.

Upon achievement of specific key development and commercial milestones, Telix will pay up to a total of US$185 million, a portion of which may be paid in cash or equity at Telix’s election. Royalties are also payable on net sales in the low single digits on a limited number of platform and early-stage products after the first four products have been developed, as well as single-digit sublicense fees, as applicable. Refer to note 39.2.

Telix Managing Director and Group Chief Executive Officer, Dr. Christian Behrenbruch, is a non-affiliated shareholder of ImaginAb, holding less than 1% of its capital stock as his only interest in the company. Dr. Behrenbruch abstained from the transaction process and the Telix Board’s approval of the arm’s length acquisition. Dr. Behrenbruch has voluntarily elected, via a binding undertaking, to donate any enrichment from the transaction as the result of his shareholding to charity.

European approvals for Illuccix®

Illuccix® was approved in Denmark¹ and the United Kingdom² in February 2025.

This follows a positive decision from The German Federal Institute for Drugs and Medical Devices (BfArM³) on Telix's Marketing Authorization Application (MAA), which was submitted in Europe via a decentralized procedure (DCP).

Other

There were no other subsequent events that required adjustment to or disclosure in the Directors’ report or the Financial statements of the Company for the year ended 31 December 2024.

Dividend

No dividend was declared or paid during the year. Telix did not return capital to any of its shareholders during the year.

Issue of convertible bonds

On 30 July 2024 the Group received net proceeds of approximately $635.0 million from the issue of convertible bonds on the Singapore Exchange. The convertible bonds are convertible into fully paid ordinary shares in Telix Pharmaceuticals Limited. The initial conversion price of the convertible bonds is $24.78 per share, subject to anti-dilution adjustments set out in the final terms and conditions of the convertible bonds.

The convertible bonds bear interest at a rate of 2.375 per cent per annum. Interest will be payable quarterly in arrears on 30 October, 30 January, 30 April and 30 July in each year, beginning on 30 October 2024. The convertible bonds will mature on or about 30 July 2029, unless redeemed, repurchased, or converted in accordance with their terms. Refer to note 23.3 for further details.

Issue of unlisted equity securities

Unlisted ordinary shares under options or rights issued during the year were as follows:

Unlisted share options or rights do not allow the holder to participate in any share or rights issue of the Company. Shares to be allocated to employees following vesting of options or rights are held in the Telix Employee Share Trust. Performance Share Appreciation Rights and other rights were issued to employees in line with Telix's Equity Incentive Plan rules. More information can be found in the Remuneration report. For details of all unlisted equity incentives on issue, refer to note 30 of the Financial report.

Performance Rights were issued to QSAM Biosciences, Inc. (QSAM) as part of the acquisition of QSAM's assets. Refer to note 21.3 and note 29.4 of the Financial report for further details.

Shares issued for acquisitions, on exercise of rights or options and lapse of options

Ordinary shares of Telix issued during the financial year ended 31 December 2024 on the exercise of options granted over unissued shares and lapse of options were as follows:

• a total of 525,434 fully paid ordinary shares were issued upon exercise of 619,205 unlisted share options, and

• a total of 2,620,994 share options lapsed unexercised. These options lapsed in accordance with the terms of their grant.

Since the end of the financial year ended 31 December 2024 to the date of this report, 2,147,823 shares have been issued for the ImaginAb asset acquisition and exercise of Lightpoint performance rights. No shares were issued from the exercise of options under Telix’s Equity Incentive Plan.

Environmental regulation and compliance

Telix seeks to be compliant with all applicable environmental laws and regulations relevant to its operations, including but not limited to Australia, Belgium, Canada and the U.S. We monitor compliance on a regular basis to minimize the risk of non‑compliance.

We conduct our activities at Telix Manufacturing Solutions (TMS) in Brussels South, Belgium, in accordance with applicable environmental regulations, including regular inspections by the Belgian Federal Agency for Nuclear Control (FANC). In 2022, TMS received updated authorizations from FANC, aligned with the scope of Telix operations, and Telix is complying with its obligations under these licences and existing Belgian regulation. In December 2022, TMS was granted an updated operation authorization and environmental permit from FANC, valid until 7 October 2042.

Telix also conducts its activities at Optimal Tracers and recently acquired IsoTherapeutics in the U.S. and ARTMS in Canada in accordance with applicable environmental regulations, including inspections by relevant authorities as required.

There were no known environmental breaches at Telix operations during the reporting period.

Information about Telix’s sustainability program, including for environmental matters, is detailed in the Sustainability section of this Annual Report.

Beyond these matters, Telix is unaware of any environmental regulations matters applying to the Group's operating activities that require disclosure.

Indemnification

Indemnification of officers

Under Telix's Constitution, Telix has entered into agreements with each person who is, or has been, an officer of the Company. This includes the Directors in office at the date of this report, the Company Secretary and other executive officers, indemnifying them against any liability to any person other than Telix, or a related body corporate, that may arise from their acting as officers of the Company, notwithstanding that they may have ceased to hold office. There is an exception where the liability arises out of conduct involving a lack of good faith or is otherwise prohibited by law. During and since the end of the financial year ended 31 December 2024, Telix has paid or agreed to pay the premiums for an insurance policy to insure current and previous Directors and other executive officers against certain liabilities incurred in that capacity. Due to the confidentiality obligations and undertakings set out in these agreements, no further details regarding premiums paid, or the terms of the agreements, can be disclosed. No indemnity payment has been made under any document referred to above during or since the financial year ended 31 December 2024.

Indemnification of auditors

To the extent permitted by law, Telix has agreed to indemnify its auditors, PricewaterhouseCoopers, as part of the terms of its audit engagement agreement, against claims by third parties arising from the audit. No payment has been made to indemnify PricewaterhouseCoopers during or since the end of the financial year.

Auditor independence and non-audit services

Telix may decide to employ its auditor on assignments additional to statutory audit duties where the auditor’s expertise and experience with the Group are important.

Details of amounts paid or payable to Telix’s auditor, PricewaterhouseCoopers, for non-audit services provided during the year are set out in note 36 of the Financial report. The Directors, in accordance with advice received from the Audit and Risk Committee, are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 for the following reasons:

• the Audit and Risk Committee has reviewed, or if required pre-approved, all non-audit services to confirm they do not affect the impartiality and objectivity of the auditor, and

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s work, acting in a management or decision-making capacity for Telix, acting as an advocate for Telix, or jointly sharing the economic risks and rewards.

A copy of the auditor’s independence declaration, as required under section 307C of the Corporations Act 2001, is included in this Report.

Rounding

The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the “rounding off” of amounts in the Directors’ report. Amounts in the Directors’ report are rounded off in accordance with the instrument to the nearest thousand dollars or, in certain cases, to the nearest dollar.

Corporate governance

Telix complies with all relevant recommendations outlined in the 4th edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations. Telix is also subject to governance requirements from our convertible bonds listing on the SGX, and our Nasdaq listing and registration with the SEC. Our Corporate Governance Statement is available at ir.telixpharma.com/governance/documents-charters.

1. Brand name subject to final regulatory approval.
2. Telix media release 11 February 2025.
3. Telix ASX disclosure 13 February 2025.
4. Bundesinstitut für Arzneimittel und Medizinprodukte. Telix ASX disclosure 17 January 2025.