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Telix Pharmaceuticals
Limited
2021 Annual Report
See it. Treat it.
T E L I X P H A R M A C E U T I C A L S
Contents
4
5
6
8
10
11
12
14
22
26
30
35
61
Our purpose, mission and values
Our business
Our technology
2021 milestones
Letter from the Chairman
Chief Executive Officer’s report
Our first commercial product: Illuccix®
Our clinical pipeline
Our future: research and innovation focus
Our global leadership team
Environmental, Social and Governance (ESG) report
Directors' report
Financial report
109
Shareholder information
112
Corporate directory
Telix Pharmaceuticals Annual Report 2021
3
3
See it. Treat it.
Telix is at the forefront of one of the biggest
transformations in medicine.
Using molecularly targeted radiation (MTR) to combine
imaging and therapy, Telix’s technology has the potential
to dramatically improve the way clinicians are able to find
and treat cancer and deliver truly personalised therapy for
patients living with cancer and rare diseases.
Telix is building the foundations for long-term growth and
value with its first commercial imaging product now approved
in the United States and Australia, and more than 18 clinical
trials underway, across a range of diseases.
The Company’s core diagnostic and therapeutic “theranostic”
pipeline is focused on:
• Prostate cancer
• Kidney cancer
• Glioblastoma (brain cancer)
• Hematologic (blood) cancers and bone marrow
transplantation
Telix is headquartered in Melbourne, Australia with
international operations in Belgium, Japan, Switzerland,
and the United States. Our manufacturing hub in
Belgium is underpinned by one of the largest private
radiopharmaceutical manufacturing footprints in Europe.
Annual General Meeting
Telix Pharmaceuticals will hold its AGM at
11.00am AEST, Wednesday 18 May 2022 at:
The Events Centre
Collins Square
727 Collins Street
Melbourne VIC 3008 Australia
Registered Office
Telix Pharmaceuticals Limited
401/55 Flemington Road
North Melbourne VIC 3051 Australia
Australian Business Number
85 616 620 369
Telix Pharmaceuticals Annual Report 2021 Telix Pharmaceuticals Annual Report 2021
4
Our purpose, mission and values
We are united by a common purpose and commitment to our values. In
2021, we updated our purpose, mission and values to reflect our patient-
centric focus, the innovative approach we apply across our business and
our ongoing commitment to quality, integrity and achievement.
These values are embedded in our organisational framework to drive
behaviours and guide decisions.
We put patients and our people first. We respect and value diversity and individuality. We foster a culture of collaboration, where all voices are heard. OUR VALUESEveryone countsWe explore the possibilities and celebrate learning and success.We are courageous and embrace challenge.We use our talents and knowledge to create a better future.We strive to be extraordinaryWe take responsibility for our words, our actions and our results. A commitment to quality and safety underpins everything we do. We strive for excellence in every action, every day.In doing this, we create value for our shareholders.We pursue our goals with determination and integrityOUR PURPOSEWe help people with cancer and rare diseases live longer, better quality lives.OUR MISSIONTo deliver on the promise of precision medicine through targeted radiation. Telix Pharmaceuticals Annual Report 2021
5
5
Our business
Extensive portfolio of diagnostic and therapeutic
assets with compelling clinical data
13,200
patient doses
delivered in the past
12 months
FDA1
approval for TLX591-CDx
(Illuccix)
Leading supply chain and distribution network
18
80
11
active clinical studies
(8 indications)
countries in the Telix
distribution network
countries with a
manufacturing footprint
Liège and Brussels (Seneffe)
Belgium
REGIONAL OFFICE (MANUFACTURING/R&D)
Kyoto
Japan
REGIONAL OFFICE
Indianapolis
United States
REGIONAL OFFICE
Geneva
Switzerland
COMMERCIAL HUB
Melbourne
Australia
CORPORATE HEAD OFFICE
1. United States Food and Drug Administration.
Telix Pharmaceuticals Annual Report 2021 6
Our technology
Molecularly targeted radiation (MTR)
Many existing cancer therapies are non-selective, killing healthy
tissue and impacting vital organs at the same time as treating
disease. Existing external beam radiation therapy (EBRT)
approaches are very effective but typically only deliver localised
treatment and also cause collateral tissue damage. Localised
therapeutic approaches rely on the treating physician making
assumptions about the extent of disease but missing even small
amounts of surviving cells means the cancer can regrow and lead
to relapse over time.
Theranostics: See it. Treat it.
MTR delivers targeted radiation to cancer cells with precision,
regardless of where the cancer is in the body. When the radioactive
“payload” uses diagnostic radionuclides, imaging can be used
to precisely localise disease and stage a patient’s cancer. When
therapeutic isotopes are delivered to the cancer cell, the patient
is treated in a highly precise way that spares most normal healthy
tissue and maximises patient outcomes. The word “theranostic” is a
combination of the terms therapeutic and diagnostic. Imaging and
therapy used together – “see and treat” – is a powerful new way to
tackle unmet need in cancer and rare diseases.
Targeted radiation delivery
• A targeted radiation drug comprises a radioactive isotope (“payload”) attached
to a targeting agent such as a small molecule or antibody, which binds
selectively to cancer cells.
The drug attaches to unique biomarkers found on the surface of cancer cells.
Depending on the payload, either imaging or therapy is delivered.
•
Systemically administered
• Once administered, targeted radiation circulates throughout the body
•
and seeks out cancer cells wherever they are located.
This is different from traditional radiation therapy, which is typically
highly localised.
See it. Treat it
•
Some radioisotopes have physical properties that may be used to image cancer,
for diagnosis and staging purposes.
• Higher dose radiation with α- and β-emitting radioisotopes can be used as
therapies to kill cancer cells.
Quality of life
• Better-informed treatment decisions and personalised, precision medicine may
lead to improved patient outcomes.
Telix Pharmaceuticals Annual Report 2021 Telix Pharmaceuticals Annual Report 2021
7
Improving and enhancing radiation oncology through MTR
Radiation has always been a critical part of cancer care, but delivery has been restricted to localised tumours, limiting efficacy,
while high dosage radiation has come with unwanted side effects.
The evolution from external-beam radiation to systemically-delivered and targeted radiation is transforming the use of radiation
in cancer care, across the spectrum of diagnostics and staging, to surgical intervention.
Telix is developing MTR for both stand-alone treatment and “combination therapy”. The goal is to integrate with traditional
medical oncology, to deliver potentially more targeted and personalised therapy, and patient-friendly dosing regimens.
Telix Pharmaceuticals Annual Report 2021 2021 milestones
8
TLX250-CDx, first
United States
patients dosed in
Ph III study (kidney
cancer imaging)
NOBLE Registry
launched and first
patient imaged
TLX66 in AL-
Amyloidosis
study results
TLX592, CUPID
study FPI
Merck KGaA pan-
cancer clinical
collaboration
177Lu supply
agreement
TLX591, ethics and
CTN2 to commence
Phase III study
TLX101 in
glioblastoma
study results
TLX66, ethics for
study in pediatric
leukemia
LightPoint Medical,
collaboration for
radioguided surgery
Jan 2021
Feb
Mar
Apr
May
Jun
July
Aug
Research
agreement with
Heidelberg
University Hospital
Illuccix,
commercial GMP1
manufacturing
agreement
Asia Pacific
operating region
established
Eurostars grant for
alpha therapy (with
ATS4)
TLX591-CDx, Emory
breast cancer study
FPI5
TLX250-CDx,
Japan study meets
objectives
Illuccix, Germany
distribution
agreement with
EZAG3
TLX250-CDx, ZiP-UP
study FPI (bladder
cancer)
Prostate cancer
therapy program
expansion with
GenesisCare
1. Good Manufacturing Practice.
2. Clinical Trial Notification.
3. Eckert & Ziegler Strahlen- und Medizintechnik AG.
4. Alpha Therapy Solutions.
5. First patient in (or first patient enrolled).
Telix Pharmaceuticals Annual Report 2021 9
TLX250-CDx,
OPALESCENCE
study FPI (TNBC9)
Illuccix, TGA10
approval
Illuccix, FDA
approval
TLX250, IND14
accepted by FDA
$175m placement
and share purchase
plan
Seneffe
manufacturing site
- removal of two
cyclotrons
Illuccix, Spain
distribution
agreement with
NUCLIBER
TLX591-CDx,
Japanese prostate
cancer imaging
study completes
enrolment
UC Louvain7
in-licencing of
novel tumour
microenvironment
PET8 tracer
TLX250-CDx, Ph III
study exceeds 90%
enrolment
Illuccix, Australia
distribution
agreement with
GMSA13
Sep
Oct
Nov
Dec
Jan
Feb 2022
Illuccix, Italy
distribution
agreement with
Radius
Commercial Hub
established in
Geneva, Switzerland
NOBLE Registry,
first Australian
patient imaged
ONJCRI12
collaboration
for brain cancer
imaging
TLX591, prostate
cancer therapy
study recruitment
commences
NCCN Guidelines®
updated to include
PSMA-PET6
Illuccix, exceptional
authorisation
granted in Brazil
TLX250-CDx,
PERTINENCE study
FPI (NMIBC11)
6. Prostate-specific membrane antigen-positron emission tomography (imaging).
7. Université catholique de Louvain (Belgium).
8. Positron emission tomography.
9. Triple negative breast cancer.
10. Australian Therapeutic Goods Administration.
11. Non muscle invasive bladder cancer.
12. Olivia Newton-John Cancer Research Institute.
13. Global Medical Solutions Australia.
14. Investigational New Drug Application.
Telix Pharmaceuticals Annual Report 2021 10
Letter from the Chairman
Dear Shareholders,
As I reflect on Telix’s journey over the past 12 months, there are
two themes that particularly stand out.
The first is the resilience and tenacity of our CEO and the Telix
management. Many of the challenges of 2020 which arose from the
COVID-19 pandemic continued in 2021, particularly with respect
to supply chain and distribution, slower clinical trial recruitment
and the limited regulator bandwidth leading to delays in approvals.
However, the Telix team proved that it could operate in this new
world order. Within this highly variable environment, Telix is
becoming better at predicting timelines and risk-managing our
clinical activity. The addition of experienced commercial leadership
in all operating territories gives the Board of Directors comfort
that we can transition to an earnings-based model for Telix and
it is clearly understood that 2022 is the year that approvals,
reimbursement and sales team performance must translate into
predictable and understandable revenue.
The second is business growth and maturity. Our organisation
grew dramatically during the year, with the workforce almost
doubling to approximately 158 employees worldwide.
We significantly expanded our Americas headcount to be
ready for the commercial launch of Illuccix in the United States.
The European team also grew considerably, both in preparation
to operationalise the Seneffe manufacturing facility and building
out a commercial team, under the leadership of Richard Valeix.
This commercial team will be primarily based in our commercial
hub in Geneva.
We also formalised the establishment of our Asia-Pacific team to
deliver on commercial activities, including the launch of Illuccix,
for the Australia / New Zealand markets, as well as oversight of
important partnerships in Japan, Korea and China. It has been a
stellar year in terms of the new talent in the team.
Revenue growth is our focus for 2022, following the marketing
approval of Illuccix by the FDA in the United States and the TGA in
Australia in late 2021. We are also working towards the submission
of two additional regulatory packages for the marketing
authorisation of our kidney cancer imaging product and our brain
cancer imaging product. These products will, if approved, over
time build out a diversified cash flow for the business.
In late 2021 your Board concluded that we had a need for capital
to aggressively pursue our therapeutic clinical studies and so
undertook a significant capital raise in January 2022 following
FDA approval of Illuccix and on having completion certainty of the
ZIRCON Phase III trial for kidney cancer imaging. Notwithstanding
market volatility at that time, we were able to raise $175 million
from institutional investors, mainly based in Australia. The quality
of the register and the support from both new and existing
shareholders is a testament to the positive perception of what
Telix is seeking to accomplish for human health, and the value
creation for shareholders that is being generated in the process.
We’d like to thank and acknowledge all our shareholders for
their support.
As a company with a market capitalisation of circa $2 billion,
a critical part of "growth and maturation" is our platform and
communication around environmental, social and governance
matters essential to the sustainable success of the business. Telix
is a highly diverse, global and inclusive organisation with many
initiatives in place to make everyone welcome and to ensure all
voices are heard. This is reflected in the values that unite and drive
our people. In 2022 this will come into sharper focus with a strong
programmatic focus on diversity and inclusion on our Board and
across our workforce.
As we have now entered the S&P/ASX 200 index, our standards
and commitment to environmental, social and governance
issues will evolve. The Board and executive team have the vision,
mindset, and dedication to achieve this. You can read more on this
in this Annual Report.
Against the backdrop of an enormous number of social challenges
and risks, our Shareholders have supported us magnificently.
This is a reflection of the impressive execution of Dr Christian
Behrenbruch and the executive team. I commend the team on
their accomplishments and also thank you, our Shareholders, for
enabling the next epoch of the Company’s journey to a mature,
established and commercially sustainable biopharmaceutical
company. Finally, I would also like to thank my Board colleagues
who greatly contributed to our achievements in 2021. They are
collegiate and hard working.
In conclusion, we have built a company with global impact,
delivering on an unmet need to patients with cancer and rare
diseases.
H Kevin McCann, AO
Independent Non-Executive Chairman
“We have built a company with global impact,
delivering on an unmet need to patients with
cancer and rare diseases.”
H Kevin McCann, AO
Independent Non-Executive Chairman
Telix Pharmaceuticals Annual Report 2021 11
“Every day, people around the globe benefit
from the impact of our R&D and now with
our first commercial product, this impact
will be even greater.”
Dr Christian Behrenbruch,
Group CEO and Managing Director
Chief Executive Officer’s report
Dear Shareholders,
Telix was one of the best performing biopharma equities on the
ASX in 2021 against the backdrop of a significant downturn in
the global life sciences sector. In some respects, this downturn
is surprising given that it is now clearly understood that biotech
saves lives and is a fundamental part of delivering human health
in our modern world. However, it also illustrates how important
supply chain, distribution, manufacturing performance and clinical
execution is to the fortunes of the biotech industry. It has not been
an easy time for the sector.
We achieved this performance through a major growth in the
execution capability of the team, particularly in key areas around
quality, regulatory affairs, compliance and commercial operations.
As Telix’s reputation for execution grows, we have been able to
bring onboard the next generation of talent that will enable the
transition from a development-stage organisation to a commercial
firm. This transition was completed last year with the approval of
our first product, Illuccix in the United States, a rare event for any
emerging biopharma company, let alone an ASX-listed one. In 2022
we will build on this platform as we prepare to file two additional
new drug applications with the FDA for kidney cancer imaging
(TLX250-CDx) and brain cancer imaging (TLX101-CDx).
Three major goals will dominate the management team’s attention
in 2022. The first is clearly commercialisation of Illuccix. Telix’s
commercial strategy varies by territory. In some places, such as
the United States, we have built a hybrid model of in-house sales
functions alongside partner distribution firms. In Europe, we
take more responsibility for manufacturing but leave the market
access to partners. In APAC we will be “on the ground” in Australia
and New Zealand but rely on carefully chosen partners for China,
Korea, Japan and other key Asian markets. The net result is an
enormous amount of market reach.
The second goal is advancing two follow-on diagnostic candidates
to commercial stage, being the kidney cancer imaging program
(TLX250-CDx) and the brain cancer imaging program (TLX101-
CDx). It is a tremendous advantage that many of our diagnostic
programs will be able to generate early – and meaningful –
standalone revenue streams in addition to their value in selecting
patients for therapy and measuring treatment response.
Which leads to our third goal, the acceleration of our therapeutic
programs, and reinforcing our position as a therapeutics company
that does “precision medicine”. The lead focus areas of prostate,
renal (kidney) and brain cancer therapy have the potential to
address large markets with significant unmet need. Oncologists
understand our products and are excited about our clinical
studies, particularly the ProstACT group of studies for metastatic
prostate cancer.
The Company’s therapy programs now have an assured path
forward following Telix’s successful capital raise, which enables us
to fund those key therapy trials and be confident that our balance
sheet will go the distance, considering conservative earnings
expectations over the next 12-18 months, as we likely come out of
this pandemic. We raised sufficient capital that we don’t expect
to go back to the market for cash to complete the development of
our lead prostate cancer therapy program, the highest value asset
in the portfolio. In 2022 we will also collect exciting and important
therapeutic data in kidney cancer, brain cancer and pediatric
leukemia, to name but a few indications. This builds on the
encouraging recurrent glioblastoma (GBM) data already obtained
for TLX101.
Importantly, the combination of the placement and earnings
expectations over the next 12-18 months means that the
Company’s financial resources underpin Telix’s market
capitalisation. A strong company, with the greatest number of
commercial, partnering and merger and acquisition (M&A) options,
requires a commensurately robust balance sheet. Our financial
resources will enable us to be maximally competitive, hire the best
people globally and continue to build out a pipeline that we believe
is the best in the radiopharmaceutical business.
We have a built a strong business through partnerships, M&A
and increasingly through our own innovation processes. With
over 18 clinical trials running globally we are demonstrating in a
highly visible way, how targeted radiation can impact cancer care,
both diagnostically and therapeutically. Every day, people around
the globe benefit from the impact of our R&D and now with our
first commercial product, this impact will be even greater. This
is reflected in our purpose to help people with cancer and rare
diseases live longer, better quality lives.
I believe this purpose is as important to shareholders as it is to our
employees.
Thank you for your ongoing support of Telix and we look forward
to delivering on our corporate objectives for 2022.
Dr Christian Behrenbruch
Group CEO and Managing Director
Telix Pharmaceuticals Annual Report 2021 Our first commercial product:
Illuccix®
12
The reporting year ended with Telix receiving FDA regulatory approval for its lead prostate
cancer imaging product, Illuccix® (Kit for the preparation of gallium-68 (68Ga) gozetotide
(also known as PSMA-11) injection).
FDA approval followed regulatory approval from the Australian Therapeutic Goods
Administration (TGA) in November.
These approvals are an important validation for the technology and Telix’s clinical
development strategy. It positions Telix as one of the first companies worldwide to bring
the next generation of prostate cancer imaging to clinicians treating cancer patients.
Further validation for this state-of-the-art imaging modality came with the addition
of prostate specific membrane antigen (PSMA) positron emission tomography (PET)
/ computed tomography (CT) (PSMA-PET/CT) imaging to a number of leading clinical
guidelines, including the National Comprehensive Cancer Network Clinical Practice
Guidelines in Oncology (NCCN Guidelines®) for Prostate Cancer, in 2021.
Illuccix is the first commercially available FDA-approved product to enable wide
accessibility to 68Ga-based PSMA-PET imaging for physicians across the United States.
Illuccix can be prepared in nuclear pharmacies and healthcare centres across the United
States using Eckert & Ziegler’s GalliaPharm® generator or IRE ELIT’s Galli Eo® generator or
using General Electric’s widely available FASTlab™ cyclotrons.
This geographic reach, combined with a four-hour shelf life after radiolabeling, enables
Illuccix to significantly expand accessibility of advanced PSMA-PET imaging to eligible
patients in the United States.
In conjunction with distribution partners, Cardinal Health and Pharmalogic, Telix has
one of the largest commercial teams in the United States focused on prostate cancer
imaging. With a distribution network encompassing more than 140 nuclear pharmacies,
Telix will be able to provide Illuccix to more than 85% of eligible PET imaging sites. An
agreement was completed with contract development and manufacturing organisation
(CDMO) Grand River Aseptic Manufacturing (GRAM) in March 2021 for commercial-scale
Good Manufacturing Practice (GMP) manufacturing of Illuccix for the United States and
Australian markets.
Telix Pharmaceuticals Annual Report 2021 13
In the United States, Illuccix is indicated for positron emission
tomography (PET) of prostate-specific membrane antigen (PSMA)
positive lesions in patients with prostate cancer with:
•
•
Suspected metastasis who are candidates for initial definitive
therapy;
Suspected recurrence based on elevated serum prostate-
specific antigen (PSA) level.
Other key achievements for Illuccix during 2021:
•
•
•
•
•
Europe: marketing authorisation application (MAA)
submission progressed to the final stage of regulatory
assessment with the Danish Medicines Agency (DKMA), in its
capacity as a Reference Member State (RMS);
Specific therapeutic program (STP) authorisation in the Czech
Republic, allowing use prior to a full European marketing
authorisation;
Commercial distribution agreements with Eckert & Ziegler
Strahlen und Medizintechnik AG, Radius S.r.l., and NUCLIBER
S.A. for Illuccix in Germany, Italy, and Spain, respectively –
all EU5 countries – in line with the planned buildout of the
Company’s European distribution network;
Brazil: exceptional authorisation for Telix’s partner MJM
Produtos Farmacêuticos e de Radioproteção LTDA (RPH),
allowing Illuccix to be marketed and sold ahead of full
regulatory approval, anticipated in 2022;
South Korea: commenced selling Illuccix and generating early
revenue with our commercial partner DuChemBio.
“
Approval of Illuccix will give patients
considerably improved access to
PSMA-PET imaging, an advanced
diagnostic tool recently included in
the NCCN Clinical Practice Guidelines
in Oncology (NCCN Guidelines®) for
Prostate Cancer.
With patient doses able to be
prepared on-site or via commercial
radiopharmacy networks, Illuccix
delivers flexible patient scheduling and
on-demand access throughout the day.”
Dr Oliver Sartor,
Medical Director at Tulane Cancer Center.
As at the end of 2021, marketing authorisation applications for
Illuccix were under review and progressing in no fewer than 15
countries including 13 European Union member states, the United
Kingdom and Canada.
Important Safety Information (U.S.):
https://www.illuccixhcp.com/important-safety-information
Prescribing Information (U.S.):
http://illuccixhcp.com/s/illuccix-prescribing-information.pdf
Telix Pharmaceuticals Annual Report 2021 14
Our clinical pipeline
Telix has one of the most expansive, late-stage research
portfolios of diagnostic and therapeutic MTR candidates
globally.
Its core product pipeline is focused on prostate, kidney, glioblastoma (brain)
and hematologic (blood) cancers.
Telix’s investigational diagnostic products enable physicians to identify which
patients may be most suitable for treatment, while its therapeutic candidates
deliver highly potent radiotherapy.
Comprehensive portfolio of MTR candidates for oncology
and rare disease applications
Targeting
Molecule
Target
Radioactive
Isotope
Phase I
Phase II
Phase III
Commercial
Small
molecule
PSMA
1
68Ga
8Ga
TLX591-CDx (68Ga-PSMA-11, Illuccix®)
Imaging
Antibody
PSMA
Antibody
PSMA
Small
molecule
Small
molecule
PSMA
PSMA
Antibody
CA9
2
Antibody
CA9
Small
molecule
Small
molecule
LAT-131
LAT-1
Antibody
CD665
Antibody
CD66
e
t
a
t
s
o
r
P
y
e
n
d
K
i
i
n
a
r
B
4
D
R
/
C
M
B
177Lu
177Lu
225Ac
225Ac
99mTc
99mTc
68Ga
Ga
89Zr
9Zr
177Lu
177Lu
18F
8F
131I
131I
99mTc
99mTc
90Y
90Y
TLX591 (177Lu–rosopatamab)
TLX592 (225Ac–RADmAb®)
TLX599-CDx (99mTc-iPSMA)*
TLX591-Sx (68Ga-PSMA-IRDye)
TLX250-CDx (89Zr–girentuximab)
TLX250 (177Lu–girentuximab)
TLX101-CDx (18F-FET)
TLX101 (131I-IPA)
Therapy
Therapy
(2nd Gen)
Imaging/
Surgery
Imaging/
Surgery
Imaging
Therapy
Imaging
Therapy
TLX66-CDx (99mTc-besilesomab, Scintimun®)6
Imaging
TLX66 (90Y-besilesomab)
Therapy
Shaded arrows indicate completion expectations in the next 12 months.
*Registry Study
1.
IX.
2. Carbonic anhydrase 9.
3. Large amino acid transporter 1.
4. Bone marrow conditioning and
.
5.
6. Scintimun is a registered trademark
®
rare diseases.
of Curium Pharma.
With the exception of Telix’s 68Ga PSMA-11 imaging agent in the United States and Australia, none of Telix’s products have received a marketing authorisation
in any jurisdiction.
Telix Pharmaceuticals Annual Report 2021
Telix is pioneering a new cancer modality
Telix is at the forefront of this highly promising medical advance with more than 18 clinical trials underway across a range of
diseases. The business is backed by a demonstrated commitment to developing the required infrastructure and supply chains
and clinical support to deliver these exciting new medical treatments into the hands of clinicians treating cancer patients.
15
Breast Cancer
Ph
Name
Asset
Dx/Tx
Glioblastoma
Ph Name
Asset
Dx/Tx
I/II
IPAX-1
TLX101
Tx
II
I
OPALESCENCE
(IIT)
TLX250-
CDx
Emory University
(IIT)
TLX591-
CDX
Dx
Dx
Lung and Ovarian Cancers
Ph
Name
Asset
Dx/Tx
I
Royal
Adelaide (IIT)
APOMAB
Dx/Tx
Bone Marrow Conditioning
Ph
Name
Asset
Dx/Tx
I/IIa
TRALA (IIT)
TLX66
Tx
Bladder Cancer
Ph
Name
Asset
Dx/Tx
I
I
ZiP-UP (IIT)
PERTINENCE
(IIT)
TLX250-
CDx
TLX591-
CDX
Dx
Dx
Kidney Cancer
Ph
Name
Asset
Dx/Tx
III
ZIRCON
I/II
ZIRDAC
TLX250-
CDx
TLX250-
CDx
Dx
Dx
II
I
STARLITE-1
TLX250
Tx
STARLITE-2
TLX250
Tx
Prostate Cancer
Ph
III
II
II
II
Name
Asset
Dx/Tx
University of
Linz (IIT)
TLX591-
CDx
Emory
University (IIT)
TLX591-
CDx
Enhancing (IIT)
Mem. Sloan
Kettering (IIT)
TLX591-
CDx
TLX591-
CDx
TLX599-
CDx
Dx
Dx
Dx
Dx
Dx
N/A*
NOBLE
III
I
PROSTACT
TLX591
Tx
CUPID
TLX592
Tx
*Registry Study.
Telix Pharmaceuticals Annual Report 2021 Prostate cancer
and PSMA program
Prostate cancer is the most commonly diagnosed male cancer and
a leading cause of death in men worldwide. In 2020 more than
1.4 million men were diagnosed, and despite recent advances in
treatment, over 375,000 died from their disease.1
High rates of screening in developed countries mean most men
are diagnosed early when their disease is clinically confined
to the prostate gland. These men receive local therapy, either
prostatectomy or radiotherapy, and may be cured of their disease.
However, approximately 15% of patients develop advanced
forms of the disease that can spread to other parts of the
body. This is known as metastatic prostate cancer. Thus, there
remains a significant need for clinical research and effective new
management tools.
Core prostate cancer portfolio:
16
NOBLE Registry image. Credit: Peter Tually.
•
•
•
•
Illuccix (TLX591-CDx, 68Ga gozetotide also known as PSMA-11), preparation for imaging prostate cancer with PET
(now approved in the United States and Australia, and under regulatory review in 15 additional countries)
TLX599-CDx (99mTc-iPSMA), an investigational prostate cancer imaging agent that uses single photon emission
computed tomography (SPECT)
TLX591 (177Lu-DOTA-rosopatamab), the Company’s lead prostate cancer therapy candidate
TLX592 (64Cu/225Ac-RADmAb®), the Company’s next generation prostate cancer therapy candidate for targeted
alpha therapy (TAT)
Each of these assets targets PSMA, a protein expressed on the surface of prostate cancer cells but which is low or
absent on most normal healthy cells, making it a suitable target for prostate cancer theranostics.
Prostate cancer imaging
Telix’s lead product for prostate cancer imaging with positron
emission tomography (PET), Illuccix, was approved by the
Australian TGA in November 2021, and the United States FDA
in December 2021 (refer to earlier section in this report).
During 2021, Telix also supported the launch of the NOBLE
Registry of the Company’s SPECT-based investigational
imaging product, TLX599-CDx (99mTc-iPSMA), co-supported by
the Brussels-based Oncidium foundation.
The Registry aims to collect data that, ultimately, may
improve access for men to state-of-the-art prostate cancer
imaging tools in remote and rural locations where SPECT is
the predominant imaging modality. The NOBLE Registry is
collecting prospective, real-world clinical data on the use of
TLX599-CDx from a consortium of sites in seven countries,
including Australia. Patients were dosed in Nigeria, Egypt and
Australia during 2021, and in Mexico during February 2022,
with other clinical sites in Indonesia, South Africa, and the
United Arab Emirates.
1. Globocan 2021.
“
The NOBLE Registry partnership with Telix
represents the essence of what we stand
for at the Oncidium foundation; raising
awareness about theranostics as an
alternative for cancer care, and providing
support to accelerate global access. Based
on promising early results, we see great
potential in NOBLE, and look forward to
other future areas of collaboration with
Telix for the benefit of patients.”
Rebecca Lo Bue,
General Manager of the Oncidium foundation
Telix Pharmaceuticals Annual Report 2021 17
Prostate cancer therapy
Telix also made significant progress with its lead PSMA-targeting
therapy program, which is exploring TLX591 in areas of unmet
medical need across the full prostate cancer treatment journey.
The ProstACT program of studies is evaluating the efficacy of
Telix’s lutetium-177 (177Lu)-labelled therapeutic antibodies in all
stages of prostate cancer, from first recurrence to advanced
metastatic disease (mCRPC). In May the Company was granted
Human Research Ethics Committee (HREC) approval and received
Clinical Trial Notification (CTN) clearance by the Australian
Therapeutic Goods Administration (TGA) to commence a pivotal
Phase III study, ProstACT GLOBAL.
ProstACT GLOBAL is an international, multi-centre, randomised
controlled trial (RCT) in patients with PSMA-expressing mCRPC,
experiencing disease progression following prior treatment with
a novel androgen axis drug (NAAD). The ProstACT trial will enrol
approximately 390 patients and incorporates patient selection
using 68Ga-PSMA imaging with TLX591-CDx (Illuccix). The trial will
compare standard of care therapy alone versus standard of care
therapy plus TLX591, with a primary endpoint of radiographic
progression-free survival (rPFS).
“
Our strategic collaboration with Telix
is helping to advance clinical trials
with the aim to make proven new
treatments available more quickly.
With GenesisCare’s extensive network
of cancer care centres and Telix’s drug
development and commercialisation
expertise, this partnership has
potential to make a real difference in
life outcomes for patients."
Prostate cancer is the most common male cancer
Dan Collins,
GenesisCare Founder and CEO
Worldwide, 1.4 million men were diagnosed
with prostate cancer in 20201
More than 375,000 men died from prostate cancer
globally in 20201
Detecting early metastatic disease in this
setting is vital
Illuccix (TLX591-CDx) was approved in the United
States and Australia during 2021
Over 13,200 individual patient doses of TLX591-CDx
delivered globally in 2021 through clinical trials and
magisterial or compassionate use
Total addressable market value for Illuccix in United
States and Europe estimated at US$1.1 billion
(increase in past 12 months owing to growing
incidence rates and inclusion in practice guidelines)
Total addressable market value for TLX591
(therapy) in United States and Europe estimated
at US$4.5 billion
1. Globocan 2021.
In August Telix announced ProstACT SELECT and ProstACT
TARGET, two ancillary studies under the ProstACT umbrella that
significantly extend the evaluation of Telix’s TLX591 antibody-
directed 177Lu therapeutic platform:
•
•
ProstACT SELECT, a Phase I radiogenomics study with the
goal of comparing 68Ga-PSMA (gallium-based imaging) and
177Lu-PSMA (lutetium-based therapy), specifically exploring
the biodistribution and tumour uptake of small molecule
and antibody-based targeting in men with PSMA-expressing
mCRPC. Demonstrating the “theranostic” approach, the
study is designed to inform optimal patient selection for
177Lu antibody therapy, with the goal of enabling indication
expansion for Telix’s PSMA therapeutic portfolio. ProstACT
SELECT is a multi-centre study and will enrol up to 50
patients.
ProstACT TARGET, a Phase II single arm study to evaluate
TLX591 in combination with EBRT in patients with PSMA-avid
biochemically recurrent oligometastatic disease, designed to
generate early data in front-line care. The aim of the study – a
collaboration with Telix’s strategic partner, GenesisCare – is
to determine the efficacy, biodistribution, and combination
dosimetry of TLX591 plus EBRT. The primary endpoint is rPFS.
This expanded ProstACT study program will inform the Company’s
long-term clinical and commercialisation strategies for the TLX591
therapeutic candidate and generate multiple opportunities for
near-term data readouts throughout the program duration.
Telix Pharmaceuticals Annual Report 2021 During August, a first patient was dosed in the first-in-human
Phase I CUPID study of Telix’s TAT prostate cancer therapy
candidate TLX592, in patients with advanced prostate cancer.
TAT delivers high-energy, short-range radiation that penetrates
only a few cells deep, potentially suited to patients with early-
stage metastatic prostate cancer with small disease burden,
or patients with late-stage prostate cancer following failure of
177Lu-PSMA therapy. TLX592 targets PSMA, as does the Company’s
TLX591 prostate cancer therapy program. However, TLX592 has
been engineered with Telix’s proprietary RADmAb® antibody
technology to clear far more rapidly from a patient’s circulation
than unmodified antibodies, while maintaining TLX591’s specificity
for tumour-expressed PSMA and hepatic (liver) clearance,
rendering it potentially more suitable for use as a targeting agent
for 225Ac, a potent therapeutic alpha emitting radionuclide.
TLX592 represents Telix’s most significant proprietary antibody
development to date and it is our aim to develop this program for
both the early stages of metastatic prostate cancer, as well as for
later stage patients no longer responding to lutetium therapy, in
tandem with TLX591.
18
One of Telix’s key objectives is to
establish category leadership in urologic
oncology, thereby being able to offer
patients with prostate cancer a broad
suite of state-of-the-art diagnostic
imaging and therapeutic options.
Future indications
The protein targeted in Telix’s prostate cancer imaging
and therapy programs, PSMA (also known as glutamate
carboxypeptidase II (GCPII), is highly expressed in many cancers
including lobular breast cancer (also called invasive lobular
carcinoma, or ILC). During 2021, first patients were dosed at
Emory University (Atlanta, GA) in a Phase I study of TLX591-
CDx for the staging of ILC, marking the first formal clinical
investigation of TLX591-CDx outside of prostate cancer. ILC is
the second most common form of breast cancer, affecting about
10% of people with invasive breast cancer. Currently there are no
accurate imaging techniques for staging lobular breast cancer,
adversely impacting clinicians’ ability to inform decisions about
optimal treatment and management of the disease.
Telix Pharmaceuticals Annual Report 2021 Kidney cancer and CA9 program
19
Worldwide 430,000 people were diagnosed with kidney cancer in
2020, with almost 180,000 dying from their disease.1 Kidney cancer
tends to be resistant to both chemotherapy and radiotherapy,
and while immunotherapies have dramatically improved the
overall outlook for patients with metastatic kidney cancer, many
do not adequately respond to these and eventually progress.
There remains a significant need for new therapeutic options for
patients with advanced kidney cancer.
Advanced imaging has a crucial role in diagnosis and staging,
including with clear cell renal cell carcinoma (ccRCC), the most
common and aggressive form of kidney cancer. The current
standard of care is computed tomography (CT) or magnetic
resonance imaging (MRI) followed by invasive surgery, however
conventional imaging techniques are unable to reliably distinguish
between benign and malignant tumours. Improved detection of
ccRCC (including metastatic disease) with PET/CT imaging could
lead to more accurate staging, with potential to spare unnecessary
biopsies and limit unnecessary surgeries.
Telix’s kidney cancer program comprises the investigational PET
imaging agent TLX250-CDx (89Zr-DFO-girentuximab), granted FDA
Breakthrough Therapy (BT) designation in the United States in
2020, and the therapeutic candidate TLX250 (177Lu-girentuximab).
Each of these investigational products is being developed to target
a cell-surface antigen called carbonic anhydrase IX (CA9), a cancer
target that is overexpressed in ccRCC due to a mutation of the
von Hippel-Lindau (VHL) protein. CA9 is present on 90+% of ccRCC
cells but is absent from most normal healthy kidney tissues and is
therefore an attractive target for both imaging and therapy.
During 2021, Telix made significant progress with the Company’s
international, multi-centre Phase III ZIRCON trial, which is
evaluating the sensitivity and specificity of pre-surgical imaging
with PET, using TLX250-CDx to non-invasively detect ccRCC, in
comparison with histologic standard of truth determined from
surgical resection in up to 252 patients. The study has now
exceeded 90% recruitment and the Biologics Licence Application
(BLA) consultation process with the FDA has commenced, as the
Company progresses a regulatory filing. With no comparable
clinical product presently available, TLX250-CDx has potential
to be the first commercially available diagnostic imaging agent
intended for the non-invasive assessment of patients with
suspected ccRCC.
There is an increasing body of scientific evidence that radiation
could enhance the effect of immune therapies, which are
increasingly used throughout oncology, by overcoming resistance
mechanisms, “immune priming” the tumour (e.g. ref Herrera et
al. Cancer Discovery 2022). The two Telix-supported STARLITE
studies, which are assessing the efficacy of TLX250 as an immune
primer in combination with current immuno-oncology therapies
for ccRCC, were also advanced during 2021. The FDA accepted
Investigational New Drug (IND) applications for both STARLITE 1
and STARLITE 2, being conducted at MD Anderson Cancer Center
(Houston, TX) and Memorial Sloan Kettering Cancer Center (New
York, NY), respectively. Patient screening commenced for STARLITE
2 in late 2021.
Future indications
The cancer target CA9 utilised in Telix’s kidney cancer imaging and
therapy programs also has overexpression in many other solid
1. Globocan 2021.
tumours, including bladder or urothelial, breast, brain, cervix,
colon, esophagus, head and neck, lung, ovarian, pancreatic and
vulval cancers. During 2021, a number of investigator-led studies
were initiated using PET imaging with TLX250-CDx to “indication
scout” for future therapy applications and demonstrate the value
of a “theranostic” approach.
•
•
•
ZiP-UP in patients with urothelial carcinoma or bladder
cancer
OPALESCENCE in triple negative breast cancer
PERTINENCE in non-muscle invasive bladder cancer
ccRCC is the most common and aggressive form of
kidney cancer
Worldwide, 430,000 people were diagnosed with
kidney cancer in 20201
More than 180,000 people died from kidney cancer
globally in 20201
TLX250-CDx has been granted Breakthrough
Therapy designation by the United States FDA
No comparable product to TLX250-CDx is presently
clinically available
TLX250-CDx has potential to be the first diagnostic
imaging agent indicated for the non-invasive
assessment of patients with suspected ccRCC
International, multi-centre Phase III ZIRCON trial
of TLX250-CDx nearing completion (expected to
complete patient recruitment during Q1 2022,
despite COVID-19 disruption)
Total addressable market value for TLX250-CDx
in United States and Europe estimated at US$350
million
Total addressable market value for TLX250 in
United States and Europe estimated at US$3 billion
Telix Pharmaceuticals Annual Report 2021 20
Glioblastoma (brain cancer)
and LAT-1 program
Worldwide, more than 300,000 people were diagnosed with brain
or central nervous system cancer in 2020 and 250,000 people died
from their disease.1 Glioblastoma (GBM) is the most common and
aggressive primary brain cancer diagnosed in adults, accounting
for more than half of all brain tumours. The mainstay of treatment
for GBM typically comprises surgical resection, followed by
combined radiotherapy and chemotherapy. However, despite such
treatment, most patients experience recurrence, with an expected
survival duration of approximately 12-15 months from diagnosis.
Telix’s GBM program comprises the investigational PET imaging
agent TLX101-CDx (18F-FET) and the therapeutic candidate TLX101
(131I-IPA). Both target L-type amino acid transporter 1 (LAT-1), a
membrane transport protein that is typically highly expressed
in GBM. TLX101 is a novel approach that is readily able to pass
through the blood-brain barrier, the normal protective
barrier that prevents many potential drug candidates
from entering the brain.
During 2021, Telix concluded the IPAX-1 study of TLX101 in
combination with EBRT in recurrent GBM. First peer-reviewed
results were presented at the Congress of Neurological Surgeons
(CNS) meeting in October, confirming that the study met its
primary objective, demonstrating safety and tolerability of TLX101
at doses tested, with overall survival (OS) at the point of interim
analysis of 15.97 months. GBM has a median survival from initial
diagnosis of 12-15 months, so the prospect of potentially improved
OS in the second line setting warrants further investigation in a
larger patient cohort, including earlier stage patients.
During 2022, TLX101 will be evaluated in front-line therapy, in
combination with standard of care and using TLX101-CDx as a
complementary imaging agent. The protocol for a Phase I/II study
was finalised in late 2021 with the Phase I component expected to
commence in Q1 2022, pending ethics approval.
In December, Telix entered into a clinical data access agreement
with the Olivia Newton-John Cancer Research Institute (ONJCRI)
relating to a clinical trial investigating the use of 18F-FET to
image glioblastoma patients with PET (FET-PET). The FET-PET in
Glioblastoma (FIG) Study is a prospective, multi-centre study,
which aims to definitively establish the role of FET-PET in the
management of GBM. Data from the FIG study may be used to
support global regulatory submissions for TLX101-CDx, whilst also
enabling public dissemination of data in a way that can be robustly
mined for the benefit of patients suffering from this disease with
particularly poor prognosis.
Glioblastoma is the most aggressive form of
primary brain cancer
Worldwide, more than 300,000 people were
diagnosed with brain or central nervous system
cancer in 2020, with GBM accounting for more than
half of all tumours1
TLX101 and TLX101-CDx have been granted orphan
drug designation in the United States and Europe
IPAX-1 study demonstrated encouraging tumour
responses including some patients with prolonged
disease stabilisation
TLX101 to be evaluated in front-line therapy
during 2022, in combination with standard of care
treatments
Total addressable market value for TLX101 in United
States and Europe estimated at US$1.5 billion
1. Globocan 2021.
Telix Pharmaceuticals Annual Report 2021 Hematologic (blood) cancers / bone
marrow conditioning and CD66 program
21
The indications for bone marrow transplantation are increasing
from hematological malignancies to more recently solid tumours
and numerous autoimmune conditions. Traditional conditioning
regimens are associated with morbidity and mortality from
chemotherapy, limiting their use particularly in pediatric and
rare diseases.
Conditions like systemic amyloid light chain amyloidosis (SALA),
an orphan disease that is often treated by autologous transplant,
could benefit from more tolerable conditioning regimens. Novel
cell and gene therapies could also increase their utilisation by
minimising chemotherapy conditioning approaches.
Telix’s TLX66-CDx (99mTc-besilesomab, Scintimun®) and TLX66
(90Y-besilesomab) investigational assets have potential application
across a range of conditions requiring bone marrow conditioning.
Besilesomab targets cluster of differentiation 66 (CD66), a
receptor expressed on specific types of immune/blood cells and
a potential target for novel conditioning radiopharmaceuticals.
TLX66 has been granted orphan drug designation (ODD) status in
Europe for bone marrow conditioning for hematopoietic stem cell
transplantation (HSCT), a broad clinical indication.
Prior Phase I and II clinical studies of TLX66 have demonstrated
encouraging efficacy and safety data in multiple myeloma,
pediatric leukemia and SALA, a rare disease with a poor prognosis
characterised by abnormal protein deposition in the organs of the
body.
During 2021, Telix reported initial results for safety and tolerability
for the Targeted Radiotherapy for AL-amyloidosis (TRALA) trial at
the University of Southampton, United Kingdom. The study found
that TLX66 was well-tolerated, enabling successful engraftment
of the patients’ own transplanted stem cells without the need for
toxic chemotherapy. Peer review data presented in December
2021 confirms the study met its primary objective, demonstrating
the initial safety profile in patients with AL amyloidosis and may
offer a new approach to bone marrow conditioning in patients
who could benefit from HSCT. This supports taking TLX66 forward
into a pivotal Phase II registration study in this rare disease
indication, which is currently being planned in collaboration with
the amyloid community of patients and physicians.
In August 2021, London-based Great Ormond Street Hospital
(GOSH), an international centre of excellence in child healthcare,
received UK research ethics approval to commence a Phase II
academic study of TLX66 in children with high-risk leukemia.
This open label Phase II study, which will enrol 25 patients, is
being carried out by GOSH to evaluate safety and efficacy of
TLX66 as part of a reduced toxicity conditioning regimen in
children and adolescents undergoing allogeneic HSCT. The study
is independently funded by the generosity of a philanthropic
foundation, with GOSH as the sponsor, and is expected to
commence enrolment during Q1 2022.
TLX66-CDx (Scintimun®) is an approved product in approximately
30 countries around the world, indicated for scintigraphic imaging,
in conjunction with other appropriate imaging modalities, for
determining the location of inflammation/infection in peripheral
bone in adults with suspected osteomyelitis. Through clinical
collaboration with key opinion leaders, Telix sees an opportunity
to significantly expand the utility of this "companion imaging"
agent to other oncology, inflammation and infection imaging
applications.
SALA is an orphan disease indication with an
annual incidence of approximately 12 per 1,000,000
population1
SALA portends a very poor prognosis, with a median
survival from diagnosis of ~11 months if untreated
TLX66 has been granted ODD status in Europe for
bone marrow conditioning for HSCT
Telix views rare disease indications as a potential
acceleration strategy across the entire pipeline
TLX66-CDx is currently approved and marketed as
Scintimun® in approximately 30 countries
Total addressable market value for TLX66 in United
States and Europe estimated at US$600 million,
with potential upside for TLX66-CDx (imaging)
1. Monique Minnema and Stefan Schönland, The EBMT Handbook: Hematopoietic Stem Cell Transplantation and Cellular Therapies, 2019.
Telix Pharmaceuticals Annual Report 2021
Our future: research and innovation focus
22
The team at Telix is driven by innovation and always looking over the horizon to what will be the “new
frontier” in the field of radiopharmaceuticals.
Building the pipeline of future products, through Telix’s own research and development, and with partners, is a core strategic focus. In
harnessing the power of MTR to explore new targets, complement existing therapies and find new clinical applications, Telix’s aim is to
build a pipeline of new product candidates which can improve patient outcomes and in turn, deliver value to shareholders.
Telix was founded on the premise of taking clinically-validated products rapidly to commercialisation. The team’s expertise in technology
evaluation and product development, along with the Company’s standing as one of the world’s largest dedicated radiopharmaceutical
companies has opened up access to a range of new opportunities and partnerships.
This research and innovation focus will define the Telix of the future.
NEW IMAGE TO BE
PROVIDED
Core areas of research
and development focus
1. Targeted alpha therapy (TAT)
TATs have the potential to supercharge targeted radiation.
Alpha emitters are “next generation” radionuclides that possess
a very high energy output, but a localised radiation profile.
This offers potentially greater potency and reduced likelihood
of hitting surrounding healthy tissue. Furthermore, the
prospective indications for alpha emitting candidates are highly
complementary to beta emitters due to their different properties:
alpha therapies have a short penetration depth into tumours to
suit smaller, disseminated disease or micro-metastatic disease,
whereas traditional beta-emitting radioisotopes (such as 177Lu
and 131I) have a longer penetration and may suit bulky metastatic
disease.
Telix’s vision is to develop alpha and beta therapies for the
indications it is pursuing, to increase the options available to treat
cancer within its portfolio and provide patients with additional
options along their treatment journey. From a commercial
standpoint this will be an important part of product “lifecycle”
management. In prostate cancer, the Company is developing
TLX591, a beta therapy and the subject of the ProstACT trials
but in parallel is also developing TLX592 as an alpha therapy,
the subject of the CUPID study. TLX592 is being evaluated as a
potential adjuvant treatment for high-risk patients that have early
metastatic disease, and eventually is expected to have utility in
any patients progressing following conventional, beta-emitting
177Lu-PSMA radionuclide therapy.
In December 2021 a first patient was dosed in a Phase I study
of TLX250-CDx in patients with non-muscle-invasive bladder
cancer (NMIBC) at the Institut de Cancérologie de l’Ouest (ICO)
in France. This study known as PERTINENCE, a collaboration with
Atonco S.A.S., is an important step towards evaluating TLX250
with an alpha emitting isotope for the first time in humans. During
2022 we look forward to furthering this collaboration to explore
girentuximab as a base for therapy with the alpha-emitting
radioisotope astatine-211 (211At) as well as extending and
accelerating development options to numerous cancer types
where there is unmet medical need.
Telix Pharmaceuticals Annual Report 2021 23
In August, Telix entered into a pan-cancer clinical collaboration with Merck
KGaA, Darmstadt, Germany (Merck), to conduct combination studies with one
of Merck’s investigational proprietary DNA Damage Response Inhibitor (DDRi)
molecules in combination with each of Telix’s TLX591 and TLX250 MTR therapeutic
programs. This clinical collaboration builds on the success of a strategic research
collaboration agreement between Telix and Merck announced in August 2019.
This collaboration represents the vanguard of nuclear medicine and oncology,
and we are excited by the new data and intellectual property already generated
demonstrating potent synergy between Telix and Merck’s technologies, which
is highly supportive of clinical translation. Pre-clinical studies provide evidence
that the combined effect of Merck’s DDRi compound with Telix’s MTR candidates
has potential to significantly impact cancer by improving efficacy and reducing the
required radiation dose for tumour reduction and remission, compared to MTR only.
2. Combination therapies
Studies have demonstrated that low doses of radiation
can act as an “immune primer” and can make a tumour
more responsive to immunotherapy. Tumours can
suppress the immune response with checkpoint
receptors. In immunotherapy, checkpoint inhibitors
(CPI) disrupt this suppression in tumour-clearing T cells.
However, responses to CPI are highly variable, based on
immune-responsiveness of tumour or cancer type.
Targeted radiation has the potential to remodel a
tumour’s immune-status and therefore enhance the
effectiveness of immunotherapy, by altering the tumour
microenvironment, priming the immune system by
recruiting the patient’s immune cells and acting to
reprime a tumour that has developed resistance.
Immunotherapy is forecast to be a US$100B market by
2027,1 and the combination of MTR and CPI could be a large
market opportunity. The STARLITE 1 and 2 Phase II studies
of TLX250 in kidney cancer therapy are a world-first clinical
evaluation of MTR in combination with checkpoint inhibitors.
1. Global Immuno-Oncology Market Size, Status and Forecast 2021-2027.
Telix Pharmaceuticals Annual Report 2021 24
3. Understanding the tumour
microenvironment (TME)
Tumours are complex, heterogeneous collections of cells.
This complex biology means that aggression of a tumour
type or expression of biomarkers is the result of interactions
of numerous molecular “drivers”. The dynamic interactions
of cancer cells with their microenvironment enhances their
complexity and stimulates the characteristics of a tumour
causing it to metastasise or become resistant to treatment. By
better understanding the TME and harnessing the ability of MTR
to target multiple parts of the tumour, Telix’s goal is to develop
new approaches which may complement existing treatments
and make them more efficacious.
Telix has in-licenced a novel antibody (APOMAB®) from
AusHealth, which is currently the subject of a Phase I study
in lung and ovarian cancers. This antibody targets the La/SSB
protein,1 which is only expressed on dying or dead cancer cells,
such as those found in patients that have been pre-treated
with chemotherapeutic agents or EBRT. Repeated cycles of
therapeutic APOMAB treatment is designed to expose increasing
amount of target protein on the newly-killed tumour cells;
resulting in a “bystander killing” effect on neighbouring cancer
cells. This is an example of how a better understanding of the
TME may boost the efficacy of many existing cancer treatments.
Telix also in-licenced a novel PET radiotracer, originating from
the Université catholique de Louvain in France, known as
18F-3-fluoro-2-hydroxypropionate or 18F-FLac, which has shown
promise for imaging lactate metabolism in oxygenated tumours
and TME, an important area of research for Telix. 18F-FLac could
act as an adjunct to 18F-FDG PET, which is used in ~90% of scans,
to help identify cancers that are more aggressive in nature and less
responsive to current treatments, particularly immuno-oncology
therapeutics.
Telix believes in the strength of collaboration and working with
the leaders of the field for translation of new theranostics. In
February 2021, Telix initiated a new collaboration with Heidelberg
University Hospital (UKHD) and Professor Frederik Giesel in
Germany for the development of next generation theranostic
radiopharmaceuticals. This combines the expertise and resources
from both Telix and UKHD to develop and explore further novel
treatments in urologic oncology. A lead candidate has already been
identified and is currently progressing through further preclinical
studies to generate the pharmacological and toxicological package
required to support clinical translation.
4. Artificial intelligence (AI)
AI is used to recognise complex patterns within large data sets and
can be applied to enhance decision-making through predictive
analysis. Radioimaging using MTR relies heavily on digital data
processing and expert input from highly trained technicians and
radiologists to correctly interpret the data. In this context AI could
be transformative in helping to improve the accuracy, precision,
efficiency and overall quality of radioimaging for cancer patients.
Telix is working with specialist partners, with a vision to use AI
to enhance its diagnostic imaging products. AI can be applied
to improve image quality, and use algorithms to better quantify
and classify lesions, and monitor changes in disease burden. AI
is also expected to play an important role in the optimisation
of treatment, by integrating imaging and clinical data to inform
disease prognosis and forecasting optimal dose prediction and
treatment response.
1. SSB (Small RNA Binding Exonuclease Protection Factor La)
is a Protein Coding gene.
Telix Pharmaceuticals Annual Report 2021 “
We are extremely excited by the
potential of this collaboration to
transform surgical outcomes for
patients across a range of major
cancer types, starting with prostate
cancer. The combination of Lightpoint’s
SENSEI® probe, alongside Telix’s
ground-breaking MTR agents, has
the potential to create an extremely
precise technique to help surgeons
detect cancer that might not otherwise
be found during surgery.”
Graeme Smith,
Lightpoint Medical CEO
25
5. Radio-guided surgery (RGS)
Bringing molecular imaging into the operating theatre is a key
part of Telix’s portfolio strategy for urologic oncology. Telix
is working with several partners to develop advanced image-
and radio-guided surgical technologies to assist urologic
surgeons with the real-time identification of cancer cells.
Surgeons currently have no reliable way to detect cancer intra-
operatively, relying on sight or touch during an operation.
As a result, cancer may be left behind or healthy tissue
needlessly removed.
Telix is collaborating with Paris-headquartered Mauna Kea
Technologies (Mauna Kea), a leading medical device company
pioneering the development of real-time intra-operative
endomicroscopic visualisation of cancer tissue. Named
the Imaging and Robotics in Surgery (IRiS) Alliance, this
collaboration is combining the use of Telix’s dual-modality PET
tracer TLX591-Sx (68Ga-PSMA-IRDye) that delivers concurrent
PET and fluorescent (optical) imaging, with Mauna Kea’s
Cellvizio® confocal laser endomicroscopy (CLE) in vivo cellular
imaging platform. The clinical objective is to enable the urologic
surgeon to access real-time visualisation of cancer tissues
in the operating theatre in a manner that can be directly
correlated to pre-operative PET imaging. The IRiS Alliance aims
to develop advanced capabilities for pre-operative planning,
intra-operative guidance, surgical margin assessment and other
surgical parameters, with initial applications in prostate and
kidney cancer.
Telix is also working with Lightpoint Medical, which has
developed a miniature gamma probe, a device used to detect
radiation in patients and guide surgery, which is inserted into a
surgical port and can then be controlled by the clinician during
the procedure. When used with molecularly-targeted imaging
agents, Lightpoint’s device may enable the intra-operative
detection of cancer in real time; supporting greater precision
in the removal of tumours. Telix and Lightpoint are evaluating
the use of Telix’s investigational prostate cancer SPECT
imaging agent TLX599-CDx (99mTc-HYNIC-iPSMA) – together with
Lightpoint’s SENSEI® flexible laparoscopic gamma probe for
intra-operative cancer detection. The ultimate objective of the
clinical collaboration is to obtain marketing approval for use of
TLX599-CDx in RGS, a new indication for prostate cancer.
Telix Pharmaceuticals Annual Report 2021 Our global leadership team
26
Christian Behrenbruch, BEng (Hons) DPhil (Oxon) MBA (TRIUM) JD (Melb) FIEAust GAICD
Group Managing Director and Chief Executive Officer
Dr Behrenbruch has over twenty years of healthcare entrepreneurship and executive leadership
experience. He has previously served in a CEO or Executive Director capacity at Mirada Solutions,
CTI Molecular Imaging (now Siemens Healthcare), Fibron Technologies and ImaginAb, Inc. He is a
former Director of Momentum Biosciences LLC, Siemens Molecular Imaging Ltd, Radius Health Ltd
(now Adaptix) and was the former Chairman of Cell Therapies Pty Ltd (a partnership with the Peter
MacCallum Cancer Centre). Christian was previously a Director of Factor Therapeutics (ASX: FTT)
and Amplia Therapeutics Limited (ASX: ATX). Christian holds a DPhil (PhD) in biomedical engineering
from the University of Oxford, an executive MBA jointly awarded from New York University, HEC
Paris and the London School of Economics (TRIUM Program) and a Juris Doctor (Law) from the
University of Melbourne. He is a Fellow of Engineers Australia in the management and biomedical
colleges and a Graduate of the Australian Institute of Company Directors.
Gabriel Liberatore BSc (Hons) PhD (Melb) MBA (La Trobe) MAICD
Group Chief Operating Officer
Dr Liberatore has over 20 years’ experience in pharmaceutical and biotech development
and operational management functions. Underpinned with science qualifications and a solid
background in research and development, Gabriel has held senior business development,
consultancy, research and development and operational roles with CSL Limited (ASX: CSL), Deloitte
(Australia), Swisse Wellness (112.HK) and the PACT Group (ASX: PGH). Gabriel holds a PhD in
Neuroscience from the University of Melbourne, a post-doctorate from Columbia University and
an MBA (Corporate Strategy) from La Trobe University. Gabriel is an Advisory Board member at
Swinburne University and is a Member of the Australian Institute of Company Directors.
Douglas Cubbin, FCA GAICD
Group Chief Financial Officer
Mr Cubbin is a Certified Practicing Accountant (CPA) with thirty years of experience in finance and
executive roles in a diversity of industry sectors, including healthcare, financial services, building,
transport/logistics and telecommunications. He is a fellow of the Australian Society of CPAs and
a Graduate of the Institute of Company Directors. Doug has spent the last sixteen years in CFO,
COO, Commercial and Business Development roles in Nuclear Medicine. Prior to that, Doug was
the Group CFO of DHL (Australia-Pacific). From 2013 to 2016, Doug was the Chairman of Australian
Nuclear Science and Technology Organisation (ANSTO) Nuclear Medicine Pty Ltd and the General
Manager of Business Development at ANSTO.
Melanie Farris BComn FGIA FCG GAICD
Chief Governance and Risk Officer, Group Company Secretary
Ms Farris is an experienced governance and corporate operations professional and Non-Executive
Director with over 15 years’ experience in listed life sciences companies, as well as extensive
experience in the planning, management and delivery of strategic corporate activities including
IPO, M&A diligence and integration, risk and governance strategy. Melanie’s prior roles include with
Factor Therapeutics Limited (ASX: FTT), Invion Limited (ASX: IVX), Menzies Research Centre, HRH
The Prince of Wales’s Office, Global Asset Management, Imperial Cancer Research Fund, and The
Prince’s Foundation. Melanie holds a Bachelor of Communication (Public Relations), and a Graduate
Diploma in Applied Corporate Governance. She is a Fellow of the Governance Institute of Australia,
a Fellow of the Chartered Governance Institute (UK) and a Graduate of the Australian Institute of
Company Directors.
Telix Pharmaceuticals Annual Report 2021 27
Dr Colin Hayward, MBBS FFPM
Group Chief Medical Officer
Dr Hayward has over 20 years’ of global pharmaceutical, biotechnology and drug development
experience and leads Telix’s medical affairs, clinical operations and pharmaco-vigilance activities
on a global basis. Prior to joining Telix, Colin was the Chief Medical Officer of Premier Research
(North Carolina, US), a leading global Contract Research Organisation (CRO) specialising in the
biopharmaceutical and specialty pharmaceutical areas of clinical research. Colin has held a series
of senior medical, executive and board-level roles with F. Hoffmann-La Roche, Myriad Genetics,
Prism Ideas Ltd and Symprove Ltd. Earlier in his career, Colin worked in the UK National Health
Service with a clinical focus in intensive care and anaesthesia. Colin holds a Medical degree from the
University of London and is a Fellow of the Faculty of Pharmaceutical Medicine (UK).
Helen Hovenga MBA, Grad. Dip. HRM & IR, BA (Psych)
Global Chief People Officer
Ms Hovenga has worked with Executives, CEOs and Boards in developing and delivering
transformation, the ideal Culture and People Strategies. Her most recent role prior to Telix was
as Executive Director, People & Culture with Peter MacCallum Cancer Centre for 3,500 Health
practitioners and Research employees. Her broad, deep and diverse Human Resources experience
has been gained across large, complex organisations and sectors, including Public Health, Finance,
Manufacturing, Mining, Automotive and Retail. She has worked with organisations such as Afterpay,
Mars, Toyota, Coles, CUB, Cleanaway, Newcrest and Peter MacCallum Cancer Centre in Executive
Leadership roles. Helen has a Masters of Business (HR) with distinction from Charles Sturt
University; Helen’s passions are in change, transformation, agility, developing and implementing
Strategy, people leadership, stakeholder partnerships, high performance, digital solutions and
improved commercial outcomes.
Richard Valeix MBA
Chief Executive Officer, EMEA
Mr Valeix joins Telix with approximately twenty years of pharmaceutical industry experience,
including radiopharmaceuticals, gained in senior executive leadership roles across a broad range
of therapeutic product areas. Prior to joining Telix, Richard worked at Advanced Accelerator
Applications (AAA), a Novartis Company where he served for seven years in the roles of General
Manager for France, Switzerland, Belgium, Netherlands and Luxembourg, and Global Head of
Marketing and Sales. Earlier in his career, Richard held senior sales, marketing and strategy
roles at Ipsen and Roche, where he gained extensive experience in European market access,
reimbursement, regulatory affairs and commercial launch planning for first-in-class products.
Richard holds a Pharmacist diploma from the Pharmaceutical University Marseille (France), a
Master’s degree in Management gained from the ESC Business School Marseille, and has completed
the International Marketing Program from INSEAD, Paris (France).
Dr David Cade, MBBS MBA GAICD
Chief Executive Officer, Asia Pacific
Dr Cade has over 20 years’ experience as an industry physician spanning the fields of novel
biotechnology, pharmaceuticals and medical devices. Prior to joining Telix, David held senior
executive roles at Cochlear Limited (ASX: COH), where he served as Chief Medical Officer, and at
Sirtex Medical Limited (ASX: SRX), where he served as Chief Medical Officer and in other senior
roles across the US, Europe and Australia, gaining deep experience in the Oncology, Interventional
Radiology and Nuclear Medicine therapeutic areas. Earlier in his career David trained in surgery at
Monash Medical Centre in Melbourne and worked at management consultancy, Booz & Company
across the Asia Pacific. David holds an MBBS from Monash Medical School, an MBA from Melbourne
Business School and ESADE Business and Law School Barcelona, and is a Graduate of the Australian
Institute of Company Directors.
Telix Pharmaceuticals Annual Report 2021 28
Tracey Brown, PhD GAICD
Global SVP Product Portfolio Management
Dr Brown joined Telix in February 2020 and leads Telix’s product portfolio in her role as the
Global Senior Vice President of Product Portfolio Management. Over the last 25 years, Tracey
has founded and acted as the Chief Scientific Officer or Chief Development Officer in several
global biotechnology companies (Meditech, Alchemia and Anatara Lifesciences) and worked
with European and USA biotechnology companies to lead product development, taking products
from conception through to registration. Through this process, Tracey has developed broad-
ranging experience in the manufacture of chemical and biological therapeutics, development and
implementation of preclinical and clinical development plans, regulatory affairs via interaction with
international regulatory agencies and management of clinical trials (Phase I-III). Tracey obtained her
PhD in Biochemistry and Molecular Biology from Monash University, is a Graduate of the Australian
Institute of Company Directors and holds an adjunct Associate Professorship at Monash University.
Jonathan Barlow, BSc LLB (Hons) PGDipMgt GAICD
Chief Business Development Officer and General Counsel
Mr Barlow has over 20 years’ experience working with major pharmaceutical, biotech and
technology-driven organisations, both in Australia and overseas. Jonathan practised in commercial
and intellectual property law at Allens, a leading international law firm, before joining the
pharmaceuticals division of Mayne Group Limited (later Hospira Inc.) where he served as Legal
Director – Asia Pacific and Director of Strategic Projects – Asia Pacific. Jonathan then founded Kinetic
Venture Advisory in 2014, a boutique legal practice focussed on supporting the commercialisation
of new technologies across the life sciences and technology sectors. Jonathan is a Graduate of
Melbourne Business School, the Australian Institute of Company Directors and the Asialink Leaders
Program.
Michael Wheatcroft, BSc (Hons) PhD (Cantab)
Chief Scientist
Dr Wheatcroft is Director of R&D at Telix. After completing a PhD in the Department of
Biochemistry, Cambridge University, Mike worked at Cambridge Antibody Technology (now
Medimmune, UK), a technology leader in the area of antibody engineering and protein sciences.
After moving to Melbourne in 2010 he oversaw the preclinical development of several engineered
antibody drug conjugates and clinical translation of novel antibody fragment in prostate and
ovarian cancer, including radioimmunoconjugates. Since then Mike has worked in senior
development roles at Medicines Development Limited (MDL), Hatchtech P/L and Starpharma
Limited where he performed in a variety of managerial roles related to GMP production, clinical
study support and nonclinical studies for a range of pharmaceutical and medical device products.
Telix Pharmaceuticals Annual Report 2021 29
Scott Law
SVP Global Manufacturing Operations
Scott brings with him over 30 years’ global pharmaceutical experience, including senior
manufacturing roles at companies such as Baxter, Emergent BioSolutions, Ferndale Laboratories,
and Pfizer. Most recently, Scott served as Vice President, Manufacturing and Operations at Cognate
BioServices where he was responsible for the manufacture and commercialisation of cell-based
products.
Kyahn Williamson, BA
SVP Investor Relations and Corporate Communications
Kyahn joined Telix in 2021 from WE Communications, where she was Group Head of Investor and
Corporate Communications. Over the past 15 years, Kyahn has worked with a wide range of ASX-
listed companies spanning the medtech and biotech sectors, designing and implementing investor
relations and public relations strategies, and advising across multiple IPOs and M&A transactions.
Kyahn holds a Bachelor of Arts (Public Relations).
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T E L I X P H A R M A C E U T I C A L S
Telix Pharmaceuticals Annual Report 2021
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ESG and its importance to Telix
Environmental, Social and Governance (ESG) is a set of standards for how a company operates in regard to the planet and its people.
In its corporate values, renewed during 2021, Telix has pledged a commitment to putting patients and its people first. Encompassed
within this is an inherent sense of responsibility to all stakeholders, including the Company’s shareholders and to minimise the impact to
the environment as the organisation grows.
At Telix, continued improvement across the spectrum of ESG standards is important in reducing risk, improving financial and operating
performance and creating economic opportunity. Strong performance on ESG standards is essential to meeting our aspirations to drive
positive change for patients, deliver value to shareholders, and create a sustainable business.
ESG matters at Telix are overseen by the Audit and Risk Committee of the Board of Directors. The Chief Governance and Risk Officer,
working closely with the SVP of Corporate Communications and Investor Relations and all members of the Global Leadership Team, is
responsible for progressing the development of the ESG strategy.
Environmental
Telix is required to carry out its activities in accordance with applicable environment and human safety regulations in each of the
jurisdictions in which it undertakes its operations. Commencing in 2020, this also includes environmental regulations relevant to its
licenced radiopharmaceutical production facility in Seneffe, Belgium.
Telix has obligations of regular inspections by the Federal Agency for Nuclear Control (FANC) and FANC’s subsidiary in charge of the
regulatory controls and safety assessments, BEL-V. Telix’s obligations with respect to these regulations have been met and are up to date.
The site passed the last requisite environmental audits conducted by FANC on 17 June 2021.
During the 2021 year, the site’s two legacy cyclotrons were decommissioned and removed. Other than two cyclotron vaults, the site has
been fully decontaminated. Telix submitted the first of its five-yearly mandatory inventory of "nuclear passive" reports to authorities on
30 March 2021.
In 2022, Telix will commence a progressive program of refurbishing or relocating to new offices in each regional hub, to accommodate
growth. Telix is committed to reducing its footprint through more energy-efficient buildings, and review of waste management and water
consumption at each site. Telix is committed to using technologies, where possible, that will minimise environmental impact right across
its operations, from the use of electronic communication methods for internal and shareholder communications, to selection of medical
radioisotopes of high-purity and sustainable production methods.
Telix is committed to the development of a Group-wide Environmental Policy, strategy and goals within the next two years, including the
development of a three-year climate related issues strategy.
During July 2021, Telix received authorisation
from the Belgian Agence Fédérale de Contrôle
Nucléaire (AFCN) to decommission the first
of two cyclotrons housed at the Company’s
licenced radiopharmaceutical production
facility in Seneffe, Belgium. The first cyclotron
was successfully removed in October 2021 by
SCK-CEN, a leader in nuclear safety and facility
decommissioning, whose innovative approach
to removal has ensured as much material can
be recycled as possible. Removal of the second
cyclotron followed in November 2021, allowing
the build-out of a new state-of-the art facility for
medical radioisotope production and drug product
manufacturing to progress. Telix’s Seneffe facility
will serve as the primary European manufacturing
site for Telix’s products, helping deliver supply
chain certainty and control.
Telix Pharmaceuticals Annual Report 2021
Social
Telix’s social criteria focus on the Company’s business relationships
with employees, vendors, customers, communities, and how they
are fostered, improved, and leveraged to create positive change. In
line with its purpose to help patients live longer, better quality lives,
the social element of ESG at Telix, also takes into consideration the
needs of patients around the world, and their communities.
Employee engagement and wellbeing, alongside diversity and
inclusion, is a focal point of the Company’s People and Culture
Strategy, particularly in the context of the rapid growth of the
workforce in the past 12 months.
Telix has a Diversity and Inclusion Policy which outlines the
Company’s commitment to diversity and inclusion and the provision
of a work environment that is free from discrimination and promotes
equal opportunity for all. The Company establishes appropriate,
measurable objectives for achieving gender and other forms of
diversity and inclusion, including with respect to increasing female
representation in senior leadership and on the Board. All employees
are required to attend respect in the workplace training, and all
people leaders are required to attend unconscious bias education.
Telix also runs an employee affinity group focused on diversity,
inclusion and belonging.
Telix has adopted culture-based objectives, in addition to
program and commercial objectives, aligned to its short-term
incentive program. These culture-based objectives promote both
performance and the delivery of goals to be in line with Telix’s Code
of Conduct and Corporate Values.
For the year ended 31 December 2021 culture-based objectives
included deliverables related to sustainable workforce practices
including for hiring, onboarding, training and retention. In 2021,
100% of objectives related to sustainable workforce were achieved.
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Diversity and inclusion metrics
The Board sets key performance indicators for senior
management to measure achievement against
objectives for gender and other forms of diversity,
and requires senior management to report against
such objectives.
•
•
Board female to male ratio 17% vs 83%
Board composition target: Not less than
30% female representation on the Board by
December 2022
• Global Leadership Team (GLT): Female to
male ratio 29% vs 71% (2020 12% vs 88%)
• Group employees: Female to male ratio 43%
vs 57% (2020 35% vs 65%)
•
2021 workforce target: Not less than 50% of
new appointments to be female. Of 83 new
appointments the ratio of females to males
was 48% vs 52%.
• Gender pay gap: Between 2020 and 2021
the gender pay gap at Telix reduced by 4%.
The gender pay gap and associated hiring
and retention processes remain under
review in 2022.
In July 2021 an engagement survey was undertaken which achieved a 90% completion rate and an overall engagement score of 86%.
Wellbeing at Telix is also monitored and addressed through regular surveys and initiatives in place to drive mental health awareness,
encourage balance, and offer direct support for employees.
The Company’s commitment to product safety and quality is articulated in its Quality Charter. A focus on safety, procedures and
documentation for clinical trials and commercial use is a key area of operational focus.
Governance
The Board is committed to good governance practices across the Group and its operations and continues to set an agenda with a focus
on environmental, social and governance matters that are essential to the Group’s sustainability and success. In furtherance of this
commitment, in May 2021, the remit of the Audit and Risk Committee was expanded to include oversight of ESG and sustainability
matters.
During 2022, the Board will consider and act upon the appropriate committee or committee structure to have oversight of healthcare
governance issues, including quality, patient safety, access to medicine, anti-bribery and transparency.
The Board continues to keep the balance of diversity, skills and experience of its members, as well as their independence, under review.
The Board has referred to the guidance provided by the ASX Corporate Governance Council and acknowledges the recommendation that
a majority of the Board of a listed entity should be independent Directors, and targets to reach this objective during 2022.
All Directors and employees of Telix must adhere to the Telix Code of Conduct. The underlying principle of the Code is that Telix has
a commitment not only to comply with its legal obligations but also to act ethically and responsibly, and in the best interests of the
Company and its stakeholders.
Telix Pharmaceuticals Annual Report 2021
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ESG materiality assessment and dashboard for action
As a step to defining its forward planning, in Q4 2021, Telix undertook a comprehensive materiality assessment to establish highly material
topics for strategy development and reporting purposes. Undertaken through research, deep dive interviews and surveys involving
employees, partners, competitors and investors, the result of this assessment is the ranking of 14 high priority topics – being those identified
as most important to Telix’s internal and external stakeholders.
The ESG dashboard maps Telix’s current status and plans against these priority areas.
Environment
1.
Environmental Policy: Target - In place by the end of 2022, with a commitment to an updated environmental
strategy and published greenhouse emission targets within two years.
Social
2.
3.
4.
5.
6.
7.
8.
9.
Access to medicine: Telix is driven to help people with cancer and rare diseases live longer, better quality lives. As part of
this commitment to action, the existing NOBLE Registry was designed to bring PSMA-SPECT imaging to rural, remote and
developing regions. NOBLE itself stands for No Body Left Behind.
Product and Service safety: Our commitment and action to patient safety is communicated in our Quality Charter and
supported by strong standard operating procedures.
Supply chain management: Supported by the existing Modern Slavery Policy, in 2022 Telix is developing a Supplier Code of
Conduct addressing sustainability issues and the identification of areas of concern and action.
Clinical trial safety: Telix is bound by and committed to international codes, principles and guidance including the
International Council for Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH).
Diversity, equity and inclusion: Continues as a strong focus of the Board and Management with measurable targets set,
engagement surveys undertaken and a tone that is promoted from the Board throughout the organisation, including via our
employee-led Wellbeing and Diversity and Inclusion groups.
Employee engagement and satisfaction: Measured formally through engagement surveys (86% engagement score in 2021)
and informally through workshops and focus groups. We encourage and facilitate employee ownership of the Company
through our equity incentive plan and promote the alignment of employee and shareholder interests.
Labour management and practices: Our philosophy is informed by the International Bill of Human Rights and the UN
Guiding Principles on Business and Human Rights. We believe that everyone should have the right to freedom of association
with others.
Employee recruitment, development and retention: Our P&C team work closely with team leaders on workforce planning
and talent acquisition. Our refreshed applicant tracking system provides service to hiring managers and applicants alike.
Telix has a comprehensive onboarding process for new hires and uses a system of cascading objectives and key results to set
goals, facilitate development and reward performance.
Governance
10.
11.
12.
13.
14.
Board oversight of ESG / sustainability: During 2021, the remit of the Audit and Risk Committee was expanded to include
oversight of ESG and sustainability matters. During 2022, the Board will consider the appropriate committee or committee
structure to have oversight of healthcare governance issues, including quality, patient safety, access to medicine, anti-
bribery and transparency.
Board composition: The Board has set a target that not less than 30% of Directors will be female by the end of 2022. The
2021 skills audit has identified expertise in global pharmaceutical sales and marketing, pharmaceutical manufacturing,
global supply chain and distribution as appropriate to bring added value to the Board.
Business ethics: The Company’s values state that we pursue our goals with determination and integrity. Telix will build on
the strong foundations of its Code of Conduct and related policies to continue to drive a culture of ethical performance.
Bribery and corruption: Telix is committed to conducting its business and operations with honesty, integrity and the highest
standards of personal and professional ethical behaviour. Telix has zero tolerance for bribery and corruption in any form.
The principles and rules of our Anti-Bribery and Corruption policies and practices, including individual accountability, will
continue to be embedded into our culture and across our operations.
Whistleblower program: Closely linked to our Code of Conduct, our Whistleblower Protection Policy is frequently trained
and discussed across the teams. The Policy has an easy-reference "how to" guide for users, and provides multiple reporting
channels including an external independent 1-800 contact for whistleblowers.
Telix Pharmaceuticals Annual Report 2021
Our people
2021 was a year of focused delivery for Telix. The Company
has undergone rapid growth in order to deliver on its
commercial, clinical and research objectives. Consequently,
there has been a strong focus on recruiting and developing
top talent, underpinned by a clear people strategy and
focus on policies, systems and processes to support its
people to deliver operationally.
As the Company transitions to commercial stage, a cross-
functional leadership team has been established for each
of the operating regions (Americas, EMEA and APAC). The
build out of the regional operations has been designed
to ensure each geography can operate autonomously,
with greater responsibility for commercial outcomes and
lifecycle management, specific to its market. The role of the
Regional President has been elevated to Regional CEO. Each
region has senior leaders in operations, manufacturing and
quality, clinical, finance, marketing and people and culture.
The operating and key cross-company functions are
represented at the Company’s Global Leadership Team
(GLT), providing a centralised steering group to share
knowledge and ensure cohesion across the global business.
Reflecting the dynamic nature of the Telix business, the GLT
represents a diverse set of skills from its global operations,
and a strong representation of female leaders. Across
the business, 43% of employees are female, and 33% of
managerial roles are performed by women.
Telix is committed to continual improvement of the
diversity in its workforce, with a strong focus on creating a
sense of belonging and supporting the health and wellbeing
of all employees.
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Our focus on quality
and patients
At Telix, our mission is to deliver on the promise of precision
medicine through targeted radiation. It is our privilege to serve
the global community as we strive to achieve our mission.
We recognise that the foundation for achieving our mission
is a willingness and capability to embrace, enable and embed
a culture of “Quality” across our organisation. We do this by
putting patient safety as our number one priority.
The Quality Culture we strive for is demonstrated in a number
of areas such as using our quality system to drive operational
excellence, support customer needs, achieve desired product
and process quality attributes and importantly addressing
patient needs when designing and delivering our products and
services.
Telix strives to support patients and patient safety by
focusing on the key obligations such as conducting business
in compliance with all applicable laws, regulations, and
standards and ensuring executive management responsibility
and accountability. We establish and provide appropriate
education and training to enable Telix’s people to carry out
their work competently.
The foundation on which we operate is through the
fundamental adoption and compliance to internationally
recognised standards and guidance documents in the three
primary areas of clinical activities (GCP), manufacturing (GMP)
and distribution (GDP).
Management of vendors is of significant importance to Telix.
In order to manage product and patients risks, we actively
manage, and audit suppliers and services, establishing and
maintaining visibility of their performance.
The Telix global quality unit is responsible for ensuring that
the Company is effectively executing quality planning, record-
keeping/document control, auditing, and issue management
while utilising appropriate risk-based decision making. Our
global pharmacovigilance unit ensures that the Company
establishes and maintains a positive benefit/risk profile for
Telix’s products.
At Telix we understand that Quality
is everybody’s responsibility.
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report
Your Directors present their report on the Telix
Pharmaceuticals Group for the financial year ended 31
December 2021. The Telix Pharmaceuticals Group (Group)
consists of Telix Pharmaceuticals Limited (Telix or the
Company) and its wholly owned subsidiaries.
The names and details of the Company’s Directors in office
during the financial year and until the date of this report are
detailed below. Directors were in office for the entire period
unless noted otherwise.
H Kevin McCann AO
Chairman
Christian Behrenbruch PhD
Managing Director and Group Chief Executive Officer
Oliver Buck
Non-Executive Director
Andreas Kluge MD PhD
Non-Executive Director
Mark Nelson PhD
Jann Skinner
Non-Executive Director
Non-Executive Director
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H Kevin McCann, AO BA LLB (Hons) LLM (Harvard) Life Fellow AICD
Appointed Non-Executive Director and Chairman, 17 September 2017
Mr McCann has extensive board experience with some of Australia’s most recognised
companies. He is Chairman of China Matters and a member of Champions of Change, a
Pro-Chancellor of the University of Sydney, and a Trustee of the Sydney Opera House Trust.
Previously, Kevin has been Chairman of Macquarie Group and Macquarie Bank Limited,
Chairman of Origin Energy Limited, Healthscope Limited and ING Management Limited.
Kevin practiced as a commercial lawyer as a partner of Allens Arthur Robinson from 1970
to 2004 and was Chairman of Partners from 1995 to 2004. Kevin has a Bachelor of Arts and
a Bachelor of Law (Honours) from Sydney University and a Master of Law from Harvard
University. Kevin was made an Officer of the Order of Australia for services to business,
corporate governance and gender equality in January 2020. He is a Life Fellow of the Australian
Institute of Company Directors.
Christian Behrenbruch, B.Eng (Hons) D.Phil (Oxon) MBA (TRIUM) JD (Melb) FIEAust
Co-Founder. Appointed Executive Director, 3 January 2017
Dr Behrenbruch has over twenty years of healthcare entrepreneurship and executive
leadership experience. He has previously served in a CEO or Executive Director capacity at
Mirada Solutions, CTI Molecular Imaging (now Siemens Healthcare), Fibron Technologies and
ImaginAb, Inc. He is a former Director of Momentum Biosciences LLC, Siemens Molecular
Imaging Ltd, Radius Health Ltd (now Adaptix) and was the former Chairman of Cell Therapies
Pty Ltd (a partnership with the Peter MacCallum Cancer Centre). Christian was previously a
Director of Factor Therapeutics Limited (ASX: FTT) and Amplia Therapeutics Limited (ASX:
ATX). Christian holds a DPhil (PhD) in biomedical engineering from the University of Oxford, an
executive MBA jointly awarded from New York University, HEC Paris and the London School of
Economics (TRIUM Program) and a Juris Doctor (Law) from the University of Melbourne. He is
a Fellow of Engineers Australia in the management and biomedical colleges and a Graduate of
the Australian Institute of Company Directors.
Ms Jann Skinner B Com FCA FAICD
Appointed Non-Executive Director, 19 June 2018
Ms Skinner has extensive experience in audit and accounting and in the insurance industry.
She was a partner of PricewaterhouseCoopers for 17 years before retiring in 2004. Jann is an
independent Non-Executive Director of QBE Insurance Group Limited, where she also serves as
Chairperson of the Audit Committee and Deputy Chairperson of the Risk & Capital Committee.
She also serves as a Director of the Create Foundation Limited and HSBC Bank Australia
Limited. Jann is a Fellow of both Chartered Accountants Australia & New Zealand and the
Australian Institute of Company Directors.
Oliver Buck, Dipl. Phys. (Theoretical Biophysics, TUM)
Appointed Non-Executive Director, 16 January 2017
Mr Buck is a bio-physicist who has spent his professional career in a variety of entrepreneurial
and management positions in industrial companies. Oliver has served as founder and Managing
Director of several companies in the fields of manufacturing, technology, demilitarisation,
pharmaceuticals and information technologies. Oliver is the co-founder of ITM Isotope
Technologies Munich SE, one of the largest isotope manufacturing and distribution companies
in the world, founded in conjunction with Technical University of Munich. Since 2012, Oliver has
acted as senior advisor to the CEO in a role that continues to support the ITM group as it has
become a leader in next generation medical isotopes and theranostics. Oliver holds a graduate
degree in theoretical physics from the Technical University of Munich and is an alumnus of the
German National Academy for Security Policy and the "Young Leaders Program" of the Atlantik
Brücke/American Council on Germany.
Telix Pharmaceuticals Annual Report 2021 37
Andreas Kluge, MD PhD (Berlin)
Co-Founder. Appointed Executive Director, 3 January 2017. Transitioned to Non-Executive
Director, 2 June 2020
Dr Kluge has over 20 years of clinical research and development experience, including as
Founder, General Manager and Medical Director for ABX-CRO, a full service CRO for Phase I-III
biological, radiopharmaceutical and anticancer trials based in Dresden, Germany. He is also
Founder and was founding CEO of ABX GmbH (www.abx.de), one of the leading manufacturers
of radiopharmaceutical precursors globally. Andreas is further Founder, General Manager and
Medical Director for Therapeia, an early-stage development company in the field of neuro-
oncology, which was acquired by Telix. Andreas has extensive experience in the practice of
Nuclear Medicine and radiochemistry, molecular imaging and the clinical development of novel
radionuclide-based products and devices. He is the author of numerous patents and publications
in the field of Nuclear Medicine, neurology, infection and immunology. Andreas is a registered
physician and holds a doctorate in Medicine from the Free University of Berlin.
Mark Nelson, B.Sc (Hons) (Melb), M.Phil (Cantab), Ph.D (Melb)
Appointed Non-Executive Director, 17 September 2017
Dr Nelson is Chairman and Co-Founder of the Caledonia Investments Group, and a Director
of The Caledonia Foundation. He is Chairman of Art Exhibitions Australia, a Director of Kaldor
Public Art Projects, Director of The Mindgardens Neuroscience Network, and serves as a
Governor of the Florey Neurosciences Institute. Previously Mark was a Director of The Howard
Florey Institute of Experimental Physiology and Medicine, and served on the Commercialisation
Committee of the Florey Institute. Mark was educated at the University of Melbourne and
University of Cambridge (UK).
Telix Pharmaceuticals Annual Report 2021 Directors’ interests in the securities of Telix
Pharmaceuticals Limited
In accordance with section 300(11) of the Corporations Act 2001 (Cth), the interests of the Directors in the shares and options of Telix
Pharmaceuticals Limited, as at the date of this report were:
38
K McCann
C Behrenbruch
O Buck
A Kluge
M Nelson
J Skinner
Number of:
Ordinary Shares
1,150,000
23,075,000
1,552,500
22,675,000
3,628,750
100,000
Options
-
300,708
-
-
-
495,000
Directors’ meetings
The number of meetings of Directors and committees of Directors held in the year to 31 December 2021, and the number of meetings
attended by each Director, is as below. The Disclosure Committee meets formally each quarter to review and approve the Appendix 4C
and Activities Report. The Disclosure Committee additionally reviews all material announcements to the market. In addition to standing
Committees of the Board, in the year ended 31 December 2021 the Board convened a special purpose Subcommittee to consider and
address matters relating to capital needs and capital management.
Board of Directors
Audit and Risk Committee
People, Culture, Nomination and
Remuneration Committee
Eligible to attend
Meetings
attended
Eligible to attend
Meetings
attended
Eligible to attend
Meetings
attended
K McCann
C Behrenbruch(i)
O Buck
A Kluge
M Nelson
J Skinner
4
4
4
4
4
4
4
4
4
4
4
4
5
5
5
-
5
5
5
5
5
-
5
5
4
4
4
-
4
4
4
3
4
-
4
4
(i) C Behrenbruch attends above committee meetings by invitation.
K McCann
C Behrenbruch
O Buck
A Kluge
M Nelson
J Skinner
Disclosure Committee
Special purpose Subcommittee
Eligible to attend
Meetings
Eligible to attend
Meetings attended
4
4
-
-
-
3
4
4
-
-
-
3
3
3
-
-
3
3
3
3
-
-
3
3
Telix Pharmaceuticals Annual Report 2021
39
Committee membership
At the date of this report the Company has three Committees of the Board in place:
•
•
•
Audit and Risk Committee, which also has oversight of ESG matters, the members of which are independent Non-Executive
Directors Ms Jann Skinner (Chairperson), Mr Kevin McCann and Dr Mark Nelson, as well as non-independent Non-Executive
Director, Mr Oliver Buck.
People, Culture, Nomination and Remuneration Committee, the members of which are independent Non-Executive Directors
Mr Kevin McCann (Chairperson), Dr Mark Nelson and Ms Jann Skinner, as well as non-independent Non-Executive Director,
Mr Oliver Buck.
Disclosure Committee, which assists the Board to discharge its responsibility for compliance with the Company’s continuous
disclosure obligations. The Disclosure Committee is constituted by the Chairperson of the Board, CEO and the Company
Secretary. The Chairperson of the Audit and Risk Committee is included as a member of the Disclosure Committee for
financial related disclosures.
Principal activities of the Company
in the year under review
Telix Pharmaceuticals Limited was formally established on 3 January 2017 and listed on the Australian Securities Exchange on
15 November 2017.
Telix is a biopharmaceutical company focused on the development and commercialisation of diagnostic and therapeutic products
using Molecularly Targeted Radiation (MTR). Telix is headquartered in Melbourne, Australia with international operations in Belgium,
Japan, Switzerland and the United States.
Telix is developing a portfolio of clinical-stage products that address significant unmet medical need in oncology and rare diseases.
In November 2021, Telix received its first marketing authorisation approval for Illuccix® (TLX591-CDx, Kit for the preparation of 68Ga
PSMA-11 injection) for prostate cancer imaging from the Australian Therapeutic Goods Administration (TGA). This was followed by
United States Food and Drug Administration (FDA) approval in December 2021.
Activities during the year were principally directed to establishing Telix as a globally recognised oncology and rare diseases company,
through the continued development and commercialisation of the Group’s four lead programs:
•
•
•
•
TLX591-CDx (Illuccix) / TLX591: diagnosis and treatment of metastatic castrate-resistant prostate cancer
TLX250-CDx/TLX250: diagnosis and treatment of renal (kidney) cancer
TLX101-CDx / TLX101: diagnosis and treatment of glioblastoma (brain cancer)
TLX66-CDx (Scintimun®) / TLX66: bone marrow conditioning and rare diseases.
Corporate structure
Telix Pharmaceuticals Limited is incorporated and domiciled in Australia. Telix Pharmaceuticals Limited is listed on the
Australian Securities Exchange (ASX) with the ticker TLX (ASX: TLX). Telix operates globally in a number of jurisdictions
through wholly owned subsidiaries. Subsidiaries of Telix have been established or acquired in order to optimally manage the
Company’s extensive intellectual property portfolio and to facilitate clinical, operational and commercial activities in the key
territories in which the Company does business.
Financial results and dividends
Telix is a commercial-stage company through the early commercialisation and sale of its investigational product TLX591-CDx (prostate
cancer imaging kit). Revenue from the sale of TLX591-CDx of $4,898,000 (2020: $3,278,000), and $2,698,000 (2020 $1,935,000) of
revenue associated with the China Grand Pharma transaction was recorded for the year. With four lead programs under clinical and
regulatory development, Telix recorded an operating loss for the year.
The loss after tax of the Group for the year ended 31 December 2021 was $80,510,000 (2020: $44,887,000). At 31 December 2021,
the Group held total assets of $109,813,000 (2020: $157,821,000) and net assets of $2,158,000 (2020: $79,016,000). No dividend was
recommended or paid during the year. There was no return of capital by the Company to any of its shareholders during the year.
Telix Pharmaceuticals Annual Report 2021 40
Significant changes in the state of affairs
Issue of unlisted equity incentives
On 27 January 2021, the Company agreed to issue 2,226,856 unlisted share options with an exercise price of $4.38 each and an
expiry date of 26 January 2026 (TLXO009). The options were issued to staff and key advisors to the Company. This number included
100,708 options which were issued to Managing Director and CEO, Christian Behrenbruch following shareholder approval at the
Company’s Annual General Meeting of Shareholders on 12 May 2021. All options vest and become exercisable upon the achievement
of $100,000,000 in cumulative revenue (before cost of goods sold) from product sales.
On 21 July 2021 the Company issued 1,292,992 unlisted share options to new employees. Options have an exercise price of $5.37 each
(being the 10 day volume weighted average price of shares to 20 July 2021), and an expiry date of 20 July 2026 (TLXO010). All options
vest and become exercisable upon the achievement of $100M in cumulative revenue (before cost of goods sold) from product sales.
Also on 21 July 2021, the Company issued 225,000 unlisted Rights to acquire fully paid ordinary shares. Each Right was issued for
nil consideration and has a nil exercise price. Subject to performance and other conditions being met, Rights will vest and become
exercisable on or before 20 July 2026 (TLXO011). TLX shares to be allocated following vesting of Rights are currently on issue and held
in the
Telix Employee Share Trust. Rights were issued in line with the Company’s Equity Incentive Plan and long-term incentive policy
for key employees.
Changes to unlisted share options: Exercise of options for the issue of shares, and lapse of options
During the year ended 31 December 2021, a total of 4,667,586 fully paid ordinary shares were issued upon exercise of 4,716,100
unlisted share options.
On 19 July 2021, a total of 1,018,574 share options lapsed unexercised. On 21 December 2021, a total of 1,088,224 share options lapsed
unexercised. These options lapsed in accordance with the terms of their grant.
The total issued securities of the Company are as follows. The increase in issued securities between 31 December 2021 and the date of
this report primarily relates to the issue of 22,727,273 new shares further to the $175,000,000 institutional placement announced on
24 January 2022.
Ordinary shares
Share options and warrants
At 31 December 2021
At the date of this Report
285,072,908
17,929,373
308,200,181
17,529,373
Telix Pharmaceuticals Annual Report 2021
41
Telix has continued to expand its partnerships with
manufacturing, supply and distribution partners globally. This
includes manufacturing agreements with Grand River Aseptic
Manufacturing (GRAM) to perform commercial-scale Good
Manufacturing Practice (GMP) manufacturing of Telix’s Illuccix
product. The Company also entered into a manufacturing
agreement with Global Medical Solutions, Ltd (GMS) to
manufacture and supply finished unit doses of TLX591 (177Lu-
rosopatamab) and TLX592 to sites in Australia for Telix’s prostate
cancer therapy trials.
The Company has also secured supply of Lutetium-177 (177Lu) for
its therapeutic programs with multiple commercial and clinical
supply agreements. This includes a global commercial and
clinical supply agreement with ITM Isotope Technologies Munich
SE, and clinical supply agreements with Eckert & Ziegler AG
(EZAG), Monrol, Shine, and the Australian Nuclear Science and
Technology Organisation (ANSTO).
During the 2021 year, Telix received authorisation
to decommission the two cyclotrons housed at the
radiopharmaceutical production facility at Seneffe, Belgium,
which will become the Company’s manufacturing site in Europe.
Both cyclotrons have been removed, in one piece, by SCK-CEN
a leader in nuclear safety and facility decommissioning. The
innovative approach to removal has ensured as much material
can be recycled as possible. Other than two cyclotron vaults, the
site has been fully decontaminated. Telix submitted the first of
its five-yearly mandatory inventory of "nuclear passive" reports
to authorities on 30 March 2021.
Telix has continued to work closely with its United States
distribution partners, Cardinal Health and Pharmalogic, in
preparation for the launch of Illuccix. Additionally, the Company
signed an agreement in the United States with Eckert & Ziegler
to co-promote Illuccix and EZAG’s GalliaPharm® generators to
ensure healthcare providers nationwide have secure access to
Illuccix and Ga-68 generators.
Telix has continued to build out its global distribution network
for Illuccix, entering into national distribution agreements with
Radius (Italy), and EZAG (Germany).
During 2021, Telix continued to build its workforce adding
high-calibre talent in the functional areas of Sales and
Marketing, Medical Affairs, Quality and Regulatory, Research
and Innovation, Human Resources, Information Technology and
Manufacturing and Supply Chain in preparation for commercial
launch and to support the clinical development in late-stage
programs. The Company also established an Asia Pacific
operating region, with Dr David Cade appointed as President.
The Company also appointed Richard Valeix, as President, EMEA,
and established a commercial hub in Geneva, Switzerland to
complement the already strong R&D, manufacturing and supply-
chain focus of the EMEA headquarters in Belgium.
Review of operations
2021 was a transitional year for the Company as it prepared
for the commercial launch of its lead product Illuccix (Kit for
the preparation of gallium-68 (68Ga)-PSMA-11), progressing the
regulatory filings underway in 17 countries, establishing and
training its United States-based sales and field force, creating
a global distribution network and preparing to implement
commercial scale manufacturing. This culminated in the first
marketing authorisation approval for Illuccix being granted by the
Therapeutic Goods Administration (TGA) in Australia in November
2021, followed by an approval from the United States Food and
Drug Administration (FDA) in December 2021.
The approval of Illuccix is an important validation for the
Company and positions Telix as one of the first companies
worldwide to deliver PSMA-PET imaging, the highly anticipated
next generation of prostate cancer imaging, to patients. This
state-of-the-art imaging modality was added to leading clinical
guidelines, including the National Comprehensive Cancer Network
Guidelines® for prostate cancer, during 2021.
Telix’s next most advanced investigational imaging product is for
kidney cancer, specifically clear cell renal cell carcinoma (ccRCC),
TLX250-CDx (89Zr-DFO-girentuximab) also progressed significantly
during 2021, overcoming the recruitment challenges arising from
the COVID-19 pandemic impacting the pivotal Phase III ZIRCON
study, which is now in the final stages of patient enrolment,
with ~95% of a planned 252 patients dosed. This study has been
conducted at over 34 sites across the United States, Europe and
Australia. TLX250-CDx has been assigned the Breakthrough
Therapy (BT) designation by the FDA. This designation gives
Telix the opportunity to interact closely with the FDA, potentially
expediting the regulatory approval process for TLX250-CDx in
the United States. The Company commenced the biologic licence
application (BLA) with the FDA in late 2021, as the first step
towards filing for regulatory approval in the United States.
The Company continues to advance the assets in its core
therapeutic pipeline. In prostate cancer, the Company initiated the
ProstACT group of studies of TLX591 (177Lu-DOTA-rosopatamab),
in Australia and New Zealand. Two ancillary studies will run
concurrently to the ProstACT GLOBAL Phase III study, being
SELECT, a Phase I radiogenomics study, and TARGET, a Phase II
study in the front line setting in combination with EBRT, which is
co-funded by GenesisCare.
Telix also commenced two Phase II studies of its investigational
kidney cancer therapy TLX250 (177Lu-DOTA-girentuximab) in
combination with immunotherapy. These two investigator-led
studies are being run in close consultation with Telix and will
inform the design of the Phase III trial in ccRCC.
In brain cancer, the Company reported topline results in the
IPAX-1 Ph I/II study of TLX101 (4-L-[131I] iodo-phenylalanine) in
combination with external beam radiation therapy in recurrent
glioblastoma multiforme (GBM). The first peer-reviewed results
from this study were presented at the Congress of Neurological
Surgeons (CNS) meeting in October 2021, demonstrating that the
treatment was well tolerated and overall survival at the point of
interim analysis was 15.97 months.
The Company reported that the TRALA (Targeted Radiotherapy for
AL Amyloidosis) Phase I/II study of TLX66 (90Y-besilesomab) met
its study objectives. Nine patients with AL amyloidosis received
TLX66 as the sole bone marrow conditioning agent prior to
undergoing autologous hematopoietic stem cell transplant (HSCT).
TLX66 demonstrated a favourable safety profile and was well
tolerated in all nine patients, each of whom completed the trial.
Telix Pharmaceuticals Annual Report 2021 Forward strategy and operational targets
42
Telix will continue recruitment of patients into its two Phase II
STARLITE trials of TLX250 (kidney cancer therapy) during 2022,
and commence the Phase I/II IPAX-2 trial of TLX101 (glioblastoma
therapy) in a front-line setting. Further, Telix plans to materially
advance its TAT program, with the first clinical data becoming
available from the Company’s first in human biodistribution
CUPID study of TLX592 during 2022. These critical data will enable
Telix to design the Company’s first therapy trials for this unique
TAT asset.
The Company also intends to use the findings from the TRALA
study of investigational therapy TLX66 in systemic amyloid light
chain amyloidosis (SALA) to progress development for this asset
which has shown encouraging results in this rare disease with
poor prognosis.
Pipeline expansion
Telix is regarded as a pioneer in the radiopharmaceutical sector
and its deep pipeline is a source of competitive advantage, will
drive the next generation of personalised, targeted radiation,
and has the potential to create future value with an extensive
intellectual property portfolio. Telix will continue to explore novel
targets, clinical applications and manufacturing technologies.
Workforce development
Talent attraction and retention remains a key priority to support
the scale up of the Company in 2022. Telix has made significant
progress in its workforce planning and hiring to support the
transition to commercialisation and delivering against key metrics
such as speed to hire talent, retention of its top performers and
increasing employee engagement.
In 2022 the Company will continue its focus on strengthening
the diversity and inclusion of Telix’s workforce and wellbeing
practices.
Telix’s corporate objectives for 2022 are underpinned by
three key themes:
1. Being patient-centric in everything we do
2. Becoming a revenue generating company
3. Building a sustainable workforce
Programs and commercial
The Company has set out five strategic priorities as it establishes
itself as a commercial, revenue generating company with its first
diagnostic product while continuing to unlock the value in the
pipeline of therapeutic assets.
Use Illuccix as a commercial launchpad
Telix will launch its first commercial product Illuccix (Kit for the
preparation of 68Ga-PSMA-11) for the imaging of prostate cancer in
the United States and Australia. Telix also expects to obtain other
required regulatory approvals to launch in Europe in 2022 and will
pursue marketing authorisation applications in priority growth
markets in Asia Pacific and other regions. Securing reimbursement
in the United States and Australia will be a priority for early 2022,
with the adoption of PSMA-PET imaging into key clinical guidelines
globally expected to help drive payor and clinical adoption.
The approval of Illuccix is an important validation for Telix, and
the Company’s goal is to establish its leadership in the urologic
oncology domain.
Create a high value diagnostic portfolio
While launching the Company’s first commercial product
represents a major inflection point for Telix, a significant
advantage Telix possesses is a broad and deep pipeline of clinical
stage, as well as earlier pre-clinical stage assets. During 2022, Telix
is preparing to file for regulatory approval for a "fast following"
second product, TLX250-CDx (89Zr-girentuximab) for the imaging
of kidney cancer, thus delivering a significant commercial de-risk
to the business. With limited commercial competition in an area
of high unmet medical need, the kidney cancer imaging diagnostic
will complement Illuccix, as a high-value imaging tool for the
urology field.
To achieve this outcome, Telix expects to report the outcomes
of the Phase III ZIRCON trial during 2022, following which a BLA
will be filed with the FDA and other regulatory authorities. Given
TLX250-CDx was granted BT designation by the FDA during 2020
and TLX250-CDx is expected to be the first product of its type
on the market for the diagnosis of "indeterminate renal masses",
Telix expects this product to significantly reduce the Company’s
commercial risk through diversification of its commercial-stage
product portfolio.
Advance late-stage assets in the core therapeutic pipeline
Beyond imaging, Telix expects to demonstrably transition from a
diagnostics-focused company to a company developing multiple
therapeutics during 2022. Telix will continue to advance the
ProstACT studies which have received ethics approval and clinical
trial notification (CTN) from the TGA and file an Investigational
New Drug application to commence the Phase III ProstACT trial for
TLX591 (prostate cancer therapy) in the United States.
Telix Pharmaceuticals Annual Report 2021 Regulatory and
environmental matters
Telix is required to carry out its activities in accordance with
applicable environment and human safety regulations in
each of the jurisdictions in which it undertakes its operations.
Commencing in 2020, this also includes environmental
regulations relevant to its licenced radiopharmaceutical
production facility in Seneffe, Belgium.
Telix has obligations of regular inspections by the Federal
Agency for Nuclear Control (FANC) and FANC’s subsidiary in
charge of the regulatory controls and safety assessments,
BEL-V. Telix’s obligations with respect to these regulations have
been met and are up to date. The site passed the last requisite
environmental audits conducted by FANC on 17 June 2021.
During the 2021 year, the site’s two legacy cyclotrons were
decommissioned and removed. Other than two cyclotron vaults,
the site has been fully decontaminated. Telix submitted the
first of its five-yearly mandatory inventory of "nuclear passive"
reports to authorities on 30 March 2021.
Beyond those mentioned above the Company is not aware
of any matter that requires disclosure with respect to any
significant regulations in respect of its operating activities.
There have been no issues of non-compliance during the year.
Significant events after
the balance date
On 27 January 2022, 22,047,273 fully paid ordinary shares were
issued further to an institutional placement announced on 24
January 2022. On 31 January 2022, 519,481 fully paid ordinary
shares were issued, and on 8 February 2022, 160,519 fully paid
ordinary shares were issued for a total number of shares issued
under the placement of 22,727,273. Shares were issued at $7.70
per share to raise $175,000,000 before costs of the offer.
A Share Purchase Plan (SPP) was also announced on 24 January
2022, to raise up to $25,000,000 at the same offer price. The
closing date of the SPP has been extended to 25 February 2022
(from 11 February 2022). The extension was effected to ensure
that all eligible shareholders had additional time to participate in
the SPP.
Also on 27 January 2022, the Company announced a first patient
dosed in Telix’s PSMA-targeting ProstACT therapeutic program,
which is exploring TLX591 in areas of unmet medical need across
the full prostate cancer treatment journey, from first recurrence
to mCRPC. The first patient, dosed at Princess Alexandra Hospital
in Brisbane, Queensland, was treated as part of the ProstACT
SELECT clinical trial, a Phase I radiogenomics study running
concurrently to the pivotal Phase III study, ProstACT GLOBAL.
43
On 3 February 2022, 400,000 fully paid ordinary shares were
issued following the exercise of 400,000 share options. MD
and CEO, Dr Christian Behrenbruch exercised fully vested
TLXO004 options with an exercise price of $1.09 each for total
consideration paid of $436,000.
On 7 February 2022, the Company announced a review period
extension or “freeze” for its marketing authorisation application
(MAA) in Europe for Illuccix. Telix requested this extension from
the Danish Medicines Agency (DKMA) to provide sufficient time to
respond to the remaining Information Requests (IRs) in relation
to product manufacturing and pharmaceutical characterisation
of Illuccix in compliance with European Pharmacopeia. The
original IR deadlines to meet the 23 March 2022 decision date
could not be met due to unexpected process delays and vendor
outages that had arisen from the rapid onset of the “omicron”
COVID-19 variant. The issuance of a time extension of this nature
was in line with European Union regulatory guidance that allows
holding an application timetable at the same procedure day and
freezing further timetable requirements when it is demonstrably
not possible for applicants to submit responses within the
original timeframe due to extraneous circumstances, such as the
COVID-19 pandemic. Telix confirmed it had until 9 August 2022 to
provide responses to the questions arising during the final stages
of the regulatory review process which were received subsequent
to the “clock restart” on 9 December 2021.
On 10 February 2022, the Company joined the S&P/ ASX 200
index.
On 16 February 2022, the Company announced a commercial
distribution agreement with Global Medical Solutions Australia
(GMSA) for Illuccix in Australia. The agreement significantly
expands patient access to Illuccix, which will now be available to
every PET/CT site across Australia via GSMA, which will distribute
Illuccix kits as well as 68Ga-PSMA-11-unit doses from its network of
six radiopharmacies across the country.
Other than the matters referred to above, there were no
subsequent events that required adjustment to or disclosure in
the Directors’ Report or the Financial Report of the Company for
the year ended 31 December 2021.
Likely developments and
expected results
The likely developments in the operations of the Group and the
expected results from those operations in future financial years
will be affected by the success of management in reaching critical
development and commercial milestones in its core programs.
This will include becoming a financially sustainable, revenue
generating company based on the successful launch of its first
product, Illuccix; launching TLX250-CDx (89Zr-girentuximab) for
the imaging of kidney cancer; and demonstrably transitioning
from a diagnostics-focused company to a multi-product
therapeutics company.
Telix Pharmaceuticals Annual Report 2021
44
Letter from the Chairman of the People, Culture,
Nomination and Remuneration Committee
Dear Shareholder
On behalf of the Board, I am pleased to present the Remuneration
Report for the year ended 31 December 2021. This Report contains
information regarding the remuneration arrangements for the
Directors and other key management personnel (KMP) for Telix
during 2021.
With the assistance of the People, Culture, Nomination and
Remuneration Committee, the Board assesses the remuneration
framework on an annual basis. In setting and reviewing the
remuneration policy, the Board considers the remuneration
guidelines of shareholder and corporate governance advisors.
In the event that we depart from these guidelines, we explain
the Board’s reasoning. The Board aims to provide clarity in the
remuneration framework so that our shareholders, employees and
all other interested parties understand how remuneration at Telix
helps drive the business forward.
•
•
•
•
That the remuneration of the CEO and executive leadership
team be comprised of Fixed Pay; Short Term Variable
Remuneration to be awarded subject to performance; and
Long Term Variable Remuneration subject to performance
measured over at least a three-year period (with a further
three-year clawback period).
That total remuneration packages of the CEO and executive
leadership team targets percentile 50 (P50) of market data,
to be achieved over a number of years in context with the
Company’s commercial success and demonstration of
sustainable revenue generation.
The adoption of a variable remuneration policy to include
deferral elements.
The development and implementation of a KMP Equity
Holding Policy.
The Board is of the view that the elements of remuneration should
produce an appropriate range of reward outcomes linked to
performance, market benchmarks and the Company’s strategy, as
well as working together to incentivise and reward for appropriate
behaviours and culture.
The Board is committed to a remuneration framework that
attracts great talent, drives a culture of performance and links
overall remuneration and incentives to the achievement of the
Group’s long-term strategy and business objectives.
During 2021, the People, Culture, Nomination and Remuneration
Committee engaged an external remuneration consultant -
Godfrey Remuneration Group, a local remuneration consultant
with experience and expertise in ASX 200 companies - to provide
KMP remuneration recommendations and advice.
Utilising the advice from Godfrey Remuneration Group, the
Committee has agreed to adopt recommendations including:
H Kevin McCann, AO
Chairman, People, Culture, Nomination and Remuneration
Committee
“The Board is committed to a remuneration
framework that attracts great talent,
drives a culture of performance and links
overall remuneration and incentives to
the achievement of the Group’s long-term
strategy and business objectives.”
H Kevin McCann,
Chairman, People, Culture, Nomination and
Remuneration Committee
Telix Pharmaceuticals Annual Report 2021 45
Remuneration report (audited)
This remuneration report for the year ended 31 December 2021 outlines the remuneration arrangements of the Group in accordance
with the requirements of the Corporations Act 2001 (Cth) and its regulations. This information has been audited as required by section
308(3C) of the Corporations Act 2001 (Cth).
The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or
indirectly, including any Director, whether executive or otherwise.
For the purposes of this report, the term “Director” refers to Non-Executive Directors only. “KMP” refers to other key management
personnel.
The names and details of the Directors and KMPs of the Group in office during the financial year and until the date of this report are
detailed below. Unless otherwise noted, Directors and KMPs listed are in office at the date of this report.
Non-Executive Directors
H Kevin McCann AO
Oliver Buck
Andreas Kluge MD PhD
Mark Nelson PhD
Jann Skinner
Executive Director
Christian Behrenbruch PhD
Director and Chairman
Director
Director
Director
Director
Managing Director and Group Chief Executive Officer
Other key management personnel
Doug Cubbin
Gabriel Liberatore PhD
Group Chief Financial Officer
Group Chief Operating Officer
External remuneration consultant advice
In July 2021, the People, Culture, Nomination and Remuneration Committee (PCNRC) engaged an external remuneration consultant -
Godfrey Remuneration Group (GRG), a local remuneration consultant with experience and expertise in ASX 200 companies - to provide
remuneration recommendations and related advice.
The scope of works included:
•
•
•
•
•
•
review of the remuneration quantum and structure, including benchmarking the market competitiveness of remuneration
practices for the CEO, KMP and other executive leadership team members;
formulating recommendations with a view to ensuring that remuneration quantum and structure was reasonable, market
competitive and appropriate to the Company’s circumstances;
recommendations on Non-Executive Director remuneration quantum and structure;
review and recommendations on short term variable remuneration design and implementation;
review and recommendations on long term variable remuneration design and implementation; and
remuneration framework development.
The amount payable for the information and work that led to GRG’s recommendations is as follows:
Godfrey Remuneration Group Pty Ltd
Market benchmarking, organisation modelling, and recommendations on NED, KMP and GLT remuneration.
Review of and advice on the design and calibration of STI and LTI plans including drafting recommendations.
Fee $
40,000
31,000
71,000
GRG was also engaged to provide consulting services regarding Telix’s general employee remuneration review. The fees charged in
relation to this activity totalled $56,000.
The Board is satisfied that the remuneration recommendations received from GRG were free from undue influence from those to whom
the recommendations related on the following basis:
•
•
•
•
the engagement of GRG as external remuneration consultant was undertaken by the PCNRC;
the engagement was led by the Chairman of the Committee and closely involved the Chairperson of the Audit and Risk Committee;
each remuneration recommendation received was accompanied by a declaration from GRG stating that their advice was provided
free from undue influence from those to whom the recommendations related; and
the Committee and the Board considered the recommendations independent of Management.
Telix Pharmaceuticals Annual Report 2021
46
Remuneration practice and philosophy
The Group’s guiding principle for remuneration is that remuneration should be transparent, should reward achievement, and should
facilitate the alignment of shareholder and executive interests. The Company’s philosophy is that shareholder and executive interests
are best aligned by:
•
•
•
providing levels of fixed remuneration and variable (or "at risk") remuneration sufficient to attract and retain individuals with the
skills and experience required to build on and execute the Company’s business strategy;
ensuring variable remuneration is contingent on outcomes that grow and/or protect shareholder value; and
ensuring a suitable proportion of remuneration is received as a share-based payment so that reward is earned by achievement
and performance over the longer term.
The Telix executive leadership team is responsible for making and executing decisions that build Group value. In setting the
remuneration philosophy and design, the Board aims to balance reward for short-term results with long-term business performance and
value creation. The Group’s remuneration practice and philosophy recognises the remuneration guidelines of shareholder and corporate
governance advisors and explains where we depart from them in specific instances. The Board’s aim is to provide clarity so that our
shareholders, executives, and all other interested parties understand how remuneration at Telix helps drive the business strategy and
shareholder alignment.
Policy and process for remuneration setting and review
The Group aims to reward the executive leadership team with a level and mix of remuneration commensurate with their position and
responsibilities so as to:
•
•
•
•
attract and retain appropriately capable and talented individuals to the Company;
reward for corporate performance;
align the interest of employees with those of shareholders; and
build a strong cohesive leadership team which can deliver execution excellence against the strategy.
Remuneration consists of:
•
•
•
Fixed Pay;
Short Term Variable Remuneration (STVR); and
Long Term Variable Remuneration (LTVR).
The sum of the elements constitutes the Target Total Remuneration Package (TTRP). Both internal relativities and external market
factors are considered when setting the structure and quantum of TTRP.
Embedded in TTRP is the concept that performance is rewarded via the STVR and LTVR plans. On the other hand, Fixed Pays aim to
recognise the competence and calibre of the individual relative to the requirements of the role. While this may change over time,
changes to the Fixed Pay are intended to provide competitive, appropriate remuneration and retain talent rather than provide an
incentive or reward for targeted performance.
The PCNRC recommends to the Board the remuneration packages for the CEO, other KMP and other members of the Global Leadership
Team (GLT) (together, the executive leadership team of the Group). As occurred during the year ended 31 December 2021, the Committee
may seek external advice to determine the appropriate level and structure of the remuneration packages.
Fixed Pay
To ensure that the Company continues to attract, retain and motivate its executive leadership team, the TTRP of the CEO and GLT is
targeted toward P50 of market data.
In the FY2021 remuneration review, two comparison groups were used to obtain market data: comparison by market capitalisation
and comparison to industry peers. The Board is of the view that these two groups provided a reasonable basis for comparison at this
stage in the Company’s growth - with demonstrated market acceptance of the Company vision and pipeline (as witnessed by market
capitalisation) but pending demonstration of sustainable revenue generation anticipated to commence in 2022 and 2023 (following
receipt in Q4 2021 of the Company’s first marketing authorisations for its lead product, Illuccix).
Four main factors are considered when adjusting Fixed Pay:
competence of the incumbent;
•
•
incumbent’s current Fixed Pay in the +/- 20% range (i.e. 80% to 120%) of the mid-point of Fixed Pay data;
• motivational and retention impact of an adjustment or lack of adjustment to the executive’s Fixed Pay; and
•
cost to Telix of increases in Fixed Pay which generally have flow on impacts to the cost of STVR and LTVR awards which are
expressed as percentages of Fixed Pay.
Telix Pharmaceuticals Annual Report 2021 47
Performance and remuneration reviews are combined and are conducted on a single cycle which runs from 1 January to 31 December.
Position descriptions are prepared for all positions. These are reviewed as necessary due to internal or external changes and are also
reviewed as part of the annual performance and remuneration review.
Refer to the section on “Remuneration and awards for the financial year ended 31 December 2021” for discussion on this point as it
relates to remuneration levels for the year commencing 1 January 2022.
Short Term Variable Remuneration (STVR)
STVR rewards performance against annual Key Performance Indicators (KPIs) – maintaining a focus on underlying value creation
within the business operations. Corporate objectives, KPIs, weightings and targets are approved by the Board on the advice and
recommendation of the CEO at the commencement of each year. KPIs are set with the primary purpose of incentivising KMP and other
members of the GLT to work together to achieve the key business-building objectives as set out in the annual corporate objectives.
Commencing 2020, the Company has included culture-based objectives in addition to program and commercial objectives against which
STVR awards are assessed. These culture-based objectives promote both performance and the delivery of goals to be in line with Telix’s
Code of Conduct and corporate values. For the year ended 31 December 2021 culture-based objectives included deliverables related to
sustainable workforce practices including for hiring, onboarding, training and retention.
In the year ended 31 December 2021, STVR eligibility was 30% of Fixed Pay for the CEO and between 20-30% for KMP and other members
of the GLT. STVR awards are based on achievement against corporate objectives and individual KPIs (if applicable).
Long Term Variable Remuneration (LTVR)
LTVR is remuneration that may vest subject to the achievement of set performance hurdles and/or requirements over a period of up to
five years. LTVR is offered as part of TTRP to build alignment between the Company’s management and the Company’s shareholders and
other stakeholders over the long term.
Each offer of LTVR relates to a separate measurement period and has separate performance measures. LTVR awarded for the year
ending 31 December 2020 (issued during the year ended 31 December 2021) have a performance metric linked to the emerging status
of the Company as sustainable revenue generating. LTVR issued in 2021 were issued as unlisted market-priced share options. Share
options vest and become exercisable upon the achievement of $100M in cumulative revenue (before cost of goods sold) from product
sales. Whilst no formal minimum vesting period or measurement period was structured into the award, vesting was targeted to occur
not before the third year after the award.
Commencing 1 January 2022, LTVR awards will normally be in the form of Share Appreciation Rights (SARs). SARs provide the same
value as an option - being the difference between the exercise price and the share price at the time of exercise. They are used in place of
options to minimise dilution and remove the need for participants to pay an exercise price. SARs issued in 2022 will have a measurement
period that is three financial years commencing with the year of the offer (thus the measurement period for an FY2022 offer would cover
FY2022, FY2023 and FY2024). SARs have a term of five years. SARs will be issued with an exercise price which will be calculated as a
volume weighted average price of shares (VWAP) over the 20 trading days following the announcement of annual results.
The following performance metrics will be used to assess performance in the Measurement Period:
Tranche 1 - Financial metric – 50% weighting at target
Performance level
Stretch
Between Target and Stretch
Target
Between Threshold and Target
Threshold
Below Threshold
EBITRD (Earnings before Interest, Taxes
and R&D expense) on a three year
cumulative basis
% Vesting of target LTI grant
$120 million
Pro-rata
$100 million
Pro-rata
$80 million
< $80 million
100%
Pro-rata
50%
Pro-rata
25%
0%
Telix Pharmaceuticals Annual Report 2021 48
Tranche 2 - Value adding performance milestone 1 - 25% weighting at target
FDA or EMA granting marketing approval for TLX101-CDx (Glioblastoma diagnostic).
Performance level
Target
Below Threshold
Approval for marketing for TLX101- CDx
by the FDA or EMA
% Vesting of target LTI grant
Approval is granted
Approval has not been granted
25%
0%
Tranche 3 - Value adding performance milestone 2 - 25% weighting at target
FDA or EMA granting marketing approval for TLX250-CDx (Renal cancer diagnostic).
Performance level
Target
Below Threshold
Approval for marketing for TLX250-CDx
by the FDA or EMA
% Vesting of target LTI grant
Approval is granted
Approval has not been granted
25%
0%
As LTVR for the CEO, other KMP and other members of the GLT is considered remuneration in the year that it is awarded, only pro-rata
forfeiture occurs if termination occurs in the first year of the Measurement Period. Termination for cause circumstances is dealt with
under Clawback and Malus provisions which apply before and after a termination.
The Board targets that the number of equity incentives on issue under the Employee Incentive Plan (EIP) (for LTVR and LTI awards) not
exceed 10% of total shares on issue.
Benefits
Market competitive benefits, aligned with the customary remuneration arrangements of the broader workforce in the country of
residence, may include superannuation or local pension plans, car parking, telephone and/or participation in local health insurance or
other benefit programs.
Clawback and Malus Policy
"Malus" means reducing or cancelling all or part of an individual’s variable remuneration as a consequence of a materially adverse
development occurring prior to payment (in the case of cash incentives) and/or prior to vesting (in the case of equity incentives).
"Clawback" means seeking recovery of a benefit paid to take into account a materially adverse development that only comes to light
after payment or the vesting of equity incentives.
The Board, in its sole discretion, may reduce, cancel in full, or seek to clawback any incentive provided to any employee, including former
employees, if it determines that an employee has at any time acted dishonestly (including, but not limited to, misappropriating funds
or deliberately concealing a transaction); acted or failed to act in a way that contributed to a breach of a significant legal or regulatory
requirement relevant to Telix; acted or failed to act in a way that contributed to the Group incurring significant reputational harm, a
significant unexpected financial loss, impairment charge, cost or provision; acted or failed to act in a way that contributed to Telix making
a material financial misstatement; and/or committed a breach or non-compliance with the Telix Code of Conduct and/or any other
employee or governance related policies.
The Board, in its sole discretion, may reduce, cancel in full, or seek to clawback any incentive provided to any employee, including
former employees, if the Board forms the view that a participant or participants have taken excessive risks or have contributed to or
may benefit from unacceptable cultures within the Company; if the Board forms the view that participants have exposed employees,
the broader community or environment to excessive risks, including risks to health and safety; and/or if a participant joins a competitor
(unless otherwise determined by the Board).
Long Term Incentives (LTI) for non-KMP and non-GLT employees
Retaining and attracting outstanding talent is central to our growth and success, therefore Telix is committed to a remuneration
framework for non-KMP and non-GLT employees that also attracts talent, drives a culture of performance and links overall
remuneration and incentives to the achievement of the Group’s long-term strategy and objectives.
The Board's view is that the provision of reward in the form of LTI provides employees with the valuable opportunity to own a portion of
the Company they are helping to grow.
Telix Pharmaceuticals Annual Report 2021 49
The Board has therefore approved the use of LTI as a sign-on bonus to incentivise high quality candidates to join TLX; the use of LTI to
award annual performance of non-GLT members; and the creation of a retention bonus scheme for critical talent in critical roles.
Sign–on LTI is a one-off bonus designed to provide an opportunity for new employees to potentially hold equity in the Company from the
beginning of their tenure. There are retention and performance measures applied to all grants of sign-on LTI.
On an annual basis the PCNRC considers the recommendation of the CEO regarding the issue of LTI to non-KMP and non-GLT employees
in light of the performance, financial position and current issued capital of the Company during that year. LTI awarded under the annual
performance review will generally match, in dollar value, STI awarded for performance. There are retention and future performance
measures applied to all grants of LTI to reward performance.
Additional LTI may be awarded as a further retention tool for high performing/ high potential employees. Retention and future
performance measures apply to all grants of LTI to incentivise high performing/ high potential employees.
The terms of any LTI grant are determined by the Board and there will be no automatic grant. LTI grants normally take the form of the
issue of unlisted share options or, from 1 January 2022, unlisted share appreciation rights. Share options and share appreciation rights
are normally issued under the Company’s equity incentive plan (EIP).
The Board targets that the number of equity incentives on issue under the EIP (for LTVR and all LTI awards) not exceed 10% of total
shares on issue.
People, Culture, Nomination and Remuneration Committee
The PCRNC is comprised wholly of Non-Executive Directors, with the majority being independent, Non-Executive Directors. The objective
of the PCNRC is to assist the Board in fulfilling its duties and responsibilities by reviewing, advising and making recommendations to the
Board on:
(a) Nomination
•
•
•
•
Board composition and succession planning, taking into account diversity objectives and the mix of Director skills and
experience;
induction and continuing education for Directors;
Board performance evaluation; and
the performance of the CEO and KMP.
(b) Remuneration
implementing policies for the purposes of using remuneration to foster long term growth and success;
•
• monitoring the implementation by management of the Board’s strategic objectives and policies;
•
•
remuneration for Non-Executive Directors; and
remuneration and incentive arrangements for the CEO and other KMP.
(c) People and Culture
•
•
•
key people and organisational culture strategies of the Group and their alignment with the Company’s overall strategy and vision;
the Group’s Workplace Health and Safety program; and
the Group’s diversity and inclusion practices.
Remuneration review and awards for the financial year ended 31 December 2021
For the year commencing 1 January 2021, the Board adopted a recommendation from the CEO that the Telix Group target remuneration
levels for KMP and other GLT towards the market median. Market median base salary would be achieved stepwise over three years, for
alignment with median by the end of FY2023. To support this stepwise approach KMP remuneration was adjusted as the first of a three
year adjustment using base salary delta which was supplemented by equity incentive awards in the form of market-priced options (or
“bridging options”). KMP were eligible to receive “bridging options” on the same terms as LTI awarded for performance in the year ended
31 December 2020. These options were issued on 28 January 2021 with the following terms:
•
•
•
•
•
Options to acquire Telix shares
Term: 5 years
Expiry Date: 26 January 2026
Exercise price: $4.38
Options vest and become exercisable upon the achievement of $100M in cumulative revenue (before cost of goods sold) from
product sales
Telix Pharmaceuticals Annual Report 2021 50
STVR awards for the year ended 31 December 2021 were applicable to KMP following the achievement of targets determined by the
Board. Corporate objectives were set by the Board in January 2021. Prior to 31 December 2021 the PCNRC reviewed achievement against
objectives:
•
•
•
•
•
•
receipt of marketing authorisation approvals in the United States and Australia for the Company's first commercial product,
Illuccix;
less than 50% of the Group’s financial goals had been reached. Lower than expected revenues were primarily the result of later
than anticipated regulatory approvals for Illuccix;
over 80% of objectives related to de-risking activities and program expansion had been achieved;
over 60% of objectives related to the Group’s therapy programs had been achieved;
over 65% of objectives related to innovation had been achieved; and
100% of objectives related to sustainable workforce had been achieved.
Actual achievement against revised corporate objectives was awarded at 75%. 75% of STVR entitlements due to each eligible KMP for the
year was awarded. The remaining 25% of STVR entitlements allocated to corporate objectives was forfeited.
No performance related LTVR was awarded to the CEO, KMP or other GLT for performance in the year ended 31 December 2021.
Following GRG’s remuneration review and having considered GRG’s recommendations, the Board approved that TTRP of the CEO and
executive leadership team would be targeted to P50 of market data, to be reached stepwise over a number of years in context with the
Company’s commercial success and demonstration of sustainable revenue generation.
In adoption of the above principles and recommendations, and in acknowledgment that CEO and other KMP remuneration was below
market rates, for the year commencing 1 January 2022, the Board approved the following TTRP:
•
•
•
Fixed Pay increase of 20% for the CEO and other KMP
STVR eligibility of 32% for the CEO and 27% for other KMP
LTVR eligibility of 50% for the CEO and 35% for other KMP
Non-Executive Director remuneration
All Non-Executive Directors enter into a letter of appointment, which summarises obligations, policies and terms of appointment,
including remuneration, relevant to the office of Director of the Company.
In accordance with the Constitution of the Company and ASX Listing Rules, the aggregate remuneration of Non-Executive Directors is
determined from time to time by General Meeting. The last determination for Telix Pharmaceuticals Limited was made at the General
Meeting of shareholders held on 12 May 2021. At that meeting, shareholders approved an aggregate annual remuneration pool for Non-
Executive Directors of $700,000. The total Non-Executive Director remuneration of Telix Pharmaceuticals Limited for the year ended 31
December 2021 utilised $458,206 of this authorised amount.
Fees to Non-Executive Directors reflect the obligations, responsibilities and demands which are made on Directors. The Board has
resolved that the remuneration of Non-Executive Directors should only be paid as cash fees and that fees will be reviewed periodically
by the Board. In conducting these reviews the Board will consider market information to seek to ensure that fees are in line with the
market, as well as the financial position of the Company.
Prior to 31 December 2020, the PCNRC reviewed public market data of a comparison group of organisations with similar corporate
profiles to Telix. The Committee recommended to the Board that Non-Executive Director remuneration levels target market median. As
a result of this recommendation, effective 1 January 2021 the Board introduced Committee fees for Non-Executive Directors which in
prior years had not formed part of Non-Executive Director remuneration. Fees in the following amounts were agreed: Chairperson of a
Committee of the Board: $15,000 per annum. Member of a Committee of the Board: $7,500 per annum. The Chairman of the Board was
not to be compensated for Committee Membership but was to be compensated as Chairperson of the PCNRC.
Annualised fees recorded below are base remuneration fees inclusive of superannuation (where applicable).
Annual fees
K McCann, Chairman
O Buck, Non-Executive Director
A Kluge, Non-Executive Director
M Nelson, Non-Executive Director
J Skinner, Non-Executive Director
2021
$
137,188
82,313
65,850
82,313
90,544
2020
$
120,000
65,700
65,700
65,700
65,700
Telix Pharmaceuticals Annual Report 2021
51
During the year ended 31 December 2021, and as part of the remuneration review undertaken, GRG recommended to the PCNRC that
the following remuneration policy for Non-Executive Director remuneration be adopted by Telix:
•
•
•
•
that Main Board Package (MBP) for Non-Executive Directors be positioned around P50 of market practices with the variation in
the clustering reflecting differences in contributions to committees (i.e. those contributing higher workloads will fall above P50
and those contributing the least just below P50);
a Chairperson to member ratio of 2:1 for committee fees;
a Board Chairperson to Non-Executive Director fee ratio of up to 2.20:1 for Main Board Fee; and
that the Board Chairperson not receive committee fees regardless of participation level.
The Board accepted GRG’s guidance, as recommended by the PCNRC. Effective 1 January 2022 the following fees therefore apply:
Role
Incumbent
Main Board Fee
Audit and Risk
Committee
PCNRC
Main Board
Package
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
K McCann
O Buck
A Kluge
M Nelson
J Skinner
$
187,000
86,000
86,000
86,000
86,000
$
-
8,300
-
8,300
16,500
$
-
8,300
-
8,300
8,300
$
187,000
102,600
86,000
102,600
110,800
Sum of MBP
589,000
Non-Executive Directors are able to participate in the Company’s Equity Incentive Plan (EIP) under which equity may be issued subject
to Shareholder approval. Options are normally not issued to Non-Executive Directors as an "incentive" under the EIP but in appropriate
cases as a means of cost-effective consideration for agreeing to join the Board.
Following Shareholder approval at the Extraordinary General Meeting held on 13 October 2017, Non-Executive Directors were granted
Director options, the vesting of which was contingent on the Company’s IPO and listing. These options became eligible to vest upon
listing and vested equally over three years from the date of issue. The options had an exercise price of $0.85 per option and an expiry
of 14 October 2021. The Company considered that this grant of Director options allowed the Company to maintain cash reserves for
its operations while providing cost-effective consideration to the Non-Executive Directors for agreeing to join the Board (in the case of
Messrs McCann and Nelson) and rewarding their commitment and contribution to the Company (in the case of Mr Buck).
Ms Jann Skinner joined the Board as a Non-Executive Director on 19 June 2018. At the AGM held on 22 May 2019, shareholders approved
the issue of 495,000 options in the Company to Ms Skinner. Options offered have a four-year term, with an expiry date of 24 January
2023. The exercise price of $1.09 per option is a 44% premium to the five-day volume weighted average closing price prior to the day of
issue ($0.7561). Options remained unvested for a three-year period and "cliff vested" on 24 January 2022.
Telix Pharmaceuticals Annual Report 2021
52
Remuneration for the year ended 31 December 2021
The below table shows details of the remuneration expenses recognised for KMP measured in accordance with the requirements of the
accounting standards.
Fixed remuneration
Variable remuneration
Total
STI and
option
STI and
option
Salary /
fees
Superannuation
Leave
accruals
(iii)
Other
(iv)
STI
(i)
Share-
based
payment
(ii)
Non-
Executive
Directors
$
$
K McCann
125,000
12,188
O Buck
A Kluge
N Nelson
J Skinner
82,313
65,850
75,000
82,500
430,663
-
-
7,313
8,044
27,544
Executive
Director
$
$
$
-
-
-
-
-
-
$
C Behrenbruch
374,146
26,250
46,350
374,146
26,250
46,350
Other KMP
$
$
$
$
-
-
-
-
-
-
$
-
-
$
$
-
-
-
-
$
137,188
82,313
65,850
82,313
$
-
-
-
-
%
-
-
-
-
35,393
125,936
35,393
28
35,393
493,599
35,393
$
-
-
-
-
-
-
$
$
$
$
82,086
91,509
620,341
173,595
82,086
91,509
620,341
173,595
$
$
$
$
%
28
%
33
30
D Cubbin
275,913
26,250
21,221
15,000
51,628
90,716
480,728
157,344
G Liberatore
280,492
26,250
20,643
-
52,144
86,172
465,701
138,316
556,405
52,500
41,864
15,000
103,772
176,888
946,429
295,660
Total for all
KMP
1,361,214
106,294
88,214
15,000
185,858
303,789
2,060,369
504,647
(i)
(ii)
(iii)
(iv)
C Behrenbruch is eligible to receive an annual STVR of up to 30% of remuneration. D Cubbin and G Liberatore are eligible to receive
an annual STVR of up to 25% of remuneration. Non-Executive Directors are not eligible to receive an STVR amount. In the year to
31 December 2021, based on actual achievement against corporate objectives, 75% of STVR entitlement due to each eligible KMP
for the year was awarded. The remaining 25% of STI entitlement due to each eligible KMP for the year was forfeited. The issue of
LTI awards for performance in the year ended 31 December 2020 occurred on 27 January 2021.
As a means of cost-effective consideration for agreeing to join the Board, and following Shareholder approval, premium-priced
unlisted share options were issued to Mssrs McCann, Nelson and Buck in 2017, and Ms Skinner in 2019. The amounts recorded for
Share Based Payments (options) for Non-Executive Directors and KMP reflect the fair value of these options expensed each year
over the life of the option.
Remuneration includes movement in annual and long service leave provisions during the year.
This includes a once off share option entitlement to D Cubbin in FY2021 for resignation from a Chairman position as requested by
Telix Pharmaceuticals Board. The equity portion has not been issued yet, hence booked at an estimate. Fair value will be calculated
once the rights are granted in FY2022.
Telix Pharmaceuticals Annual Report 2021
53
Remuneration for the year ended 31 December 2020
The below table shows details of the remuneration expenses recognised for KMP measured in accordance with the requirements of the
accounting standards.
Fixed remuneration
Variable remuneration
Total
STI and
option
STI and
option
Salary /
fees
Superannuation
Leave
accruals
(iii)
Other
(iv)
STI
(i)
Share-
based
payment
(ii)
Non-
Executive
Directors
$
$
K McCann
109,550
10,450
O Buck
A Kluge
N Nelson
J Skinner
65,700
65,700
60,000
60,000
360,950
-
-
5,700
5,700
21,850
Executive
Director
$
$
$
-
-
-
-
-
-
$
C Behrenbruch
295,100
25,000
(31,687)
295,100
25,000
(31,687)
Other KMP
$
$
$
$
-
-
-
-
-
-
$
-
-
$
$
-
-
-
-
-
-
$
$
$
$
78,210
198,210
78,210
15,096
80,796
15,096
-
65,700
-
78,210
143,910
78,210
35,393
101,093
35,393
206,909
589,709
206,909
$
$
$
86,607
46,473
421,493
133,080
86,607
46,473
421,493
133,080
$
$
$
$
D Cubbin
241,626
23,778
11,697
15,000
55,220
113,990
461,311
184,210
G Liberatore
248,935
24,595
10,809
-
56,811
51,580
392,730
108,391
490,561
48,373
22,506
15,000
112,031
165,570
854,041
292,601
Total for all
KMP
1,146,611
95,223
(9,181)
15,000
198,638
418,952
1,865,243
632,590
%
39
19
-
54
35
%
32
%
40
28
(i)
(ii)
(iii)
(iv)
C Behrenbruch is eligible to receive an annual STI of up to 30% of remuneration. D Cubbin and G Liberatore are eligible to receive
an annual STI of up to 25% of remuneration. No other KMP are eligible to receive an STI amount. In the year to 31 December 2020,
based on achievement against corporate objectives between 88-91% of STI entitlements due to each eligible KMP for the year was
awarded. The remaining 9-12% of STI entitlements were forfeited. LTI to the dollar value of STI awards were awarded to KMP. The
issue of LTI awards for performance in the year ended 31 December 2020 occurred on 27 January 2021.
As a means of cost-effective consideration for agreeing to join the Board, and following Shareholder approval, premium-priced
unlisted share options were issued to Mssrs McCann, Nelson and Buck in 2017, and Ms Skinner in 2019. The amounts recorded for
Share Based Payments (options) for Non-Executive Directors and KMP reflect the fair value of these options expensed each year over
the life of the option.
Remuneration includes movement in annual leave provisions during the year.
This column represents a restatement of prior year remuneration. D Cubbin was entitled to a compensation payment to resign as
Chairman position as requested by Telix Pharmaceuticals Board. The full bonus of $30k, was to be paid as 50% as cash in FY2020 and
50% as equity in FY2021. The cash bonus was paid in FY2020.
Telix Pharmaceuticals Annual Report 2021
54
Related party transactions with KMP
Remuneration: Remuneration to KMP is recorded in the tables above.
Loans: There were no loans between the Company and any KMP in the years ended 31 December 2021 and 2020.
Other transactions: ABX-CRO is a clinical research organisation that specialises in radiopharmaceutical product development. Telix has
entered into a master services agreement with ABX-CRO for the provision of clinical and analytical services for its programs. Non-
Executive Director, Dr Andreas Kluge, is the principal owner and Managing Director of ABX-CRO. In the year ended 31 December 2021,
the total amount paid or payable to ABX-CRO was $1,997,836 (2020: $1,390,458). Fees payable to ABX-CRO are on an arms' length basis
and are reviewed on an ongoing basis by the Audit and Risk Committee.
Other than those noted above, there were no related party transactions with any KMP in the year ended 31 December 2021.
Employment contracts
Executive Directors and other key management personnel have rolling contracts, not limited by term. Terms approved by the Board as at
the date of this Report are as follows:
KMP and start date
Remuneration
Notice period
STVR and treatment of
STVR on termination
LTVR and treatment of
LTVR on termination
Christian Behrenbruch
PhD –
MD and Group CEO
Appointed 3 January 2017
Base salary of $453,000
subject to annual review.
Exclusive of
superannuation paid at
government-determined
levels.
3 months’ notice of
termination by either
party. All payments
on termination will be
subject to the termination
benefits cap under the
Corporations Act.
Eligible to receive an
annual STVR of up to 30%
of base remuneration.
Payout of any STVR is
at the discretion of the
Board.
Shareholder approval was
obtained prior to listing for
the provision of benefits on
cessation of employment.
The treatment of STVRs
on termination is at Board
discretion.
Eligible to participate in
the Company’s EIP. Any
issue of securities is
subject to shareholder
approval.
The treatment of LTVRs
on termination is at Board
discretion.
Doug Cubbin –
Group CFO
Appointed 22 May 2017
Base salary of $335,000
subject to annual review.
Exclusive of
superannuation paid at
government-determined
levels.
3 months’ notice of
termination by either
party. All payments
on termination will be
subject to the termination
benefits cap under the
Corporations Act.
Eligible to receive an
annual STVR of up to 25%
of base remuneration.
Eligible to participate in
the Company’s EIP.
Payout of any STVR is
at the discretion of the
Board.
The treatment of LTVRs
on termination is at Board
discretion.
Shareholder approval was
obtained prior to listing for
the provision of benefits on
cessation of employment.
The treatment of STVRs
on termination is at Board
discretion.
Gabriel Liberatore –
Group COO
Appointed 18 February
2019
Base salary of $341,000
subject to annual review.
Exclusive of
superannuation paid at
government-determined
levels.
3 months’ notice of
termination by either
party. All payments
on termination will be
subject to the termination
benefits cap under the
Corporations Act.
Eligible to receive an
annual STVR of up to 25%
of base remuneration.
Eligible to participate in
the Company’s EIP.
Payout of any STVR is
at the discretion of the
Board.
The treatment of LTVRs
on termination is at Board
discretion.
Shareholder approval was
obtained prior to listing for
the provision of benefits on
cessation of employment.
The treatment of STVRs
on termination is at Board
discretion.
Telix Pharmaceuticals Annual Report 2021
55
Shareholdings of Directors and KMPs for the year ended 31 December 2021
K McCann
O Buck
A Kluge
M Nelson
J Skinner
C Behrenbruch
D Cubbin
G Liberatore
Balance
1 January
160,000
1,552,500
24,675,000
2,638,750
100,000
24,675,000
49,298
-
Shares issued from
Options exercised
Net acquired/
Balance 31 December
(disposed)
990,000
-
-
990,000
-
-
790,000
-
-
-
-
-
-
-
(112,558)
-
1,150,000
1,552,500
24,675,000
3,628,750
100,000
24,675,000
726,740
-
53,850,548
2,770,000
(112,558)
56,507,990
Shareholdings of Directors and KMPs for the year ended 31 December 2020
K McCann
O Buck
A Kluge
M Nelson
J Skinner
C Behrenbruch
D Cubbin
G Liberatore
Balance
1 January
160,000
1,222,335
24,675,000
2,238,750
100,000
24,675,000
–
-
Shares issued from
Options exercised
Net acquired/
Balance 31 December
(disposed)
-
330,165
-
-
-
-
-
-
-
-
-
400,000
-
-
49,298
-
449,298
160,000
1,552,500
24,675,000
2,638,750
100,000
24,675,000
49,298
-
53,850,548
53,071,085
330,165
Telix Pharmaceuticals Annual Report 2021 56
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Telix Pharmaceuticals Annual Report 2021
58
Telix Pharmaceuticals Limited performance
and shareholder wealth
Basic earnings per share, Net tangible assets per share and Dividend per share (cents per share) are as follows. Year end share price has
been included as one measure of shareholder wealth:
Basic loss per share (cents)
Net tangible assets per share
($)
Dividend per share ($)
Closing share price ($)
Increase/(decrease) in share
price (%)
2021
(28.5)
(0.20)
-
7.75
+105
2020
(17.5)
6.44
–
3.78
+144
2019
(11.9)
11.83
-
1.55
+138
2018
(6.8)
0.06
-
0.65
+5
2017
(5.0)
0.39
-
0.62
(5)(i)
Market capitalisation ($)
2,209,315,000
1,059,932,000
392,584,000
141,938,000
122,411,000
(i) Telix listed on the ASX on 15 November 2017. Telix's IPO Offer Price was $0.65.
Rounding of amounts
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 have been rounded off in accordance with the instrument to the nearest thousand dollars, or
in certain cases, to the nearest dollar.
Indemnity
Subject to the Corporations Act 2001 (Cth) and rule 10.2 of the Constitution of Telix Pharmaceuticals Limited, the Company must
indemnify each Director, Secretary and Executive Officer to the maximum extent permitted by law against any liability incurred by them
by virtue of their holding office as, and acting in the capacity of, Director, Secretary or Executive Officer of the Company, other than:
•
•
•
a liability owed to the Company or a related body corporate of the Company;
a liability for a pecuniary penalty order under section 1317G Corporations Act 2001 (Cth) or a compensation order under section
1317H Corporations Act 2001 (Cth); and
a liability owed to a person other than the Company that did not arise out of conduct in good faith.
The Company has paid premiums in respect of a contract insuring its Directors, the Company Secretary and Executive Officers for the
financial year ended 31 December 2021. Under the Company’s Directors and Officers Liability Insurance Policy, the Company cannot
disclose the nature of the liabilities insured by the policy or the amount of the premium.
Indemnification of auditors
To the extent permitted by law, the Company 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.
Telix Pharmaceuticals Annual Report 2021 59
Group company secretary
Melanie Farris FGIA, FCG, GAICD
Ms Farris holds a Bachelor of Communication (Public Relations), and a Graduate Diploma in Applied Corporate Governance. She is a
Fellow of the Governance Institute of Australia, a Fellow of the Chartered Governance Institute (UK) and a Graduate of the Australian
Institute of Company Directors.
Corporate Governance Statement
Telix Pharmaceuticals and the Board are committed to achieving and demonstrating the highest standards of corporate governance.
The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations
(4th edition) published by the ASX Corporate Governance Council. The 2021 Corporate Governance Statement reflects the corporate
governance practices in place throughout the financial year ended 31 December 2021 and is available in the Investors section of the
Company’s website: http://www.telixpharma.com/investors/corporate-governance/.
Signed in accordance with a resolution of Directors on 24 February 2022
Kevin McCann AO
Chairman
Christian Behrenbruch PhD
Managing Director and Group CEO
Telix Pharmaceuticals Annual Report 2021 Auditor's independence declaration
60
Auditor’s Independence Declaration
As lead auditor for the audit of Telix Pharmaceuticals Limited for the year ended 31 December 2021, I
declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Telix Pharmaceuticals Limited and the entities it controlled during the
period.
Brad Peake
Partner
PricewaterhouseCoopers
Melbourne
24 February 2022
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Telix Pharmaceuticals Annual Report 2021
T
R
O
P
E
R
L
A
U
N
N
A
1
2
0
2
61
Financial report
T E L I X P H A R M A C E U T I C A L S
Telix Pharmaceuticals Annual Report 2021
Telix Pharmaceuticals Annual Report 2021
Contents
63
64
65
66
67
101
102
Consolidated statement of
comprehensive income or loss
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor's report
Telix Pharmaceuticals Annual Report 2021
63
Consolidated statement of
comprehensive income or loss
For the year ended 31 December 2021
Continuing operations
Revenue
Cost of inventory sold
Research and development costs
Administration and corporate costs
Employment costs
Remeasurement of provisions
Depreciation and amortisation
Finance costs
Other income and expenses
Loss before income tax
Income tax (expense)/benefit
Loss from continuing operations after income tax
Loss is attributable to:
Owners of Telix Pharmaceuticals Limited
Loss for the year
Other comprehensive (loss)/income
Items to be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations
Total comprehensive loss for the year
Total comprehensive loss for the period is attributable to:
Owners of Telix Pharmaceuticals Limited
Basic loss per share from continuing operations attributable to the
ordinary equity holders of the Company
Diluted loss per share from continuing operations attributable to
the ordinary equity holders of the Company
Note
4
5
6
7
21
8
9
10
11
Note
33.1
33.2
2021
$’000
7,596
(2,548)
(34,135)
(16,882)
(30,104)
(14,855)
(5,174)
(5,218)
20,855
(80,465)
(45)
(80,510)
(80,510)
(80,510)
(1,452)
(81,962)
2021
Cents
(28.5)
(28.5)
2020
$’000
5,213
(2,024)
(23,085)
(8,915)
(15,560)
(6,727)
(4,882)
(1,739)
9,784
(47,935)
3,048
(44,887)
(44,887)
(44,887)
361
(44,526)
2020
Cents
(17.5)
(17.5)
The above consolidated statement of comprehensive income or loss is to be read in conjunction with the notes to the consolidated financial statements.
Consolidated statement of financial position
as at 31 December 2021
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Contract liabilities
Lease liabilities
Provisions
Employee benefit obligations
Total current liabilities
Non-current liabilities
Borrowings
Contract liabilities
Lease liabilities
Deferred tax liabilities
Provisions
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Foreign currency translation reserve
Share-based payments reserve
Accumulated losses
Total equity
Note
12
13
14
15
13
16
17
18
19
20
16.2
21
22
19
20
16.2
23
21
22
24.1
24.2
2021
$’000
22,037
19,420
3,454
2,632
47,543
212
6,329
55,729
62,270
109,813
19,040
19
6,143
613
7,403
4,764
37,982
-
23,056
1,907
-
44,578
132
69,673
107,655
2,158
170,840
(1,153)
5,942
(173,471)
2,158
The above consolidated statement of financial position is to be read in conjunction with the notes to the consolidated financial statements.
64
2020
$’000
77,945
12,399
633
2,651
93,628
183
4,821
59,189
64,193
157,821
10,892
264
3,235
503
3,053
2,009
19,956
95
27,515
1,345
-
29,894
-
58,849
78,805
79,016
167,058
299
4,620
(92,961)
79,016
Telix Pharmaceuticals Annual Report 2021
Consolidated statement of changes in equity
for the year ended 31 December 2021
65
Foreign
currency
translation
reserve
Share-based
payments
reserve
Total
equity
$’000
$’000
$’000
Balance at 1 January 2021
Loss for the year
Other comprehensive loss
Total comprehensive loss
Issue of shares on exercise of options
Share based payments
Share capital
Accumulated
losses
Note
24.1
24.2
$’000
167,058
-
-
-
3,782
-
3,782
$’000
(92,961)
(80,510)
-
(80,510)
-
-
-
299
-
(1,452)
(1,452)
-
-
-
Balance at 31 December 2021
170,840
(173,471)
(1,153)
Balance at 1 January 2020
115,943
Loss for the year
Other comprehensive income
Total comprehensive loss
Contributions of equity
Transaction costs arising on new share
issues
Issue of shares on exercise of options
Share based payments
Balance at 31 December 2020
-
-
-
50,407
(130)
838
-
51,115
167,058
24.1
24.1
24.1
24.2
(48,074)
(44,887)
-
(44,887)
-
-
-
-
-
(62)
-
361
361
-
-
-
-
-
(92,961)
299
4,620
79,016
-
-
-
-
1,322
1,322
5,942
(80,510)
(1,452)
(81,962)
3,782
1,322
5,104
2,158
2,274
70,081
-
-
-
-
-
-
2,346
2,346
4,620
(44,887)
361
(44,526)
50,407
(130)
838
2,346
53,461
79,016
The above consolidated statement of changes of equity is to be read in conjunction with the notes to the consolidated financial statements.
Telix Pharmaceuticals Annual Report 2021
Consolidated statement of cash flows
for the year ended 31 December 2021
Cash flows from operating activities
Receipts from customers
Receipts in relation to R&D tax incentive
Payments to suppliers and employees
Interest received
Interest paid
Note
2021
$’000
4,158
12,123
(75,420)
-
(189)
Net cash (used in)/provided by operating activities
25
(59,328)
Cash flows from investing activities
Payment for acquisition of subsidiary, net of cash acquired
Purchase of intangible assets
Purchase of plant and equipment
Payment for decommissioning liability
Net cash used in investing activities
Cash flows from financing activities
Repayment of borrowings
Principal element of lease payments
Proceeds from issue of shares and other equity
Transaction costs of capital raising
Net cash provided by financing activities
Net (decrease)/increase in cash held
Net foreign exchange differences
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
12
-
-
(1,339)
(1,387)
(2,726)
(340)
(596)
3,782
-
2,846
(59,208)
3,300
77,945
22,037
The above consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial statements.
66
2020
$’000
36,539
11,405
(45,860)
67
(191)
1,960
(322)
(74)
(248)
(447)
(1,091)
(402)
(502)
35,151
(130)
34,117
34,986
(1,639)
44,598
77,945
Telix Pharmaceuticals Annual Report 2021
Notes to the consolidated financial statements
67
1. Corporate information
Telix Pharmaceuticals Limited (Telix or the Company) is a for profit
company limited by shares incorporated in Australia whose shares
have been publicly traded on the Australian Securities Exchange
since its listing on 15 November 2017 (ASX:TLX). Telix is developing
a portfolio of clinical-stage products that address significant
unmet medical need in oncology and rare diseases. Telix is the
ultimate parent company of the Telix Pharmaceuticals Group
(the Group).
This consolidated financial report of Telix Pharmaceuticals Limited
for the year ended 31 December 2021 was authorised for issue in
accordance with a resolution of the Directors on 24 February 2022.
2. Segment reporting
The Telix Pharmaceuticals Group is an oncology group with
operations in Australia, the United States, Belgium and Japan.
The Group does not currently consider that the risks and returns
of the Group are affected by differences in either the products
or services it provides, nor the geographical areas in which the
Group operates. As such the Group operates as one segment.
Group performance is evaluated based on operating profit or loss
and is measured consistently with profit or loss in the financial
statements. Financing (including finance costs and finance income)
and income taxes are managed on a Group basis.
3. Summary of significant accounting policies
The significant accounting policies that have been used in the
preparation of these financial statements are summarised below.
3.1 Going concern
For the year ended 31 December 2021, the Group incurred an
operating loss of $80,510,000 (2020: $44,887,000) and cash used in
operating activities of $59,328,000 (2020: provided by $1,960,000).
As at 31 December 2021 the net assets of the Group stood at
$2,158,000 (2020: $79,016,000), with cash on hand at $22,037,000
(2020: $77,945,000).
The Group has recorded current trade and other receivables in the
amount of $18,690,000 (2020: $12,239,000) from the Australian
Taxation Office (ATO) in respect of its Research and Development
(R&D) tax incentive claim for eligible R&D activities undertaken in
the year to 31 December 2021. The Group expects to receive this
amount during the 12 months ending 31 December 2022.
On 27 January 2022 the Group completed a $175,000,000
institutional placement of new, fully paid ordinary shares at a price
of $7.70 per share. The institutional placement was followed by a
Share Purchase Plan which will raise up to a further $25,000,000 at
the same offer price.
Cash on hand following the institutional placement and share
purchase plan is considered sufficient to meet the Group’s
forecast cash outflows in relation to commercial and research
and development activities currently underway and other
committed business activities for at least 12 months from
the date of this report.
On this basis, the Directors are satisfied that the Group continues
to be a going concern as at the date of this report. Further, the
Directors are of the opinion that no asset is likely to be realised
for an amount less than the amount at which it is recorded
in the consolidated statement of financial position as at
31 December 2021.
As such, no adjustment has been made to the financial report
relating to the recoverability and classification of the asset carrying
amounts or the classification of liabilities that might be necessary
should the Group not continue as a going concern.
3.2 Basis of preparation
These general-purpose financial statements have been prepared
in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards
Board and the Corporations Act 2001 (Cth). Telix Pharmaceuticals
Limited is a for-profit entity for the purpose of preparing the
financial statements.
a. Compliance with IFRS
The consolidated financial statements of the Telix Pharmaceuticals
Group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
b. Historical cost convention
The financial statements have been prepared on a historical cost
basis, except for the following: intellectual property, share based
payments, government grants, contingent consideration and
decommissioning liabilities which are measured at fair value.
c. Comparatives and rounding
Where necessary, comparative information has been re-classified
to achieve consistency in disclosure with current financial amounts
and other disclosures. The Company is of a kind referred to in ASIC
Legislative Instrument 2016/191, relating to the "rounding off" of
amounts in the consolidated financial statements. Amounts in
the consolidated financial statements have been rounded off in
accordance with the instrument to the nearest thousand dollars,
or in some cases the nearest dollar.
d. New and amended standards adopted by the Group
The group has applied the following standards and amendments
for the first time for their annual reporting period commencing
1 January 2021:
•
•
AASB 2020-8 Amendments to Australian Accounting
Standards – Interest Rate Benchmark Reform Phase 2 (AASB9,
AASB 139, AASB 4 and AASB 16)
AASB 2020-4 and AASB 2021-3 Amendments to Australian
Accounting Standards – COVID-19 Related Rent Concessions
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
e. New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been
published that are not mandatory for 31 December 2021 reporting
periods and have not been early adopted by the Group. These
standards are not expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable
future transactions.
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
3.3 Principles of consolidation
Subsidiaries are all entities (including structured entities) over
which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. If the Group loses control of
a subsidiary, the Group derecognises the assets and liabilities of
the former subsidiary from the consolidated statement of financial
position and recognises the gain or loss associated with the loss of
control attributable to the former controlling interest.
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the transferred
asset. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted
by the Group.
3.4 Foreign currency translation
a. Functional and presentation currency
Items included in the financial statements of the Group are
measured in Australian dollars, being the currency of the primary
economic environment in which the entity operates (the functional
currency). The financial statements are presented in Australian
dollars.
b. Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end exchange
rates are generally recognised in profit or loss. Foreign exchange
gains and losses that relate to borrowings are presented in the
consolidated statement of comprehensive income or loss, within
finance costs. All other foreign exchange gains and losses are
presented in the consolidated statement of comprehensive income
or loss on a net basis within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date when
the fair value was determined. Translation differences on assets
and liabilities carried at fair value are reported as part of the fair
value gain or loss.
c. Group companies
The results and financial position of foreign operations (none of
which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
•
•
•
assets and liabilities for each consolidated statement of
financial position presented are translated at the closing rate
at the date of that consolidated statement of financial position
income and expenses for each consolidated statement
of comprehensive income or loss are translated at actual
exchange rates at the dates of the transactions). For practical
reasons, in the comparative period the average rate was used
to approximate the exchange rates at the transaction dates.
all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation
of any net investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such
68
investments, are recognised in other comprehensive income.
When a foreign operation is sold or any borrowings forming part of
the net investment are repaid, the associated exchange differences
are reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a
foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
3.5 Business combinations
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the:
•
•
•
•
•
fair values of the assets transferred
liabilities incurred to the former owners of the acquired
business
equity interests issued by the Group
fair value of any asset or liability resulting from a contingent
consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred. The excess
of the consideration transferred, amount of any non-controlling
interest in the acquired entity, and acquisition-date fair value
of any previous equity interest in the acquired entity over the
fair value of the net identifiable assets acquired is recorded as
goodwill. If those amounts are less than the fair value of the net
identifiable assets of the subsidiary acquired, the difference is
recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred,
the amounts payable in the future are discounted to their present
value as at the date of exchange. The post-tax discount rate used
is the entity’s incremental borrowing rate, being the rate at which
a similar borrowing could be obtained from an independent
financier under comparable terms and conditions. Contingent
consideration is classified either as equity or a financial liability.
Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in
profit or loss.
The acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value
at the acquisition date. Any gains or losses arising from such
remeasurement are recognised in profit or loss. If the initial
accounting for a business combination is incomplete by the end of
the reporting period in which the combination occurs, the Group
reports provisional amounts for the items for which the accounting
is incomplete. Those provisional amounts are adjusted during the
measurement period (see below), or additional assets or liabilities
are recognised, to reflect new information obtained about facts
and circumstances that existed as of the acquisition date that, if
known, would have affected the amounts recognised as of that
date. The measurement period is the period from the date of
acquisition to the date the Group obtains complete information
about facts and circumstances that existed as of the acquisition
date and is subject to a maximum of one year.
3.6 Asset acquisitions
When the Group acquires a business, the Directors consider the
treatment of the transaction under AASB 3 Business Combinations,
including the amendment made to AASB 3 (AASB 2018-6: Business
Combinations, Definitions of a Business, issued in December 2018).
This standard clarifies the definition of a business, and assists
entities in determining whether a transaction should be accounted
for as a business combination or as an asset acquisition.
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3.6 Asset acquisitions CONTINUED
In assessing the qualification as a business combination or asset
acquisition, the Directors determine whether the acquisition meets
the requirements of the "concentration test" as prescribed by the
accounting standards. When identifying net identifiable assets
acquired, the Directors determine whether the acquisition relates
to an asset acquisition – generally being intellectual property.
This policy has been applied historically to the Atlab and
TheraPharm acquisitions. The intangible assets acquired in these
purchases have been recognised at their respective fair values at
acquisition date. No goodwill or deferred tax is recognised.
3.7 Current and non-current classification
Assets and liabilities are presented in the consolidated
statement of financial position based on current and non-current
classification. An asset is current when it is expected to be realised
or intended to be sold or consumed in the Group’s normal
operating cycle; it is held primarily for the purpose of trading; it
is expected to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets are classified as
non-current. A liability is current when it is expected to be settled
in the Group’s normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after
the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting
period. All other liabilities are classified as non-current. Deferred
tax assets and liabilities are always classified as non-current.
3.8 Cash and cash equivalents
For the purpose of presentation in the consolidated statement
of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value, and
bank overdrafts. Bank overdrafts are shown within borrowings
in current liabilities in the consolidated statement of financial
position.
3.9 Trade and other receivables
Trade receivables and other receivables are all classified as
financial assets held at amortised cost. Trade receivables
are recognised initially at the amount of consideration that
is unconditional, unless they contain significant financing
components when they are recognised at fair value.
a. Impairment of trade and other receivables
The collectability of trade and other receivables is reviewed
on an ongoing basis. Individual debts which are known to be
uncollectible are written off when identified. The Group recognises
an impairment provision based upon anticipated lifetime losses
of trade receivables. The anticipated losses are determined with
reference to historical loss experience and are regularly reviewed
and updated. They are subsequently measured at amortised
cost using the effective interest method, less loss allowance. See
note 26.4 for further information about the Group’s accounting
for trade receivables and description of the Group’s impairment
policies.
3.10 Inventory
Raw materials and stores, work in progress and finished goods
Raw materials and stores, work in progress and finished goods
are stated at the lower of cost and net realisable value. Cost
comprises direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure, the latter
69
being allocated on the basis of normal operating capacity. Cost
includes the reclassification from equity of any gains or losses on
qualifying cash flow hedges relating to purchases of raw material
but excludes borrowing costs. Costs are assigned to individual
items of inventory on the basis of weighted average costs. Costs of
purchased inventory are determined after deducting rebates and
discounts. Net realisable value is the estimated selling price in the
ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
3.11 Property, plant and equipment
All property, plant and equipment is stated at historical cost less
accumulated depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items. Cost
may also include transfer from equity of any gains or losses on
qualifying cash flow hedges of foreign currency purchases of
property, plant and equipment. Subsequent costs are included
in the asset’s carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of
any component accounted for as a separate asset is derecognised
when replaced. All other repairs and maintenance are charged
to profit or loss during the reporting period in which they are
incurred.
Depreciation is calculated using the straight-line method to
allocate the cost, net of the residual values, over the estimated
useful lives. The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at the end of each reporting
period. An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
The useful lives of assets are as follows:
•
•
•
•
Buildings: 18 years
Plant and equipment: 3-5 years
Furniture, fittings and equipment: 3-5 years
Leased plant and equipment: 3-5 years
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in profit or
loss. When revalued assets are sold, it is Group policy to transfer
any amounts included in other reserves in respect of those assets
to accumulated losses.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement
date less any lease incentives received
any initial direct costs, and
restoration costs.
Right-of-use assets are depreciated over the shorter of the asset’s
useful life and the lease term on a straight-line basis. If the group is
reasonably certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset’s useful life.
3.12 Leases
Leases are recognised as a right-of-use asset and a corresponding
liability at the date at which the leased asset is available for use by
the Group. Each lease payment is allocated between the liability
and finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period.
The right-of-use asset is depreciated over the shorter of the asset’s
useful life and the lease term on a straight-line basis.
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3.13 Intangible assets
a. Goodwill
Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised, but it is tested for impairment
annually, or more frequently if events or changes in circumstances
indicate that it might be impaired and is carried at cost less
accumulated impairment losses. Gains and losses on the disposal
of an entity include the carrying amount of goodwill relating to the
entity sold. Goodwill is allocated to cash-generating units for the
purpose of impairment testing. The allocation is made to those
cash-generating units or group of cash-generating units that are
expected to benefit from the business combination in which the
goodwill arose.
b. Patents, trademarks, licences and customer contracts
Separately acquired trademarks and licences are shown at
historical cost. Trademarks, licences and customer contracts
acquired in a business combination are recognised at fair value
at the acquisition date. They have a finite useful life and are
subsequently carried at cost less accumulated amortisation and
impairment losses. The useful life of these intangibles assets is 15
years.
c. Intellectual property
Intellectual property has been realised on the acquisition of
Therapeia GmbH & Co.KG (Therapeia) (2017), Atlab Pharma
SAS (Atlab) (2018), Advanced Nuclear Medicine Ingredients SA
(ANMI) (2018) and TheraPharm GmbH (TheraPharm) (2020). The
intellectual property associated with the Therapeia, Atlab and
TheraPharm acquisitions is recorded as an indefinite life asset
as it is not yet ready for use. At the point the asset is ready for
use, the useful life will be reassessed as a definite life asset and
amortised over an appropriate period. All assets will be tested
annually for impairment and subsequently carried at cost less
accumulated impairment losses and/or accumulated amortisation.
The intellectual property associated with ANMI is recorded with
a useful life of seven years and will be amortised on a straight
line over the period. An impairment trigger assessment will be
performed annually.
d. Research and development
Research expenditure on internal projects is recognised as an
expense as incurred. Costs incurred on development projects
(relating to the design and testing of new or improved products)
are recognised as intangible assets when it is probable that
the project will, after considering its commercial and technical
feasibility, be completed and generate future economic benefits
and its costs can be measured reliably. The expenditure that could
be recognised comprises all directly attributable costs, including
costs of materials, services, direct labour and an appropriate
proportion of overheads. Other expenditures that do not meet
these criteria are recognised as an expense as incurred. As
the Group has not met the requirement under the standard
to recognise costs in relation to development as intangible
assets, these amounts have been expensed within the financial
statements.
3.14 Impairment of assets
Goodwill and intangible assets that have an indefinite useful
life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by
70
which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or Groups of
assets (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
3.15 Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within
30 days of recognition. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months after
the reporting period. They are recognised initially at their fair value
and subsequently measured at amortised cost using the effective
interest method.
3.16 Provisions
Provisions are recognised when the Group has a present (legal or
constructive) obligation as a result of a past event, it is probable
the Group will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date,
taking into account the risks and uncertainties surrounding the
obligation. If the time value of money is material, provisions are
discounted using a current pre-tax rate specific to the liability.
The increase in the provision resulting from the passage of time is
recognised as a finance cost.
a. Contingent consideration
The contingent consideration liabilities associated with business
combinations are measured at fair value which has been calculated
with reference to our judgement of the expected probability
and timing of the potential future milestone payments, based
upon level 3 inputs under the fair value hierarchy, which is then
discounted to a present value using appropriate discount rates
with reference to the Group’s weighted average cost of capital.
Contingent consideration in connection with the purchase of
individual assets outside of business combinations is recognised
as a financial liability only when a non-contingent obligation arises
(i.e. when milestone is met). The determination of whether the
payment should be capitalised or expensed is usually based on
the reason for the contingent payment. If the contingent payment
is based on regulatory approvals received (i.e. development
milestone), it will generally be capitalised as the payment is
incidental to the acquisition so the asset may be made available
for its intended use. If the contingent payment is based on period
volumes sold (i.e. sales related milestone), it will generally be
expensed.
Changes in the fair value of financial liabilities from contingent
consideration are capitalised or expensed based on the nature
of the asset acquired (refer above). Interest rate effects from
unwinding of discounts are recognised as finance costs. Further
detail has been provided in note 21.2.
b. Decommissioning liability
The Group has recognised a provision for its obligation to
decommission its nuclear product manufacturing plant facility over
its operating life. At the end of a facility’s life, costs are incurred
in safely removing certain assets involved in the production of
radioactive isotopes. The Group recognises the full discounted cost
of decommissioning as an asset and liability when the obligation
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3.16 Provisions CONTINUED
to restore sites arises. The decommissioning asset is included
within property, plant and equipment with the cost of the related
installation. The liability is included within provisions. Revisions
to the estimated costs of decommissioning which alter the level
of the provisions required are also reflected in adjustments to the
decommissioning asset. The amortisation of the asset is included
in the consolidated statement of comprehensive income or loss
and the unwinding of discount of the provision is included within
finance costs. Further detail has been provided in note 21.3.
3.17 Employee benefits
Employee benefits are recognised as an expense, unless the cost
qualifies to be capitalised as an asset.
a. Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits
and annual leave that is expected to be settled wholly within
12 months after the end of the period in which the employees
render the related service are recognised in respect of employees’
services up to the end of the reporting period. These liabilities are
measured at the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current employee
benefit obligations in the consolidated statement of financial
position.
b. Other long-term employee benefit obligations
The liabilities for long service leave and annual leave are not
expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service. They
are therefore measured as the present value of expected future
payments to be made in respect of services provided by employees
up to the end of the reporting period using the projected unit
credit method. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market
yields at the end of the reporting period of high-quality corporate
bonds with terms and currencies that match, as closely as possible,
the estimated future cash outflows. Re-measurements as a result
of experience adjustments and changes in actuarial assumptions
are recognised in profit or loss. The obligations are presented
as current liabilities in the consolidated statement of financial
position if the entity does not have an unconditional right to defer
settlement for at least twelve months after the reporting period,
regardless of when the actual settlement is expected to occur.
c. Share-based payments
Equity-settled share-based compensation benefits are provided
to certain employees. Equity-settled transactions are awards
of shares, options or performance rights over shares, that are
provided to employees. The cost of equity-settled transactions
is measured at fair value on grant date. Fair value is determined
using the Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield and the
risk-free interest rate for the term of the option and volatility. No
account is taken of any other vesting conditions.
If the non-vesting condition is within the control of the
consolidated entity or employee, the failure to satisfy the condition
is treated as a cancellation. If the condition is not within the
control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award
is recognised over the remaining vesting period, unless the award
is forfeited. If equity-settled awards are cancelled, it is treated
as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is
substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
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d. Termination benefits
Termination benefits are payable when employment is terminated
by the Group before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these
benefits. The Group recognises termination benefits at the earlier
of the following dates:
•
•
when the Group can no longer withdraw the offer of those
benefits; and
when the entity recognises costs for a restructuring that
is within the scope of AASB 137 Provisions, Contingent
Liabilities and Contingent Assets and involves the payment
of termination benefits. In the case of an offer made to
encourage voluntary redundancy, the termination benefits
are measured based on the number of employees expected
to accept the offer. Benefits falling due more than 12 months
after the end of the reporting period are discounted to
present value.
3.18 Borrowings
Borrowings are initially recognised at fair value, net of transaction
costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective
interest method. Fees paid on the establishment of loan facilities
are recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down.
In this case, the fee is deferred until the draw-down occurs. To
the extent there is no evidence that it is probable that some or
all of the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised over the period of
the facility to which it relates.
Borrowings are removed from the consolidated statement of
financial position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the
carrying amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the group
has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting period.
3.19 Revenue
Revenue is measured at the fair value of the consideration received
or receivable. Amounts disclosed as revenue are net of returns,
trade allowances, rebates and amounts collected on behalf of third
parties.
Revenue is recognised using a five step approach in accordance
with AASB 15 Revenue from Contracts with Customers to depict
the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the Group expects
to be entitled in exchange for those goods or services.
Distinct promises within the contract are identified as performance
obligations. The transaction price of the contract is measured
based on the amount of consideration the Group expects to be
entitled to from the customer in exchange for goods or services.
Factors such as requirements around variable consideration,
significant financing components, noncash consideration, or
amounts payable to customers also determine the transaction
price. The transaction is then allocated to separate performance
obligations in the contract based on relative standalone selling
prices.
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3.19 Revenue CONTINUED
d. Financing component
Revenue is recognised when, or as, performance obligations are
satisfied, which is when control of the promised good or service is
transferred to the customer.
The existence of a significant financing component in the contract
is considered under the five-step method under AASB 15 Revenue
from Contracts with Customers.
Amounts received prior to satisfying the revenue recognition
criteria are recorded as contract liabilities. Amounts expected
to be recognised as revenue within the 12 months following the
consolidated statement of financial position date are classified
within current liabilities. Amounts not expected to be recognised
as revenue within the 12 months following the consolidated
statement of financial position date are classified within non-
current liabilities.
a. Sales of goods – imaging kits
Sales are recognised at a point-in-time when control of the
products has transferred, being when the products are delivered
to the customer. Delivery occurs when the products have been
shipped to the specific location, the risks of obsolescence and loss
have been transferred to the customer, parties have accepted the
products in accordance with the sales contract and the acceptance
provisions have lapsed. Revenue from these sales is recognised
based on the price specified in the contract, net of the estimated
volume discounts.
Accumulated experience is used to estimate and provide for the
discounts, using the expected value method, and revenue is only
recognised to the extent that it is highly probable that a significant
reversal will not occur. No element of financing is deemed present
as the sales are made with a credit term of 30 days, which is
consistent with market practice. The Group’s obligation to replace
faulty products under the standard warranty terms is recognised
as a provision.
b. Licences of intellectual property
When licences of intellectual property are distinct from other
goods or services promised in the contract, the transaction price is
allocated to the licence as revenue upon transfer of control of the
licence to the customer. All other promised goods or services in the
licence agreement are evaluated to determine if they are distinct.
If they are not distinct, they are combined with other promised
goods or services.
The transaction price allocated to the licence performance
obligation is recognised based on the nature of the licence
arrangement. The transaction price is recognised over time if the
nature of the licence is a "right to access" licence. This is where the
Group performs activities that significantly affect the intellectual
property to which the customer has rights, the rights granted
by the licence directly expose the customer to any positive or
negative effects of the Group’s activities, and those activities do
not result in the transfer of a good or service to the customer as
those activities occur. When licences do not meet the criteria to be
a right to access licence, the licence is a "right to use" licence, and
the transaction price is recognised at the point in time when the
customer obtains control over the licence.
c. Research and development services
Where research and development (R&D) services do not
significantly modify or customise the licence nor are the
licence and development services significantly interrelated or
interdependent, the provision of R&D services is considered to
be distinct. The transaction price is allocated to the R&D services
based on a cost-plus margin approach. Revenue is recognised over
time based on the costs incurred to date as a percentage of total
forecast costs. Reforecasting of total costs is performed at the end
of each reporting period to ensure that costs recognised represent
the goods or services transferred.
If the timing of payments agreed to by the parties to the contract
(either explicitly or implicitly) provides the customer or the Group
with a significant benefit of financing the transfer of goods or
services to the customer, the promised amount of consideration
will be adjusted for the effects of the time value of money when
determining the transaction price.
e. Milestone revenue
The five-step method under AASB 115 Revenue from Contracts
with Customers the standard is applied to measure and recognise
milestone revenue.
The receipt of milestone payments is often contingent on meeting
certain clinical, regulatory or commercial targets, and is therefore
considered variable consideration. The transaction price of the
contingent milestone is estimated using the most likely amount
method. Within the transaction price, some or all of the amount
of the contingent milestone is included only to the extent that
it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur when the uncertainty
associated with the contingent milestone is subsequently
resolved. Milestone payments that are not within the control of
the Group, such as regulatory approvals, are not considered highly
probable of being achieved until those approvals are received. Any
changes in the transaction price are allocated to all performance
obligations in the contract unless the variable consideration relates
only to one or more, but not all, of the performance obligations.
When consideration for milestones is a sale-based or usage-based
royalty that arises from licences of IP (such as cumulative net
sales targets), revenue is recognised at the later of when (or as)
the subsequent sale or usage occurs, or when the performance
obligation to which some or all of the royalty has been allocated
has been satisfied (or partially satisfied).
f. Sales-based or usage-based royalties
Licences of intellectual property can include royalties that are
based on the customer’s usage of the intellectual property or sale
of products that contain the intellectual property. The specific
exception to the general requirements of variable consideration
and the constraint on variable consideration for sales-based
or usage-based royalties promised in a licence of intellectual
property is applied.
The exception requires such revenue to be recognised at the
later of when (or as) the subsequent sale or usage occurs and the
performance obligation to which some or all of the sales-based
or usage-based royalty has been allocated has been satisfied (or
partially satisfied).
3.20 Government Grant Income
Income from government grants, such as research and
development tax incentives, is recognised at fair value where
there is a reasonable assurance that the grant will be received, and
the Group will comply with all attached conditions. Income from
government grants is recognised in the consolidated statement
of comprehensive income or loss on a systematic basis over the
periods in which the entity recognises as expense the related costs
for which the grants are intended to compensate. See note 3.25 for
further information in critical estimates, judgements and errors.
3.21 Income tax
The income tax expense or credit for the period is the tax payable
on the current period’s income based on the applicable income
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
73
3.21 Income tax CONTINUED
tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to
unused tax losses.
associated with dilutive potential ordinary shares, and the
weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
Deferred income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted
or substantially enacted by the end of the reporting period and
are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled. Deferred
tax assets are recognised only if it is probable that future taxable
amounts will be available to utilise those temporary differences
and losses.
Tax consolidation regime
Telix Pharmaceuticals Limited and its wholly owned Australian
resident entities have formed a tax-consolidated group and are
therefore taxed as a single entity. The head entity within the tax-
consolidated group is Telix Pharmaceuticals Limited. The Company,
and the members of the tax-consolidated group, recognise their
own current tax expense/income and deferred tax assets and
liabilities arising from temporary differences using the "standalone
taxpayer" approach by reference to the carrying amounts of assets
and liabilities in the separate financial statements of each entity
and the tax values applying under tax consolidation. In addition
to its current and deferred tax balances, the Company also
recognises the current tax liabilities (or assets), and the deferred
tax assets arising from unused tax losses and unused tax credits
assumed from members of the tax-consolidated group, as part
of the tax-consolidation arrangement. Assets or liabilities arising
as part of the tax consolidation arrangement are recognised as
current amounts receivable or payable from the other entities
within the tax consolidated group.
3.22 Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount
of associated GST, unless the GST incurred is not recoverable from
the taxation authority. In this case it is recognised as part of the
cost of acquisition of the asset or as part of the expense.
Cash flows are presented on a gross basis. The GST components
of cash flows arising from investing or financing activities which
are recoverable from, or payable to the taxation authority, are
presented as operating cash flows.
3.23 Earnings per share
a. Basic earnings per share
Basic earnings per share is calculated by dividing: the profit
attributable to owners of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the
financial period, adjusted for bonus elements in ordinary shares
issued during the period and excluding treasury shares.
b. Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
the after-income tax effect of interest and other financing costs
3.24 Fair value measurement
Certain judgements and estimates are made in determining the
fair values of the financial instruments that are recognised and
measured at fair value in the financial statements. To provide an
indication about the reliability of the inputs used in determining
fair value, the Group has classified its financial instruments into
the three levels prescribed under the accounting standards. The
different levels have been defined as follows:
•
•
•
Level 1: fair value of financial instruments traded in active
markets is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial
assets is the current bid price.
Level 2: fair value of financial instruments that are not traded
in an active market is determined using valuation techniques
which maximise the use of observable market data and rely as
little as possible on entity specific estimates. If all significant
inputs required to fair value an instrument are observable,
the instrument is included in level 2.
Level 3: if one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3.
There were no transfers between level 1, 2 and 3 for recurring
fair value measurements during the year. The Group’s policy is to
recognise transfers into and transfers out of fair value hierarchy
levels at the end of the reporting period. Certain judgements and
estimates are made in determining the fair values of the financial
instruments that are recognised and measured at fair value in the
financial statements.
3.25 Critical estimates, judgements and errors
Accrued R&D expenditure
As part of the process of preparing our financial statements,
the Group is required to estimate its accrued expenses. This
process involves reviewing open contracts and purchase orders,
communicating with program directors and managers to identify
services that have already been performed for the Group,
estimating the level of services performed with associated costs
incurred for the service for which the Group has not yet been
invoiced or otherwise notified of the actual cost. The majority
of service providers invoice the Company monthly in arrears for
services performed or when contractual milestones are met.
The Group estimates accrued expenses as of each consolidated
statement of financial position date in the financial statements
based on facts and circumstances known at that time. The Group
periodically confirms the accuracy of estimates with the service
providers and makes adjustments if necessary. Examples of
estimated accrued expenses include fees paid to:
•
•
•
•
Contract Research Organisations (CROs) in connection with
clinical studies
investigative sites in connection with clinical studies
vendors in connection with preclinical development activities,
and
vendors related to product manufacturing, process
development and distribution of clinical supplies.
Telix Pharmaceuticals Annual Report 2021
74
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
3.25 Critical estimates, judgements and errors CONTINUED
Recognition of R&D tax incentive income
The Australian government allows a refundable research and
development (R&D) tax incentive to eligible companies with an
annual aggregate turnover of less than $20,000,000. Eligible
companies can receive refundable amounts of their research
and development expenditure. During 2021 the Department of
Innovation, Industry and Science (Innovation and Science Australia)
granted Telix an advance/overseas R&D tax finding providing
approval for expenditure up to $320,834,000 (2020: $126,900,000)
that could be eligible for R&D tax incentives.
The research and development activities have been assessed by
management and also by an independent subject matter expert
to determine which areas are eligible under the R&D tax incentive
scheme. This analysis includes an assessment of both the domestic
and international spend. For the year ended 31 December 2021
the Group has recognised $18,574,000 (2020: $12,318,000) in the
consolidated statement of comprehensive income or loss.
Impairment assessment – carrying value of goodwill and intangible
assets
Since its inception Telix has completed four acquisitions:
Therapaeia (2017), Atlab (2018), ANMI (2018) and TheraPharm
(2020). The assessment of impairment of the goodwill and
intangible assets has required estimates and judgements to be
made. The inputs for these have been outlined in note 17.
Contingent consideration and decommissioning liabilities
The Group has identified the contingent consideration and
decommissioning liabilities as balances requiring estimates and
significant judgements. These estimates and judgements have
been outlined in note 21.
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
4. Revenue
Disaggregation of revenue from contracts with customers
The Group derives revenue from the sale and transfer of goods and services over time and at a point in time under the following major
business activities:
75
Sale of goods - at a point in time
Licences of intellectual property - at a point in time
Research and development services - over time
Total revenue from continuing operations
5. Research and development costs
Preclinical
Clinical
Manufacturing
Other research and development related costs
6. Administration and corporate costs
Professional fees
Marketing and sponsorship
Other administration
Rent and insurance
Training and compliance
Travel costs
7. Employment costs
Salaries and wages
Share based payments and incentives
Superannuation
Non-Executive Directors’ fees
2021
$’000
4,898
-
2,698
7,596
2021
$’000
207
10,395
18,542
4,991
34,135
2021
$’000
6,176
5,891
2,296
1,754
143
622
16,882
2021
$’000
24,618
4,379
642
465
2020
$’000
3,278
1,402
533
5,213
2020
$’000
473
6,476
10,771
5,365
23,085
2020
$’000
5,267
1,202
936
878
447
185
8,915
2020
$’000
11,037
3,820
327
376
30,104
15,560
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
8. Depreciation and amortisation
Depreciation
Amortisation of intangible assets
9. Finance costs
Bank fees
Interest expense
Unwind of discount
10. Other income expenses
Research and development tax incentive income
Realised currency loss
Unrealised currency gain/(loss)
Interest income
Other income
11. Income tax expense/(benefit)
11.1 Income tax expense/(benefit)
Current tax expense/(benefit)
Deferred tax expense/(benefit)
Total income tax expense/(benefit)
76
2020
$’000
777
4,105
2021
$’000
995
4,179
5,174
4,882
2021
$’000
26
163
5,029
5,218
2020
$’000
23
191
1,525
1,739
2021
$’000
18,574
(914)
2,612
-
583
20,855
2021
$’000
45
-
45
2020
$’000
12,318
(7)
(3,930)
67
1,336
9,784
2020
$’000
-
(3,048)
(3,048)
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
11. Income tax expense/(benefit) CONTINUED
11.2 Numerical reconciliation of prima facie tax payable to income tax expense/(benefit)
Loss from continuing operations before income tax expense/(benefit)
Prima-facie tax at a rate of 26.0% (2020: 27.5%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
R&D tax incentive credit
Eligible expenses claimed under R&D tax incentive
Share based payments
Deductible transaction costs on share issues
Sundry items
Foreign exchange translation (gain)/loss
Current year tax losses not recognised
Adjustment for current tax of prior periods
Provisions recognised in international jurisdictions
Impact of change in tax rates
income tax expense/(benefit)
11.3 Tax losses
77
2020
$’000
(47,935)
(13,182)
(3,387)
7,787
645
(314)
162
907
(7,382)
4,174
37
123
-
(3,048)
2020
$’000
2021
$’000
(80,465)
(20,920)
(4,829)
10,473
343
(305)
(48)
(203)
(15,489)
14,486
581
45
422
45
2021
$’000
Unused tax losses for which no deferred tax asset has been recognised:
Potential tax benefit (presented net)
20,420
5,934
12. Cash and cash equivalents
Cash on hand
2021
$’000
22,037
2020
$’000
77,945
(i)
(ii)
Reconciliation to cash flow statement: The above figures agree with the amount of cash shown in the consolidated statement of cash flows at the
end of the financial year.
Classification as cash equivalents: Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date
of acquisition.
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
13. Trade and other recievables
Trade receivables
R&D tax incentive receivable
Deposits
Current
Non-current
Total trade and other receivables
78
2020
$’000
160
12,239
183
12,582
12,399
183
12,582
2021
$’000
730
18,690
212
19,632
19,420
212
19,632
Research and development activities have been assessed by the Group and by an independent subject matter expert to determine which areas are likely
to be eligible under the R&D tax incentive scheme. This assessment includes a review of both domestic and international spend. For the year ended
31 December 2021 the Group has recognised a total current receivable of $18,690,000 (2020: $12,239,000). The R&D tax incentive receivable has been
determined based on a combination of eligible domestic and international expenditure of $42,965,000 (2020: $28,317,000) at a rate of 43.5 cents tax
incentive rebate per eligible R&D dollar spent. The credit risk associated with this receivable is low.
14. Inventories
Raw materials and stores
Work in progress
Finished goods
15. Other current assets
GST receivables
Other receivables
Prepayments
2021
$’000
3,283
-
171
3,454
2021
$’000
1,135
290
1,207
2,632
2020
$’000
149
404
80
633
2020
$’000
337
1,455
859
2,651
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
16. Property, plant and equipment
16.1 Property, plant and equipment
Land and
buildings
Plant and
equipment
Furniture,
fittings and
equipment
Leasehold
improvements
Right-of-use
assets
$’000
$’000
$’000
Balance at 1 January 2021
Additions
Depreciation charge
Exchange differences
Balance at 31 December 2021
Cost
Accumulated depreciation
Net book amount
Balance at 1 January 2020
Additions
Depreciation charge
Exchange differences
Balance at 31 December 2020
Cost
Accumulated depreciation
Net book amount
$’000
2,402
-
(88)
(111)
2,203
2,352
(149)
2,203
-
2,463
(61)
250
796
(52)
(3)
991
1,117
(126)
991
177
112
(39)
-
-
2,402
2,463
(61)
2,402
250
324
(74)
250
225
396
(161)
1
461
729
(268)
461
164
120
(77)
18
225
313
(88)
225
187
147
(38)
-
296
376
(80)
296
211
6
(30)
-
187
230
(43)
187
16.2 Lease liabilities
The consolidated statement of financial position shows the following amounts relating to leases:
Right-of-use assets
Properties
Motor vehicles
Total right-of-use assets
Lease liabilities
Current
Non-current
Total lease liabilities
Additions to right-of-use assets during the 2021 financial year were $1,268,000 (2020: $950,000).
79
Total
$’000
4,821
2,607
(995)
(104)
6,329
8,423
$’000
1,757
1,268
(656)
9
2,378
3,849
(1,471)
(2,094)
2,378
6,329
1,347
950
(570)
30
1,757
2,560
(803)
1,757
2021
$’000
2,065
313
2,378
2021
$’000
613
1,907
2,520
1,899
3,651
(777)
48
4,821
5,890
(1,069)
4,821
2020
$’000
1,380
377
1,757
2020
$’000
503
1,345
1,848
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
16. Property, plant and equipment CONTINUED
The consolidated statement of comprehensive income or loss shows the following amounts relating to leases:
Depreciation charge on right-of-use assets
Properties
Motor vehicles
Interest expense relating to leases
Properties
Motor vehicles
Total lease liabilities
2021
$’000
515
141
656
2021
$’000
126
31
157
80
2020
$’000
455
115
570
2020
$’000
120
27
147
The total cash outflow for leases in 2021 financial year was $785,000 (2020: $649,000). This is made up of $596,000 (2020: $502,000)
principal and $189,000 (2020: $147,000) interest payments.
17. Intangible assets
Balance at 1 January 2021
Transfers
Amortisation charge
Changes in provisions
Exchange differences
Balance at 31 December 2021
Cost
Accumulated amortisation
Net book amount
Balance at 1 January 2020
Additions
Amortisation charge
Exchange differences
Balance at 31 December 2020
Cost
Accumulated amortisation
Net book amount
Goodwill
$’000
4,224
-
-
-
(127)
4,097
4,097
-
4,097
4,224
-
-
-
4,224
4,224
-
4,224
Intellectual
property
$’000
50,377
(125)
(3,823)
(170)
(1,773)
44,486
55,680
(11,194)
44,486
37,527
16,586
(3,881)
145
50,377
58,088
(7,711)
50,377
Patents
$’000
249
125
(66)
-
29
337
672
(335)
337
197
72
(22)
2
249
365
(116)
249
Licence
$’000
4,339
-
(290)
2,975
(215)
6,809
7,301
(492)
6,809
-
4,540
(202)
1
4,339
4,541
(202)
4,339
Total
$’000
59,189
-
(4,179)
2,805
(2,086)
55,729
67,750
(12,021)
55,729
41,948
21,198
(4,105)
148
59,189
67,218
(8,029)
59,189
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
17. Intangible assets CONTINUED
The allocation of intangible assets to each cash-generating unit (CGU) is summarised below:
CGU
Name of entity
TLX591-CDx (Illuccix)
Telix Innovations
TLX591
TLX101
TLX66
TLX66-CDx
Seneffe manufacturing facility licence
Patents
Atlab
Therapeia
TheraPharm
TheraPharm
Telix Belgium
Corporate
81
2020
$’000
23,134
13,440
1,441
15,476
1,110
4,339
249
59,189
2021
$’000
18,316
12,984
1,473
14,824
986
6,809
337
55,729
Impairment test for goodwill and indefinite life intangible assets
Since its inception Telix has completed four acquisitions Therapeia (2017), Telix Innovations (formerly ANMI) (2018), Atlab (2018)
and TheraPharm (2020).
TLX591-CDx (Illuccix®): Goodwill and definite life intangible assets, being intellectual property, were acquired as part of
the acquisition of ANMI. Goodwill is required to be annually tested for impairment whereas a definite life intangible asset is
required to be tested for impairment where triggers have been identified. At 31 December 2021, the Directors used a fair value
less costs to sell approach to assess the carrying value of the associated goodwill. No impairment of goodwill was recognised by
the Group. No impairment of definite life intangible assets was recognised by the Group at 31 December 2021 as no impairment
triggers were noted.
TLX591 and TLX66: Indefinite life intangible assets, being intellectual property, were acquired as part of the acquisitions of
Atlab and TheraPharm and are required to be annually tested for impairment. At 31 December 2021, the Directors used a fair
value less costs to sell approach to assess the carrying value of the associated intangible assets. No impairment was recognised
by the Group.
TLX101: Goodwill and indefinite life intangible assets, being intellectual property, were acquired as part of the acquisition
of Therapeia and are required to be annually tested for impairment. At 31 December 2021, the Directors used a fair value
less costs to sell approach to assess the carrying value of the associated goodwill and intangible assets. No impairment was
recognised by the Group.
Seneffe manufacturing facility licence: The Group acquired an isotope licence as part of the Seneffe manufacturing facility
acquired in April 2020. The licence represents a definite life intangible asset which is required to be tested for impairment
where triggers have been identified. The licence does not generate cash inflows that can be separately identified from other
assets therefore the CGU for the licence is the Seneffe manufacturing facility as a whole. At 31 December 2021, there were no
impairment triggers noted.
The Group has identified the estimate of the recoverable amount as a significant judgement for the year ended 31 December
2021. In determining the recoverable amount of all CGU’s listed above, the Group has used discounted cash flow forecasts and
the following key assumptions:
•
•
•
•
Risk adjusted post-tax discount rate – 12.2%
Expected sales volumes
Net sales price per unit
Approval for marketing authorisation probability success factor
The Group has considered reasonably possible changes in the key assumptions and has not identified any instances that could
cause the carrying amounts of the intangible assets at 31 December 2021 to exceed their recoverable amounts.
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
18. Trade and other payables
Trade creditors
Other creditors and accruals
Payroll liabilities
19. Borrowings
Borrowings - unsecured
Current
Non-current
Total borrowings
82
2020
$’000
5,808
4,600
484
10,892
2020
$’000
264
95
359
2021
$’000
11,884
6,721
435
19,040
2021
$’000
19
-
19
All borrowings outstanding at 31 December 2021 are in relation to Telix Innovations and have arisen as a result of the acquisition by the Group.
Borrowings are with a French government authority as a development loan. Details of the borrowings are as follows:
Lenders
Loan balance
Due < 1 year
Due > 1 year
Maturity date
19
19
$’000
19
19
$’000
$’000
31/05/2022
-
-
Development loan
Total
(i)
Development loans are provided by local and national government bodies to support the industry in which they operate in their
jurisdictions. All loans are denominated in Euros and have been translated to Australian dollars at the exchange rate current at 31
December 2021.
Fair value: For all borrowings, the fair values are not materially different to their carrying amounts, since the interest payable on those
borrowings is either close to current market rates or the borrowings are of a short-term nature.
Capital risk management: Capital is defined as the combination of shareholders’ equity, reserves and net debt. The key objective
of the Group when managing its capital is to safeguard its ability to continue as a going concern, so that the Group can continue to
provide benefits for stakeholders and maintain an optimal capital and funding structure. The aim of the Group’s capital management
framework is to maintain, monitor and secure access to future funding arrangements to finance the necessary research and
development activities being performed by the Group. Consistent with others in the industry, the Group monitors capital on the basis
of the following gearing ratio: Debt as divided by Equity. At 31 December 2021, the Group’s on-balance sheet gearing and leverage ratio
was less than 1% (2020: less than 1%).
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
19. Borrowings CONTINUED
Reconciliation of liabilities arising from financing activities:
83
Opening balance Net cash inflow/(outflow)
Other non-cash
movements
Closing balance
$’000
$’000
$’000
$’000
For the year ended 31 December 2021
Borrowings
Lease liabilities
For the year ended 31 December 2020
Borrowings
Lease liabilities
359
1,848
2,207
761
1,370
2,131
(340)
(596)
(936)
(402)
(502)
(904)
-
1,268
1,268
-
980
980
20. Contract liabilities
The Group has recognised the following liabilities related to a contract with a customer in licencing arrangements:
Balance at 1 January
Consideration received
Revenue recognised
Unwind of discount
Balance at 31 December
Current
Non-current
Total contract liabilities
2021
$’000
30,750
-
(2,698)
1,147
29,199
6,143
23,056
29,199
19
2,520
(2,539)
359
1,848
2,207
2020
$’000
-
32,468
(1,935)
217
30,750
3,235
27,515
30,750
China Grand Pharma strategic partnership
On 2 November 2020, the Group entered into a strategic commercial partnership with China Grand Pharmaceutical and Healthcare
Holdings Limited (CGP) for the Group’s portfolio of MTR products. A non-refundable upfront payment of US$25,000,000 was received
upon signing of the contract with CGP. The strategic partnership with CGP includes a licence of existing intellectual property and the
provision of research and development services. The Group has recorded its contractual liability to undertake the identified performance
obligations relating to research and development services using a cost plus margin approach.
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
21. Provisions
Reconciliation of liabilities arising from financing activities:
Government
grant liability
Contingent
consideration
Decomissioning
liability
Balance at 1 January 2021
Remeasurement of provisions
Unwind of discount
Charged to profit or loss
Exchange differences
$’000
1,055
587
155
742
(197)
$’000
25,096
14,268
3,283
17,551
(567)
Amounts deducted from intangible assets
-
(170)
$’000
6,796
-
443
443
(295)
2,975
(61)
1,539
-
(1,387)
41,910
Provision utilised
Balance at 31 December 2021
Current
Non-current
Total provisions
Balance at 1 January 2020
Remeasurement of provisions
Unwind of discount
Charged to profit or loss
Exchange differences
Provision (utilised)/recognised on acquisition
Balance at 31 December 2020
Current
Non-current
Total provisions
55
5,078
1,484
1,539
650
380
52
432
-
(27)
1,055
73
982
1,055
36,832
41,910
16,441
6,347
944
7,291
-
1,364
25,096
1,294
23,802
25,096
8,532
2,270
6,262
8,532
7,003
-
358
358
(118)
(447)
6,796
1,686
5,110
6,796
84
Total
$’000
32,947
14,855
3,881
18,736
(1,059)
2,805
(1,448)
51,981
7,403
44,578
51,981
24,094
6,727
1,354
8,081
118.00
890
32,947
3,053
29,894
32,947
21.1 Government grant liability
Telix Innovations has received grants from the Walloon regional government in Belgium. These grants meet the definition of a
financial liability as defined in AASB 9 Financial Instruments and are required to be recognised at fair value through profit and loss.
The grants are repayable to the Walloon government based on a split between fixed and variable repayments. The fixed proportion
is based on contractual cash flows agreed with the Walloon government. The variable cash flows are based on a fixed percentage
of future sales and are capped at an agreed upon level.
The Group has estimated that the full variable repayments will be made up to the pre-agreed capped amount. The key inputs into
this calculation are the risk adjusted post-tax discount rate (0.4%), the expected sales volumes and the net sales price per unit.
These assumptions are consistent with those utilised by the Group in the calculation of the contingent consideration liability and
intellectual property valuation, other than the post-tax discount rate which is based on the risk-adjusted government bond yield in
Belgium for the duration of the obligation.
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
21. Provisions CONTINUED
21.2 Contingent consideration
TheraPharm
85
Telix acquired TheraPharm on 14 December 2020. Part of the consideration for the acquisition was in the form of future payments
contingent on certain milestones. These are:
•
•
EUR 5m cash payment upon successful completion of a Phase III pivotal registration trial.
EUR 5m cash payment upon achievement of marketing authorisation in the Europe or the United States, whichever approval
comes first.
5% of net sales for the first three years following marketing authorisation in the Europe or the United States, whichever approval
comes first.
•
The valuation of the contingent consideration has been performed utilising a discounted cash flow model that uses certain unobservable
assumptions. These key assumptions include risk adjusted post-tax discount rate (12.2%), expected sales volume over the forecast period,
net sales price per unit and approval for marketing authorisation probability success factor.
The following table summarises the quantitative information about these assumptions, including the impact of sensitivities from
reasonably possible changes where applicable:
Contingent consideration valuation
Unobservable input
Methodology
31 December 2021
Risk adjusted post-tax discount rate
Expected sales volumes
The post-tax discount rate used in the
valuation has been determined based on
required rates of returns of listed companies
in the biotechnology industry (having regards
to their stage of development, size and risk
adjustments)
This is determined through assumptions on
target market population, penetration and
growth rates in the United States and Europe
Net sales price per unit
The sales price per unit is estimated based on
comparable products currently in the market
Approval for marketing authorisation
probability success factor
This assumption is based on management’s
estimate for achieving regulatory approval
and is determined through benchmarking of
historic approval rates
A 0.5% increase in the post-tax discount rate
would decrease the contingent consideration
by 1.6% and decreasing the post-tax discount
rate by 0.5% would increase the contingent
consideration by 1.6%
A 10% increase in the sales volumes would
increase the contingent consideration
by 2.4% and a 10% decrease in market
population would decrease the contingent
consideration by 2.4%
A 10% increase in the net sales price per unit
would increase the contingent consideration
by 2.4% and 10% decrease in net sales price
per unit would decrease the contingent
consideration by 2.4%
An increase in the probability of success
factor by 10% would increase the contingent
consideration by 104%
Telix Innovations (formerly ANMI)
The Group acquired Telix Innovations on 24 December 2018. The Group is liable for future variable payments which are calculated based
on the percentage of net sales for five years following the achievement of market authorisation of the product. The percentage of net
sales varies depending on the net sales achieved in the United States and the rest of the world. The Group also holds an option to
buy-out the remaining future variable payments in the third year following the achievement of market authorisation, if specified sales
thresholds are met.
As at consolidated statement of financial position date, the Group has remeasured the contingent consideration to its fair value.
The remeasurement is as a result of changes to the key assumptions such as probability of success factors, risk adjusted post-tax
discount rate, expected sales volumes and net sales price per unit.
The Group has adopted a process to value the contingent consideration liability with the assistance of an independent valuation expert.
The contingent consideration liability has been valued using a discounted cash flow model that utilises certain unobservable level 3
inputs. These key assumptions include risk adjusted post-tax discount rate (12.2%), expected sales volume over the forecast period,
net sales price per unit and approval for marketing authorisation probability success factor.
The following table summarises the quantitative information about these assumptions, including the impact of sensitivities from
reasonably possible changes where applicable:
Telix Pharmaceuticals Annual Report 2021 86
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
21. Provisions CONTINUED
21.2 Contingent consideration CONTINUED
Advanced Nuclear Medicine Ingredients SA (ANMI) CONTINUED
Contingent consideration valuation
Unobservable input
Methodology
31 December 2021
Risk adjusted post-tax discount rate
Expected sales volumes and net sales price
per unit
The post-tax discount rate used in the
valuation has been determined based on
required rates of returns of listed companies
in the biotechnology industry (having regards
to their stage of development, size and risk
adjustments)
This is determined through the FY22-FY24
commercial budgets approved for each
region
A 0.5% increase in the post-tax discount rate
would decrease the contingent consideration
by 1.0% and decreasing the post-tax discount
rate by 0.5% would increase the contingent
consideration by 1.0%
A 10% increase in the sales volumes would
increase the contingent consideration by
2.4% and a 10% decrease in sales volumes
would decrease the contingent consideration
by 2.4%
21.3 Decommissioning liability
Telix purchased the facility at Seneffe in Belgium on 27 April 2020. The site has cyclotrons installed in concrete shielded vaults which
also contain some nuclear contamination associated with past manufacturing activities. As part of this transaction, Telix assumed the
obligation to remove these assets after the end of their useful lives and restore the site.
The Group has recognised a provision for its obligation to decommission its nuclear product manufacturing plant facility over its
operating life. During the period the site’s two legacy cyclotrons were decommissioned and removed. Other than two cyclotron vaults,
the site has been fully decontaminated.
Other decommissioning costs not required to upgrade the manufacturing plant facility have been deferred to the end of the operating life
of the facility in 2041. The decommissioning costs expected to be incurred in 2041 of €4,357,000 have been discounted at a rate of 0.4%
and translated to Australian dollars at the exchange rate at 31 December 2021.
The provision represents the best estimate of the expenditures required to settle the present obligation at 31 December 2021.
Such cost estimates adjusted for inflation have been discounted to $8,531,000, using a discounted cash flow model, utilising a discount
rate of 0.4% (2020: 8.0%). While the Group has made its best estimate in establishing its decommissioning liability, because of potential
changes in technology as well as safety and environmental requirements, plus the actual timescale to complete decommissioning, the
ultimate provision requirements could vary from the Group’s current estimates. Any subsequent changes in estimate will be recognised
directly through profit and loss. Each year, the provision is increased to reflect the unwind of discount and to accrue an estimate for the
effects of inflation, with the charges being presented in the consolidated statement of comprehensive income or loss. Actual payments
for commencement of decommissioning activity are disclosed as provision utilised.
22. Employee benefit obligations
Annual leave
Bonus
Long service leave
Current
Non-current
Total employee benefit obligations
2021
$’000
1,877
2,887
132
4,896
4,764
132
4,896
2020
$’000
779
1,230
-
2,009
2,009
-
2,009
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
23. Deferred tax assets and liabilities
23.1 Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Lease liabilities
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
2021
$’000
4,692
756
5,448
(5,448)
-
Deferred tax assets movements
Tax losses
Lease liability
$’000
$’000
The balance comprises temporary differences attributable to:
Balance at 1 January 2021
(Charged)/credited:
to profit and loss
Balance at 31 December 2021
Balance at 1 January 2020
(Charged)/credited:
to profit and loss
Balance at 31 December 2020
23.2 Deferred tax liabilities
The balance comprises temporary differences attributable to:
Intangible assets
Right-of-use assets
Total deferred tax liabilities
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
6,066
(1,374)
4,692
4,064
2,002
6,066
555
201
756
411
144
555
2021
$’000
4,734
714
5,448
(5,448)
-
87
2020
$’000
6,066
555
6,621
(6,621)
-
Total
$’000
6,621
(1,173)
5,448
4,475
2,146
6,621
2020
$’000
6,094
527
6,621
(6,621)
–
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
23.2 Deferred tax liabilities CONTINUED
Deferred tax liabilities movements
Intangible assets
Right-of-use asset
$’000
$’000
The balance comprises temporary differences attributable to:
Balance at 1 January 2021
Charged/(credited):
to profit and loss
directly to equity
Balance at 31 December 2021
Balance at 1 January 2020
Charged/(credited):
to profit and loss
directly to equity
Balance at 31 December 2020
24. Equity
24.1 Share capital
6,094
(1,350)
(9)
4,735
7,241
(1,149)
2
6,094
Balance at 1 January
Shares issued through the exercise of share options (i)
Shares issued CGP (ii)
Shares issued TheraPharm (iii)
Less transaction costs
2021
Number
’000
280,405
4,668
-
-
-
2021
$’000
167,058
3,782
-
-
-
Balance at 31 December 2021
285,073
170,840
527
187
-
714
404
123
–
527
2020
Number
’000
253,280
1,866
20,947
4,312
-
280,405
88
Total
$’000
6,621
(1,164)
(9)
5,448
7,645
(1,026)
2
6,621
2020
$’000
115,943
838
35,401
15,006
(130)
167,058
(i)
(ii)
(iii)
Options exercised during the year through the employee Equity Incentive Plan resulted in 4,667,586 (2020: 1,865,991) shares being
issued of total value of $3,782,000 (2020: $838,000).
On 2 December 2020, the Group entered into a strategic commercial partnership with China Grand Pharmaceutical and Healthcare
Holdings Limited (CGP) for the Group portfolio of MTR products. CGP made an equity investment of $35,401,000 (US$25,000,000) in the
form of a placement to CGP of 20,947,181 fully paid ordinary Telix shares, issued at a price of $1.69 per share.
On 14 December 2020, Telix acquired all of the issued capital of TheraPharm for consideration which included $15,006,000
(€10,200,000) comprising 4,312,151 fully paid ordinary Telix shares, issued at a price of $3.48 per share.
The weighted average ordinary shares for the period 1 January 2021 to 31 December 2021 is 282,205,557 (2020: 257,271,000). The Company
does not have a limited amount of authorised capital.
Rights applying to securities:
(i)
Ordinary shares: Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up the
Company in proportion to the number of and amounts paid on the shares held.
(ii)
Options and warrants: Holders of Options and Warrants have no voting rights. Information relating to the Company’s Employee
Incentive Plan (EIP), including details of Options issued, exercised and lapsed during the financial year, is set out in note 28.
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
24.2 Share-based payments reserve
Balance at 1 January
Options issued
Options exercised
Options or warrants lapsed
Balance at 31 December
2021
Number
’000
20,226
3,745
(4,716)
(2,107)
17,148
2021
$’000
4,620
1,322
-
-
5,942
2020
Number
’000
17,814
5,530
(2,710)
(408)
20,226
89
2020
$’000
2,274
2,436
-
(90)
4,620
On 11 September 2018, Telix completed the acquisition of Atlab. The consideration for the acquisition comprised $12,612,000 in Telix shares
at a fair value of shares on the execution date of $0.85 per share (14,837,531 Telix shares) and in warrants over Telix shares at a fair value of
$184,000 (780,923 warrants). The warrants have an expiry date of 11 September 2022 and an exercise price of $1.34 per warrant.
25. Cash flow information
25.1 Reconciliation of loss after income tax to net cash (used in)/provided by operating activities
Operating loss after income tax
Adjustments for
Depreciation and amortisation
Fair value remeasurement of contingent consideration
Unwind of discount
Income tax benefit
Share based payments
Foreign exchange (gains)/losses
Changes in assets and liabilities
(Increase) in trade and other receivables
(Increase) in inventory
(Increase)/decrease in other current assets
(Increase) in other non-current assets
Increase in trade and other creditors
Increase in employee benefit obligations and provisions
(Decrease)/increase in contract liabilities
Net cash (used in)/provided by operating activities
Note
8
11
2021
$’000
2020
$’000
(80,510)
(44,887)
5,174
14,855
5,029
45
1,322
(2,612)
(7,192)
(2,821)
198
(29)
7,484
2,428
(2,698)
(59,328)
4,882
6,727
1,525
(3,048)
2,346
2,603
(328)
(91)
(1,184)
(101)
1,674
1,092
30,750
1,960
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
90
26. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The overall risk management
program focuses on the unpredictability of markets and seeks to minimise potential adverse effects on the financial performance
of the Group. The Group uses different methods to measure different types of risk to which it is exposed.
26.1 Interest rate risk
The majority of the Group’s borrowings have fixed interest rates, and therefore the Group is not exposed to any significant interest
rate risk.
26.2 Price risk
The Group is not exposed to any significant price risk as contracts are in place to meet current estimated material requirements.
26.3 Foreign currency risk
Foreign currency risk is the risk of fluctuation in fair value or future cash flows of a financial instrument as a result of changes
in foreign exchange rates. The Group has certain clinical and regulatory activities conducted internationally. The main currency
exposure to the Group is research and development activities which are occurring in Europe, the United States of America, Japan
and Australia. As a result of these activities, the Group has foreign currency liabilities in Euro (EUR) and United States Dollars (USD).
These foreign currency balances give to a currency risk, which is the risk of the exchange rate moving, in either direction, or the
impact it may have on the Group’s financial performance.
Telix has a policy of holding foreign currency reserves to cover a projected 12 month contract spend.
The major foreign currency exposure is in USD. This is as a result of cash funds held and both receivable and payable contracts
entered into in this currency. The Group maintains foreign currency bank accounts denominated in USD in order to minimise
foreign currency risk exposure. The Group had a deficit of foreign currency receivables over payables of $10,080,000 at 31
December 2021 (2020: deficit of $4,181,000).
The Group’s exposure to the risk of changes in foreign exchange rates also relates to the Group’s net investments in foreign
subsidiaries, which predominantly include denominations in EUR and USD, however given the level of current investments in
foreign subsidiaries, the impact of this is limited.
The Group manages the currency risk by evaluating the trend of foreign currency rates to the Australian dollar and making
decisions as to the levels to hold in each currency by assessing its future activities which will likely be incurred in those currencies.
As at 31 December 2021, the Group held 1.2% (2020: 2.9%) of its cash in Australian dollars, 93.6% (2020: 95.0%) in United States
dollars, 4.3% (2020: 1.8%) in Euros and 0.9% (2020: 0.2%) in Japanese Yen.
The balances held at 31 December 2021 that give rise to currency risk exposure are presented in Australian dollars, together with
a sensitivity analysis which assesses the impact that a change of +/- 10% in the exchange rate as of 31 December 2021 would have
on the Group’s reported profit/(loss) after income tax and/or equity balance.
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
26. Financial risk management CONTINUED
26.3 Foreign currency risk CONTINUED
91
At 31 December 2021
Bank accounts – USD
Bank accounts – EUR
Bank accounts – JPY
Trade and other receivables – USD
Trade and other receivables – EUR
Trade and other payable - USD
Trade and other payable - EUR
Trade and other payable - SGD
Trade and other payable - GBP
Trade and other payable - CHF
Trade and other payable - CAD
Trade and other payable - JPY
Government grant liability – EUR
Decommissioning liability – EUR
Contingent consideration – EUR
Borrowings – EUR
At 31 December 2020
Bank accounts – USD
Bank accounts – EUR
Bank accounts – JPY
Trade and other receivables – USD
Trade and other receivables – EUR
Trade and other payables – USD
Trade and other payables – EUR
Trade and other payables – SGD
Trade and other payables – GBP
Trade and other payables – JPY
Government grant liability – EUR
Contingent consideration – EUR
Decommissioning liability – EUR
Borrowings – EUR
Foreign currency
balance held
+10% Profit/(loss)
-10% Profit/(loss)
$’000 AUD
$’000 AUD
$’000 AUD
20,624
(1,879)
947
193
32
700
(5,293)
(5,248)
(5)
(186)
(14)
(60)
(7)
(1,539)
(8,532)
(41,910)
(19)
(86)
(18)
(3)
(64)
481
477
-
17
1
5
1
139
776
3,810
2
2,296
105
21
4
78
(588)
(583)
(1)
(21)
(2)
(7)
(1)
(170)
(948)
(4,657)
(2)
Foreign currency
balance held
+10% Profit/(loss)
-10% Profit/(loss)
$’000 AUD
$’000 AUD
$’000 AUD
74,078
1,370
180
15
293
(3,155)
(1,012)
(13)
(303)
(6)
(1,055)
(25,096)
(6,796)
(359)
(6,734)
(125)
(16)
(1)
(27)
287
92
1
28
1
96
2,281
618
33
8,231
152
20
2
33
(351)
(112)
(3)
(34)
(1)
(117)
(2,788)
(755)
(40)
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
26. Financial risk management CONTINUED
26.4 Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
Given the absence of loan receivables, the Group’s exposure to credit risk is limited to trade receivables. The Group obtains
guarantees where appropriate to mitigate credit risk.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the
days past due. The expected loss rates are based on historical payment profiles of sales and the corresponding historical credit
losses experienced. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivables. As at the 31 December 2021, the expected credit losses are
$NIL (2020: $NIL). The following tables sets out the ageing of trade receivables, according to their due date:
Aged trade receivables
Gross carrying amount
30 days
60 days
90 days
120 days
Total
26.5 Liquidity risk
2021
$’000
487
164
79
-
730
92
2020
$’000
79
1
-
80
160
The Group is exposed to liquidity and funding risk from operations and from external borrowings, where the risk is that the
Group may not be able to refinance debt obligations or meet other cash outflow obligations when required. Vigilant liquidity risk
management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents). The Group manages
liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast cash flows and matching the
maturity profiles of financial assets and liabilities.
Remaining contractual maturities: The following tables detail the consolidated entity’s remaining contractual maturity for its
financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based
on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash
flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the
consolidated statement of financial position.
At 31 December 2021
$’000
$’000
$’000
$’000
$’000
$’000
1-6 months
6-12 months
1-5 years
Over 5 years
Total contractual
cash flows
Carrying
amount
Non-derivatives
Trade and other payables
Borrowings
Lease liabilities
Decommissioning liability
Government grant liability
Contingent consideration
Total financial liabilities
19,040
19
417
2,271
-
-
21,747
-
-
-
-
375
1,940
-
-
55
1,022
5,400
5,830
64.853
67,815
-
-
330
6,809
468
19,040
19,040
19
3,062
9,080
1,545
19
2,520
8,532
1,539
1,549
71,802
41,910
9,156
104,548
73,560
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
26. Financial risk management CONTINUED
93
At 31 December 2020
$’000
$’000
$’000
$’000
$’000
$’000
1-6 months
6-12 months
1-5 years
Over 5 years
Total contractual
cash flows
Carrying
amount
Non-derivatives
Trade and other payables
Borrowings
Lease liabilities
Decommissioning liability
Government grant liability
Contingent consideration
10,892
132
334
–
–
–
Total financial liabilities
11,358
–
132
298
129
1,738
1,453
3,750
–
95
1210
2,480
6,393
33,445
43,623
–
–
406
–
–
–
406
10,892
10,892
359
2,248
2,609
8,131
34,898
59,137
359
1,848
1,055
6,796
25,096
46,046
26.6 Fair value
Provisions are categorised as Level 3 financial liabilities and remeasured at each reporting date with movements recognised in profit
or loss, except in instances where changes are permitted to be added to / reduce an associated asset. The inputs used in fair value
calculations are determined by Management.
The carrying amount of financial liabilities measured at fair value is principally calculated based on inputs other than quoted prices that
are observable for these financial liabilities, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Where no price
information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, fair value is
estimated based on the Group’s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling and
other risks implicit in such estimates.
Sensitivity of Level 3 financial liabilities
The potential effect of using reasonably possible alternative assumptions in valuation models, based on a change in the most significant
input, such as sales volumes, by an increase/(decrease) of 10 per cent while holding all other variables constant will increase/(decrease)
profit before tax by $1,006,000 (2020: $602,000).
Valuation processes
The finance team of the Group performs the valuation of provisions required for financial reporting purposes, including Level 3 fair
values. This team reports directly to the Chief Financial Officer (CFO). Discussions of valuation processes and results are held between the
CFO and Board at least once every six months, in line with the Group’s half-yearly reporting periods.
The main Level 3 inputs used by the Group in measuring the fair value of provisions are derived and evaluated as follows:
•
Discount rates are determined by an independent third party using a weighted average cost of capital model to calculate a post-tax
rate that reflects current market assessments of the time value of money and the risk specific to the asset.
•
•
•
Regulatory/marketing authorisation approval dates and approval for marketing authorisation probability risk factors are derived
in consultation with the Group’s regulatory team.
Expected sales volumes and net sales price per unit are estimated based on market information on annual incidence rates and
information for similar products and expected market penetration.
Contingent consideration cash flows are estimated based on the terms of the sale contract. Changes in fair values are analysed
at the end of each reporting period during the half-yearly valuation discussion between the CFO and Board. As part of this
discussion the CFO presents a report that explains the reason for the fair value movement.
Telix Pharmaceuticals Annual Report 2021 N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
94
27. Contingent liabilities and contingent assets
On 18 March 2021 the Group entered into a non-exclusive global clinical and commercial supply agreement with Garching-based ITM
Isotopen Technologien München AG (ITM) for the supply of highly pure no-carrier-added lutetium-177, a therapeutic isotope. ITM will
supply the product for use in the Group’s investigational programs in prostate and kidney cancer therapy and subject to approval of the
Group’s drug candidates for therapeutic use and also provide the product for scale-up and commercialisation.
At 31 December 2021, there is a possible obligation for the Group to pay €1,000,000 to ITM on the approval of the product for therapeutic
use by the relevant regulatory authority in either USA, France, Germany, Spain, Italy or the UK and €1,000,000 when the Group makes
a commercial arms-length sale of the product. The existence of the obligation will be confirmed only by the occurrence of one or more
uncertain future events not wholly within the control of the Group.
28. Share based payments
Equity Incentive Plan and Options
The Equity Incentive Plan (EIP) was established to allow the Board of Telix to make offers to Eligible Employees to acquire securities in the
Company and to otherwise incentivise employees. "Eligible employees" includes full time, part time or casual employees of
a Group Company, a Non-Executive Director of a Group Company, a Contractor, or any other person who is declared by the Board to be
eligible.
The Board may, from time to time and in its absolute discretion, invite Eligible Employees to participate in a grant of Incentive
Securities, which may comprise Rights, Options, and/or Restricted Shares. Vesting of Incentive Securities under the EIP is subject
to any vesting or performance conditions determined by the Board and specified in the Offer document. Options are normally granted
under the EIP for no consideration and carry no dividend or voting rights. When exercised, each Option is convertible into one Share.
Non-Executive Directors are able to participate in the Equity Incentive Plan, under which equity may be issued subject to Shareholder
approval. Options are however normally issued to Non-Executive Directors not as an "incentive" under the EIP but as a means of
cost-effective consideration for agreeing to join the Board. The details of Options on issue to individual Directors can be found in the
Remuneration Report for the year ended 31 December 2021. For the purposes of this table and to illustrate the total number of
Options on issue under the rules of the EIP, all Options issued to Non-Executive Directors, Executive Directors, employees
and contractors are included.
2021
Number
'000
20,226
3,745
(4,716)
(2,107)
17,148
1,319
2021
WAEP(i)
1.34
4.46
0.85
2.36
2.03
0.85
Balance at 1 January
Granted during the year
Exercised during the year
Lapsed/forfeited during the year
Balance at 31 December
Vested and exercisable at 31 December
(i)
WAEP – weighted average exercise price
Expense arising from share based payments transactions:
Options issued under EIP
Total
2020
Number
'000
17,814
5,530
(2,710)
(408)
20,226
3,528
2021
$‘000
1,322
1,322
2020
WAEP(i)
1.08
1.96
0.87
1.36
1.34
0.85
2020
$‘000
2,346
2,346
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
28. Share based payments CONTINUED
Equity Incentive Plan and Options
Details of options issued under the EIP outstanding at the end of the year:
95
Grant date
Vesting
date
Expiry date
Exercise
price
Options on
issue at 1
January
2021
Issued
during the
year
Vested
during the
year
Exercised
during the
year
Lapsed/
forfeited
during the
year
Options on
issue at 31
December
2021
'000
'000
'000
'000
'000
'000
15 October
2017
15 October
2018
14 October
2021
15 October
2017
15 October
2019
14 October
2021
15 October
2017
15 October
2020
14 October
2021
0.85
131
-
-
(131)
-
-
0.85
2,206
-
-
(2,206)
-
-
0.85
2,212
-
-
(2,212)
-
-
11 June
2018
11 June
2018
11 June
2020
11 June
2021
11 June 2022
0.85
998
-
-
(167)
-
831
11 June 2022
0.85
1,319
-
1,319
-
-
1,319
24 January
2019
24 January
2022
24 January
2023
4 November
2019
4
November
2022
3 November
2023
1.09
6,245
-
-
-
(300)
5,945
2.30
1,710
-
-
-
(400)
1,310
13 January
2020
13 January
2023
12 January
2024
1 July 2020
1 July 2023
30 June 2024
2.23
1.83
3,630
-
-
-
1,350
-
-
-
(330)
(50)
3,300
1,300
13 October
2020
27 January
2021
(i)
(ii)
24
September
2021
26 January
2026
27 July 2021
27 July 2025
20 July 2026
-
425
-
-
-
(425)
-
4.38
5.37
-
2,227
-
-
-
1,293
-
-
(327)
(275)
1,900
1,018
225
27 July 2021
27 July 2025
20 July 2026
-
-
225
-
-
-
Total
(i)
(ii)
20,226
3,745
1,319
(4,716)
(2,107)
17,148
Vest on receipt of marketing authorisation.
The options vest on or before their expiry date subject to the achievement of $100 million in cumulative revenue from product
sales, commencing from 1 January 2021.
Telix Pharmaceuticals Annual Report 2021
96
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
28. Share based payments CONTINUED
The assessed fair value of grant options issued in January and July 2021 was $2.12 and $2.62 respectively (January, July and October
2020 was $0.4596, $0.4193 and $1.80 respectively). The fair value at grant date is independently determined using the Black
Scholes Model. The model inputs for options granted during the year ended 31 December 2021 are:
January 2020
July 2020
October 2020
January 2021
July 2021
July 2021
Consideration
Exercise price
Grant date
Expiry date
Term
$NIL
$2.23
$NIL
$1.83
$NIL
$NIL
$NIL
4.38
$NIL
5.37
13-Jan-20
1-Jul-20
13-Oct-20
27-Jan-21
21-Jul-21
12-Jan-24
30-Jun-24
24-Sep-21
(i)
20-Jul-26
4 years
4 years
0.951 year
5 years
5 years
Share price at grant date
Volatility
Dividend yield
Risk-free rate
$1.54
52%
0.00%
0.83%
$1.50
56%
0.00%
0.33%
$1.80
59%
0.00%
0.09%
$4.36
58%
0.00%
0.38%
$5.35
58%
0.00%
0.56%
$NIL
$NIL
21-Jul-21
20-Jul-26
5 years
$5.35
58%
0.00%
0.56%
(i)
The options vest on or before their expiry date subject to the achievement of $100 million in cumulative revenue from
product sales, commencing from 1 January 2021.
29. Commitments
At 31 December 2021, and at the date of this Report, the Group had commitments against existing R&D and clinical development
related contracts. R&D commitments in future years are expected, specifically with relation to manufacturing agreements.
At 31 December 2021
R&D manufacturing commitments
At 31 December 2020
R&D manufacturing commitments
30. Related party transactions
30.1 Key management personnel compensation
Short-term employee benefits
Superannuation entitlements
Share-based payments
Due < 1 year
Due >1 year
$’000
$’000
13,916
13,916
19,457
19,457
2,069
2,069
1,630
1,630
2021
$
2020
$
1,635,286
1,336,067
106,294
303,789
95,223
418,952
2,045,369
1,850,242
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
30. Related party transactions CONTINUED
30.2. Transactions with other related parties
Purchases of various goods and services from entities controlled by key management
personnel(i)
97
2021
$
2020
$
1,997,836
1,390,458
(i)
ABX-CRO is a clinical research organisation (CRO) that specialises in radiopharmaceutical product development. Telix has entered
into a master services agreement with ABX-CRO for the provision of clinical and analytical services for its programs. Non-
Executive Director, Dr Andreas Kluge, is the principal owner and Geschäftsführer (Managing Director) of ABX-CRO. In the year
ended 31 December 2021, the total amount paid and payable to ABX-CRO was $1,512,452 (2020: $1,213,348) and $485,384 (2020:
$177,110) respectively.
30.3 Interests in other entities
The Group’s principal subsidiaries at 31 December 2021 are set out below. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals the
voting rights held by the Group. The country of incorporation or registration is also the principal place of business.
Name of entity
Telix Pharmaceuticals (EST) Pty Ltd Employee Share Trust
Telix International Pty Ltd
Telix Pharmaceuticals (ANZ) Pty Ltd
Telix Pharmaceuticals (US) Inc
Telix Life Sciences (UK) Ltd
Telix Pharmaceuticals (Singapore) Pte Ltd
Telix Pharmaceuticals Holdings (Germany) GmbH
Telix Pharmaceuticals (Germany) GmbH
Therapeia GmbH & Co KG
Telix Pharma Japan KK
Telix Pharmaceuticals (Belgium) SPRL
Telix Pharmaceuticals (France) SAS
Telix Innovations SA (formerly Advanced Nuclear Medicine Ingredients
SA)
Telix Switzerland GmbH
Telix Pharmaceuticals (NZ) Limited
Telix Pharmaceuticals (Canada) Inc.
TheraPharm Deutschland GmbH
Place of business/
country of
incorporation
Ownership interest
held by the Group
Principal activities
Australia
Australia
Australia
USA
England
Singapore
Germany
Germany
Germany
Japan
Belgium
France
Belgium
Switzerland
New Zealand
Canada
Germany
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Employee Share
Trust
Holding company
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Research and
production
Clinical R&D
Clinical R&D
Clinical R&D
Clinical R&D
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
31. Parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated financial
statements. The individual financial statements for the parent entity show the following aggregate amounts:
Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Other reserves
Accumulated losses
Total equity
Loss for the year
2021
$’000
21,573
37,359
58,932
14,694
14,694
44,238
170,840
5,939
(132,541)
44,238
(62,655)
98
2020
$’000
57,049
46,774
103,823
2,031
2,031
101,792
167,058
4,620
(69,886)
101,792
(32,330)
Total comprehensive loss for the year
(62,655)
(32,330)
32. Remuneration of auditor
Auditors of the Group - PwC Australia and related network firms
Audit or review of financial statements
Other advisory services
Other auditors and their related network firms
Audit or review of financial statements
Other advisory services
2021
$
310,080
159,657
469,737
2021
$
63,132
-
63,132
2020
$
322,500
37,000
359,500
2020
$
32,821
-
32,821
Telix Pharmaceuticals Annual Report 2021
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
33. Earnings per share
33.1. Basic earnings per share
Basic loss per share from continuing operations attributable to the ordinary equity holders
of the Company
Total basic loss per share attributable to the ordinary equity holders of the Company
33.2. Diluted earnings per share
Diluted loss per share from continuing operations attributable to the ordinary equity holders
of the Company
Total diluted loss per share attributable to the ordinary equity holders of the Company
33.3. Weighted average number of shares used as the denominator
99
2020
Cents
(17.5)
(17.5)
2020
Cents
(17.5)
(17.5)
2021
Cents
(28.5)
(28.5)
2021
Cents
(28.5)
(28.5)
Weighted average number of ordinary shares used as the denominator in calculating basic
loss per share(i)
2021 Number
2020 Number
’000
’000
282,206
257,271
(i)
The 3,744,848 options granted in 2021 are not included in the calculation of diluted earnings per share because they are
antidilutive for the year ended 31 December 2021. These options could potentially dilute basic earnings per share in the future.
34. Events occurring after the reporting period
On 27 January 2022, 22,047,273 fully paid ordinary shares were issued further to an institutional placement announced on 24 January
2022. On 31 January 2022, 519,481 fully paid ordinary shares were issued, and on 8 February 2022, 160,519 fully paid ordinary shares were
issued for a total number of shares issued under the placement of 22,727,273. Shares were issued at $7.70 per share to raise $175,000,000
before costs of the offer.
A Share Purchase Plan (SPP) was also announced on 24 January 2022, to raise up to $25,000,000 at the same offer price. The closing
date of the SPP has been extended to 25 February 2022 (from 11 February 2022). The extension was effected to ensure that all eligible
shareholders had additional time to participate in the SPP.
Also on 27 January 2022, the Company announced a first patient dosed in Telix’s PSMA-targeting ProstACT therapeutic program, which is
exploring TLX591 in areas of unmet medical need across the full prostate cancer treatment journey, from first recurrence to mCRPC. The
first patient, dosed at Princess Alexandra Hospital in Brisbane, Queensland, was treated as part of the ProstACT SELECT clinical trial, a
Phase I radiogenomics study running concurrently to the pivotal Phase III study, ProstACT GLOBAL.
On 3 February 2022, 400,000 fully paid ordinary shares were issued following the exercise of 400,000 share options. MD and CEO,
Dr Christian Behrenbruch exercised fully vested TLXO004 options with an exercise price of $1.09 each for total consideration paid of
$436,000.
On 7 February 2022, the Company announced a review period extension or “freeze” for its marketing authorisation application (MAA) in
Europe for Illuccix. Telix requested this extension from the Danish Medicines Agency (DKMA) to provide sufficient time to respond to the
remaining Information Requests (IRs) in relation to product manufacturing and pharmaceutical characterisation of Illuccix in compliance
with European Pharmacopeia. The original IR deadlines to meet the 23 March 2022 decision date could not be met due to unexpected
process delays and vendor outages that had arisen from the rapid onset of the “omicron” COVID-19 variant. The issuance of a time
extension of this nature was in line with European Union regulatory guidance that allows holding an application timetable at the same
Telix Pharmaceuticals Annual Report 2021
100
N o t e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s
34. Events occurring after the reporting period CONTINUED
procedure day and freezing further timetable requirements when it is demonstrably not possible for applicants to submit responses
within the original timeframe due to extraneous circumstances, such as the COVID-19 pandemic. Telix confirmed it had until 9 August
2022 to provide responses to the questions arising during the final stages of the regulatory review process which were received
subsequent to the “clock restart” on 9 December 2021.
On 16 February 2022, the Company announced a commercial distribution agreement with Global Medical Solutions Australia (GMSA) for
Illuccix in Australia. The agreement significantly expands patient access to Illuccix, which will now be available to every PET/CT site across
Australia via GSMA, which will distribute Illuccix kits as well as 68Ga-PSMA-11-unit doses from its network of six radiopharmacies across
the country.
Other than the matters referred to above, there were no subsequent events that required adjustment to or disclosure in the Directors’
Report or the Financial Report of the Company for the year ended 31 December 2021.
Telix Pharmaceuticals Annual Report 2021
101
Directors’ declaration
for the year ended 31 December 2021
In the opinion of the Directors:
(a) the financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its performance for the financial
year ended on that date, and
(ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 3.2; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A
of the Corporations Act 2001 for the financial year ended 31 December 2021 by the Chief Executive Officer and Chief Financial Officer
and as recommended under the ASX Corporate Governance Council’s Corporate Governance Principles.
Signed in Melbourne on 24 February 2022.
On behalf of the Board
Kevin McCann AO
Chairman
Christian Behrenbruch
Managing Director and Group CEO
Telix Pharmaceuticals Annual Report 2021 Independent auditor's report
102
Independent auditor’s report
To the members of Telix Pharmaceuticals Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Telix Pharmaceuticals Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
the consolidated statement of financial position as at 31 December 2021
the consolidated statement of comprehensive income or loss for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
Telix Pharmaceuticals Annual Report 2021
Independent auditor's report
103
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
For the purpose of our audit we used overall Group materiality of $3.0 million, which represents
approximately 5% of the Group’s adjusted loss before tax.
We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
We chose Group adjusted loss before tax because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured. We adjusted for the fair value remeasurement of
contingent consideration as this represents a volatile item.
We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
We performed an audit of the financial information of the parent company, Telix Pharmaceuticals Limited,
given its financial significance to the Group. The parent company holds the largest share of the Group’s
total assets and losses.
We also performed further audit procedures at a Group level, including over impairment assessments, fair
valuation of assets and liabilities, and consolidation of the Group’s reporting units.
Where audit work was performed by an auditor operating under our instruction (component auditor), we
determined the level of involvement we needed to have in their audit work to be able to conclude whether
Telix Pharmaceuticals Annual Report 2021 Independent auditor's report
104
sufficient and appropriate audit evidence had been obtained as a basis for our opinion. This included
active dialogue throughout the year through phone calls, discussions and written instructions.
Component auditors performed an audit of Telix Innovation SA (formerly ANMI) given the nature and risk
profile of the entity and its contribution to Group revenue. The responsibility for testing several balances
was retained by PwC Australia as group auditor due to their significance or complexity, including: contract
liabilities, decommissioning liability, accounting for leasing under AASB 16 Leases, share-based payments
and intangible asset impairment assessments.
We performed specific risk focused audit procedures on selected balances and transactions arising within
Telix International Pty Ltd, Telix Pharmaceuticals (US) Inc and Telix Pharmaceuticals (Belgium) SPRL, as
well as the specific out of scope balances for component auditors of Telix Innovation SA. We also
performed analytical procedures over the financial information of all other entities within the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Audit
and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Impairment assessment for goodwill and
intangible assets
(Refer to note 17) $55.7 million
Our audit procedures over the Group’s impairment
assessments of goodwill and intangible assets
included, amongst others:
The Group has recognised $4.1 million of goodwill
and $51.6 million of other intangible assets as at 31
December 2021. These assets are predominately
divided amongst Illuccix ($18.4 million), TLX66 ($16.0
million) TLX 591 ($12.8 million), TLX101 ($1.4 million)
and Seneffe manufacturing facility license ($6.8
million) cash generating units (CGUs).
In accordance with Australian Auditing Standards, the
Group is required to test goodwill and indefinite lived
intangible assets for impairment annually and
consider definite lived intangibles for impairment
indicators.
We considered the impairment assessment of
goodwill and intangible assets to be a key audit
matter due to:
- the financial significance of the balances
- evaluating the existence of impairment indicators for
definite lived intangible assets by considering both
financial performance and product developments
during the year
- evaluating the appropriateness of the discounted
cash flow models used to estimate recoverable
amount (the impairment models) in light of the
requirements of Australian Accounting Standards
- assessing the mathematical accuracy of key
formulas in the impairment models
- comparing key assumptions used within the
impairment models to Board approved budgets and
other evidence obtained throughout the course of the
audit
Telix Pharmaceuticals Annual Report 2021 Independent auditor's report
105
Key audit matter
How our audit addressed the key audit matter
- the judgement exercised by the Group in calculating
the recoverable amount of each CGU, including
estimating the regulatory/marketing authorisation
dates, expected sales volumes, net sales price per
unit and approval for marketing authorisation
probability of success factor (key inputs and
assumptions)
- the judgement exercised by the Group in calculating
and applying a discount rate to the impairment
models.
Research and development tax incentive
(Refer to note 10) $18.6 million
The Group assessed research and development
(R&D) activities, related expenditure and qualifying
criteria to determine its eligibility under an Australian
Government tax incentive programme for a
refundable tax offset. The R&D tax incentive income
recognised in the consolidated statement of
comprehensive income or loss was $18.6 million and
the R&D tax incentive receivable as at 31 December
2021 was $18.7 million.
The Group makes a number of judgements and
estimates in determining the eligibility of claimable
expenses, including the eligibility of employee costs.
The Group was assisted by an expert on the review of
- for Illuccix, TLX66, TLX 591 and TLX101, comparing
actual performance of the CGUs to the Group’s prior
year forecasts to assess budgeting accuracy
- comparing the key inputs and assumptions
underpinning the impairment models to available
external market and industry data
- with the assistance of PwC valuation experts,
assessed whether the discount rates used in the
models were appropriate by comparing them to
market data, comparable companies and industry
research
- assessing the Group’s sensitivity analysis over key
assumptions in the impairment models in order to
assess the potential impact of a range possible
outcomes
- comparing the valuation of goodwill and intangible
assets as per the Group’s impairment models to
external data sources including broker report
valuations
- considering the reasonableness of associated
disclosures in the financial report in light of the
requirements of the Australian Accounting Standards.
Our audit procedures to assess the Group’s estimate
of the R&D tax incentive receivable as at 31
December 2021 and income recognised in the
consolidated statement of comprehensive income or
loss included, amongst others:
- assessing the eligibility of the Group to qualify for
the refundable tax offset under the Australian
Government’s R&D tax incentive programme
- assessing the nature of a sample of expenses and
the Group’s assumptions on the eligibility of employee
costs against the eligibility criteria of the R&D tax
incentive programme
- comparing the prior year receivable recorded in the
financial statements at 31 December 2020 to the
Telix Pharmaceuticals Annual Report 2021 Independent auditor's report
106
Key audit matter
How our audit addressed the key audit matter
the eligibility of expenses underlying the Group’s
claim and with the lodgement of the R&D refund
application.
This is a key audit matter due to:
- the financial significance of the amount recognised
as income during the year and the amount receivable
as at 31 December 2021
amount of cash received from the Australian Tax
Office (ATO) after lodgement of the 2020 R&D tax
incentive claim to assess historical accuracy of the
Group’s estimate
- testing a sample of eligible expenditure in the
Group’s calculation of the R&D tax incentive
receivable to the general ledger or other underlying
accounting records
- the degree of judgement and interpretation of the
R&D tax incentive legislation required by the Group to
assess the eligibility of the incurred R&D expenditures
under the programme.
- obtaining copies of correspondence between the
Group and their expert and agreeing the advice to the
R&D tax incentive calculation
Valuation of contingent consideration
(Refer to note 21) $41.9 million
- assessing the classification of the R&D tax incentive
in the financial statements in light of the requirements
of Australian Accounting Standards.
Our audit procedures to assess the Group’s valuation
of contingent consideration as 31 December 2021
included, amongst others:
The Group values the contingent consideration that
arose as part of the acquisition of Telix Innovation SA
(formerly ANMI) and TheraPharm at each balance
sheet date.
- evaluating the Group’s valuation methodology
against the requirements of Australian Accounting
Standards
The initial measurement of the contingent
consideration was performed at the acquisition date.
The Group have remeasured both liabilities to reflect
post-acquisition changes in circumstances and
assumptions in the valuation as at 31 December
2021.
- assessing the mathematical accuracy of the
valuation calculation
- comparing the key inputs and assumptions
underpinning the valuation to available external
market and industry data
This is a key audit matter due to:
- the financial significance of the contingent
consideration liability
- complexities and judgement required by the Group
to determine the valuation of the liability including
marketing authorisation dates, expected sales
volumes, net sales prices per unit and approval for
marketing authorisation probability of success factors
(key inputs and assumptions)
- assessing the Group’s sensitivity analysis over key
inputs and assumptions in order to assess the
potential impact of a range possible outcomes
- with the assistance of PwC valuation experts,
assessed whether the discount rates used in the
models were appropriate by comparing them to
market data, comparable companies and industry
research
Telix Pharmaceuticals Annual Report 2021 Independent auditor's report
107
Key audit matter
How our audit addressed the key audit matter
- the judgement exercised by the Group in calculating
and applying a discount rate to the cash flow model
used to calculate the valuation of the contingent
consideration liability.
- considering the reasonableness of associated
disclosures in the financial report in light of the
requirements of the Australian Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2021, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
Telix Pharmaceuticals Annual Report 2021 Independent auditor's report
108
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 45 to 57 of the directors’ report for
the year ended 31 December 2021.
In our opinion, the remuneration report of Telix Pharmaceuticals Limited for the year ended 31
December 2021 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Brad Peake
Partner
Melbourne
24 February 2022
Telix Pharmaceuticals Annual Report 2021 109
Shareholder information
Telix Pharmaceuticals Limited ACN 616 620 369
Registered Office
Suite 401, 55 Flemington Road
North Melbourne, VIC 3051
www.telixpharma.com
Share Registry
Shareholder information in relation to shareholding or share transfer can be obtained
by contacting the Company’s share registry:
Link Market Services
Locked Bag A14
Sydney South NSW 1235
Tel: 1300 554 474
Fax: (02) 9287 0303
Email: registrars@linkmarketservices.com.au
www.linkmarketservices.com.au
For all correspondence to the share registry, please provide your Security-holder Reference Number (SRN) or Holder Identification
Number (HIN).
Change of address
Changes to your address can be updated online at www.linkmarketservices.com.au or by obtaining a Change of Address Form from
the Company’s share registry. CHESS sponsored investors must change their address details via their broker.
Annual General Meeting
The Annual General Meeting is anticipated to be held at 11.00am, Wednesday 18 May 2022 at The Events Centre, Collins Square 727
Collins Street, Melbourne VIC 3008.
Annual report mailing list
All shareholders are entitled to receive the Annual Report. In addition, shareholders may nominate not to receive an annual report by
advising the share registry in writing, by fax, or by email, quoting their SRN/HIN.
Securities exchange listing
Telix Pharmaceuticals’ shares are listed on the Australian Securities Exchange and trade under the ASX code TLX. The securities of the
Company are traded on the ASX under CHESS (Clearing House Electronic Sub-register System).
ASX shareholder disclosures
The following additional information is required by the Australian Securities Exchange in respect of listed public companies.
The information is current as at 8 February 2022.
Total securities on issue
Fully paid ordinary shares
Options and Warrants to acquire shares
Total
Securities (Listed)
Securities (Unlisted)
308,200,181
-
308,200,181
–
17,529,373
17,529,373
Telix Pharmaceuticals Annual Report 2021 Shareholder information
Distribution of equity securities – ordinary shares
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
Voting rights
Securities
263,985,910
30,662,658
6,384,045
5,993,656
1,173,912
308,200,181
-
%
85.65
9.95
2.07
1.94
0.38
100.00
-
No. of holders
177
1,060
831
2,268
2,685
7,021
-
110
%
2.52
15.10
11.84
32.30
38.24
100.00
-
Shareholders in Telix Pharmaceuticals Limited have a right to attend and vote at general meetings. At a general meeting, individual
shareholders may vote in person or by proxy. On a show of hands every member present in person or by proxy shall have one vote.
Upon a poll each share shall have one vote. All quoted and unquoted share options, and convertible notes, have no voting rights. A
copy of the Constitution is available at https://telixpharma.com/investors/#corporate-governance.
Substantial shareholder
Elk River Holdings Pty Ltd as trustee for The Behrenbruch Family Trust and
C Behrenbruch
Gnosis Verwaltungsgesellschaft m.b.H
Grand Decade Developments Limited
Securities
23,075,000
22,675,000
20,947,181
%
7.49%
7.36%
6.80%
Share buy-back
There is no current or planned buy-back of the Company’s shares.
Statement in accordance with ASX Listing Rule 4.10.19
The Company confirms that it has used the cash and assets in a form readily convertible to cash at the time of admission in a way
consistent with its business objectives.
Telix Pharmaceuticals Annual Report 2021 111
Shareholder information
Twenty largest shareholders - ordinary shares
Rank
1
2
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
41,027,846
13.31
Name
8 February
2022
%IC
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
ELK RIVER HOLDINGS PTY LTD
GNOSIS VERWALTUNGSGESELLSCHAFTM B H
GRAND DECADE DEVELOPMENTS LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
UV-CAP GMBH & CO KG
THE ONCIDIUM FOUNDATION
SCINTEC DIAGNOSTICS GMBH
UBS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
BNP PARIBAS NOMS PTY LTD
MAN HOLDINGS PTY LTD
YELWAC PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
NETWEALTH INVESTMENTS LIMITED
PACIFIC CUSTODIANS PTY LIMITED
JEAN-MARC LE DOUSSAL
BNP PARIBAS NOMINEES PTY LTD
25,203,406
22,675,000
22,675,000
20,947,181
14,637,434
9,925,410
7,775,000
6,398,550
4,312,151
4,305,063
3,843,512
3,630,279
3,268,729
3,228,750
2,381,804
2,334,746
2,184,202
2,115,000
2,010,000
1,955,863
Total
206,835,227
Balance of register
101,364,954
8.18
7.36
7.36
6.80
4.75
3.22
2.52
2.08
1.40
1.40
1.25
1.18
1.06
1.05
0.77
0.76
0.71
0.69
0.65
0.63
67.11
32.89
Grand total
308,200,181
100.00
Twenty largest shareholders - quoted share options
No share options are quoted.
Holders of greater than 20% unquoted securities
No shareholder owns greater than 20% or more of unquoted equity securities (by class) of the Company.
Telix Pharmaceuticals Annual Report 2021 112
Corporate directory
Directors
Australian Business Number
H Kevin McCann AO (Chairman)
Christian Behrenbruch PhD
Oliver Buck
Andreas Kluge MD PhD
Mark Nelson PhD
Jann Skinner
Company Secretary
Melanie Farris
Registered Office
Telix Pharmaceuticals Limited
401/ 55 Flemington Road
North Melbourne VIC 3051
info@telixpharma.com
www.telixpharma.com
85 616 620 369
Securities Exchange Listing
Australian Securities Exchange
ASX Code: TLX
Auditor
PricewaterhouseCoopers
2 Riverside Quay
Southbank VIC 3006
Share Registry
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Australia
P: 1300 554 474
F: (02) 9287 0303
W: www.linkmarketservices.com.au
Telix Pharmaceuticals Annual Report 2021 113
Telix Pharmaceuticals Annual Report 2021 114
Telix Pharmaceuticals Annual Report 2021