Telix Pharmaceuticals to acquire Canadian isotope innovator ARTMS in $125.9m deal

Australian biopharmaceutical company Telix Pharmaceuticals (ASX: TLX) is set to acquire Canadian radioisotope technology firm ARTMS Inc in a $125.9 million deal designed to boost its supply chain and production capacity.

The deal will include ARTMS’ advanced cyclotron-based isotope production platform, a manufacturing plant and a stockpile of ultra-pure rare metals required for consumable target production.

Telix will also acquire ARTMS’ production facility and clean rooms at Burnaby in British Columbia with a view to expanding its research, development and production capabilities to support in-house and customer needs.

Consideration for the acquisition will comprise approximately $65.3m payable as 5.6m Telix shares, a cash payment of $23m with another $37.6m in contingent future payments following the achievement of certain clinical or commercial milestones and cash earn-outs representing a net sales percentage of ARTMS or Telix products.

The acquisition has the potential to be financially accretive and have a positive impact on gross margins for Telix’s imaging agents Illuccix and Zircaix when commercially available.

Greater control

Telix managing director Dr Christian Behrenbruch said the ARTMS acquisition is expected to enhance the vertical integration of Telix’s supply chain and manufacturing by providing a greater level of control and security over each of its diagnostic isotopes.

“It is our hope that by closely aligning [ARTMS’] powerful technology with pharmaceutical development, we will transform the cost, market access and utility of diagnostic and therapeutic radiopharmaceuticals,” he said.

“Cyclotron and accelerator-based isotope production have the potential to significantly increase the capacity and lower the cost of commercially-important isotopes, serving as an important adjunct to reactor-based production.”

“We are pleased to be able to expand a fruitful collaboration into a deeper partnership.”

Trailblazing company

ARTMS chief executive officer Doug Gentilcore said the company had been a “trailblazer” in next-generation, cyclotron-based isotope production systems and demonstrated production efficiency and yields that eclipse comparable systems.

“Our aim has always been to ensure key isotopes are available on demand to the populations that need them most and joining forces with Telix is the ideal way to realise this ambition,” he said.

“Our long-term goal is therapeutic radionuclides and together with Telix we believe we have the opportunity to potentially deliver these at commercial scale, including through their extensive late-stage product pipeline.”

Core technology platform

ARTMS’ core technology platform is based on the QUANTM Irradiation System (QIS), which is a complete cyclotron-based production house designed to support high-efficiency and cost-effective production of commercially-important medical isotopes including zirconium-89, gallium-68, technetium‐99m and copper-64.

In the past, QIS has demonstrated industry-leading production yields and is reported to have significantly outperformed conventional cyclotron target systems due to its unique intellectual property and target manufacturing processes.

The ARTMS portfolio is expected to have immediate application and differentiation in the production of future commercially-important, alpha-emitting therapeutic isotopes including actinium-225 and astatine-211.

IsoTherapeutics acquisition

Today’s news follows Telix’s $20.7m acquisition last month of US radiopharmaceutical development firm IsoTherapeutics.

The move was driven by a need to bring select aspects of Telix’s development programs in-house, with the goal of reducing cost and time to achieve technical milestones.

It is expected to expand Telix’s US manufacturing footprint and further enhance its in-house drug development capabilities.

Founded in 2005, IsoTherapeutics is a private commercial-stage company that provides bioconjugation development and contract manufacturing services to companies in the radiopharmaceutical industry, including Telix.