Telix Pharmaceuticals on the NASDAQ: It is a realistic possibility in 2024

What would you have thought if you were told 5 years ago you would see Telix Pharmaceuticals on the NASDAQ someday? It would have been harder to believe back in those days compared to even 1 year ago. Telix (ASX: TLX) told its investors last week that it was considering a NASDAQ IPO. These plans are not set in stone, although it is clearly more than a pipe dream given the company has told investors about it.

Telix Pharmaceuticals on the NASDAQ – what would it look like

As of early January 2024, the only concrete plans are that Telix would in such a scenario stay listed on the ASX and that any such shares listed on the NASDAQ wouldn’t be ordinary shares per se but American Depository Shares (ADSs). This is eerily similar to how some companies with primary listings in America but secondary listings in Australia use CDIs.

Everything else is undecided including:

• • The number of ADS’ to be offered
  • How exactly ADS’ would reflect ordinary shares, in other words how many ordinary shares would be represented by ADS’
  • the pricing of these instruments
  • the precise timing of the offering.

It’s vital to note that this dream of Telix’s hinges on a multitude of factors, including the U.S. Securities and Exchange Commission’s (SEC) review process, prevailing market conditions, investor demand, and customary corporate approvals.

A giant In the Making

Telix Pharmaceuticals is one of the few biotechs that has gone from a microcap clinical stage company to a fully commercial company, having successfully bought prostate cancer imagine agent Illuccix to market. With a market capitalisation of approximately $3.5 billion (US$2.3 billion), Telix now ranks as the fourth-largest radiopharmaceutical company globally, trailing only behind giants such as Switzerland’s Novartis AG, Germany’s Bayer AG, and U.S.-based Lantheus. Yes, even though it has just one product.

Telix could well attract an even higher valuation in the US market. Furthermore, it is not as if it has no link to the US whatsoever. Illuccix’s commercial rollout began in the US and is almost exclusively occurring there. Also keep in mind that 25% of the company’s shareholders consist of U.S.-based institutions and funds, and that 70% of Telix’s workforce operates within the United States. Finally, as we noted above, is not as if the company is departing the ASX – at least for now. Local investors will still be able to take a part in the company’s journey.

Telix is going from strength to strength

Telix’s revenues have kept growing exponentially ever since Illuccix was commercialised. In the June quarter of CY22, it made A$22.5m in revenue, up 10x from the quarter before. The cash just kept coming in:

• A$55.3m in the September quarter of CY22
• A$78.2m in the December quarter of CY22
• A$100.1m in the March quarter of CY23
• A$120.7m in the June quarter of CY23
• A$133.6m in the September quarter of CY23
• A$148.1m in the December quarter of CY23

It is important to note that results for the December quarter are unaudited, although audited results will come by the end of January.

Won’t be a one-trick pony forever

You may argue this company is just a one-trick pony, with just one product in one market. But it won’t be forever.

Telix Pharmaceuticals is actively pursuing marketing authorizations for Illuccix in various jurisdictions, including the United Kingdom, the European Union, and Brazil. Additionally, a Phase III study aimed at bridging the marketing authorization granted by the United States Food and Drug Administration (FDA) is underway in China. The company also recently engaged in a formal pre-NDA meeting with the Japanese regulator, the Pharmaceuticals and Medical Devices Agency (PMDA). This meeting yielded valuable feedback to support a regulatory submission for Illuccix in Japan in 2024.

It is also continuing clinical work including with TLX250-CDx (Illuccix) for liver imaging as well as another asset (TLX101-CDx) for the imaging of glioma).

The company is also working its way towards profitability. It still saw US$14.3m in outflows during the first half of CY23 (1HY23), although this was way down from the US$70.9m it list in 1HY22. Its EBITDAR was $82.4m in positive territory, from $28m in negative territory 12 months ago, and it made a 64% gross margin.

Telix on the NASDAQ – is it that important

Amidst all these achievements, the prospect of Telix on the NASDAQ may seem like something minor in the grand scheme of things, especially considering it is just an idea. If and when this eventuates, we would argue it would only be important for American investors. What will be most important for Australian investors is that the company can continue to deliver. And we have every confidence that the momentum can continue. To state the bleeding obvious, if it hadn’t achieved the feats it had, the company couldn’t even imagine the idea of listing on the NASDAQ.

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