55 Flemington Road
North Melbourne, Victoria, 3051, Australia
telixpharma.com
Telix Pharmaceuticals Limited
ACN 616 620 369
27 February 2023
ASX Market Announcements Office
Australian Securities Exchange
20 Bridge Street
Sydney NSW 2000
Telix Pharmaceuticals Limited (TLX) Appendix 4E and 2022 Annual Report
Telix Pharmaceuticals Limited announces to the market its financial results for the year ended 31 December
2022.
The following documents are attached:
• Appendix 4E – Final Report given under Listing Rule 4.3A; and
•
Telix 2022 Annual Report including its Financial report and Corporate governance statement, for the
year ended 31 December 2022.
Yours faithfully
Genevieve Ryan
Company Secretary
This announcement has been authorised for release by the Board of Telix Pharmaceuticals Limited.
Page 1
TE LIX P HA RMA CE U T ICA LS
AP PE NDIX 4E
Appendix 4E
Financial year ended
31 December 2022
Results announcement to the market
Current Reporting Period:
Previous Reporting Period:
year ended 31 December 2022
year ended 31 December 2021
This page and the following pages comprise the year end information given to the ASX under Listing Rule 4.3A.
The results are prepared in accordance with IFRS and are presented in AUD.
Revenue and net profit / (loss)
2022 result
Change
Change
Change
2021 result
$'000
160,096
(104,079)
(103,488)
Up
Up
Up
$'000
%
152,500
2008%
$'000
7,596
(23,569)
29%
(80,510)
(21,526)
26%
(81,962)
Revenue from contracts with customers
Loss after income tax for the year
attributable to members
Total comprehensive loss for the year
attributable to members
Dividends
No dividend was proposed or paid. The Company is not yet profitable and therefore there can be no assurance that the
Company will become profitable or will pay dividends in the near future. Should any dividends be paid in the future, no
assurances can be given as to the level of franking credits attaching to such dividends.
Loss per share
Net tangible assets per share
Dividend per share
1. Restated to remove the impact of right-of-use assets (0.8 cents)
2022
Cents
(33.5)
3.3
-
2021
Cents
(28.5)
(19.8)1
-
1
TE LIX P HA RMA CE U T ICA LS
AP PE NDIX 4E
Brief explanation of results
Telix launched its first commercial product for prostate cancer imaging, Illuccix, in 2022. The Company generated total
revenue of $160,096,000 (2021: $7,596,000). The Company recorded an operating loss for the year of $104,079,000 (2021:
$80,510,000). Operating expenditure (including income tax expense) in the year totalled $264,175,000 (2021: $88,106,000).
Included within operating expenditure was $79,756,000 (2021: $48,323,000) related to R&D activities for the Company’s
assets and development programs.
For further commentary on the Company’s results and other information required by Listing Rule 4.3A, please refer to the
investor releases and Company’s 2022 Annual Report, including the Operating and financial review and Financial report
lodged with the ASX today.
Statement of accumulated losses
Statement of accumulated losses
Balance at the beginning of the year
Total comprehensive loss for the year
Transfer on exercise of options
Balance at end of the year
Audit report
2022
$'000
2021
$'000
(173,471)
(92,961)
(104,079)
(80,510)
4,735
-
(272,815)
(173,471)
This Appendix 4E (Final Report) is based on the audited Financial report for the year ended 31 December 2022 which
are attached.
The Appendix 4E and Annual report have been approved for release by the Board of Directors.
Genevieve Ryan
Company Secretary
27 February 2023
2
3TELIX PHARMACEUTICALS2022 ANNUAL REPORTTelix Pharmaceuticals 2022 Annual ReportTELIX PHARMACEUTICALS LIMITED2022 ANNUAL REPORT TELIX PHARMACEUTICALS2022 ANNUAL REPORTLegal notice. This report is intended for global use.This 2022 Annual Report is a summary of Telix’s operations and activities for the year ended 31 December 2022 and its financial position as at 31 December 2022.This report covers Telix’s global operations, including subsidiaries, unless otherwise noted. A reference to Telix, Telix Group, we, us and our and similar expressions refer collectively to Telix Pharmaceuticals Limited and its related bodies corporate. Telix products are currently investigational use only unless indicated and are subject to future regulatory developments and product approvals. Except for Illuccix® (Ga-68 gozetotide injection), none of the other products have received a marketing authorisation in any jurisdiction. Registrations vary country to country. Some statements about products, registered product indications or procedures may differ in certain countries. Therefore, always consult the country-specific product information, package leaflets or instructions for use. Any content relating to third party products is based on publicly available data and is accurate at the date of presentation. ©2023 Telix Pharmaceuticals Limited. The Telix Pharmaceuticals and Illuccix name and logo are trademarks of Telix Pharmaceuticals Limited and its affiliates (all rights reserved). Brand names designated by a R or a ™ throughout this report are trademarks either owned by and/or licensed to Telix or its affiliates. Not all brands are used or registered as trade marks in all countries served by Telix. Forward-looking statementsThis report contains forward-looking statements including statements with respect to future company compliance and performance. While these forward-looking statements reflect Telix’s expectations at the date of this report, they are not guarantees or predictions of future performance or statements of fact. These statements involve known and unknown risks and uncertainties. Many factors could cause the Group’s actual results, performance or achievements to differ, possibly materially, from those expressed in the forward-looking statements. These factors include changes in government and policy; actions of regulatory bodies and other governmental authorities such as changes in taxation or regulation (or approvals under regulation); the effect of economic conditions; technological developments; advances in environmental protection policies or processes; and uncertainty and disruption caused by the COVID-19 pandemic and geo-political developments. There are also limitations with respect to scenario analysis, and it is difficult to predict which, if any, of the scenarios might eventuate. Scenario analysis is not an indication of probable outcomes and relies on assumptions that may or may not prove to be correct or eventuate. Readers should read this report together with our material risks, as disclosed in our most recently filed reports with the ASX and on our website.Readers are cautioned not to place undue reliance on forward-looking statements. Except as required by applicable laws or regulations, Telix does not undertake to publicly update or review any forward-looking statements. Past performance cannot be relied on as a guide to future performance.Non-IFRSReferences to AASB refer to the Australian Accounting Standards Board and IFRS refers to the International Financial Reporting Standards. There are references to IFRS and non-IFRS financial information in this report. Non-IFRS financial measures are financial measures other than those defined or specified under any relevant accounting standard and may not be directly comparable with other companies’ information. Non-IFRS financial measures are used to enhance the comparability of information between reporting periods, and enable further insight and a different perspective into the financial performance. Non-IFRS financial information should be considered in addition to, and is not intended to be a substitute for, IFRS financial information and measures. Non-IFRS financial measures are not subject to audit or review.Telix Pharmaceuticals Limited ABN 85 616 620 369 Contents
Our company
Chairman's and CEO's messages
Our technology
Our portfolio
Operating and financial review
Global leadership team
Environmental, Social, Governance and Sustainability
(ESGS) report
Corporate governance statement
Directors’ report
Auditor's independence declaration
Financial report
Shareholder information
Glossary
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10
11
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39
45
53
63
92
93
153
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2TELIX PHARMACEUTICALS2022 ANNUAL REPORTTELIX PHARMACEUTICALS2022 ANNUAL REPORT2Telix’s targeted radiation imaging and therapy technologies have potential to transform the way clinicians can find and manage cancer and rare diseases, to inform treatment decisions and deliver personalised therapy in areas of major unmet medical need globally. Telix launched its first commercial product for prostate cancer imaging, Illuccix®, in 2022. The Company is now building the foundations for long-term sustainable growth to unlock the value in our world-leading, late-stage theranostic (therapeutic and diagnostic) pipeline.With more than 20 clinical studies underway worldwide (including partnered investigator-led studies), Telix’s core pipeline aims to address significant unmet medical needs in prostate, kidney (renal), brain, and blood cancers as well as a range of hard to treat immunologic and rare diseases. Telix also has a growing research pipeline focused on novel targets and technologies.Telix is listed on the Australian Securities Exchange (ASX: TLX) and headquartered in Melbourne, Australia, with international operations in Belgium, Japan, Switzerland, and the United States (U.S.). Our new manufacturing facility in Belgium will become operational in 2023. We expect this to deliver significant flexibility and reliable supply for our growing commercial production requirements.Our companyTelix is changing the way cancer and rare diseases are managed 3• Illuccix® for prostate cancer imaging approved in Australia, Canada and the U.S.• Regulatory filings in preparation for kidney cancer and glioma (brain cancer) imaging agents• World-leading distribution and supply partners• Delivering patient-doses globally• In-house manufacturing and radiochemistry development• Four core disease areas• Imaging and therapy assets• More than 20 active clinical studies across eight indications• 234 employees globally• Headquartered in Melbourne, Australia• Regional offices in Belgium, Japan, Switzerland and the U.S.• Commercial revenue funding R&DLiège and BrusselsBelgiumREGIONAL OFFICE AND MANUFACTURING/R&DKyotoJapanREGIONAL OFFICEMelbourneAustraliaCORPORATE HEAD OFFICEIndianapolisUnited StatesREGIONAL OFFICESacramentoUnited StatesMANUFACTURING/R&DGenevaSwitzerlandCOMMERCIAL HUBSydney AustraliaREGIONAL OFFICEBrisbaneAustraliaREGIONAL OFFICECommercial stage imaging portfolioAdvanced supply chain & manufacturingIndustry leading theranostic pipelineA global business3TELIX PHARMACEUTICALS2022 ANNUAL REPORTA global leader in radiopharmaceuticalsTheranostics for oncology and rare diseases 4
TELIX PHARMACEUTICALS2022 ANNUAL REPORTOur purpose, mission and valuesEveryone at Telix is united by a common purpose and commitment to shared values. Our purpose, mission and values reflect our patient centric focus, the innovative approach we apply across our business and our ongoing commitment to quality, integrity and achievement.TELIX PHARMACEUTICALS2022 ANNUAL REPORT 5
62022: A transformational yearOur financial year 2022 results reflect our transition to a commercial revenue-generating company, to enable a financially sustainable business. Larry’s story*The first commercial dose of Illuccix®Financial highlights20x$149.7M$160.1MTotal group revenue upRevenue from U.S. sales of Illuccix® in the first nine months1$116.3Mclosing cash balancetoTELIX PHARMACEUTICALS2022 ANNUAL REPORTLawrence (Larry) Doone is 72 years old and a retired railroad worker. Larry took a routine PSA (prostate-specific antigen) test, which returned a higher than normal result. After talking with his doctor, Larry had his prostate gland surgically removed.When his PSA level began to rise only a few weeks after surgery, indicating that not all of the cancer had been cut out, his surgeon Dr Clint Bahler at the Indiana University School of Medicine recommended he get a new type of scan – a gallium-68 PSMA-PET scan2 – that might show where the cancer was hidden. On the morning of 14 April 2022, Larry became the first American patient to be scanned with Illuccix after FDA3 approval.Later that same evening, Dr Bahler called Larry at home with the results. The test found one cancerous lymph node. Based on the information in the scan, Dr Bahler was able to recommend targeted radiation treatment, rather than the trauma of additional surgery or broad external radiation.With his prostate cancer now under control, Larry is back to enjoying his retirement, spending time with his wife Sharon, hopeful that his experience will raise awareness of this new imaging approach and help other men living with prostate cancer to manage their disease.To watch Larry’s full story:“They always tell you, and believe sincerely that they’ve got it all. But you never know until you go back and follow up. I’m excited to have pioneered this scan that is now helping men with prostate cancer across the United States to find that bad spot in them that needs acting on.”1. Revenue for nine months from commercial launch on 14 April 2022.2. Imaging of prostate-specific membrane antigen with positron emission tomography.3. United States Food and Drug Administration.*Used with permission.Our patient impactU.S., Australia & New ZealandPhase III kidney cancer imaging study completion and highly positive top-line data Illuccix commercial doses delivered to patients in theFirst patients dosed in:prostate cancer therapy studiesGlioblastoma therapy study final results demonstrate promising early efficacy data kidney cancer immunotherapy studies TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Chairman’s message
Dear Shareholders,
November 2022 marked the five-year anniversary of Telix’s listing on the Australian Securities Exchange (ASX), an
occasion that gave me cause to reflect upon the Company’s remarkable journey and impact so far.
Another year of rapid growth
Since listing on the ASX, the company has grown from just nine employees in Melbourne, to a thriving global, commercial
business with 234 employees worldwide. Telix has secured regulatory approvals in the United States (U.S.), Australia
and Canada for its prostate cancer imaging agent, Illuccix, and scaled up the business and manufacturing to support a
successful commercial launch.
We delivered a highly successful outcome for global Phase III study ZIRCON of TLX250-CDx, our investigational kidney
cancer imaging agent and follow-on product for the urology field. The clinical pipeline and research pipeline has also
expanded considerably through acquisitions, partnerships and the expertise and effort of the team.
Aside from the usual challenges of leading a start-up, Telix has achieved all this despite a global pandemic, geopolitical
unrest, supply chain challenges and economic and market uncertainty.
In 2022, Telix earned the accolade of being one of the few Australian biotechnology companies which has made the
transition from a start-up to a commercial revenue-generating company.
What I’m most proud of is the real-life impact Telix is having on patients around the world. In 2022, more than
50,000 people have received a Telix product – either through commercial programs, one of our clinical studies or via
a compassionate use program.
A clear future vision
Our mission does not stop here. In 2023 Telix will embark on the next stage of our global growth strategy with the aim
of having multiple commercial products, delivering on clinical milestones in our therapeutic programs and continuing to
advance the field of radiopharmaceuticals through our research and innovation program.
In 2023, we expect to see our manufacturing capability expanded considerably as our radioisotope production facility
in Brussels South is completed and commences operations. This combination of commercial products and revenue, an
advanced therapeutic pipeline, and in-house production will ensure that Telix maintains its leadership position in the
global radiopharmaceutical industry – a sector that garners increasing interest from the international investment and
pharmaceutical industries.
The Company has a clear vision for the future and the capital raise of $175.0M in January 2022 has provided the funding
to implement the organisational infrastructure to deliver on the priority, late-stage therapeutic and imaging programs in
the pipeline.
The strengthened balance sheet has also been a source of security in a volatile investment market. The Company’s
commitment to fiscal responsibility is evident. It achieved cash flow positive status in the December 2022 quarter and
improved working capital to provide optionality to fund priority pipeline products.
6
TELIX PHARMACEUTICALSANNUAL REPORT 2022“What I’m most proud of is the real-life impact Telix is having on patients around the world. In 2022, more than 50,000 people have received a Telix product – either through commercial programs, one of our clinical studies or via a compassionate use program.” TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
The Board appreciated the opportunity, in 2022, to visit our U.S. headquarters in Indianapolis and our European
headquarters in Brussels. These visits enabled us to meet and engage with staff in their offices, assess the culture
in Telix and to see our purpose at work.
In line with the transition to a commercial stage business, the executive leadership team and Board has been refreshed
with new appointments throughout the year as part of the Company’s ongoing succession planning to ensure the skills and
experience is commensurate with Telix’s growth and future focus.
At Board level, I am pleased to have welcomed Tiffany Olson, our U.S.-based Non-Executive Director, who brings a wealth
of global radiopharmaceutical sector experience to complement the diverse skills and experience of our Board.
I also acknowledge the contribution of Oliver Buck, a foundation Director and shareholder of Telix, who retired from the
Board in May 2022. We benefitted from his experience in radiopharmaceuticals.
Governance priorities
As a values-driven organisation, we continue to evolve our approach and commitment to embedding our Environmental,
Social, Governance and Sustainability (ESGS) priorities within our strategy and operations. The actions we have taken and
our policies are set out in more detail in our ESGS report.
Conclusion
On behalf of the Board I would like to thank the CEO, the management team and all our employees across the world, for
their personal commitment and contributions to the success of Telix in this very important year.
Our diligent and hardworking Board members have also contributed to our achievements in 2022.
I would also like to thank our shareholders for their ongoing support in 2022, which has been an important contribution to
our success.
I look forward to the Company’s global impact and influence growing, as we continue to pursue our purpose of helping
patients with cancer and rare diseases live longer, better quality lives.
Yours faithfully,
H Kevin McCann AO
Independent Non-Executive Chairman
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TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
CEO’s message
Dear Shareholders,
2022 has been another significant year for Telix. We launched Illuccix, our first commercial product, with great success,
enabling us to invest our earnings to fund the late-stage programs in our pipeline, while transitioning to cash flow positive.
We also completed and reported positive results from our first Phase III clinical trial for TLX250-CDx, our kidney (renal)
cancer imaging agent. As we work towards the regulatory submissions for this product and our brain cancer imaging
agent for glioma (TLX101-CDx) there is a higher likelihood that we will have two additional commercial products in market
in 2024.
We have also made important advances across our therapeutic programs in prostate and kidney cancer and glioblastoma.
We are dosing patients in our prostate cancer therapy trials – ProstACT SELECT and TARGET – and scaled up our
manufacturing capability in preparation to commence the ProstACT GLOBAL Phase III study across international sites
in 2023.
We delivered highly positive final data from the IPAX-1 study of our investigational therapy for glioblastoma and have
transitioned this program into an earlier line setting, in the IPAX-2 study. We continue to collaborate with investigators
at the Kepler University Hospital in the IPAX-Linz study, to address the unmet need in this debilitating disease. We have
continued to expand TLX250 for renal cancer, dosing patients in the STARLITE-2 study, an important investigator-initiated
trial exploring this product in combination with immunotherapy.
Executing our growth strategy
Our achievements this year have demonstrated that Telix can effectively identify, develop and commercialise assets,
deliver complex global Phase III studies and scale-up a business. This has all been achieved in just seven years – including
five listed on the ASX.
Importantly, we have demonstrated our resilience in executing on our strategy despite challenging market conditions,
including the unprecedented global pandemic. Herein lies the opportunity: 2023 is shaping up to be our biggest and most
important year yet. This year we have outlined three key focus areas, which build on the goals we set out to achieve – and
delivered against – last year.
• Continue to grow commercial revenues from Illuccix sales: The rapid uptake of PSMA-PET imaging in the U.S.
illustrates the demand and potential for targeted radiopharmaceutical imaging agents. Telix has punched above its
weight as the second commercial entrant to PSMA-PET imaging in the U.S. market, generating US$100.4M ($149.7M) in
revenue from U.S. sales of Illuccix in the first nine months since launch. We have built an exceptional commercial team
and established supply, manufacturing and distribution channels with the ability to service 90% of the U.S. PET imaging
market. The estimated US$1B market for PSMA-PET imaging is evolving rapidly, and there is potential for the overall
addressable market to grow as physicians become more accustomed to using this tool and expanding clinical utility.
In 2023 we will re-file our marketing authorisation application in Europe and pursue commercial growth in our current
markets of Australia, New Zealand and Canada. We also anticipate regulatory approval decisions in Brazil and South
Korea and will progress development for the Chinese and Japanese markets.
8
2TELIX PHARMACEUTICALS2022 ANNUAL REPORT“Our achievements this year have demonstrated that Telix can effectively identify, develop and commercialise assets, deliver complex global Phase III studies and scale-up a business. This has all been achieved in just seven years – including five listed on the ASX.” TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
• Advance two diagnostic imaging agents towards regulatory filing: With the positive readout of the Phase III ZIRCON
study, we are now focused on preparation for the Biologics License Application (BLA) with the goal of gaining
approval and being ready to launch commercially in 2024, initially in the U.S. TLX250-CDx is the perfect follow-on
product to Illuccix and builds on the strong engagement we have established in the urology field. It allows us to
leverage the commercial infrastructure Telix has built to service this market. There is a great deal of anticipation
for this product given the high unmet need in the diagnosis of clear cell renal cell carcinoma (ccRCC), where there
currently is no reliable imaging method to characterise small renal masses, nor are there currently any – besides
ours – in development. We are also evaluating and preparing to file a New Drug Application (NDA) in the U.S. for our
investigational brain cancer imaging agent, TLX101-CDx. Although used widely in Europe on a magisterial basis, there
is currently no such pathway or commercial supply in the U.S. It is estimated that more than 13,000 Americans were
diagnosed with glioblastoma in 2022.1 We have an opportunity to help these patients and demonstrate commercial
leadership in this market.
• Advancing our therapeutic programs, including the prostate cancer therapy program: By advancing our therapies
we can deliver the most meaningful impact to patients and unlock further value in the Company as we deliver
against clinical milestones. In 2023 we expect several important milestones for the ProstACT program investigating
the prostate cancer therapy candidate, TLX591. This year, a considerable effort went towards the scale-up of
manufacturing to support a global Phase III trial. Given the lead-times and complexity of antibody manufacturing this is
an important development and paves the way for the finalisation of regulatory submissions to commence the trial and
enrol patients in the U.S. and Europe. In the background, patient dosing in the ProstACT SELECT and ProstACT TARGET
studies of TLX591 has been progressing and we expect to report clinical data from the SELECT study in 2023. In 2023
we expect to make progress on clinical trials across our other core indications which will reinforce our positioning as a
therapeutic company.
Investment in M&A, partnerships and innovation
We have continued to strengthen our business through mergers and acquisitions (M&A), partnerships and innovation.
Over the past year, we established much of the organisational infrastructure to support our commercial operations
and clinical programs. As one of few global companies solely dedicated to the development and commercialisation of
radiopharmaceuticals, our specialist capabilities in manufacturing and research and development (R&D) will be further
enhanced in 2023 as our radioisotope manufacturing facility in Brussels South is commissioned and we leverage the
dose manufacturing and radiochemistry development capabilities within Telix Optimal Tracers, which we acquired during
the year. The depth of development expertise combined with our production capability further differentiates us and
strengthens our position in this fast-growing field.
We finished the year with a healthy cash balance of $116.3M and became cash flow positive in the fourth quarter,
demonstrating our continued stewardship of financial resources while continuing to invest in high value, priority programs.
Delivering on our promise
We are now helping thousands of patients around the world. Our ability to help impact the lives of people living with
cancer is increasing every day, through our commercial products, clinical trials and compassionate use programs. This
impact is where our people and our shareholders can be incredibly proud.
Yours faithfully,
Dr Christian Behrenbruch
Managing Director and Group CEO
1. National Brain Tumor Society (U.S.).
9
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52022 ANNUAL REPORTOur technologyTelix is developing targeted radiation across the continuum from diagnosis and staging to treatment, both as stand-alone and combination therapies. Many existing cancer therapies are non-selective, impacting healthy tissue and vital organs at the same time as treating disease. Existing external beam radiation therapy (EBRT) approaches are effective but typically only deliver localised treatment and also cause damage to surrounding tissue. Localised therapeutic approaches rely on the treating physician making assumptions about the extent of disease but missing even small amounts of surviving cells can lead to the cancer or disease recurring over time. Telix’s technology delivers molecularly targeted radiation to cancer cells with precision, regardless of where the cancer is in the body. It is intended that imaging and therapy are used together to “see and treat”. Referred to as “theranostic” - a combination of the terms therapeutic and diagnostic - this approach is a powerful new way to tackle unmet need in cancer and rare diseases.How does targeted radiation work?1. Targeted radiation drug2. Intravenous injection3. Targeted delivery4. See it. Treat it.A radioactive isotope (“payload”) is attached to a targeting agent such as a small molecule or antibody, which has an affinity for unique biomarkers found on the surface of cancerous or diseased cells.Depending on the payload, either imaging or therapy can be delivered.The targeted radiation drug is administered into the bloodstream and circulates throughout the body.Targeted radiation seeks out cancerous or diseased cells wherever they are, including small metastases (where the cancer has spread) and binds selectively to its target.This is different from traditional radiation therapy, which is typically only delivered to a local tumour site.Some radioisotopes have physical properties that may be used to image cancer or rare diseases, for diagnosis and staging purposes.Higher dose radiation with alpha- and beta-emitting radioisotopes can potentially be used as therapies to kill cancerous or diseased cells. Our point of difference: harnessing the power of targeted radiation throughout the patient journey Our goal is to integrate with traditional medical oncology, the standard of care, to deliver potentially more targeted and personalised therapy, and patient-friendly dosing regimens. This reflects the modern team-based approach to managing cancer and rare diseases. TELIX PHARMACEUTICALS2022 ANNUAL REPORT TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
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TELIX PHARMACEUTICALS2022 ANNUAL REPORTOur portfolioTelix has over 20 clinical studies currently underway worldwide across a range of diseases. Some of these studies are funded directly by Telix, others are funded in collaboration with leading cancer centres and commercial partners. Together this extensive investment puts Telix at the forefront of global innovation in theranostic drug development.1121. Run in collaboration with Grand Pharma.2. Registry study.Note: Dx = diagnostic; Tx = therapeutic. 12
21Prostate cancer and PSMA programOur focus on patients and innovation has created the most clinically advanced antibody-based PSMA therapy program in development globally. This exciting development in an area of high unmet medical need has generated significant interest among clinicians and medical professionals. Our goal is to unlock the full potential of PSMA targeted therapies to help treat the 1.4 million men worldwide who are diagnosed with prostate cancer every year. Telix’s prostate cancer portfolio targets PSMA, a protein expressed on the surface of prostate cancer cells, which is low or absent on most normal healthy cells. PSMA has become a major breakthrough in prostate cancer diagnosis and the growing field of nuclear medicine. High rates of screening in developed countries mean most men are diagnosed and treated early before their disease has spread. 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. Imaging with targeted radiation can identify prostate cancer wherever it is in the body and help guide patient treatment. Our aim is to support patients across the full spectrum of prostate cancer.ImagingTherapy• Illuccix (TLX591-CDx, 68Ga-PSMA-11), preparation for imaging prostate cancer with positron emission tomography (PET) (now approved in the U.S., Australia, and Canada). The cold kit format of TLX591-CDx enables rapid radiolabelling at room temperature with high radiochemical purity and production consistency, suited to the commercial and hospital radiopharmacy setting.• TLX591 (177Lu-DOTA-rosopatamab), an antibody-directed prostate cancer therapy candidate. The ProstACT series of studies (including the Phase III ProstACT GLOBAL study) is evaluating the efficacy of TLX591 in all stages of prostate cancer, from first recurrence to advanced metastatic disease.• TLX599-CDx (99ᵐTc-iPSMA), an investigational prostate cancer imaging agent that uses single photon emission computed tomography (SPECT), the predominant imaging modality outside of major cities and in emerging healthcare systems. The NOBLE Registry is a collaboration to advance SPECT-based PSMA imaging with the Oncidium Foundation.• TLX592 (64Cu/225Ac-RADmAb®), next generation prostate cancer therapy candidate for targeted alpha therapy (TAT) based on Telix’s proprietary RADmAb® engineered antibody technology. The Phase I CUPID study is evaluating copper-64 labelled TLX592 in patients with advanced prostate cancer, prior to commencing therapeutic studies with actinium-225.Targeting the potential of PSMA across the full spectrum of prostate cancerOur prostate cancer portfolioProstate cancer worldwide1.4 millionmen were diagnosed with prostate cancer globally in 20201 375,000+men died from prostate cancer globally in 20201 34%increase in prostate cancer diagnoses in Australia during the past 12 months299%5-year survival rate for men diagnosed with early-stage prostate cancer in the U.S.32022 ANNUAL REPORTTELIX PHARMACEUTICALS1. Globocan 2020.2. Australian Institute of Health and Welfare 2022.3. American Cancer Society. 13
TELIX PHARMACEUTICALS2022 ANNUAL REPORTThe 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 (metastatic castrate-resistant prostate cancer, or mCRPC).The antibody approach may deliver superior efficacy, with reduced potential for undesirable side-effects, and a more efficient dosing regimen compared to a small molecule approach.Functionally specific for tumour-expressed PSMA, does not “hit” most endogenous PSMAReduced off-target radiation, reduced potential for undesirable side-effects1Longer circulation time and tumour retention, cleared in the liver and excreted, allowing for fewer doses2Shortest dosing regimen of all PSMA therapies, two x 76 mCi doses, 14 days apartTLX591 is the most clinically advanced antibody-based PSMA therapy in developmentOne approved product in the market. Other products in development are undifferentiatedTaken up by endogenous PSMAANTIBODY (TLX591)TLX591Small MoleculeSMALL MOLECULESOff-target effects impact quality of life, including dry eye, xerostomia and back pain from ganglia irradiationRapidly excreted via the urinary tract: approx. 70% activity lost by 12 hoursDosing regimens range up to 36 weeks, at up to 200 mCi per doseLacrimal, Parotid, Submandibular (salivary) glandsLiverSpleenBladder (urinary excretion)Kidneys, Small bowelLiver (preferred clearance organ)Fecal excretionTelix’s approach is highly differentiatedPSMA competitive landscape“With previous studies having confirmed the preliminary efficacy and safety profile of TLX591, GenesisCare is pleased to partner with Telix to further their therapeutic antibody-based program, which has potential to improve health outcomes for thousands of men living with prostate cancer in Australia and worldwide.”Professor Nat Lenzo, Nuclear Medicine Physician, GenesisCare 1. New Class of Radiopharmaceutical Therapy Makes Headway in Prostate Cancer (onclive.com).2. Sun, Michael et al. Curr Oncol Rep. 2021. 14
2022 ANNUAL REPORTTELIX PHARMACEUTICALSKidney cancer and carbonic anhydrase IX (CAIX) programKidney 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.1 There remains a significant need for new therapeutic options for patients with advanced kidney cancer.ImagingTherapy• TLX250-CDx (89Zr-DFO-girentuximab) is an investigational PET imaging agent granted FDA Breakthrough Therapy (BT) designation in the U.S. and with a positive Phase III study in ccRCC.• TLX250 (177Lu-DOTA-girentuximab) is Telix’s therapeutic candidate for kidney cancer currently being evaluated in ccRCC in investigator-initiated Phase II studies in combination with checkpoint inhibitors (STARLITE-1 and 2) and in a company-sponsored Phase I study in combination with a Merck KGaA DDRi2 candidate (STARSTRUCK).TLX250-CDx targets CAIX, a protein expressed on the surface of ccRCC and a number of other solid tumours including bladder or urothelial, breast, brain, cervix, colon, oesophagus, head and neck, lung, ovarian, pancreatic and vulval cancers (see figure on following page based on literature reports of CAIX expression). CAIX is often expressed in hypoxic (oxygenated) tumour cells, characteristic of advanced disease with typically poor treatment outcomes. Hypoxic tumours are typically more aggressive and less responsive to current treatments, particularly immunotherapies.Telix’s lead product for kidney cancer imaging with positron emission tomography (PET), TLX250-CDx (89Zr-DFO-girentuximab), was the subject of the Phase III ZIRCON study (ClinicalTrials.gov Identifier: NCT03849118) in patients with clear cell renal cell carcinoma (ccRCC), which reported highly positive results in November 2022 (refer to the Operating and financial review section of this report).Kidney cancer imaging and other tumour typesOur kidney cancer portfolioKidney cancer worldwide430,000people were diagnosed with kidney cancer globally in 20203 180,000people died from kidney cancer globally in 2020384,000kidney / urinary biopsies orsurgeries performed annuallyin the U.S.480%of small renal masses are thought to be malignant512%5-year survival rate for metastatic renal cell carcinoma61. Makhov et al. Mol Cancer Ther. 2018.2. DNA Damage Response Inhibitor. 3. Globocan 2020. 4. Management estimate based on renal cancer incidence rates and detection of benign masses, source: SEER and HCUPnet.5. Abu Haeyeh et al. Bioengineering (Basel). 2022.6. Padala et al. World J Oncol. 2020. 15
TELIX PHARMACEUTICALS2022 ANNUAL REPORTAn increasing body of scientific evidence suggests low doses of targeted radiation can potentially overcome immune resistance – or immunologically “prime” a tumour making it more susceptible to cancer immunotherapy.1 Two Telix supported STARLITE studies are assessing the efficacy of TLX250 as an immune primer in combination with current immuno-oncology therapies for ccRCC. The Company is also running a Phase I study of TLX250 in combination with a Merck KGaA DDRi candidate in patients with solid tumours expressing CAIX.Based on the potential of TLX250-CDx to target different tumour types, investigator-led studies are also in progress using these investigational assets in urothelial carcinoma or bladder cancer (ZiP-UP, ClinicalTrials.gov Identifier: NCT05046665), triple negative breast cancer (OPALESCENCE, ClinicalTrials.gov Identifier: NCT04758780), and non-muscle invasive bladder cancer (NMIBC, PERTINENCE, ClinicalTrials.gov Identifier: NCT04897763).The OPALESENCE and PERTINENCE studies reported positive preliminary data during 2022 at the European Association of Nuclear Medicine (EANM) Annual Congress, with early results suggesting theranostic potential in these difficult to treat diseases.Patients with NMIBC currently have few therapeutic options with the risk of complete cystectomy (bladder removal). Therefore, new treatment options with preservation of the urinary bladder are urgently needed to address unmet medical need. The Company also announced STARBURST (ClinicalTrials.gov Identifier: NCT05563272), a prospective, open-label, Phase II study to explore CAIX expression through TLX250-CDx PET/CT imaging in patients with various solid tumours for potential diagnostic and therapeutic applications. An investigational new drug application (IND) has been submitted to the FDA with first patients expected to be enrolled in the study during Q1 2023.Kidney cancer therapy 1. Herrera et al. Cancer Discovery. 2022. 16
Glioblastoma (brain cancer) and LAT-1 programGlioblastoma, also known as glioblastoma multiforme (GBM), is the most common and aggressive form of brain cancer. It has a poor prognosis, primarily due to there being few effective treatment options.1TLX101 and TLX101-CDx have been granted orphan drug designation in the United States and Europe.ImagingTherapy• TLX101-CDx (18F-FET) is a PET agent for imaging gliomas, widely used in clinical research settings including in Telix’s IPAX series of studies as a complementary diagnostic agent to the company’s TLX101 GBM therapeutic candidate.• TLX101 (131I-IPA) is Telix’s therapeutic candidate for GBM, currently being evaluated in front line and recurrent GBM in the IPAX series of studies.The mainstay of treatment for glioblastoma is surgical resection, followed by combined radiotherapy and chemotherapy. Despite such treatment, recurrence occurs in almost all patients.2 Telix’s brain cancer program targets a membrane transport protein called LAT-1 (L-type amino acid transporter 1) 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 entering the brain. Our brain cancer portfolioGlioblastoma (GBM) worldwide300,000people were diagnosed with brain or central nervous system cancer globally in 2020350%of all brain tumours are GBM312-15months median overall survival from diagnosis45%5-year survival rate51. American Association of Neurological Surgeons 2023.2. Park et al. Journal of Clinical Oncology. 2010.3. Globocan 2020.4. Ostrom et al. Neuro Oncol. 2018.5. Mayo Clinic.2022 ANNUAL REPORTTELIX PHARMACEUTICALS“The standard of care for newly diagnosed GBM hasn’t changed since 2005, and in recurrent disease no standard treatment is available, with other recent trials showing no significant improvement in overall survival. Based on promising safety and preliminary efficacy data for TLX101 in the IPAX-1 study, I am pleased to continue to explore this investigational therapy in both the front line and recurrent setting.”Professor Josef Pichler, Kepler University Hospital, Austria, Principal Investigator in the IPAX-2 and IPAX-Linz studies. 17
2022 ANNUAL REPORTTELIX PHARMACEUTICALSDuring 2022, Telix reported the final results from the IPAX-1 Ph I/II study of TLX101 therapy (4-L-[131I] iodo-phenylalanine, or 131I-IPA) in combination with EBRT in patients with recurrent GBM. The study met its primary objective demonstrating safety and tolerability profile of intravenous 131I-IPA administered concurrently with second line EBRT. The study also delivered encouraging preliminary efficacy data for further evaluation, demonstrating a median overall survival of 13 months from the initiation of treatment in the recurring setting, or 23 months from initial diagnosis. Telix has initiated a Phase I study, IPAX-2, to confirm safety of TLX101 as a front-line therapy in combination with standard of care treatment, ahead of progressing to a label-indicating Phase II study. In parallel, TLX101 is being investigated in the recurrent setting in the investigator-initiated IPAX-Linz Phase II study, which dosed a first patient in December 2022. Brain cancer therapy 1718F-FET has been widely used in clinical research settings but recently, new practice guidelines have been developed for the imaging of gliomas using PET with radiolabelled amino acids, of which 18F-FET is a key enabling radiopharmaceutical.1 18F-FET (TLX101-CDx) was used to select patients and track disease response in Telix’s IPAX-1 Phase I/II clinical trial (ClinicalTrials.gov Identifier: NCT03849105) and is being used in the IPAX-2 (ClinicalTrials.gov Identifier: NCT05450744) and IPAX-Linz studies. Brain cancer imaging 1. Piccardo et al. Eur J Nucl Med Mol Imaging. 2022. 18
2022 ANNUAL REPORTTELIX PHARMACEUTICALSHematologic (blood) cancers / bone marrow conditioning and CD66 programHematopoietic stem cell transplantation (HSCT) is an important life saving treatment opportunity for various hematological malignancies and a variety of nonmalignant conditions such as severe aplastic anemia, inherited bone marrow failure syndromes, sickle cell disease, transfusion-dependent thalassemia, inherited immune deficiency syndromes, andcertain metabolic disorders. Experimentally, HSCT has been used in severe refractory autoimmune diseases.1 Conditions such as acute myeloid leukemia (AML), multiple myeloma (MM) and systemic amyloid light chain amyloidosis (SALA), could benefit from more tolerable conditioning regimens.2 Novel cell and gene therapies could also increase their utilisation by replacing toxic chemotherapy conditioning approaches with bone marrow targeted high intensity conditioning with TLX66.ImagingTherapy• TLX66-CDx (99ᵐTc-besilesomab) is approved and marketed as Scintimun®3 by Telix’s licence partner in approximately 30 countries for scintigraphic imaging, in conjunction with other appropriate imaging modalities, for determining the location of inflammation or infection in peripheral bone in adults with suspected osteomyelitis.• TLX66 (90Y-besilesomab), is an investigational asset granted orphan drug designation (ODD) status in Europe and the U.S. for bone marrow conditioning for HSCT, a broad clinical indication. TLX66 is the subject of investigator-initiated studies as a conditioning agent in SALA, MM and AML.Telix’s rare disease portfolio targets distinct members of Cluster of Differentiation 66 (CD66), a family of receptors expressed on specific types of immune or blood cells and a target for novel experimental conditioning radiopharmaceuticals. Developing high intensity conditioning agents with potential reduced toxicity compared with chemotherapy Our rare disease and bone marrow conditioning portfolioBone marrow conditioning worldwide>50,000HSCTs performed globally each year1>5%Average annual growth in HSCTs41. Bazinet et Propradi. Curr Oncol. 2019.2. Venner C et al. Blood. 2012.3. Marketed under licence by Curium Pharma.4. See: https://www.marketgrowthreports.com/global-hematopoietic-stem-cell-transplantation-hsct-industry-21744022 19
TELIX PHARMACEUTICALS2022 ANNUAL REPORTResearch and innovationNew frontiers in targeted radiopharmaceuticals Telix is working to build a sustainable and valuable pipeline of new product candidates and related platform technologies that can help dramatically improve patient outcomes. Our expertise in technology evaluation and reputation in product development, has opened up access to a range of new opportunities and partnerships. This research and innovation focus will define the Telix of the future. Research pipeline: Novel targets and technologies1ASSETTARGETISOTOPEDESCRIPTIONSTATUSTLX250 ComboCAIXTLX250 + Merck KGaA DNA Damage Response Inhibitor (DDRi) candidate in patients with CAIX-expressing solid tumoursTLX592PSMAUtilisesTelixproprietary engineered antibody TLX592 (64Cu/225Ac-RADmAb®) in prostate cancer, as an alpha therapy candidate TLR300PDGFRα1Exploring the development of radiolabelledforms of Olaratumabfor the diagnosis and treatment of human cancers, in-licensed from Eli LillyTLR400La/SSB2Novel antibody targeting La/SSB protein in lung and ovarian cancer, in partnership with AusHealthPhase Ib study (STARSTRUCK) to commence H1 2023Phase I study (CUPID) in progressIND enabling studies planned for 2023Phase I study in progressTLX599-CDxPSMANOBLE Registry in partnership with Oncidium Foundation exploring use of 99mTc-iPSMA for imaging of prostate cancer where SPECT is the predominant modalityActively recruiting at eight sites globallyImmuno-oncologyTargeted alpha therapyTumour microenvironmentTLX591-SxPSMADual-labelled PSMA-targeting molecule that comprises both a radioactive isotope (68Ga) and a fluorescent dyePhase 0 (biodistribution) clinical studies in progressRadio-guided surgeryIlluccix life cycle management177Lu225AcUndisclosed89Zr99mTc68Ga/IRDyeα-TLX250CAIXExploring TLX250 as an alpha therapy, in non-muscle invasive bladder cancer (in partnership with ATONCO). First-in-human study in planningPhase I proof of concept study (PERTINENCE) completed 211At1.Platelet derived growth factor receptor alpha.2.Small RNA binding exonuclease protection factor La.Note: TLR designates a research asset that has not yet achieved product candidate status. 1. Platelet derived growth factor receptor alpha.2. Small RNA binding exonuclease protection factor La.3. Morad et al. Cell. 2021.4. Kleinendorst et al. Clin Cancer Res. 2022.5. Global Immuno-Oncology Market Size, Status and Forecast 2021-2027.Note: TLR designates a research asset that has not yet achieved product candidate status. Immuno-oncology (I-O) Tumours can suppress the body’s immune response with checkpoint molecules. In one form of immunotherapy, checkpoint inhibitors (CPI) disrupt this suppression of tumour-clearing T cells. However, responses to CPI are highly variable, dependent in part on the ability of a tumour to provoke an initial immune response.3Targeted radiation has the potential to remodel a tumour’s immune microenvironment, including the recruitment of cancer-fighting T cells, and therefore enhance the effectiveness of immunotherapy.4 Immunotherapy is forecast to be a US$100B market by 2027,5 and Telix believes the combination of MTR and CPI could present a significant market opportunity. To this end, the STARLITE-1 and 2 Phase II investigator-initiated studies of TLX250 in kidney cancer therapy are a world-first clinical evaluation of targeted radiation in combination with CPIs. CAIXEli Lilly and Company (Lilly) 20
TELIX PHARMACEUTICALS2022 ANNUAL REPORTTumour microenvironment (TME) Tumours are complex, heterogeneous collections of cells. Their interaction with the surrounding microenvironment further enhances this complexity and can affect how the tumour grows and spreads. By better understanding the tumour microenvironment and harnessing the ability of targeted radiation to target multiple parts of the tumour, Telix’s goal is to develop new approaches to complement existing treatments and make them more effective. Telix is working with leaders in the field to progress this research and has licensed a number of novel radiotracers for translation into new theranostics. During 2022, Telix signed a licence agreement with Lilly for the exclusive worldwide rights to develop and commercialise radiolabelled forms of Lilly’s olaratumab antibody for the diagnosis and treatment of human cancers. Olaratumab was originally developed by Lilly as a non-radiolabelled monoclonal antibody targeting PDGFRα. PDGFRα is expressed in multiple tumour types including a rare type of cancer known as soft tissue sarcoma, where Telix will initially focus development. Soft tissue sarcomas are generally a radiation susceptible cancer that may be inherently amenable to systemic radionuclide therapy and olaratumab’s ability to target PDGFRα makes it a highly novel candidate for use as a radionuclide targeting agent. Olaratumab has an established safety profile that underpins its potential use as a radionuclide targeting agent. Telix has in-licensed a novel antibody known as APOMAB® from AusHealth, which is the subject of a Phase I study in lung and ovarian cancers. The antibody targets the La/SSB protein, which is only expressed on dying or dead cancer cells, such as those found in patients who have been pre-treated with chemotherapeutic agents or EBRT. Also in 2022, Telix licensed 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 the tumour microenvironment. This is an important area of focus, and researchers believe 18F-FLac could act as an adjunct to 18F-FDG PET, which is used in about 90% of scans, to help identify aggressive cancers, which are less responsive to current treatments, particularly immuno-oncology therapeutics. 1. Poty et al. J Nucl Med. 2018.Targeted alpha therapy (TAT) Alpha emitters have the potential to deliver very high amounts of energy to cancer tissue whilst the short range can decrease the risk of damage to surrounding healthy cells, increasing the selectivity and potency of the radiation treatment. 1 Telix is developing alpha and beta therapies to increase the options available to treat cancer within its portfolio. For example, in prostate cancer, Telix is developing a beta therapy known as TLX591, the subject of the ProstACT series of trials. At the same time we are exploring the use of TLX592 as a potential alpha therapy in the CUPID study. 21
TELIX PHARMACEUTICALS2022 ANNUAL REPORTRadio-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 Mauna Kea Technologies and Lightpoint Medical to develop advanced image and radio-guided surgical technologies, respectively, to assist urologic surgeons with the real-time identification of cancer cells. The Imaging and Robotics in Surgery (IRiS) Alliance 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. Artificial intelligence (AI) Radio imaging using targeted radiation relies heavily on digital data processing and input from highly trained technicians and radiologists to correctly interpret the data. AI technology can recognise complex patterns in large datasets and conduct predictive analysis, with potential to transform imaging analysis and improve the accuracy of decision making for clinicians. This is a promising area and a priority in Telix’s broad research and innovation program. During 2022, Telix announced a partnership with Invicro LLC to develop an artificial intelligence platform denoted as TelixAI™. TelixAI™ will initially focus on prostate cancer and will eventually be applied to all of the Group’s imaging products. The platform seeks to increase the efficiency and reproducibility of imaging assessments by automatically separating healthy versus abnormal tracer uptake and then classifying lesions as either soft tissue or bone lesions. 22
TELIX PHARMACEUTICALS2022 ANNUAL REPORTIlluccix lifecycle management While PSMA-PET imaging is emerging as a new standard of care for prostate cancer diagnosis and staging, access to equipment is typically limited outside of major cities and in health care systems in emerging countries. Telix is developing TLX599-CDx (99mTc-iPSMA) as an accessible alternative where SPECT is the predominant imaging modality. This work is conducted under a program called the NOBLE (Nobody Left Behind) Registry, which is funded in collaboration with the Oncidium Foundation. Since its launch in April 2021, patients have been imaged with TLX599-CDx at eight sites in eight different countries.1 During 2022 four new sites in Mexico, Indonesia, South Africa and Azerbaijan imaged their first patients. See: www.nobleregistry.org Solutions across the continuum of imaging, surgery and therapy for prostate cancerContinuous innovation in urologic oncologyPSMA SPECT tracer, TLX599-CDx (99mTc-iPSMA) – imaging access for patients in developing and remote areas, where PET is not readily availableTLX599-CDx with Lightpoint’s SENSEI® gamma probe; andTLX591-Sx, dual-labelled PET-optical tracer, with Mauna Kea’s Cellvizio® for real-time intra-operative detection of cancerPartnership with RefleXion, using Illuccix as a biological guide for external-beam radiotherapy in real-timeDemonstrating Illuccix utility in new imaging hardware, potential to deliver whole-of-body scans in less than 10 minutes with high resolutionAntibody-based approach, highly differentiated from existing PSMA-targeting therapies. Complementary beta and alpha therapies in development.Registry study active across eight global sites1Clinical trials in planning. Human PoC demonstrated with TLX591-SxClinical trial to commence in 2023Active use at BAMF Health theranostic centerProstACT GLOBAL Phase III study commencing in 2023ADDITIONAL PSMA IMAGING MODALITIESRADIO/IMAGE GUIDED SURGERYILLUCCIX FOR BgRT2TOTAL-BODY PET SCANPROSTATE CANCER THERAPY1. The NOBLE Registry is being conducted at eight sites globally in Australia, Azerbaijan, Egypt, Indonesia, Mexico, Nigeria, South Africa, and the United Arab Emirates.2. Biology-guided radiotherapy. TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Operating and financial review
Group revenue $160.1M: First year of commercial sales from Illuccix
• Transition to a commercial-stage company in 2022 delivered a significant increase in revenue, with $149.7M revenue
generated from U.S. sales of Illuccix in the first nine months since launch in April 2022
Net operating loss and expenses reflect investment scale-up and further pipeline development
• Net loss after tax of $104.1M (2021: $80.5M) reflects a period of investment to build the organisational infrastructure
required to:
• Support commercial operations, sales and marketing
• Increase capacity of internal and external resources to advance the late-stage and high value assets in the
Company’s clinical pipeline, which will underpin the next phase in the Company’s growth strategy
• Gross margin steadily improved during the year to end at 62% for 2022 (up from 56% at the end of H1 2022), reflecting
efficiency gains in manufacturing of commercial products
Key expenditure items
• External research and development associated with four lead programs under clinical development and/or approaching
regulatory filing with $44.7M (2021: $28.9M) spent on clinical and manufacturing activities towards these assets
• Selling, general and administration costs increased to $44.0M (2021: $16.9M) in the year, supporting the cost of
establishing the distributor network in the U.S., professional fees associated with obtaining regulatory approvals and
the ongoing marketing costs to assist in growing commercial revenue
• Employment costs were $64.5M (2021: $30.1M), driven by increased headcount to support the Group’s transition to a
commercial business and prepare acceleration of development activity on the company’s late stage assets including
the prostate cancer therapy program, and the imaging agents for renal cancer and glioma which are advancing towards
regulatory filings, with the goal of commercial launch in 2024
23
TELIX PHARMACEUTICALSANNUAL REPORT 2022Operating and financial reviewFinancial Report Total group revenue increase in first year of commercial sales, compared with FY 2021Revenue growth and expenditure control saw transition to cash flow positive in Q4 2022Reflects investment to scale up commercial and clinical activities Steady improvement in H2 2022 due to efficiency gains in commercial manufacturing Cash balanceNet loss after tax Gross margin $160.1M20x $116.3M $104.1M 62% TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Significant improvement in cash balance and net cash utilisation
• Cash and cash equivalents of $116.3M as at 31 December 2022 (2021: $22.0M) with the first quarter of net operating
cash inflow delivered in Q4 2022
• Improved cash balance reflects $175.0M capital raise undertaken in January 2022, cash generation from sales of
Illuccix in the U.S. and operating expenditure control
• Operating cash inflows included customer receipts of $124.1M (2021: $4.2M) from commercial sales of Illuccix in the
U.S. and pre-commercial sales in other regions and receipt of R&D tax incentives of $18.9M (2021: $12.1M)
• Operating cash outflows included payments to suppliers and employees of $204.6M (2021: $75.4M) and taxes paid in
the U.S. of $2.3M (2021: $Nil)
• Net cash used in investing activities of $17.0M (2021: $2.7M) included payments for the in-licence of Eli Lilly and
Company’s ("Lilly") olaratumab ($6.8M), acquisition of Optimal Tracers for $1.0M, payments for decommissioning costs
of $2.2M (2021 $1.4M) and investment in our Brussels South manufacturing facility of $7.0M (of which $3.0M was
financed through borrowings during the year)
Financial position as at 31 December 2022
• Net working capital as at 31 December 2022 was $114.6M (2021: $25.9M)
• Trade and other receivables at 31 December 2022 of $39.4M (2021: $19.4M) predominately reflect sales of Illuccix in
the last quarter of the year that were not yet due for collection
• Inventories increased to $8.5M (2021: $3.5M) to meet commercial demand
• Trade and other payables of $49.5M (2021: $19.0M), with the increase driven by distribution and radiopharmacy fees
associated with the sale of Illuccix and government rebates payable, combined with a general increase in operational
expenditure following commercialisation
• Provisions increased to $72.8M (2021: $52.0M), primarily due to the remeasurement of the contingent consideration
liabilities following the strong performance of Illuccix sales in the U.S.
2022 ANNUAL REPORTTELIX PHARMACEUTICALS1. Refer to the Glossary for a definition of our alternative performance measures (APMs). 25
TELIX PHARMACEUTICALS2022 ANNUAL REPORTIlluccix - lead commercial productCommercialise the diagnostic portfolio Advance the therapeutic pipeline Strengthen global supply chain and manufacturing Expand the pipeline Build the commercial infrastructure and engagement with urology customer base and deliver first commercial revenue stream. Leverage the existing commercial infrastructure and establish our leadership in urology with TLX250-CDx. Add additional revenue streams as new imaging agents are commercialised and used to inform treatment decisions – underpinning the “theranostic” approach. Advance clinical programs and in turn unlock the value in our differentiated products being developed for diseases with high unmet need. Ultimately this is where we have the potential to deliver the greatest impact to patients. Protect and enhance our ability to service patients in all global markets and further develop production expertise through in-house manufacturing. Leverage our expertise to identify, evaluate and develop novel targets and technologies to build the future pipeline. • First commercial product Illuccix delivered global revenue of $156.0M • Commercial launch in the U.S., Australia and New Zealand and regulatory approval in Canada• Reimbursement obtained for U.S. market • Highly positive results for Phase III ZIRCON study of TLX250-CDx in kidney cancer• This follow-on product will leverage the commercial infrastructure created for Illuccix • Preparation underway for regulatory filing for two imaging agents (TLX250-CDx and TLX101-CDx)• Prostate cancer therapy trials ProstACT SELECT and TARGET recruiting patients• Manufacturing scale-up to support commencement of Phase III ProstACT GLOBAL study • Positive results published for TLX250-CDx proof of concept imaging study for future targeted alpha therapy in bladder cancer, and TLX101 (glioblastoma therapy) trial• STARLITE-2 study of TLX250 in combination with immunotherapy dosing patients • Buildout of the radiopharmaceutical manufacturing facility in Brussels South• Acquisition of Optimal Tracers • Grant for Australian Precision Medicine Enterprise (APME) project for radioisotope manufacturing in Australia • Multiple new clinical and commercial supply and distribution agreements • Licence agreement with Lilly granting exclusive worldwide rights to develop and commercialise radiolabelled forms of olaratumab antibody • Reseller agreement with GE Healthcare for supply of two PET imaging radiotracers to the pharma clinical trials services market • Continued development across key research areas and expansion of intellectual property portfolioGrowth strategy: Our focus areasOur progress in 2022Telix’s growth strategy and progress is laid out in the table below. Further commentary on each of these focus areas follows on the subsequent pages. Review of operations2022 ANNUAL REPORTTELIX PHARMACEUTICALS 26
TELIX PHARMACEUTICALS2022 ANNUAL REPORTIlluccix - lead commercial productIlluccix launched in the United States,1 Australia2 and New Zealand3 during 2022, and was approved in Canada.4 Successful commercial launch of Illuccix is an important validation for the Company and positions Telix as one of the first companies to commercially deliver prostate-specific membrane antigen (PSMA) positron emission tomography (PET) imaging, the highly anticipated next generation of prostate cancer imaging, to patients in the U.S..As of 1 July 2022, Illuccix is fully reimbursed in the U.S. having received a designated Healthcare Common Procedure Coding System (HCPCS) Level II code, A9596. Telix was also granted Transitional Pass-Through Payment Status to enable the Centers for Medicare & Medicaid Services (CMS) to provide separate payments for the radiopharmaceutical and the PET-CT scan, when performed with Illuccix in a hospital outpatient setting.5 Illuccix was also made available for purchase by all Veterans Affairs entities entitled to Federal Supply Service (FSS) pricing.In September 2022, the Company withdrew its marketing authorisation application (MAA) in Europe,6 and is progressing with re-filing, targeting to have an updated dossier finalised by the end of Q1 2023 for submission. The Company will advise the revised review timeline upon formal acceptance of the updated dossier by the relevant Competent Authority.Marketing authorisation applications for TLX591-CDx are under review and progressing in Brazil and South Korea. Telix currently has temporary use (pre-approval) authorisations in the Czech Republic and Brazil.In October 2022, Telix and its partner Grand Pharmaceutical Group Limited (Grand Pharma) received approval from the Chinese National Medical Products Administration (NMPA) Center for Drug Evaluation (CDE) to commence a pivotal Phase III registration study that will bridge to the U.S. FDA approval of Illuccix. The study is expected to commence in Q1 2023. Telix continues to drive product innovation in PSMA imaging and collaboration with partners for potential new applications of Illuccix. For example, during the year, Telix announced a partnership with Invicro LLC to develop an artificial intelligence platform denoted as TelixAI™.7 Following a successful preliminary strategic collaboration, Telix expanded its relationship with U.S.-based RefleXion Medical, signing a co-development and commercialisation agreement to evaluate the use of Illuccix as a biological guide with RefleXion’s advanced biology-guided radiotherapy (BgRT) platform.81. Telix ASX disclosure 4 April 2022.2. Telix media release 28 September 2022.3. Telix media release 30 September 2022.4. Telix ASX disclosure 14 October 2022.5. Telix ASX disclosure 30 May 2022.6. Telix ASX disclosure 28 September 2022.7. Telix media release 14 June 2022.8. Telix ASX disclosure 10 June 2022.9. At 27 February 2023.PSMA-PET imaging for men with prostate cancerFor newly diagnosed patients with suspected metastases1.2.For patients with suspected recurrence based on elevated PSADistribution network 193 pharmacies9 Pharmacy / distribution partners Cardinal Health, Pharmalogic, UPPI, Jubilant, RLSFully reimbursed in the U.S. and Australia 27
Lower rate of false positives with gallium-68 imaging agents:Efficacy at low disease burden: Lower radiation dose:Illuccix: Clinical differentiationNew scientific publications illustrate the important clinical differences between gallium-68 and fluorine-18 based imaging agents. PSMA PET/CT with gallium-68 based imaging agents has a lower rate of false positives than PET/CT with fluorine-18 based imaging agents 1,2Gallium-68 based imaging agents have lower incidence of non-specific bone uptake compared to fluorine-18 based imaging agents which more frequently demonstrate non-specific and indeterminate PSMA uptake in soft tissue or bone 1,2PSMA uptake in indeterminate bone lesions can be mistaken for bone metastases (false positives) and lead to inappropriate changes in patient management 3,4These differences can potentially provide more accurate interpretation and understanding of the extent of disease.Data from the pivotal trials used in the Illuccix marketing authorisation application shows that gallium-68 based imaging agents provide early and accurate prostate cancer detection At initial staging, the data shows high diagnostic accuracy for patients with low prostate cancer disease burden, as evidenced by the performance of gallium-68 based agents in clinical trials on patients with low PSA levels, low tumour burdens, and low Gleason scores 5Sensitivity and specificity data at initial staging was shown on a patient population that included patients with a low tumour burden (tumour level cT2b) 6Illuccix detects recurrent prostate cancer in the biochemical recurrence (BCR) setting, even for patients with low PSA levels (<2 ng/mL). At low PSA levels, the correct localisation rate is 92% 6This can help clinicians detect prostate cancer at its first signs, potentially leading to a change in management for patients early in their disease. Earlier detection of cancers has shown to correlate strongly with better health outcomes for patients.An important factor in overall safety profileWith gallium-68 based imaging the whole-body radiation dose to the patient is 25% lower than with the approved fluorine-18 based imaging agent at the recommended average dose (i.e. 5 mCi with gallium-68 and 9 mCi with fluorine-18) 7-9Exposure to the PET nuclear medicine physician results in a 62% reduction in occupational exposure at one metre distance and at the average recommended dose.7,82022 ANNUAL REPORTTELIX PHARMACEUTICALS1. Rauscher et al. J Nucl Med. 2020.2. Hoberück et al. EJNMMI Res. 2021.3. Phelps et al. J Nucl Med. 2022.4. Grünig et al. Eur J Nucl Med Mol Imaging. 2021.5. Hope et al. JAMA Oncol. 2021.6. Illuccix prescribing information 2021.7. Illuccix package insert. September 2021.8. Pylarify package insert. May 2021.9. Comparison of effective dose in mSv. 28
TELIX PHARMACEUTICALS2022 ANNUAL REPORTCommercialise the diagnostic portfolioThe detection of renal masses is increasing due to widespread use of cross-sectional imaging. Many of these are small and represent a diagnostic challenge as current imaging cannot reliably distinguish benign or malignant lesions from renal cell carcinoma, leading to invasive biopsy or partial nephrectomy (kidney removal) to confirm the diagnosis. These procedures are not always necessary and can lead to complications.Telix’s investigational imaging agent, TLX250-CDx (89Zr-DFO-girentuximab) for kidney cancer, specifically ccRCC, made significant advances towards commercialisation in 2022. TLX250-CDx is Telix’s planned follow-on imaging agent for the field of urology. TLX250-CDx targets CAIX, a protein expressed on the surface of ccRCC, the most common and aggressive form of kidney cancer. During 2022, Telix’s international, multi-centre, Phase III ZIRCON trial of TLX250-CDx completed enrolment and reported highly positive top-line data, meeting all of its primary and secondary endpoints.1 Telix is now progressing a BLA filing with the FDA and worldwide regulatory filings in key commercial jurisdictions. Based on the potential of TLX250-CDx to target multiple tumour types, investigator-led studies also progressed during 2022 in imaging of urothelial carcinoma or bladder cancer (ZiP-UP), metastatic triple negative breast cancer (OPALESCENCE), and non-muscle invasive bladder cancer (PERTINENCE). OPALESENCE and PERTINENCE studies reported positive preliminary data during Q4 2022 at the EANM Annual Congress.2In September 2022, the Chinese NMPA CDE approved a pivotal Phase III registration study that will bridge to Telix’s global Phase III ZIRCON trial.3 The bridging study is required to provide “supplementary” data obtained in a Chinese population to establish that the diagnostic efficacy of this investigational product is equivalent in Chinese and Western populations. The investigational new drug (IND) application was submitted by Telix’s partner in the Greater China region, Grand Pharma. The Company has also focused on preparation towards filing a New Drug Application for its investigational agent TLX101-CDx for glioma imaging. TLX101-CDx (18F-FET) has potential as the first commercial FET-PET imaging agent for the U.S. market, with demonstrated ability to provide a rapid and conclusive diagnosis of gliomas, providing an important tool for management of progression and treatment monitoring. While this type of imaging is used extensively in Europe under magisterial use, it is not widely accessible in the U.S.. Further detail can be found in the forward strategy and operational targets section of this report.Potential to change standard of care in the diagnosis and management of renal masses and ccRCCPhase III ZIRCON study findings: Primary endpoint met: Sensitivity of ≥84% and specificity of ≥84% in all three readers (86% / 87% overall)Considerably exceeds confirmatory trial sensitivity and specificity success target of 70%93% positive predictive value (PPV)Key secondary endpoints met, namely sensitivity and specificity targets in small renal masses (less than 4cm)Phase III data demonstrates TLX250-CDx provides a way to non-invasively diagnose the presence and spread of ccRCC – delivering on a major unmet medical need Data strongly validates that the CAIX target is potentially as ground-breaking in ccRCC as PSMA has been for prostate cancerAn effective non-invasive tool for more confident decision making.1. Telix ASX disclosure 7 November 2022.2. Telix ASX disclosure 18 October 20223. Telix ASX disclosure 28 September 2022. 29
13TELIX PHARMACEUTICALS2022 ANNUAL REPORT“A positive result from the study is a critical step in better diagnosing clear cell renal cancer. Having an imaging product like TLX250-CDx will be so important in managing the continued increasing incidence of small renal masses and reducing the need for unnecessary invasive surgery for lesions that in the prior era were often found to be benign at the time of surgery.”“Kidney cancer is a diagnostic dilemma for the majority of our patients. Without biopsy or surgery, we can’t currently give them the information they need. Based on this result from the ZIRCON Phase III study, TLX250-CDx may help us to be more accurate in who we treat, whilst also providing reassurance for those patients who don’t need treatment.”“Results from the Phase III ZIRCON study of TLX250-CDx should represent a major milestone in the management of small renal lesions and the diagnosis of clear cell renal cell carcinoma. There is so much potential in optimal targeting of CAIX, paving the way for better staging of this neoplasia and a theranostic approach.”A/Prof. Brian Shuch, MDDirector, Kidney Cancer Program, UCLA Institute of Urologic OncologyMr Gregory Jack, F.R.A.C.S.Renal and Transplant Surgeon, Austin Health and Olivia Newton-John Cancer CentreProf. Françoise Kraeber-Bodéré, MD, PhDNuclear Medicine Department - CHU NantesMembers of the global clinical community reinforce the potential of TLX250-CDxIndependent study investigator views and opinions. 30
TELIX PHARMACEUTICALS2022 ANNUAL REPORTAdvance the therapeutic pipelineTelix has a world-leading theranostic pipeline, focused on the development of imaging agents and therapies with the goal of bringing new products to market that help improve the way cancer is treated. While the imaging agents offer near-term commercialisation opportunities, the therapeutic pipeline offers greater potential to impact patients through treatment and to create shareholder value as clinical milestones are achieved. Our core therapeutic pipeline is focused on late-stage assets in prostate, kidney and brain cancers, as well as bone marrow conditioning and rare diseases. In 2022 the Company made advances across each of the core pipeline programs through progression of clinical studies and generation of clinical data. In prostate cancer, Telix is running a series of clinical studies evaluating the efficacy of TLX591 (177Lu-DOTA-rosopatamab) across the patient continuum from first recurrence to advanced metastatic disease. Progress was made across all programs during 2022: During 2022, first patients were dosed in the Phase II STARLITE-2 study of TLX250 (177Lu-DOTA-rosopatamab), assessing the efficacy of TLX250 targeted radiation in combination with immunotherapy for ccRCC (ClinicalTrials.gov Identifier: NCT05239533).3The investigator-led OPALESENCE and PERTINENCE studies reported positive preliminary data during 2022 at the EANM Annual Congress, with early results suggesting theranostic potential in these difficult to treat diseases. Telix reported final results from the IPAX-1 Ph I/II study of TLX101 therapy (4-L-[131I] iodo-phenylalanine, or 131I-IPA) in combination with EBRT in recurrent GBM.4 Final data from the post-study follow-up period confirmed the study met its primary objective, demonstrating the safety and tolerability profile of TLX101 at the dosing range tested. The study also delivered encouraging preliminary efficacy data for further evaluation.Telix has initiated a Phase I study, IPAX-2, to confirm safety profile of TLX101 as a front-line therapy in combination • The multi-centre ProstACT SELECT Phase I radiogenomics study (ClinicalTrials.gov Identifier: NCT04786847) dosed its first cohort of patients 1• A first patient was enrolled in the ProstACT TARGET Phase II study (ClinicalTrials.gov Identifier: NCT05146973), being run in collaboration with GenesisCare.2 The study is evaluating TLX591 in combination with external beam radiation therapy in patients with PSMA-avid, biochemically recurrent oligometastatic disease• Manufacturing scale-up and regulatory submissions progressed for the ProstACT GLOBAL Phase III study (ClinicalTrials.gov Identifier: NCT04876651) in preparation to commence dosing patients in Australia and New Zealand, and in the U.S. and Europe, subject to the requisite regulatory approvals. 1. Telix ASX disclosure 27 January 2022.2. Telix media release 14 September 2022.3. Telix media release 4 May 2022.4. Telix ASX disclosure 21 September 2022. 31
Core pipelinewith standard of care treatment, ahead of progressing to a label-indicating Phase II study. In parallel, TLX101 is being investigated in the recurrent setting in the investigator-initiated IPAX-Linz Phase II study, where a first patient was dosed in November 2022.1 During the year, the Company announced that it has been granted ODD status from the FDA for TLX66 (90Y-besilesomab) for conditioning treatment prior to HSCT.21. Telix media release 22 November 2022.2. Telix ASX disclosure 29 March 2022.3. Large amino acid transporter 1.4. Bone marrow conditioning/rare diseases.5. Cluster of differentiation 66.2022 ANNUAL REPORTTELIX PHARMACEUTICALS 32
TELIX PHARMACEUTICALS2022 ANNUAL REPORTTELIX PHARMACEUTICALS2022 ANNUAL REPORTGlobal supply chain and manufacturing During the year, Telix secured project financing and made significant progress with the buildout of its radioisotope manufacturing facility in Brussels South.1 The Company was also granted an updated radiation licence by the Belgian FANC, paving the way for site activation during H2 2023 subject to the requisite regulatory inspections and approvals.Telix aims to have a degree of vertical integration in its three operating regions. In line with this goal, Telix acquired Optimal Tracers, a Sacramento (California)-based company that provides radiochemistry process development services and research tracers for use in clinical trials.2 The acquisition of Optimal Tracers expands Telix’s translational radiochemistry capability and establishes a U.S.-based laboratory and production footprint for clinical trial doses. Optimal Tracers will also remain available as a strategic collaborative resource to partner organisations and pharma collaborators that need access to specialist radiochemistry knowledge.In the Asia Pacific region, Telix announced grant funding awarded with Monash University and Global Medical Solutions Australia (GMSA) to establish the APME project.3 This initiative aims to address the Good Manufacturing Practice (GMP) manufacturing gap in the Australian radiopharmaceuticals manufacturing sector and foster a stable, long-term supply of radioisotopes for the Australian medical market.Telix continues to focus on strengthening its global supply chain. During the year, the Company announced two additional clinical supply agreements with Eckert & Ziegler Strahlen- und Medizintechnik AG (EZAG)4 and SHINE Technologies5 to enhance its 177Lu supplier network, which includes a commercial supply agreement with ITM Isotope Technologies Munich SE, and clinical supply agreements with the Australian Nuclear Science and Technology Organisation (ANSTO), and Eczacıbaşı-Monrol (Monrol).Industry-leading supplychain partnersGlobal manufacturing and logistics networkExpansive distributionnetworkIn-housemanufacturing / R&DClinical and commercialsupply of radioisotopesSHINE and Eckert and Ziegler added to 177Lu clinical supply networkJust-in-time manufacturing,servicing all major markets11 countries with manufacturing footprint and ability to deliver in 80 countries Extension of the commercial teamDistribution network expanded to 193 pharmacies across the U.S. and Puerto Rico6 in alignment with sales strategyFacility in Brussels Southon track for 2023Updated licence granted. Acquisition of Optimal Tracers adds clinical manufacturing and process development capability1. Telix ASX disclosure 22 March 2022.2. Telix ASX disclosure 14 November 2022.3. Telix ASX disclosure 4 April 2022.4. Telix media release 9 February 2022.5. Telix media release 11 February 2022.6. At 27 February 2023. 33
TELIX PHARMACEUTICALS2022 ANNUAL REPORTExpand the pipelineTelix is working to build a sustainable and valuable pipeline of new product candidates and related platform technologies that can help improve patient outcomes. Our expertise in technology evaluation and reputation in product development has opened up access to a range of new opportunities and partnerships. This research and innovation focus aims to drive the next generation of personalised, targeted radiation and create future value. Telix will continue to explore novel targets, clinical applications and manufacturing technologies. As part of its extensive research and innovation program, Telix has during the year: • Conducted pre-clinical development of the antibody olaratumab, (in-licensed from Lilly), as an investigational radionuclide targeting agent for the treatment of soft tissue sarcoma.• Established a collaborative development and reseller agreement with GE Healthcare to supply two of its PET imaging radiotracers (TLX250-CDx and [18F]-FLac (18F-3-fluoro-2-hydroxypropionate)) for use in third party pharmaceutical company clinical research and development activities.1 This partnership will enable these investigational imaging agents to be used more widely in third-party clinical trials, separate to Telix’s commercialisation of TLX250-CDx.• Commenced a collaboration with UniQuest Pty Ltd, the commercialisation company of The University of Queensland, to develop a radiolabelled molecule targeting an immune checkpoint protein.2Telix’s Research and Innovation team is focused on the pre-clinical development of new targets and technologies in five main areas. More information can be found in the Research and innovation section of this report.Our research and innovation focus:Next Generation therapeutics with alpha-emitting radioisotopesTargeted radiation sets the groundwork for cancer immuno-therapy in combinationA better understanding of the TME has the potential to guide more effective use of targeted radiation with or without standard of care treatmentsAI can help physicians maximise insights from imaging data and translate them into better treatment decisionsBringing molecular imaging into the operating roomTargeted alpha therapy (TAT)Immuno-oncologyTumour microenvironment (TME)Artificial intelligence (AI)Radio-guided surgery1. Telix ASX disclosure 17 October 2022.2. Telix media release 27 October 2022. 34
TELIX PHARMACEUTICALS2022 ANNUAL REPORTForward strategy and operational targets In line with our growth strategy, the Company has identified key areas of focus in 2023 to advance its therapeutic pipeline, grow revenue and help more patients in need: The commercial launch of Illuccix in 2022 was a major inflection point and validated Telix’s ability to successfully commercialise a product. The revenue from this first commercial product has grown substantially quarter-on-quarter during 2022 and has underpinned the Company’s transition to a commercial-stage business with the financial resources to fund the development of its core pipeline. In 2023 the Company will focus on continuing to grow revenue from sales of Illuccix in the U.S. and other commercial markets, including Canada where commercial launch is expected in H1 2023. The Company will re-file its marketing authorisation application in Europe and is awaiting regulatory approval decisions in Brazil and South Korea.Telix’s goal is to establish leadership in urologic oncology and bring its technology to other fields of medicine, with the ultimate goal of having a portfolio of multiple commercial stage imaging agents to help support the development of therapeutic assets. In 2023 a major area of focus will be the preparation of a BLA submission to the FDA (and submissions to other global regulators) for TLX250-CDx, Telix’s investigational imaging agent for renal cancer. This candidate is highly anticipated, and will help to firmly establish Telix’s leadership in urologic oncology, should it be granted marketing authorisation.The Company is also working towards a regulatory filing for TLX101-CDx, Telix’s investigational imaging agent for glioma (brain cancer). This imaging agent has the potential to provide a rapid and conclusive diagnosis of glioma, delivering on an unmet need for improved management of this disease. Global expansion and Illuccix revenue growthAdvance regulatory filings for two additional diagnostic imaging agents 35
TELIX PHARMACEUTICALS2022 ANNUAL REPORTImaging is central to the theranostic approach, providing information and insights that may inform the treatment pathway and enable clinicians to deliver personalised, precision medicine. Telix will continue to build on the progress made in 2022 across its core therapeutic pipeline. The Company expects to report data from the ProstACT SELECT trial of TLX591, its investigational prostate cancer therapy. It will commence enrolling patients in ProstACT GLOBAL, the Phase III study of this asset in 2023. Telix will continue recruitment of patients into its two Phase II STARLITE trials of TLX250 (renal cancer therapy) during 2023 and will launch a study of TLX250 in combination with one of Merck KGaA’s DDRi candidates in patients with CAIX-expressing solid tumours. In addition, the STARBURST study of TLX250-CDx in multiple solid tumours is being conducted with the goal of exploring and validating new disease targets for Telix’s CAIX program. The Company will also progress its Phase I/II IPAX-2 trial of TLX101 (glioblastoma therapy) in a front-line setting, with the Phase I component expected to commence dosing patients in early 2023. Telix also expects to complete enrolment in the Company’s first in human biodistribution CUPID study of TLX592 (ClinicalTrials.gov Identifier: NCT04726033), its first Targeted Alpha Therapy candidate based on its proprietary RADmAb® engineered antibody. The Company also intends to continue development in hematological malignancies.Telix is focused on the identification of new assets with the potential to drive the next generation of personalised, targeted radiation and create future value. Telix will continue to explore novel targets, clinical applications and manufacturing technologies. As an example, Telix intends to bring the antibody olaratumab, in-licensed from Lilly in 2022, into the clinic in 2023, as an investigational radionuclide targeting agent for the treatment of soft tissue sarcoma. Telix’s radiopharmaceutical production facility located in Brussels South is expected to be operational in 2023 subject to successful completion of the building works underway and regulatory clearance to commence production. The state-of-the-art facility will serve as the primary European manufacturing site for Telix’s products, aligning with the Group’s strategic objective of maintaining control and reliability of its supply chain, as well as cost control. It will also be an integral hub for Telix’s R&D activities, specifically in relation to the scale-up of radioisotope production. The future prospects of our growth and operational targets depend on: • Continued revenue growth of Illuccix • Biologics License Application submission for TLX250-CDx • New Drug Application for TLX101-CDx brain (glioma) cancer imaging • Advancement of our therapeutic pipeline More information relating to factors that could affect our future prospects and operational targets is provided below in the Managing risk section of this Annual Report. Deliver on clinical milestones in the core therapeutic pipeline Pipeline expansion and advanced manufacturingProspects and likely developments TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Managing risk
Managing risk
Effective risk management is essential in delivering
sustainable value for our stakeholders and requires
commitment and involvement across the business, from
the Board through to employees across all levels of
Telix’s operations.
The risk context within which the Telix Group operates is
characterised by:
• its purpose to help people with cancer and rare
diseases live longer, better quality lives
• its mission to deliver on the promise of precision
medicine through targeted radiation
• the varying business activities of the Group
– namely innovation of new products, product
development, commercialisation and marketing of
approved products, service delivery, and (near-term)
manufacturing operations
• the global regulatory regime within which Telix operates
• the intent to deliver adequate shareholder returns in a
complex and/or competitive environment.
As a global business, the regulatory and development
environment associated with clinical development differs
between regions. The Group will adhere to Good
Clinical Practice (GCP), Good Manufacturing Practice
(GMP) and Good Distribution Practice (GDP) guidelines
as phase appropriate to the stage of clinical
development/ commercialisation.
Enterprise Risk Management Framework
and governance
Central to Telix’s approach to risk and opportunity
management is our Enterprise Risk Management
Framework (ERMF) which is embedded within our business
operations to support our overall strategic objectives.
This framework articulates our approach to managing
risk and opportunity and is supported by risk appetite
and tolerance statements relating to key business
performance indicators.
The ERMF:
• incorporates the principles of effective risk
management, as set out in the Global Risk Management
Standard ISO 31000 and seeks to apply risk
management across the entire organisation so that all
material risks (both financial and non-financial) can be
identified, assessed and managed
• is integrated with our ESGS, business continuity, crisis
management and assurance policies and practices
with the aim of enhancing business resilience and
growth prospects.
In its mitigation strategies and tactics, Telix identifies the
drivers of each risk and aims to implement controls and
assurances that address each key cause and consequence.
Telix’s ERMF risk governance model reflects a "three
lines" approach, encompassing authorities, accountabilities
and responsibilities for managing risk across the Group.
Ultimate risk management oversight is with the Board.
Several layers assist the Board in ensuring the appropriate
focus is placed on the ERMF:
• Audit and Risk Committee — provides assistance and
advice to the Board in fulfilling its responsibility relating
to the Company’s financial reporting, internal control
structure, risk management systems, including the
ERMF, ESGS strategy and reporting framework, and the
internal and external audit functions
• People, Culture, Nomination and Remuneration
Committee — provides assistance and advice to
the Board on the Company’s people, culture and
remuneration policies and practices
• Telix’s Disclosure Committee — has responsibility for
assessing any potential material risk to Telix and any
consequent need for market disclosure
• Internal Audit — has the responsibility for reviewing
and challenging management on mitigation plans for
principal and other key risks to ensure alignment to
risk appetite
• SVP Global Governance, Risk and Compliance, together
with the Global Leadership Team — have responsibility
for driving and supporting risk management across
the Telix Group. Each operating jurisdiction within
the Group then has responsibility for implementing
this approach and adapting it, as appropriate, to its
own circumstances.
Principal risks
Telix actively manages a range of principal risks and
uncertainties with the potential to have a material impact
on the Group and its ability to achieve its strategic and
business objectives.
During the reporting period, a strategic risk profiling
process was undertaken to identify risks and opportunities
in respect of the Group’s near, medium and long term
objectives. A number of risks specific to the operations
and objectives of Telix were identified, each of which is
subject to ongoing risk management across the Group.
The identified risks, which are common to companies in
the pharmaceutical and health sciences industries, were
prioritised in order of risk and opportunity impact to Telix
and are detailed below. The principal risks, which include
other areas of focus relevant to global trends, have also
formed the basis of the development of a three-year
indicative internal audit plan.
While every effort is made to identify and manage material
risks, additional risks not currently known or detailed
36
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
below may also adversely affect future performance. Telix’s
principal risks are outlined below.
Principal risk area
Description of risk
Key mitigation strategies and tactics
Successful
commercialisation
Telix’s operating and financial performance is dependent
on its ability to develop and successfully commercialise
its product portfolio. Telix will need to manage and
optimally develop its business model and global presence
to support the commercialisation of its existing and future
portfolio. Successful commercialisation includes the receipt
of regulatory approvals, successful product launches, the
ability to supply and sell products to customers, and
obtaining and maintaining adequate reimbursement coding,
coverage and payments for products. Should Telix not be
materially successful in one or more of these areas, there is
risk of a loss of commercial opportunities essential for the
achievement of the long-term strategy which may lead to
the inability to realise, or the inability to retain, value.
Telix faces risks in respect to the ongoing success of its
first commercial product, Illuccix. This includes the impact
of new and existing competitive products in the market and
the ability of Telix to continue to drive market growth and
market penetration.
The purpose and mission of the Telix Group is implemented
through short, medium and long-term strategy, clear near-
term objectives restated on at least an annual basis, and
forward-looking measurable targets.
Telix dedicates resources to attracting and retaining talent
to key roles and has developed a dedicated commercial
business unit and global team. Telix has embedded
program development and commercialisation planning and
reporting systems into its operations - including asset
lifecycle management planning, market access planning,
competitive awareness, sales team targets, training and
maturity activities.
The Group is committed, with appropriate cost/benefit
analysis, to investment into required internal infrastructures
to support its ongoing commercial success in the
complex environment in which it operates. Telix has an
enterprise wide risk management approach and an internal
audit function dedicated to protecting and enhancing
company value.
Telix seeks to drive competitive success through its
identification and hiring of experienced key talent
into senior leadership, sales, marketing and strategic
commercialisation roles. The development of life cycle
planning strategies is in place to enable the identification
of opportunities and risks associated with the continuing
success of Illuccix.
Product pipeline
Telix’s long-term sustainable viability will be determined in
part by its ability to continue to identify and successfully
develop and fund a pipeline of products capable of
commercialisation, and will need to be successful in this
in the context of a dynamic and changing competitive
landscape. Telix will also need to protect and enhance the
intellectual property position surrounding its portfolio.
Telix has a strong Research and Innovation (R&I) ethos and
has developed an R&I team and strategy which is driven to
continuously identify and progress early development on a
broad pipeline of pre-clinical and clinical assets. Revenue
growth from commercialisation of Telix assets, including
Illuccix, will provide the Company with optionality to fund
the research and development of its core pipeline assets.
Supply chain resilience
Regulatory risk
Nuclear medicine products and technologies have
inherently complex manufacturing, supply and logistics
chains. Telix is dependent on third parties for the
manufacture and supply of a substantial portion of our
products, both commercial and those under development.
Telix is also dependent on the global radioisotope supply
chain which can be subject to periodic limitations and
disruptions. Disruptions to Telix’s supply chain caused
by an interruption to the availability of key product
components or cost-effective transportation may result in
unexpected delays or increased costs.
Telix operates under a broad range of legal, regulatory,
tax and political systems. The profitability of Telix’s
operations and continued viability - including its ability
to have assets successfully approved or commercialised
in its operating regions, including to maintain competitive
advantage - may be adversely impacted by regional
specific regulatory regimes (which may result in delays
or rejections of applications or regulatory sanctions if
not appropriately managed), changes in regulatory or
fiscal regimes, difficulties in interpreting or complying
with local laws and reversal of current political, judicial
or administrative policies, including as a result of
geopolitical tensions. Regulatory risk includes changes in
reimbursement regulation.
The commercial and business development teams remain
alert to scientific, medical and market developments and
the Group engages expert scientific advisory. The Group
dedicates resources to intellectual property protection
strategy and implementation.
Telix has dual supply surety where possible and
continues to seek viable and sustainable opportunities
for supply chain integration within the Group structure,
for example the acquisition and development of in-house
manufacturing capability at its Brussels South, Belgium
facility. Supplier diligence, proactive vendor management
and vendor audit programs are critical elements of Telix’s
risk mitigation tactics in this area.
Telix takes a phase-appropriate and risk analysis approach
to the development and implementation of regulatory
strategy for its development-stage assets.
Telix has developed and seeks to continuously improve
its regulatory compliance frameworks – including those
for risk area identification and management, training,
monitoring, reporting and remediation. Telix combines
in house-expertise with specialist advisory as needed
and subscribes to a range of global services to keep
abreast of regulatory changes and updates. Telix develops
reimbursement strategies and life cycle management plans
for its products as part of its asset risk management plans.
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Principal risk area
Description of risk
Key mitigation strategies and tactics
Financial risk
Product quality
In addition to the above-mentioned risks associated
with securing financial viability through the successful
commercialisation of its product portfolio, Telix faces a
variety of risks arising from the unpredictability of financial
markets, including the cost and availability of funds to meet
its business needs and movements in market risks, such as
interest rates and foreign exchange rates.
Telix’s products are required to comply with a wide range
of jurisdictionally unique regulatory requirements aimed at
ensuring the quality and efficacy of its products and the
safety of patients. Telix’s financial performance and social
licence to operate could be adversely impacted by poor or
sub-optimal quality of its products.
In addition to mitigation strategies and tactics as described
above to seek long term financial sustainability through
the successful commercialisation of its product portfolio,
Telix implements financial risk management practices
and procedures aimed at protecting value by managing
exposure to financial risks, including those for sound
internal controls, cash flow management and controls,
customer diligence and payment management, treasury
management, and relevant business insurances.
Telix has a Quality Management System (QMS) in
place based on international standard ISO 9001
that is consistently implemented, and risk-based to
maintain quality product for clinical and commercial
distribution. Telix products are manufactured and tested
at certified GMP facilities, and processes, methods
and change control are validated. Telix has a vendor
assurance program in place, including vendor audits. Telix
is committed to training and continuous improvement for
employees and provides training and continuous education
activities to support employee understanding of GMP,
GCP and Good Laboratory Practice (GLP). Telix has an
internal audit program in place as part of its QMS and in
accordance with regulatory requirements. The purpose of
this product-related internal audit program is to provide
assurances around product quality. The QMS internal audit
program is subject to review by the Group’s broader
internal audit program.
Additional areas of focus relevant to current global trends
Principal risk area
Description of risk
Key mitigation strategies and tactics
Talent
Telix’s operating and financial performance is linked
to its ability to attract and retain key talent. Loss of
key personnel could adversely affect operating and
financial performance.
Information security
including
cybersecurity
Increasing sophistication of external attackers
demands an effective and up-to-date cyber
security control environment to prevent significant
organisational loss of systems, intellectual property
and clinical data, damage to reputation and/or
disruption to business.
Telix’s strategic people priorities aim to create
an inclusive culture that optimises diversity of
background and thought, by attracting and retaining
top market talent. Telix continues to invest in a
high-performance culture, which is encouraged by
setting challenging objectives and rewarding high
performers. Remuneration is competitive and is
aligned with business outcomes that deliver value
to shareholders.
Telix undertakes business continuity and disaster
preparedness planning. This includes monitoring
and enhancing information security capabilities
to keep pace with the evolving nature and
sophistication of cyber threats. Telix’s Information
Technology team seeks to continuously enhance
Telix’s ability to prevent, detect and respond to
cyber-attacks both through implementing new tools
and a cyber awareness program for team members.
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Global leadership team
Christian Behrenbruch, BEng (Hons) DPhil (Oxon) MBA
(TRIUM) JD (Melb) FIEAust GAICD
Managing Director and Group Chief Executive Officer
Dr Behrenbruch has over 20 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.
Darren Smith, FCPA MBA
Group Chief Financial Officer
Mr Smith has over 20 years’ experience in executive finance and general
management experience across a broad range of industries, including
in life-sciences, for publicly listed, private, international, and Australian
government organisations.
Prior to joining Telix, Darren was Global Chief Financial Officer and Company
Secretary at Sirtex Medical Ltd for 11 years, during which time the company
experienced rapid workforce expansion and revenue growth.
Darren holds a Master of Business Administration (MBA) from the University of New
South Wales (UNSW) in Australia, and a Bachelor of Business (Accounting) and has
been a Fellow Certified Practicing Accountant (FCPA) for 20 years.
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).
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Richard Valeix, MBA
Group Chief Commercial Officer
Mr Valeix has approximately 20 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).
Kevin Richardson, MBA
Chief Executive Officer, Americas
Mr Richardson has more than 25 years’ experience in the healthcare industry
including seven years focused in sales, marketing and business operations in
the radiopharmaceutical segment. Immediately prior to Telix, Kevin was the
Chief Operating Officer of UroShape Medical, a technology company which
has developed and successfully commercialised a medical device for a large,
undertreated segment in the women’s health market. Prior to this, he spent
seven years in the Americas division of Sirtex Medical, an Australian-founded
radiopharmaceutical company which commercialised a device for the treatment of
liver cancer. During his tenure, firstly as Head of Sales, and then subsequently in the
roles of General Manager and CEO Americas, Kevin oversaw a five-fold increase in
sales for the U.S. region. Kevin has also held senior sales roles with St Jude Medical
and Boston Scientific. He holds an MBA from the University of Texas.
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
U.S., 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.
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Raphaël Ortiz, LLB MIA MBA
Chief Executive Officer, EMEA
Raphaël has more than 20 years of pharmaceutical industry experience in a variety
of roles, including in finance, business development, marketing and sales, as well
as general management in Europe, Latin America and Asia. Prior to joining Telix,
Raphaël worked at Advanced Accelerator Applications, a Novartis Company, and
most recently in the role of Asia-Pacific Cluster Head, setting up the radioligand
therapy operations in the region.
A graduate in Law from Reims (France) and Sevilla (Spain) Universities, Raphaël is
also an alumnus from the Paris Institute of Political Studies (Sciences-Po) and holds
an MBA from UNC Kenan Flagler Business School in the USA.
Lena Moran-Adams, LLB
General Counsel
Ms Moran-Adams has over 25 years’ experience driving proactive, results driven
legal solutions across Australia and the UK, including 19 years’ experience in the
pharmaceutical industry in various country, regional and global leadership roles.
Prior to joining Telix, Lena was most recently a Head of Legal and Business Conduct
at Gilead Sciences and a Global Head of Legal at Novartis. In addition to her
pharmaceutical industry experience, she has worked in small start-up and large
multinational blue-chip businesses in Australia and internationally across the IT,
telecommunications, media and energy industries.
Lena holds a Bachelor of Laws from Flinders University in Australia and is admitted
to the bar and entitled to practice law in Australia, the UK and in New York.
Michael Wheatcroft, BSc (Hons) PhD (Cantab)
Chief Scientist
Dr Wheatcroft has more than 20 years' experience and leads Telix's R&D as Chief
Scientist. 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, Hatchtech Pty Limited 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.
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Jonathan Barlow, BSc LLB (Hons) PGDipMgt GAICD
SVP Global Business Development & Alliance Management
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 focused 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.
Tracey Brown, PhD GAICD
SVP Global Early Stage Clinical Development
Dr Brown joined Telix in February 2020 and leads Telix’s product portfolio in her
role as the SVP Global Early Stage Clinical Development. 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.
Meredith Crowe, BDes MDes
SVP Global People & Culture (Interim)
Ms Crowe is an experienced People & Culture leader specialising in organisation
performance, culture change, leadership development, and team effectiveness.
Prior to joining Telix, Meredith was the Organisational Development Manager at the
Peter MacCallum Cancer Centre in Melbourne where she oversaw the delivery of
strategic and operational People & Culture activities.
Meredith is an Institute of Executive Coaching and Leadership (IECL) Certified
Executive Coach.
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Melanie Farris, BComn FGIA FCG GAICD
SVP Global Governance, Risk and Compliance
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.
Scott Law
SVP Global Manufacturing Operations
Mr Law has 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.
James Stonecypher, BSc MSc RAC
SVP Global Regulatory Affairs and Quality Science
Mr. Stonecypher has over 25 years’ experience in the life science industry in
research, development, and commercialisation of novel human medicines. An expert
in Regulatory Affairs and Quality, James is passionate about rapidly advancing
innovative therapies for high unmet needs and improving access to medicine.
James has held senior leadership roles at major and emerging biopharmaceutical
companies in the U.S. and Europe, including Amgen, Allergan, Micromet, and
BioNTech, leading global regulatory strategy and health authority interactions for
investigational and commercial products. James has worked extensively in oncology
with biologics, small molecules, combination products, and advanced technology
products, including cell and gene therapies.
James holds a Bachelor of Science in Biological Sciences from the University of
Southern California (USC) and a Master of Science in Regulatory Science from the
Johns Hopkins University.
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TE LIX P HA R MA CE UT ICALS
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Kyahn Williamson, BA
SVP Investor Relations & Corporate Communications
Ms Williamson 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).
44
Environmental,
Social, Governance and
Sustainability (ESGS) report
5TELIX PHARMACEUTICALSANNUAL REPORT XXXX TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Introduction
Telix has pledged, in its corporate values, a commitment to putting patients and its people first. Encompassed within this is
an inherent sense of responsibility to all key stakeholders, including the Company’s shareholders, to strive for a high level
of performance on ESGS matters that are material to our Company.
Our approach to ESGS begins with continually understanding the areas that align to our purpose, objectives and the
delivery of sustainable Group performance. With stakeholder input we have developed ESGS priority actions that are
integrated into our business strategy and operations. We recognise that our performance on ESGS standards is linked
to our ultimate ability to drive positive change for patients and our people and create a sustainable business. We hold
ourselves accountable through our governance and reporting practices, and we aim to report comprehensively and
transparently on both our ESGS, and overall performance.
In 2021 we published our first ESGS report and materiality assessment. This provided the starting point for our ESGS
journey. This year’s report outlines the steps we have taken to address these material matters during 2022, in our quest for
ongoing and continual improvement across the spectrum of ESGS standards.
This ESGS report should be read in conjunction with the Managing risk section of the Annual Report and our 2022
Corporate Governance Statement.
ESGS governance
The Board retains ultimate oversight of material ESGS risks and opportunities and operates through the Audit and
Risk Committee to ensure compliance with applicable requirements (including the ASX Corporate Governance Council’s
Recommendation 7.41), and consideration of emerging landscapes and expectations where appropriate. The Board
oversees and approves Telix’s strategic direction and the effectiveness of Telix’s corporate governance policies. Telix’s
CEO and Global Leadership Team, supported by working groups, have responsibility for sustainability at Telix. The SVP
Global Governance, Risk and Compliance collaborating with all members of the Global Leadership Team, is responsible for
progressing the development of the ESGS strategy. Regular updates and recommendations are provided to the Board and
Audit and Risk Committee on ESGS activities across the Telix Group.
Our key stakeholders
Telix stakeholders represent a broad range of individuals and groups. By engaging with our key stakeholders we can better
understand their expectations and needs aligned to the long-term sustainability of our business.
Who
Why
How
Employees
To create a safe, sustainable
and performance-driven
working environment with
a culture that will drive
innovation and deliver on the
Group’s objectives and goals
Medical
community
and patients
Customers –
including payers
To ensure our innovation and
pipeline development remains
connected to patient needs
and experience
To mitigate risk and
to ensure our commercial-
stage and development-stage
assets meet the needs of
the customer
• Code of Conduct and other key corporate governance policies
• diversity, equity and inclusion initiatives
•
•
•
•
•
•
•
training and development pathways
engagement surveys – in which we promote and reward participation
company events to facilitate connection and collaboration
proactive and inclusive internal communication forums
health, safety, wellbeing and environment (HSWE) programs
key clinician opinion leader strategy
product and disease area advisory boards
• direct connections with patient and patient advocacy groups
•
participation in scientific and medical congresses
• direct communication
1. Recommendation 7.4: a listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or
intends to manage those risks. Source: Corporate Governance Principles and Recommendations, Australian Securities Exchange Corporate Governance Council (4th edition), 2019.
46
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Who
Why
How
Shareholders
and investors
To communicate our strategy,
our governance around
delivery and our performance
Policy makers
and regulators
Partners,
contract
organisations
and material
supply
chain vendors
To lift the profile of
Theranostics, and partner
with governments to create
systems that encourage
innovation and access to the
latest technologies
To support sustainable
business growth and deliver
access to a range of
diagnostics and therapies
ESGS materiality assessments
•
investor communications strategy and dedicated investor relations team
• direct engagement with shareholders and investors
•
•
•
•
•
•
•
hybrid Annual General Meetings (AGM) which enable direct feedback to
Directors from the widest possible group of shareholders, located both
within Australia (who can participate physically or participate online), or
outside Australia via online participation. Shareholders who choose to
participate online can hear and view the AGM on their own devices, vote
on resolutions and ask questions as if they were physically present
engagement program for governance and proxy advisors
investor roadshows and webinars
lead industry collaboration with policy makers, highlighting the unique and
complex nature of personalised nuclear medicine and its high value to
society, delivering better outcomes for patients
contribute to policy initiatives that improve healthcare system readiness
for Theranostics, across governance, regulation and reimbursement, service
provision, workforce and health information
conduct assessments, diligence and risk assessments of our contract
research and manufacturing organisations and other material supply
chain vendors
foster connections between material supply chain partners to
facilitate interconnectedness
Understanding and prioritising the ESGS issues that matter most to our key stakeholders and the long term sustainability
of our business enables us to focus and report on them effectively and transparently. Telix conducted its first ESGS
materiality assessment in Q4 2021, the results of which guided our ESGS priority commitments and resulting activities
during 2022.
Pillar
Priority
FY22 Progress
Environment
Statement on
environmental commitments
Telix established and published its inaugural Environment and Environmental
Sustainability Policy which states our principles and commitments to
managing environmental risks; improving environmental performance; safe
practices for manufacture, transport, disposal and waste management for
radiopharmaceutical products; safe and healthy workplaces; educating and
rewarding our teams for good environmental management practices; and
environmental sustainability.
In 2022, Telix:
•
•
commenced 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.
implemented a reusable packaging solution for transporting
radiopharmaceutical products and product accessories to help reduce
the Company’s packaging footprint. Refer to figure in the Promoting
environmental sustainability section of this ESGS report.
Social
• Access to medicine
In 2022, Telix established and published its first:
• Product and service safety
• Supply Chain Management
• Clinical trial safety
• Diversity, equity and inclusion
•
•
•
Employee engagement
and satisfaction
Labour management
and practices
Employee recruitment,
development and retention
• Access to Medicines Policy which states our principles and commitment
to discovery and innovation; enabling access where possible and
incorporating compliant access strategies into our product development,
post-clinical trial and lifecycle management plans
• Supplier Code of Conduct which details minimum standards expected from
our suppliers, through suitable management systems and processes, in
respect to modern slavery and human rights.
The Board approved measurable gender diversity objectives for FY22. Refer to
the Corporate Governance Statement for our progress against these objectives,
and our FY23 priorities.
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TE LIX P HA R MA CE UT ICALS
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Pillar
Priority
FY22 Progress
Governance
• Board oversight of ESGS matters
• Board composition
• Business ethics
• Bribery and corruption
• Whistleblower program
During 2022, we established, implemented and trained employees on our
Global Field Interaction Manual which acts as a roadmap to ensure all Telix
employees understand the Group’s compliance and values commitments and
how to interact with healthcare professionals ethically and with integrity, as well
as in accordance with applicable codes and regulations.
During the year Tiffany Olson was appointed as a Non-Executive Director.
Along with bringing valuable industry skills and experience, this appointment
contributed to the Board’s ongoing commitment to gender diversity and
increased the Board’s female representation to 33%.
Key corporate governance policies, including the Whistleblower Protection
Policy were translated into the first languages of our employee base (English,
French and Japanese) to increase accessibility and understanding.
Environmental
We recognise that responsible management and efficient
use of natural resources is key to our sustainable growth.
We are committed to complying with all environmental laws
applicable to our operations. During the year, there were no
breaches of environmental laws that resulted in a financial
penalty or public notice.
In 2022, our manufacturing facility under refurbishment in
Brussels South, Belgium, received updated authorisations
from the Belgian FANC aligned with the scope of
Telix operations. It also received an updated operation
authorisation and environmental permit for the facility from
the local Belgian authorities, valid up to 7 October 2042.
Promoting environmental sustainability
During the year, Telix implemented its Environment and
Environmental Sustainability Policy outlining our principles
and commitments to managing environmental risks;
improving environmental performance; safe practices for
manufacture, transport, disposal and waste management
for radiopharmaceutical products; safe and healthy
workplaces; educating and rewarding our teams for good
environmental management practices; and environmental
sustainability. Telix is also 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.
As an example of our commitment to environmental
performance, during the year, Telix commenced use
of a second-generation reusable packaging solution
for transporting radiopharmaceutical products and
product accessories to help reduce the Company’s
packaging footprint.
Climate change
We recognise that climate change poses a risk for the
health of the global population, businesses, communities
and the economy. A warming planet increases the risk
of wildfires, rising sea levels, extreme heat, severe
weather and droughts. These hazards can have a direct
effect on population health and further stress health
care infrastructure.
We are committed to adopting and implementing
appropriate and relevant responses to climate change.
These include aiming to optimise energy efficiency with
an overarching goal of reducing emissions; maintaining
an understanding of government and other science-based
reports and findings; and ensuring the leadership team
and Board are kept aware of current and emerging climate
change related issues and risks.
For future disclosures we will give consideration to the
rapidly evolving standards and impending release of
the International Sustainability Standards Board’s Climate-
related Disclosures (Climate Exposure Draft).
48
Reusable packaging for radiopharmaceutical shipmentsTelix designed a reusable Type A Package1 for transporting radiopharmaceutical products. The objective was to help reduce the Company's packaging footprint, whilst remaining compliant with radiation transport safety standards.2,3In collaboration with an Australian supplier, packaging was validated to transport a range
of Telix assets at various temperatures.These packages are being used
in shipments for clinical trials, supporting Telix’s commitment
to improving environmental performance. The flexible
design provides a sustainable transportation blueprint for
future commercial assets.1. See: https://nuclearaustralia.com.au/2020/01/20/type-a-package-design-and-verification/
2. International Atomic Energy Agency
3. International Air Transport Association
TE LIX P HA R MA CE UT ICALS
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Energy efficiency and safe practices for
radiopharmaceutical products
an environment that empowers wellbeing, helps us attract
and retain top talent.
We are committed to applying strategies and procedures
to effectively manage the energy use of office equipment
and appliances; ensuring building operations are effectively
managed to gain operational efficiency and energy
performance; applying strategies and procedures to
effectively manage energy use for employee travel;
procuring and sourcing motor vehicles that have high
clean air, energy efficiency and greenhouse gas indexes;
evaluating alternative means of conducting business before
undertaking travel commitments; applying strategies and
procedures to effectively manage general office waste
including through the ongoing provision of recycling
receptacles, ensuring any surplus office supplies are
reused where practical and using electronic document
management wherever possible; and applying strategies
and procedures to effectively manage potable water use
and waste water.
Telix recognises that nuclear industries must carefully
monitor and control what they release into the
environment to keep the air, water and land clean. Telix
recognises and supports the safety standards of the
International Atomic Energy Agency and the International
Commission of Radiological Protection which provide for
rigorous regulatory mechanisms to restrict the release
of radionuclides and control any radiological impact
on people and the environment. Telix is committed to
limiting the release of radioactivity into the environment
and to ensuring compliance with established radiation
protection standards.
Waste management
Telix will apply and promote strategies, processes,
practices and procedures to effectively manage the
safe and responsible manufacture, transport, disposal
and waste management of radiopharmaceutical products
relevant to its business operations and activities;
ensure waste management and disposal infrastructure
is established and maintained; maintain accurate and
complete records for reporting purposes to nuclear
regulatory authorities in the jurisdictions in which
Telix operates; and acknowledge and reward employee
innovations in this area.
Social
Our greatest opportunity to contribute to society is
through the development of new medical products and
ways to make existing medical products better and/or
more accessible to patients across the globe with
unmet medical needs. The patient impact map shows
global locations where Telix products (commercial and
investigational) were delivered for use to patients during
the year. We recognise that our success starts with
our people; creating a safe workplace and culture that
fosters diversity, equity, inclusion, belonging and wellbeing
drives a healthy, innovative and high-performing workforce.
Cultivating a diverse and inclusive workforce, and fostering
Access to Medicines
Our global approach is guided by our Access to Medicines
Policy which includes our statement of guiding principles
and commitments and covers commitment to discovery
and innovation, commitment to enabling access and
incorporating access strategies into development plans,
commitment to working with industry partners and patient
advocacy groups and promotion of strong global healthcare
systems. Strategies and actions to enable delivery to
these commitments are embedded across the Group. For
example, as part of Telix's commitment to enabling access
to medicines, the Company is running a registry study of
a technetium-based PSMA-targeting imaging agent which
works with SPECT cameras, the predominant imaging
modality in developing countries.
Telix will maintain an awareness of the efforts and strategic
plans of industry partners - including large pharmaceutical
companies, supply chain partners and government or non-
government agencies – and patient advocacy groups on
access to medicine issues. Where possible and aligned to
the Group’s strategic objectives, mission and values, Telix
will work with industry partners to consolidate efforts and
positive outcomes for more patients.
At the date of this report, Telix has one product
commercially approved in certain jurisdictions - an imaging
agent for men with prostate cancer - and a pipeline
of innovative diagnostic and therapeutic assets under
development. Given the Group’s current size and stage,
setting defined targets with respect to access to medicine
strategies is not appropriate. The Group will continue to
assess this status.
R&D and innovation
Telix has a strong research, development and innovation
program which aims to build a pipeline of new product
49
Patient impact*Illuccix sale permitted under special exemption, compassionate or magisterial use.
**Clinical trials (including IITs) and NOBLE Registry.Illuccix (TLX591-CDx) other use*AustraliaNew ZealandIlluccix approvedClinical trials**SwedenCzech RepublicFinlandSlovakiaAustriaItalyFranceSpainBelgiumSouth AfricaIndonesiaKoreaMexicoBrazilNorwayUKLuxembourgU.S.CanadaNetherlandsAzerbaijanTurkey TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
candidates and related platform technologies that have the
potential to improve patient outcomes.
Telix’s values affirm our commitment to explore possibilities,
embrace challenge and use our talents and knowledge to
create a better future for patients. Telix is leveraging its
expertise in the development of radiopharmaceuticals to
develop new targets and technologies that complement
existing therapies and products or lead to new clinical
applications. As outlined in the Annual Report Telix’s
achievements this year bring the Company closer to
its goal of bringing potential new imaging agents and
therapies to patients. Notably in 2022, the positive readout
of the Phase III ZIRCON studies, demonstrates the potential
to fulfil a significant unmet need in the diagnosis of ccRCC,
the most common and aggressive form of kidney cancer.
We believe that participating in clinical trials conducted
under International Conference on Harmonisation
guidelines for Good Clinical Practice (ICH GCP) standards
with full local regulatory and ethics committee review is
the most appropriate way for patients to access medicines
prior to regulatory approval and marketing authorisation.
In some circumstances when this is not possible, patients
with life-threatening conditions may seek special access
to investigational medicines outside of a formal clinical
trial setting. These situations are typically referred to as
compassionate use, but can also be known as expanded
access/ special licence, special access, early access, pre-
approval access and emergency use. The criteria for these
options are based on regulations enabling this type of
access that are different in each country.
We work to minimise the frequency and severity
of safety and environmental incidents by focusing
on proper facility design, process controls, operation
and maintenance procedures, protection systems and
emergency response capabilities.
Our global safety program is designed to drive a proactive
safety culture and reinforce the link between our leadership
behaviours and our WHSE strategy. We believe that
through visible management, leadership and employee
engagement, we can increase the awareness of hazards
and help employees make the right choices when it comes
to WHSE.
WHSE plans at the Brussels South location are prepared
by an experienced and accredited external “safety
coordinator” as required by Belgian legislation. The General
Plan of Health and Safety at work is specifically prepared
to cover safety before, during and in follow up after
completion of each section of building works at site. All
employees, contractors and visitors are obliged to follow
the plan in addition to any other existing internal safety
rules and obligations.
Our Wellbeing program aims to advance the conversation
on mental health and provide support for employees where
and when they need it. The program is designed to support
our people in proactively managing mental health concerns
and challenges. Through it, employees and their families
can access early intervention and clinical resources, such
as free, independent, and confidential support from trained
professionals through an Employee Assistance Program.
In addition, such programs may be a condition of specific
regulatory pathways such as Expanded Access Programs
with Breakthrough Designation from the FDA. Telix
will consider compassionate use requests from treating
physicians subject to local/national laws and regulations.
Health, safety and well-being
As a global healthcare company, we are committed to
providing a safe and healthy workplace for our employees
and contractors, and comply with all applicable safety
laws and regulations. We seek to eliminate work-related
injuries, illnesses and unplanned events from all aspects of
our operations through comprehensive programs that are
part of our work, health, safety and environment (WHSE)
strategy. WHSE leading and lagging statistics are reported
to the leadership team, the PCNRC, and the Board.
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. We are embracing hybrid
working, so that employees have more flexibility to
balance professional and personal needs and reduce
unnecessary travel while maintaining connectivity and
working relationships.
Diversity, equity and inclusion
We strive to develop a culture of belonging and to
ensure the diversity of our employees reflects the
external world. This will help us better understand the
needs of the patients, health care providers, customers
and other stakeholders we serve, including those with
different abilities.
Telix maintains and promotes meaningful consultation with
employees on health, safety, wellbeing and environment
issues through an active global WHSE network, with WHSE
officers and representatives in each of Telix’s global office
locations. We adopt a proactive and preventive approach to
WHSE issues by providing information, education, training
and consultation on current and emerging WHSE issues. All
employees are required to attend respect in the workplace
training, and all people leaders are required to attend
unconscious bias education.
Employee engagement and wellbeing, alongside diversity,
equity and inclusion (DEI), is a focal point of the
Group’s People & Culture strategy. Telix has a Diversity
and Inclusion Policy (available on our website) which
outlines the Group’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 Board approves appropriate, measurable
objectives for achieving gender and other forms of
diversity and inclusion, including with respect to increasing
representation in senior leadership by employees that
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TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
identify as female. Refer to the Corporate Governance
Statement for more information on diversity and inclusion,
including progress against our FY22 measurable objectives.
our Employees and business partners, wherever they
are operating.
Telix runs an employee affinity group focused on diversity,
inclusion and belonging, and a ‘Learning Network’ which
provides a safe environment to share stories, experiences,
skills and insights with the aim of creating a network
of support across the Group and advancing individual
leadership capability.
We use a comprehensive approach to ensure recruiting,
retention and leadership development goals are executed
across the Group. We hire talented leaders to achieve
improved representation across all dimensions of diversity.
We provide training to our people managers on strategies
to mitigate unconscious bias in the candidate selection and
hiring process. In addition, we utilise a communications
strategy to reach a broad pool of talent in our critical
business areas.
Product safety and quality
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.
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. We manufacture our investigational and
commercial products using world class techniques and put
our products through rigorous quality control. We partner
with manufacturers and suppliers across the value chain
who are carefully selected and committed to our strategy,
values and corporate citizenship.
Our global Quality function supports patients and patient
safety by focusing on: conducting business in compliance
with all applicable laws, regulations, and standards;
ensuring management responsibility and accountability;
providing appropriate education and training to enable
Telix’s people to carry out their work competently; actively
managing supplier services and maintaining visibility;
effectively executing quality planning, record-keeping,
auditing, and issue management; utilising risk-based
decision making; and establishing and maintaining positive
benefit/risk profile for Telix’s products.
Telix adopts internationally recognised guidelines for
ethical conduct of clinical trials including ICH GCP, as well
as individual country regulations and guidelines.
Human rights
An overarching philosophy of Telix is to respect and
promote human rights. As such, the Group is committed
to identifying and addressing any instances of modern
slavery in our operations and supply chains. We respect
international human rights and expect the same from
Our philosophy is informed by the International Bill of
Human Rights (which includes the Universal Declaration of
Human Rights and the International Labour Organisation's
Declaration on Fundamental Principles and Rights at Work)
and the UN Guiding Principles on Business and Human
Rights. We are striving to have transparent supply chains
and to report in a way which complies with all applicable
modern slavery legislation including the Australian Modern
Slavery Act 2018. In 2022 we established and published
our Supplier Code of Conduct which details minimum
standards expect from our suppliers, through suitable
management systems and processes, in respect of the
management of labour and human rights risks.
We abide by strict ethical standards in our own operations,
and we expect equivalent standards from our suppliers. Our
Supplier Code of Conduct is based on our Company’s Code
of Conduct, as well as on the United Nations’ Universal
Declaration of Human Rights.
Governance
We are committed to conducting business in an open
and accountable way. We aim to instil and maintain
corporate governance practices that are rigorous and
of a high standard and that assist in ensuring the
delivery of shareholder value. The Audit and Risk
Committee supports the Board in providing oversight
of the Company’s enterprise risk and compliance
management frameworks and the ESGS strategy and
reporting framework. Whistleblower complaints and
material breaches of the Code of Conduct and other key
corporate governance policies are reported to the Board.
Code of Conduct
The purpose of our Code of Conduct (Code) is to set
standards for the way we work at Telix, and to provide a
statement of our values to anyone dealing with Telix.
The expectations and requirements outlined in the Code
apply to the way employees deal with each other,
customers and stakeholders in person, as well as via
technology such as telephone or mobile device, video
conferencing, instant messaging, email and social media.
Employees are expected at all times to act consistently
with the following commitments and ethical standards as
set out in the Code, to:
• act in a way guided by Telix’s values, including
acting in the best interests of Telix and with honesty
and integrity
• comply with the laws and regulations which apply to
Telix and its operations
• disclose material relationships with Telix employees,
collaborators, business partners, customers
and/or suppliers
• not knowingly participate in any illegal or
unethical activity
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• take reasonable steps to avoid conflict of interest, real
or apparent, in connection with your employment
• not enter into any arrangement or participate in any
activity that would conflict with the interests of Telix
• conduct themselves in a manner, both within and
outside working hours, which would not be likely to
negatively impact the integrity or reputation of Telix
• not take advantage of Telix’s property or information or
position for personal gain or to compete with Telix
• not take advantage of or misuse a third party’s property
or information
• immediately report any concern about a possible breach
of the Code.
Whistleblower Protection and Anti-bribery and
Corruption Policies
Under our Whistleblower Protection Policy, employees
have the right and obligation to raise concerns about
values, ethics and professional conduct without fear of
retribution. Our aspiration is to create an environment
where everyone feels comfortable seeking advice or raising
concerns to their manager, People & Culture, or the Legal
and Compliance team. Telix has multiple channels for the
receipt, triaging and redress of ethics and compliance-
related concerns, including General Counsel, Whistleblower
Protection Officer, Risk Officer, or through People & Culture.
However, we recognise there are times when employees
may feel the need for an opportunity to raise a concern or
ask a question without coming forward directly. For those
instances, the Company has established a global hotline
called ‘Your Voice’, operated by an independent third party,
which allows employees to raise concerns relating to
potential violations of the law and the Company policies,
professional standards, and values in a confidential manner
and, where legally permissible, anonymously.
Employees and agents of Telix must comply with our
Anti-bribery and Corruption Policy. They must not, either
directly or indirectly offer, promise, give, solicit, accept or
request any bribe, facilitation or acceleration payments, nor
must they falsify any books, records or accounts relating to
Telix. Employees cannot offer or provide gifts, hospitality or
any other benefit to public officials without prior written
approval of the General Counsel, nor can any gift or
hospitality be provided which does not comply with the law
and/or related Telix policies. Employees cannot make any
political or charitable donations on behalf of Telix which are
or could be perceived to be a bribe, nor are they permitted
to cause, authorise or willfully ignore any conduct that is
believed or suspected to be contrary to the Company’s
related policies or any anti-corruption laws.
Interactions with Healthcare Professionals
Telix employees must always comply with applicable laws,
regulations and codes and uphold the highest standards
of ethics and integrity leadership. Our relationships with
Healthcare Professionals (HCPs) are highly regulated, are
intended to benefit patients, and are intended to enhance
the practice of medicine. Our interactions with HCPs is
focused on informing them about products and providing
relevant scientific and educational information. Telix has
in place a global Field Interaction Policy Handbook which
details expectations with respect to interactions with HCPs
and provides Q&A and real-world examples to enable
employees to understand the requirements in practice.
Other key corporate governance policies
Telix is committed to ensuring that its practices globally
comply with all applicable competition laws. Telix’s
Competition Policy forms part of Telix's risk management
framework. The Policy is designed to provide employees
an understanding of the basic competition law prohibitions
and their responsibilities in relation to those prohibitions.
Employees are required to recognise situations where
competition law issues arise and then work with legal
staff to resolve these issues or to seek further legal
advice. All Telix employees are required to comply with
the Competition Policy at all times. To facilitate a
better understanding of the competition rules, training
is conducted from time to time. Compliance with the
Competition Policy is subject to internal audit and is
reportable to the Board.
Telix is committed to protecting the privacy of all
individuals with whom it deals. We are committed to
protecting the privacy of information and to handling
personal information in a responsible manner in accordance
with Australian privacy legislation, including the Privacy Act
1988 (Cth), the Privacy Amendment (Enhancing Privacy
Protection) Act 2012, the Australian Privacy Principles
(APPs), and relevant Australian State and Territory privacy
legislation (collectively the Australian Privacy Law).
Telix also acts in accordance with applicable legislation
concerning privacy in other countries and regions in
which Telix operates, including but not limited to the
General Data Protection Regulation 2016/679 (GDPR), UK
Data Protection Act 2018 (amended 2020) (UK DPA),
Swiss Federal Act on Data Protection (FADP), U.S. Health
Insurance Portability and Accountability Act of 1996
(HIPAA), and the Japanese Act on the Protection of
Personal Information (APPI).
We have implemented systems, processes and procedures
to ensure that we appropriately collect, use and safeguard
information throughout its life cycle to ensure integrity
of information and to prevent unauthorised access and
disclosure. We have developed and continue to improve an
information security and cyber resiliency program, including
an information security training program.
In the event of a data breach, Telix is committed to
complying in all respects with the requirements of all
relevant privacy laws. Telix has in place data breach
policies and plans which apply when handling personal
information breaches related to the data protection laws
applicable to Telix.
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TE LIX P HA R MA CE UT ICALS
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Corporate governance statement
The Board is committed to achieving and demonstrating standards of corporate governance appropriate to the operations
and size of the Company, and continuing to refine and improve Telix’s governance framework and practices to ensure they
meet the interests of shareholders and other stakeholders.
The Board of Directors of Telix Pharmaceuticals Limited and its subsidiaries (Telix or the Company) believe good
corporate governance:
• is an integral part of the culture and business practices of the Company
• will add to Telix’s performance to create shareholder value, while having regard to other stakeholders and an
appropriate risk and return framework.
The Board uses the guidance provided by the Australian Securities Exchange (ASX) Corporate Governance Council’s
Corporate Governance Principles and Recommendations 4th Edition (ASX Principles) as a focus for the development and
continuous improvement of the Group’s governance framework, policies and practices to ensure they meet the interests
of shareholders, regulators and other stakeholders. The Board has adopted Charters and key corporate governance
documents which articulate the policies and procedures followed by Telix. These documents, together with Telix’s 2022
Annual Report, are available on Telix’s website at www.telixpharma.com under the Investors Centre section.
This Corporate Governance Statement summarises Telix’s main corporate governance practices for the reporting period,
being the year that ended 31 December 2022.
This Statement is current as at 27 February 2023 and has been approved by the Board.
The following table indicates where each ASX Principle is dealt with in this Statement.
ASX Corporate Governance Principles and Recommendations
Principle 1 – Lay solid foundations for management and oversight
Principle 2 – Structure the Board to be effective and add value
Principle 3 – Instill a culture of acting lawfully, ethically and responsibly
Principle 4 – Safeguard the integrity of corporate reports
Principle 5 – Make timely and balanced disclosure
Principle 6 – Respect the rights of security holders
Principle 7 – Recognise and manage risk
Principle 8 – Remunerate fairly and responsibly
Section reference in
this Statement
1, 2, 4
1, 2
3
2, 6
6, 7
7
2, 6
2, 5
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1. Board of Directors
1.1. The Board
The Directors of the Company as at the date of this
Statement are set out below.
1.4. Delegations to management
Day-to-day management of Telix is formally delegated
to the CEO, supported by the management team, in
accordance with the Board Charter and the Company’s
Delegated Authorities Policy.
Details of each Director’s tenure, experience, expertise and
qualifications are set out in the Directors’ report in the 2022
Annual Report and on Telix’s website.
These delegations are reviewed on a regular basis to
ensure that the delegation of functions remains appropriate
to the needs of the Company.
• H Kevin McCann (Chairman)
• Chris Behrenbruch (Managing Director and Group Chief
Executive Officer) (CEO)
• Andreas Kluge
• Mark Nelson
• Tiffany Olson – appointed 31 March 2022
• Jann Skinner
The Board periodically reviews its composition, and
tenure and succession of the Directors, upon input and
recommendation from the People, Culture, Remuneration
and Nomination Committee (PCNRC).
1.2. Role of the Board
The Board is responsible for the governance of the
Company and is accountable to shareholders for guiding
and monitoring the effective management and performance
of the Company.
The Board Charter, which was updated during the year and
available on Telix’s website, sets out how the Board’s role,
powers and responsibilities are exercised, having regard to
principles of good corporate governance, market practice
and applicable laws.
The Board operates in accordance with the principles
set out in its Board Charter, the Company’s Constitution,
relevant laws and ASX listing rules.
1.3. Responsibilities of the Board
The Board’s key responsibilities, as summarised in the
Board Charter, include to:
• set the strategic objectives and risk appetite of
the Company within which the Board expects the
management team to operate
• model and monitor the values and culture of
the Company
• select, appoint, remove and evaluate the performance,
determine the remuneration, and plan succession of
the CEO
• oversee the management, performance and corporate
governance frameworks of the Company, including
ensuring that mechanisms are in place for making
timely and balanced disclosure to shareholders and the
market regarding the Company’s performance and major
developments affecting its state of affairs.
1.5. Board composition and succession
The Board is committed to ensuring that it is comprised
of individuals who collectively have the appropriate skills
and experience to develop and support the Board’s
responsibilities and Company objectives. The Board’s
composition is determined based on criteria set out in the
Company’s Constitution and the Board Charter, including:
• a majority of Independent Non-Executive Directors
(NED) and a NED as Chairman
• the Board having an appropriate mix of skills,
knowledge, experience, and expertise necessary to
review and approve the strategic directions of the
Company, and to guide and monitor management
• Directors who can understand and competently deal
with current and emerging business issues
• Directors who can effectively review and challenge
the performance of management and exercise
independent judgement
• re-election of Directors at least every three years
(except for the CEO).
1.6. Board skills and experience
The Board recognises the importance of having Directors
with a broad range of skills, backgrounds, expertise,
diversity and experience in order to facilitate constructive
decision making and facilitate good governance processes
and procedures.
The Company has established a Board skills matrix relevant
to the Company, which was reviewed during the reporting
period. A summary of the main skills and experience
of the Board as applicable to its strategic objectives is
set out in the skills matrix below. A regular assessment
of the optimum mix of these skills and experience is
conducted and takes into account the strategic positioning
of the Company.
The skills attributed to each Director recognise their
experience acquired through previous executive or NED
roles. The Board has access to the Company’s senior
management team and external consultants for required
expertise. The Board considers that, following the
appointment of Tiffany Olson on 31 March 2022, there are
currently no significant gaps in the skill set that it seeks
to have represented on the Board, and that the skills and
experience of the Directors are relevant and appropriate
to Telix.
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Skill category
Skill description
Number
of Directors
Strategic thinking
Experience in developing and implementing enterprise-wide successful strategies,
and an effective capital management framework, including appropriately
questioning and challenging management on the delivery of agreed strategic
planning objectives.
Relevant industry experience
Experience in the radiopharmaceuticals industry, including global
radiopharmaceutical sales and marketing, radiopharmaceutical manufacturing,
global supply chain and distribution, and a deep understanding of patient focus.
Global corporate experience
Global experience on board or management of geographically
diverse organisations.
Commercial partnering, M&A
Experience in planning, managing, directing or advising on mergers,
acquisitions, divestments, portfolio optimisations, delivering funding solutions, and
commercial partnering.
Financial and/or
assurance acumen
Experience in financial accounting and reporting, corporate finance and/or
restructuring, corporate transactions, assurance, including ability to evaluate the
adequacies of financial and risk controls and understand key financial drivers of
the business.
Risk and
compliance management
Experience and deep understanding of risk management and compliance
frameworks and controls, ability to identify and oversee mitigation strategies for
emerging risk and compliance issues in the organisation.
People, culture
and remuneration
Experience in leading people, oversight of culture and organisational design,
remuneration frameworks that attract and retain a high calibre workforce and a
culture that promotes diversity and inclusion.
6/6
3/6
6/6
5/6
5/6
6/6
6/6
1.7. Director independence
The Board has adopted specific principles in relation to
NED independence as set out in the Board Charter.
The Company recognises that independent Directors have
an important role in assuring shareholders that the Board is
able to act in the best interests of Telix and independently
of management. The Company’s NEDs meet in the absence
of management and Directors are also able to consult
independent experts at the Company’s expense, subject
to the estimated costs being approved by the Chair in
advance as being reasonable. The Board Charter requires
that the Board has a majority of NEDs who satisfy the
Company’s criteria for independence.
The independence of NEDs is assessed prior to
appointment and reviewed annually by the PCNRC. The
Board believes that independence is evidenced by an
ability to constructively challenge and independently
contribute to the work of the Board. The Company’s
criteria for assessing Director independence align with the
guidance provided in the ASX Principles.
As at the date of this statement, with the exception
of the CEO and Andreas Kluge, the Board considers
that each NED is independent, having regard to the
Board Charter and ASX Principles. Andreas Kluge is not
considered independent due to his substantial holding in
Telix shares, and his prior employment as a Telix Executive
Director until 2 June 2020. The Board has determined
that Tiffany Olson is independent and can demonstrate
an objective assessment of all matters before the Board,
notwithstanding her prior employment with Cardinal Health
Inc (CAH:NYSE); which provides radiopharmacy and
logistics services to support Telix’s prostate cancer imaging
product TLX591-CDx (68Ga-PSMA-11) in the United States.
1.8. Conflicts of interest
Directors must keep the Board advised, on an ongoing
basis, of any interest that could potentially conflict with
their duties to the Company. The Board has developed
procedures to assist Directors to disclose potential
conflicts of interest and, during the year, all NED completed
independence declarations. Where the Board believes that
a significant conflict exists for a Director on a Board matter,
appropriate restrictions or conditions are imposed, which
may include, but are not limited to, the Director concerned
not receiving the relevant Board papers and not being
present at the meeting whilst the item is considered.
1.9. Chairman
The Board Charter provides that the Chairman should
be an Independent Director and should not be the CEO.
The Chairman, H Kevin McCann, is an independent NED.
The responsibilities of the Chairman are described in the
Board Charter. The roles of the Chairman and the CEO are
exercised by separate individuals.
1.10. Company Secretary
During the reporting period, the Board appointed
Genevieve Ryan as Company Secretary, to replace Melanie
Farris. Details of the Company Secretary’s skills, experience
and expertise are set out in the Directors’ report of the
Annual Report. The role of the Company Secretary is
set out in the Board Charter. The Company Secretary is
accountable to the Board through the Chairman, and the
appointment or removal of the Company Secretary is a
matter for the Board as a whole. Each Director is entitled to
access the advice and services of the Company Secretary.
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1.11. Nomination and appointment of Directors
Before appointing or proposing a person for election
as a Director, Telix conducts all appropriate background
checks, which may include reference checks, criminal and
bankruptcy record checks.
may seek independent professional advice from an
advisor suitably qualified in the relevant field at the
Company’s expense.
A copy of advice received by the Director will be made
available for all other Directors.
Prior to a NED election or re-election by shareholders, the
Board provides shareholders with all material information
known to Telix which is relevant to the decision of
shareholders to elect or re-elect the Director, in order to
assist their decision-making process. This information is
contained in the notice of meeting of the AGM at which the
Director’s appointment will be considered by shareholders.
1.15. Senior executive appointments, agreements
and induction
The Company conducts all appropriate background
checks on prospective senior executives, which may
include reference checks and criminal and bankruptcy
record checks.
A candidate for election or re-election as a NED will be
required to provide the Board or PCNRC with all material
information and an acknowledgement that he or she will
have sufficient time to fulfil his or her responsibilities as
a Director.
1.12. Agreements with Directors
NED are appointed pursuant to a formal letter and a deed
of appointment, which set out the key terms relevant
to the appointment, including the term of appointment,
the responsibilities and expectations of Directors in
relation to attendance and preparation for all Board
meetings, appointments to other boards, requirements for
dealing with conflicts of interest, and the availability of
independent professional advice. NED are expected to
spend a reasonable amount of time each year preparing
for and attending Board and Committee meetings and
associated activities. Other commitments of NED are
considered by the PCNRC prior to appointment to the
Board and are reviewed each year as part of the annual
Board performance assessment.
1.13. Director induction and development
Telix has a process in place to educate new Directors
about the operation of the Board and its Committees,
the Company’s purpose, values, strategy, any financial,
strategic, operational and risk management issues, and the
expectations of performance of Directors. This induction
program includes providing new Directors with access
to previous Board and Committee meeting minutes,
Telix’s policies and its strategic objectives, and facilitates
meetings with relevant senior executives. This induction
process was undertaken for Tiffany Olson during the year.
Directors visit Telix sites on an ongoing basis and meet
with management to gain a better understanding of
business operations. These visits are conducted either as
a full Board, or Board Committee, or with one or two
Directors. Directors are also given access to continuing
education opportunities to update and enhance their skills
and knowledge.
1.14. Independent professional advice and access to
information
Each Director has the right to access all relevant
Company information and senior executives and, subject
to prior consultation with and approval from the Chairman,
The Company also has written agreements with the CEO
and each senior executive, setting out the terms and
conditions of their employment and the obligations they
are required to fulfil in their role. Each candidate is required
to accept all terms and obligations as a condition of their
employment. The key terms of the employment contracts
of key management personnel (KMP) are set out in the
Remuneration Report in the 2022 Annual Report.
The Company has a process for the induction of new senior
executives, which enables them to gain an understanding
of the Company’s purpose, values, strategy, financial
position, operations and risk management policies.
2. Board committees
To increase its effectiveness, the Board has established the
following standing Board Committees:
• Audit and Risk
• Disclosure
• People, Culture, Remuneration and Nomination
The members of these Committees as at the date of this
Statement are set out in the table below. Profiles of each
member/Director, including their relevant experience and
qualifications, are set out in the Directors’ report of the
2022 Annual Report and on the Company’s website. The
Company Secretary is the Secretary of each Committee.
The Audit and Risk, and People, Culture, Remuneration
and Nomination Committees have a Charter which includes
a more detailed description of their roles, responsibilities
and specific composition requirements. The Charters are
available on Telix’s website. The Board may establish other
Committees from time to time to deal with matters of
special importance. In FY21 and FY22, a special purpose
Subcommittee was convened to consider and address
matters relating to capital needs and capital management.
All Directors are welcome to attend Committee meetings
even though they may not be a member.
The Committees have access to senior executives
and management, and independent advisors. Committee
agendas and papers are available to Directors before
the meetings. Copies of the minutes of each Committee
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TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
meeting are made available to the full Board, and the
Chair of each Committee provides an update on the
outcomes at the Board meeting that immediately follows
the Committee meeting.
Board Committees
Directors
Board Audit and Risk Committee Disclosure Committee
People, Culture, Remuneration and
Nomination Committee
M
M
M
C
H Kevin McCann
Chris Behrenbruch
Andreas Kluge
Mark Nelson
Tiffany Olson1
Jann Skinner
C: Chair
M: Member
C
M
M
M
M
M
1. Appointed 31 March 2022
2. For financial related disclosures
C
M
M2
C
M
M
2.1. Audit and Risk Committee
The Committee Charter provides that all members of
the Committee must be NED, the majority of whom are
independent, and the Chair cannot be the Chairman of the
Board. At least one member of the Committee must be
a qualified accountant or other finance professional with
relevant experience of financial and accounting matters.
Current members including Chair of the Committee are
shown in this Statement and in the Directors’ report of
the 2022 Annual Report. Tiffany Olson was appointed as
a member of the Committee on 31 March 2022.
The Committee assists the Board in fulfilling its
responsibilities by:
• overseeing the quality and integrity of the Company’s
financial reporting and the operation of the financial
reporting processes. The processes are aimed at
providing assurance that the financial statements
and related notes are complete, in accordance with
applicable legal requirements and accounting standards
and give a true and fair view of the Company’s financial
position and financial performance. During its review of
the Company’s interim and year‑end financial reports
the Committee meets with the external auditor in the
absence of management
of, appointment of a new, or removal of the existing
external auditor
• monitoring and reviewing the Company’s ESGS strategy
and reporting framework.
The internal auditor, and external auditors, the CEO and
the CFO are invited to the Committee meetings at the
discretion of the Committee Chair.
The Committee is required under its Charter to meet
at least quarterly and otherwise as necessary. The
Committee formally met four times during the year.
2.2. Disclosure Committee
The Disclosure Committee reviews all material
announcements to the market, and formally meets to
review and approve the periodic Appendix 4C and activities
report, where not reviewed and approved by the full Board.
All material market announcements are provided to the full
Board following lodgment with the ASX.
Current members, including the Chair, of the Committee
are shown in this Statement and in the Directors’ report of
the 2022 Annual Report. The Committee formally met twice
during the year.
• reviewing and monitoring the Company’s systems of
2.3. People, Culture, Remuneration and Nomination
internal control and its risk management framework (for
financial and non-financial risks), including elevated,
new or emerging risks
• reviewing the external auditor engagement. At least
annually, the Committee reviews the terms of the
engagement and assesses the performance, quality,
expertise, resources and qualifications, objectivity,
independence, and effectiveness of the external
auditor. This includes review of any non-audit services
provided by the external auditor. At least annually the
Committee recommends to the Board the continuation
Committee
The Committee assists the Board in fulfilling its
responsibilities to shareholders and regulators in relation
to the Company’s people and culture policies and
practices, including:
• overseeing CEO and Senior Executive Team
remuneration and performance, taking advice from
external advisors where appropriate
• Board renewal and nominations
• Board induction and training
• health, safety, wellbeing and environment
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When a vacancy in the position of NED exists or there is
a need for particular skills, the Committee, in consultation
with the Board, determines the selection criteria based on
the skills deemed necessary, having regard to the skills and
experience of the Board as referred to in the Board skills
matrix. The Committee identifies potential candidates, with
advice from an external third party where appropriate. The
Board then appoints the most suitable candidate. Board
appointees must stand for election at the next AGM of
shareholders following their appointment.
The Committee comprises three Independent NED, and
the Chairman of the Board is the Chair of the Committee.
Current members of the Committee are shown in this
Statement and in the Directors’ report of the 2022
Annual Report.
The CEO is not a member of this Committee, but attends
meetings by invitation, other than for matters relating to his
own remuneration.
Committee members are not involved in making
recommendations to the Board in respect of themselves.
The Committee meets at least half yearly and as otherwise
required. The Committee formally met four times during
the year.
The Code emphasises a strong culture of integrity and
ethical conduct in association with independent Anti-
Bribery and Corruption and Whistleblower Protection
policies, which are available on Telix’s website.
The policies cover expectations on a broad range of
issues, including health and safety, use of information and
its security, market disclosure, fraud, bribery, corruption
and the avoidance of conflicts of interest. Telix has zero
tolerance for bribery and corruption in any form.
The Code includes multiple reporting channels for
suspected breaches and is strongly linked to the
Whistleblower Protection Policy. The Whistleblower
Protection Policy has an easy-reference “how-to guide” for
users, and provides multiple reporting channels including
an external independent contact for whistleblowers.
The Board has also adopted specific policies in key areas,
including diversity and inclusion, continuous disclosure and
dealing with price sensitive information, and dealing in
the securities of Telix. These policies each interact with
the Code. The Board and Management are committed to
ensuring a fair and safe work environment, free from all
forms of discrimination, and accessible and independent
channels to report breaches or suspected breaches
of policy.
2.4. Attendance at Board and Committee meetings
during the reporting period
Details of Director attendance at Board and Committee
meetings held during the financial year are provided in the
Directors’ report of the 2022 Annual Report.
Material breaches of the Code and the Anti-Bribery and
Anti-Corruption Policy, and reports of incidents under
the Whistleblower Protection Policy, are reported to the
Board, and the program is periodically reviewed for its
effectiveness and promoted to team members across Telix.
3. Corporate responsibility
Telix’s Values, Code of Conduct and related policies shape
Telix’s approach to corporate responsibility.
3.1. Acting ethically and responsibly
Telix recognises the importance of honesty, integrity and
fairness in conducting its business, and is committed to
increasing shareholder value in conjunction with fulfilling its
responsibilities as a good corporate citizen. All Directors,
managers and team members are expected to act lawfully
and with the utmost integrity and objectivity, striving at
all times to enhance the reputation and performance of
the Company.
Telix continually assesses and upgrades its policies
and procedures to ensure compliance with corporate
governance requirements.
3.2. Code of Conduct, Anti-Bribery and Corruption
and Whistleblower Protection Policies and
procedures
Telix’s Code and values set the standards we expect of our
people. It represents Telix’s commitment to act ethically,
lawfully and responsibly.
During the year, Telix also introduced a Supplier Code
of Conduct, which sets out the expectations of Telix’s
suppliers and applies to all suppliers, including all
organisations and sub-contractors providing goods and
services to Telix, globally. The Supplier Code of Conduct
is available on Telix’s website.
3.3. Trading in Company securities
By promoting Director and employee ownership of shares,
the Board hopes to encourage Directors and employees to
become long-term holders of Telix securities, aligning their
interests and supporting the long-term success of Telix.
Telix has a Securities Dealing Policy that outlines insider
trading laws and prohibits Directors, team members and
certain associates from trading in Telix’s securities during
specified blackout periods.
The blackout periods are the period from the close
of trading on 31 December each year until after the
announcement to the ASX of the Company’s full-year
results, the period from the close of trading on 30 June
each year until after the announcement of the Company’s
half-year results, the period from the close of trading
on 31 March and 30 September each year until after
announcement of the Company’s quarterly activities report,
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and any other period that the Board specifies from time
to time.
commitment to addressing any instances of modern slavery
and human rights in our operations and supply chains.
Trading of securities during a blackout period can only
occur in exceptional circumstances as outlined in the
Securities Dealing Policy.
The Securities Dealing Policy prohibits Directors, team
members and certain associates from engaging in hedging
arrangements over unvested securities issued pursuant to
any equity incentive plan. The Securities Dealing Policy
meets the requirements of the ASX Listing Rules on trading
policies and is available on Telix’s website.
3.4. Other policies
The Company has a number of other governance policies
which outline expected standards of behaviour of Directors
and team members, a selection of which are available on
Telix's website.
3.5. Ethical conduct of research
As a drug development Group, Telix is involved in testing
potential new medicines on both animals and humans. This
testing is an essential requirement of international medicine
development and regulatory approval processes. All studies
undertaken involving animals or humans are developed
in association with medical, scientific and regulatory
advisors, and with reference to national and international
ethical and scientific codes, including Australia’s National
Health and Medical Research Council and the International
Council for Harmonisation of Technical Requirements
for Pharmaceuticals for Human Use. Studies are only
commenced after necessary ethics approvals have been
received from the institution or clinical site at which studies
are to be carried out.
3.6. Modern slavery and human rights
Telix is committed to its people, and the protection of
human rights. The Company has adopted a Modern Slavery
Policy, available on the Company's website, confirming our
Female representation at each executive level
3.7. Compliance training
Telix has a compliance training program in place which is
completed by team members. This program supports the
principles set out in the Code and other applicable policies.
There are also numerous activities and compliance
programs across the Company designed to promote
and encourage the responsibility and accountability
of individuals for reporting inappropriate or
unethical practices.
4. Diversity and inclusion
Telix’s major centres of operation in Australia, Europe,
Japan and the United States leads to a demographically
diverse workforce. Telix is committed to developing an
inclusive and respectful work environment to optimise
diversity of thought and background. Bringing together
people with different backgrounds and ways of thinking is a
powerful source of competitive advantage in driving better
decision making, innovation and growth.
Telix’s Diversity and Inclusion Policy, available on Telix’s
website, 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, and recognises the positive differences each team
member brings to the business. The Policy includes the
requirement for the Board to set measurable objectives for
achieving gender diversity.
4.1. Measurable objectives and progress
Each year the Board approves measurable objectives for
diversity and inclusion and monitors progress towards
achieving them. The measurable objectives for the
reporting period and progress towards achieving these
objectives is outlined on the following page.
Level
Board
Senior Executive Team
Global Leadership Team
Band 3 Employees (equivalent to VP’s and Senior/Global Directors)
Total workforce
Female representation (%) (as at
31 December 2022)
33%
0%
31%
31%
47%
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FY22 diversity measurable objectives
FY22 measurable objective
Progress (as at 31 December 2022)
Not less than 30% of each gender in
the composition of Telix’s Board
The Board comprises 33% of female Directors, following the appointment of Tiffany Olson on
31 March 2022
Move to equality, targeting not less
than 50% of new appointments to
senior positions be women
Targeting to increase female
representation in executive team
38% of new appointments to senior positions (Band 3 and above) were female (36% in 2021)
During the year, as part of an internal reorganisation to position the Company for its next
stage of growth, the executive leadership team was classified into two groups: the Senior
Executive Team (comprising the CEO and other Executive Key Management Personnel
and Regional CEO’s) and the Global Leadership Team (comprising Senior Executive Team
members and other senior executives who together provide a centralised steering group to
share knowledge and ensure cohesion across the global business). While there is no female
representation on the Senior Executive Team, female representation on the broader Global
Leadership Team increased to 31% from the prior year (29% in 2021)
Targeting workforce gender
composition of 50/50 gender balance
99% of Telix’s workforce have identified themselves as either male or female. 47% have
identified themselves as female
A reduction of 4% in gender pay gap achieved since 2021
Move to equality, targeting a
reduction in gender pay gap
4.2. Looking ahead
Recognising the importance of moving towards gender
equality, the Board has approved the following measurable
objectives for FY23, with management initiatives in place:
• maintaining not less than 30% of each gender in the
composition of Telix’s Board
• targeting to identify and attract female talent for Board
and Senior Executive Team (SET) and Global Leadership
Team (GLT) vacancies
• targeting that not less than 50% of appointments to
senior positions (band 3 and above) are female
• targeting that not less than 50% of internal promotions
are female
consideration of the degree to which each NED has
demonstrated the skills relevant to the position of NED or
Chair, as applicable.
During the reporting period, the Company undertook
an internal evaluation of the Board and Committee
performance, having regard to the ASX Principles.
This evaluation concluded that the composition of the
Board is appropriate having regard to the skill set, expertise
and experience required for a company of Telix’s size and
geographic spread. The evaluation further concluded that
the Company’s Committee structure is effective and is well
led by appropriately experienced and skilled Directors.
• targeting that total workforce is comprised of not more
5.2. Senior executive induction and performance
than 55% of either male or female gender
evaluation
• targeting a year on year reduction of the gender
pay gap.
5. Remuneration
Details of Telix’s remuneration policies, practices and
performance reviews and outcomes, and the remuneration
paid to Directors (Executive and Non-Executive) and other
KMP are set out in the Remuneration report of the 2022
Annual Report.
Shareholders will be invited to consider and adopt the
Remuneration report at the 2022 AGM (May 2023).
5.1. Board and Committee performance evaluation
The Board undertakes a performance evaluation to review
its performance and that of its Committees at least
annually. The Chairman reports to the Board regarding
the performance evaluation process and the findings of
these reviews.
The evaluation may involve surveys by the Directors and
the Board, the assistance of external facilitators and
The performance of senior executives is reviewed on
an ongoing basis, and a formal performance evaluation
takes place annually. Senior executives and the CEO
are assessed against measurable short and long-term
objectives which are aligned with the Company’s key
corporate objectives and business strategy, as well as how
they have demonstrated behaviours that are consistent
with Telix’s values. The CEO performs the evaluations
of the other senior executives. An evaluation of senior
executives was last undertaken in December 2022. The
outcomes of these assessments are then reported to
the Board.
The Board is responsible for approving the objectives
of the CEO and other members of the SET, comprising
the CEO and other Executive KMP and Regional CEOs.
The Board conducts a formal annual evaluation of
the performance of the CEO and SET (following CEO
assessment of SET performance), including an assessment
against these objectives and the demonstration of
behaviour consistent with Telix’s values.
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The outcomes of the performance evaluations of the
CEO and SET then contribute to the determination of
their remuneration.
6. Risk management and assurance
The Company understands and recognises that rigorous
risk and opportunity management is essential for corporate
stability and for sustaining its competitive market position
and long-term performance.
6.1. Risk management
The Board is responsible for overseeing the risk
management framework, internal controls and systems for
monitoring legal and ethical compliance. The Board, with
the assistance of the Audit and Risk Committee sets the
risk appetite and considers Telix’s risk profile on a regular
basis to ensure it supports the achievement of Telix’s
strategic and corporate goals.
The Risk Management section, including the Principal Risks
table in the Directors’ report of the 2022 Annual Report
lists the Company’s risk management governance, current
strategic risks and outlines its strategies to respond to
identified exposures.
Telix’s approach to managing its environmental, social,
governance and sustainability risks is set out in further
detail in the ESGS report within the 2022 Annual Report.
The Audit and Risk Committee reviews the Company’s
ERMF on a regular basis to ensure that it continues to
be sound. The ERMF was reviewed during the reporting
period. It remains fit for purpose and will be reviewed on an
ongoing basis for continuous improvement opportunities.
6.2. Assurance
The Board is responsible for oversight of the effectiveness
of the Company’s internal control environment, with input
and recommendation from the Audit and Risk Committee.
The Board’s policies on internal control governance are
comprehensive, as noted earlier in this Statement, and
include clearly drawn lines of accountability and delegation
of authority, as well as adherence to the Code.
In order to effectively discharge these responsibilities,
the Company has a number of assurance functions
(including internal and external audit) to independently
review the control environment and provide regular
reports to the Board, the Audit and Risk Committee and
management committees. These reports and associated
recommendations are considered and acted upon to
maintain or strengthen the control environment.
6.3. Financial reporting
The Board is committed to ensuring the integrity and
quality of its financial reporting, risk management and
compliance and control systems.
Prior to giving their Directors’ declaration in respect
of the full-year and half-year financial statements, the
Board requires the CEO and CFO to each sign a written
declaration to the Board, to the effect that, in their opinion,
the financial records of the entity have been properly
maintained and that the financial statements comply with
the appropriate accounting standards and give a true and
fair view of the financial position and performance of the
entity and that their opinion has been formed on the basis
of a sound risk management and internal control system,
which is operating effectively.
This written declaration was received by the Board
prior to its approval of the FY22 full-year and interim
financial statements.
The process of receiving CEO and CFO declarations
is also required for the Company’s financial information
included in the quarterly activities reports and consolidated
statements of cash flow.
6.4. Verification of unaudited periodic corporate
reports
Telix prepares periodic corporate reports for the benefit of
investors, including the annual Directors’ report, quarterly
activities reports, consolidated statements of cash flow,
ESGS reports and this Statement.
The Company completes a documented internal verification
process of corporate reports that the Company releases
to the market, including those that are not audited or
reviewed by the external auditor, to ensure that the report
is materially accurate and balanced, and that it provides
investors with appropriate information to make investment
decisions. External advice is obtained, as required.
The Disclosure Committee (or Board) meets on a quarterly
basis to review and approve the activities reports and
consolidated statements of cash flow.
7. Engagement with shareholders and
other stakeholders
Telix has a number of stakeholders including shareholders,
employees, customers, suppliers and local communities.
The Board identifies and prioritises Telix’s key stakeholders,
develops a strategy for engagement with stakeholders and
supports management to engage with key stakeholders to
understand, consider and respond to issues.
Telix is committed to keeping the market informed in
a timely manner and complying with its continuous
disclosure obligations.
7.1. Continuous disclosure and communications
Telix’s Continuous Disclosure Policy, which was recently
updated, is available on Telix’s website and details
the Company’s procedures to ensure compliance with
applicable legal and regulatory requirements under the
Corporations Act and the ASX Listing Rules. The Policy is
approved by the Board and is reviewed regularly to ensure
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compliance with the ASX Listing Rules and guidance on
continuous disclosure. It applies to all Directors and Telix
team members. Its purpose is to ensure:
• giving shareholders the option to receive
communications from, and send communications to,
Telix and its share registry electronically.
• compliance with legal obligations to identify and keep
the market fully informed of material information
• that access to this material information is protected and
controlled until such material information is announced
to the market
• Telix meets its disclosure obligations
• that investors are provided with equal and timely access
to material information.
Telix’s Disclosure Committee meets as required, and often
on very short notice, to ensure compliance with disclosure
requirements. The CEO approves all disclosures before
they are released. Directors receive a copy of all ASX
disclosures promptly following release. The Company
Secretary is responsible for communications with the ASX.
7.2. Shareholder engagement
Telix is committed to providing shareholders and
other financial market participants with consistent and
transparent corporate reporting, as well as timely and
accurate disclosures.
Shareholders and other stakeholders are informed of
all material matters affecting the Company through
ASX announcements, periodic communications and a
range of forums and publications, available on the
Company’s website.
Other shareholder engagement activities include:
• encouraging shareholders to participate in general
meetings, including attending the AGM, exercising
voting rights, and asking questions of the Board. Telix
conducts all voting at general meetings by a poll,
ensuring that voting outcomes reflect the proportionate
holdings of all shareholders who vote (whether in
person or by proxy or other representative). The
Company’s external auditor will attend the AGM and will
be available to answer questions from shareholders on
the conduct of the audit
• participating in Telix’s investor relations program, which
includes investor roadshows and ad-hoc investor
meetings and conference calls with institutional
investors, private investors and sell-side analysts
• engagement with proxy advisors, investor
representative organisations and the Australian
Shareholders Association
• providing through the Company’s website up-to-date
information about the Company and its operations,
the Corporate Governance Framework, the Board and
management, ASX announcements, the share price, and
other relevant information. Information about Telix is
also communicated through a range of other channels,
such as Twitter and LinkedIn
62
Directors’
report
5TELIX PHARMACEUTICALSANNUAL REPORT XXXX TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Company Directors
The names and details of the Company’s Directors at the date of this report are detailed below. All Directors except Tiffany
Olson served on the Board for the full financial year ended 31 December 2022. Oliver Buck retired as Director with effect
from 18 May 2022.
H Kevin McCann, AO BA LLB (Hons) (Syd) LLM (Harvard)
LL.D (Syd) (Hon) 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. Kevin is a former corporate lawyer and experienced
Chairman and Director of listed private and government companies and
government agencies.
Previously, Kevin has been Chairman of Macquarie Group and Macquarie Bank
Limited, Chairman of Origin Energy Limited, Healthscope Limited, the Sydney
Harbour Federation Trust and a Director of Bluescope Steel. He practised 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 was made an Officer of
the Order of Australia for services to business, corporate governance and gender
equality in January 2020.
Directorships of other entities and offices
Current
• Chairman, China Matters (since 2019)
• Chair and Board Advisor, Blueprint Institute (since 2022)
• Member, Champions of Change Founding Group (since 2010)
• Trustee, Sydney Opera House (since 2019)
Recent (last 3 years)
• Director, E&P Financial Group Limited (February 2020 to November 2021)
Board Committee membership
• Chair – People, Culture, Nomination and Remuneration Committee
• Chair – Disclosure Committee
• Member – Audit and Risk Committee
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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.
Board Committee membership
• Member – Disclosure Committee
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
neurooncology, 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.
Directorships of other entities and offices
Current
• General Manager, ABX-CRO advanced pharmaceutical services GmbH (since
August 2002)
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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. 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).
Directorships of other entities and offices
Current
• Chairman, Art Exhibitions Australia (since February, 2019)
• Director, The Mindgardens Neuroscience Network (since February, 2018)
• Director, Kaldor Public Art Projects (since October, 2005)
• Governor, Florey Neurosciences Institute (since October, 2007)
Board Committee membership
• Member – Audit and Risk Committee
• Member – People, Culture, Nomination and Remuneration Committee
Ms Tiffany Olson, MBA (Minnesota), BSB (Minnesota)
Appointed Non-Executive Director, 31 March 2022
Ms Olson brings a depth of experience in commercialisation and corporate strategy
in oncology, including in the radiopharmaceutical sector. Her most recent executive
role was with Cardinal Health, the largest provider of radiopharmaceuticals in the
United States, where she was President of Cardinal Health Nuclear & Precision
Health Solutions overseeing Cardinal’s radiopharmaceutical manufacturing and
nuclear pharmacy network. During her eight-year tenure in this role she led a major
business transformation which led to increased market share and profit growth.
Prior to her role at Cardinal Health, Ms. Olson served as President of NaviMed and
in executive roles at Eli Lilly and Roche, where she attained the position of President
and CEO of Roche Diagnostics Corporation.
Directorships of other entities and offices
Current
• Director, Castle Biosciences, Inc., (NASDAQ: CSTL) (since April 2021)
• Advisory Board member, Langham Logistics (since August 2021)
Recent (last 3 years)
• Director, Asuragen, Inc. (August 2016 to March 2021)
• BioTelemetry, Inc., (NASDAQ: BEAT) (February 2019 to February 2021)
Board Committee membership
• Member – Audit and Risk Committee
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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 Chair of the Audit Committee and Deputy Chair
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.
Directorships of other entities and offices
Current
• Director, HSBC Bank Australia Limited (since April 2017)
• Director, QBE Insurance Group Limited (since October 2014)
• Director, Create Foundation Limited (since June 2004)
Board Committee membership
• Chair – Audit and Risk Committee
• Member - People, Culture, Nomination and Remuneration Committee
• Member – Disclosure Committee (for financial related disclosures)
Directors' meetings
The following tables set out the number of Directors’ meetings (including meetings of Board Committees) held during
the financial year ended 31 December 2022, and the number of meetings attended by each Director. The Disclosure
Committee reviews all material announcements to the market, and formally meets to review and approve the Appendix 4C
and activities report, where not reviewed and approved by the full Board. In addition to standing Committees of the Board,
in the financial year, a special purpose Subcommittee was convened 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
H K McCann
C Behrenbruch1
O Buck2
A Kluge
M Nelson
T Olson3
J Skinner
9
9
5
9
9
6
9
9
9
4
9
9
6
9
4
4
1
-
4
3
4
3
4
1
-
4
2
4
5
5
2
-
5
-
5
1. C Behrenbruch attends above committee meetings by invitation.
2. O Buck retired as Director on 18 May 2022.
3. T Olson was appointed as Director on 31 March 2022.
All Directors are welcome to attend Committee meetings even though they may not be a member.
5
5
2
-
5
-
5
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TE LIX P HA R MA CE UT ICALS
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H K McCann
C Behrenbruch
O Buck2
A Kluge
M Nelson
T Olson3
J Skinner
Disclosure Committee
Special purpose Subcommittee1
Eligible to
attend
Meetings
attended
Eligible to
attend
Meetings
attended
2
2
-
-
-
-
2
2
2
-
-
-
-
2
2
2
-
-
2
-
2
2
2
-
-
2
-
2
1. Convened to consider and address matters relating to capital needs and capital management.
2. O Buck retired as Director on 18 May 2022.
3. T Olson was appointed as Director on 31 March 2022.
Directors' interest in the securities of Telix Pharmaceuticals Limited
The relevant interests of each of the Directors in the share capital of the Company as at the date of this report are
as follows:
H K McCann
C Behrenbruch
A Kluge
M Nelson
T Olson
J Skinner
Details are set out in the Remuneration report.
Company Secretary
Genevieve Ryan B.Sc(Hons)/LLB(Hons), FGIA, FCG
Ordinary shares
Options/PSARs
1,150,000
23,075,000
22,675,000
3,628,750
43,930
595,000
-
440,380
-
-
52,070
-
Genevieve Ryan was appointed Company Secretary of Telix on 5 December 2022, replacing Melanie Farris. Ms Ryan holds
a Bachelor of Science with Honours, and a Bachelor of Laws with Honours from Monash University. She also holds a
Graduate Diploma in Applied Corporate Governance and she is a Fellow of the Governance Institute of Australia. Ms Ryan
is a Solicitor of the Supreme Court of Victoria and has 17 years’ experience in legal and governance roles working with
ASX-200 companies, including Australian Pharmaceutical Industries Limited and Orora Limited.
Principal activities of the Company in the year under review
Telix Pharmaceuticals Limited was incorporated on 3 January 2017 and listed on the Australian Securities Exchange
on 15 November 2017. Telix is a commercial-stage biopharmaceutical company focused on the development and
commercialisation of diagnostic and therapeutic radiopharmaceuticals. Telix is headquartered in Melbourne, Australia
with operations in the United States, Europe (Belgium and Switzerland), and Japan. Telix is developing a portfolio of
radiopharmaceutical products that aim to address significant unmet medical need in oncology and rare diseases.
Activities during the year were principally directed to further advancing Telix’s standing as a globally recognised
theranostics company, through the commercialisation and development of the imaging and therapeutic products in its
core pipeline.
Notably, during the year, Telix launched its first commercial product Illuccix® (kit for the preparation of 68Ga PSMA-11
injection) for prostate cancer imaging in the United States, Australia and New Zealand and received regulatory approval
from Health Canada.
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The Company continues to advance the development and commercialisation of its assets in four key disease areas:
• 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.
Review of operations
Information on the operations and financial position for Telix and likely developments in the Group’s operations in future
financial years is set out in the Operating and financial review (OFR). The OFR should be read in conjunction with the
Chairman and CEO messages, Our Company, Managing Risk and ESGS report within this Annual Report and accompanying
this Directors’ report.
Likely developments and expected results
The OFR sets out information on Telix’s business strategies and prospects for future financial years, and refers to
likely developments in Telix’s operations and the expected results of those operations in future financial years. Certain
information regarding developments in operations in future years and expected results of those operations is excluded
because it is likely to result in material prejudice to the Group.
State of affairs
There have been no significant changes in the state of affairs of the Group during the financial year ended 31 December
2022 other than as disclosed in this Annual Report.
Events subsequent to the end of the financial year
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 2022.
Dividends
No dividend was declared or paid during the year. There was no return of capital by the Company to any of its
shareholders during the year.
Issue of unlisted equity incentives
Unlisted ordinary shares of the Company under options or rights issued during the year were as follows:
Options/Rights granted
ASX code
Expiry date
Exercise price ($)
TLXO012
TLXO013
TLXO014
TLXAO
TLXAP
TLXAO
4 April 2027
4 April 2027
24 October 2027
4.95
Nil
6.15
Number
under option
2,756,380
220,000
1,459,666
Unlisted share options do not allow the holder to participate in any share or rights issue of the Company. Shares to be
allocated following vesting of Rights are held in the Telix Employee Share Trust. Performance Share Appreciation Rights
and other rights were issued in line with the Company’s Equity Incentive Plan and long-term incentive policy for key
employees. Refer to the Remuneration report for more information. Refer to Note 32 of the Financial report for details of
all unlisted equity incentives on issue.
Shares issued on exercise of options and lapse of options
Ordinary shares of the Company issued during the financial year ended 31 December 2022 on the exercise of options
granted over unissued shares and lapse of options are as follows:
• a total of 8,542,589 fully paid ordinary shares were issued upon exercise of 8,842,806 unlisted share options
• a total of 1,005,492 share options lapsed unexercised. These options lapsed in accordance with the terms of
their grant.
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Since the end of the financial year ended 31 December 2022 and the date of this report, 742,313 shares have been issued
from the exercise of 1,020,454 options under the Company’s Equity Incentive Plan.
Regulatory and environmental matters
Telix is required to carry out its activities in accordance with applicable environment and human safety regulations in each
of its operating jurisdictions.
Following the acquisition of a radiopharmaceutical production facility in Brussels South, Belgium in 2020, Telix is required
to carry out its activities at this facility in compliance with applicable environmental regulations.
Telix is required to comply with regular inspections by the Belgian FANC which is in charge of regulatory controls and
safety assessments. In 2022, the facility received updated authorisations from the FANC aligned with the scope of Telix
operations. Telix is complying with its obligations under these licences and the current Belgian regulation.
In December 2022, Telix received from the Belgian FANC an updated operation authorisation and environmental permit for
the facility, valid up to 7 October 2042. Refer also to the ESGS report of this Annual report.
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 known issues of non-compliance during the year.
Indemnification
Indemnification of officers
In accordance with the Company’s Constitution, the Company has entered into agreements with each person who is, or
has been, an officer of the Company. This includes the Directors in office at the date of this report, all former Directors and
other executive officers of the Company, indemnifying them against any liability to any person other than the Company,
or a related body corporate, that may arise from their acting as officers of the Company, notwithstanding that they may
have ceased to hold office. There is an exception where the liability arises out of conduct involving a lack of good faith or
is otherwise prohibited by law.
During and since the end of the financial year ended 31 December 2022, the Company has paid or agreed to pay the
premiums for an insurance policy to insure current and previous Directors and other executive officers of the Company
against certain liabilities incurred in that capacity.
Due to the confidentiality obligations and undertakings set out in these agreements, no further details in respect of the
premiums paid, or the terms of the agreements, can be disclosed.
No indemnity payment has been made under any of the documents referred to above during or since the financial year
ended 31 December 2022.
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.
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Auditor independence and non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with Telix and/or the Group are important.
Details of amounts paid or payable to the Company’s auditor, PricewaterhouseCoopers, for non-audit services provided
during the year are set out in note 37 to the Financial report. The Directors, in accordance with the advice received
from the Audit and Risk Committee, are satisfied that the provision of non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Audit and Risk Committee to confirm they do not affect the
impartiality and objectivity of the auditor, and
• none of the services undermine the general principles relating to auditor independence as set out in APES 10 Code of
Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or
decision making capacity for Telix, acting as an advocate for Telix or jointing sharing the economic risks and rewards.
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001
accompanies this report.
Rounding
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the “rounding off” of amounts
in the Directors’ report. Amounts in the Directors’ report have been rounded off in accordance with the instrument to the
nearest thousand dollars, or in certain cases, to the nearest dollar.
Corporate governance statement
The key features of the Company’s corporate governance framework are set out in the Corporate governance statement,
which is available on pages 53 to 62 of this Annual report.
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5TELIX PHARMACEUTICALSANNUAL REPORT XXXX TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
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 Telix Remuneration Report for the year ended 31 December 2022.
Telix remains committed to providing transparent reporting and clear communications for shareholders, employees and all
other stakeholders.
With the assistance of the People, Culture, Nomination and Remuneration Committee (PCNRC), 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.
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 and long-term sustainability, as well as working
together to incentivise and reward for appropriate behaviours and culture.
During the year, Telix made several key executive leadership appointments as part of ongoing succession.
As a result, the Board determined that the Group Chief Medical Officer (Colin Hayward) and the Group Chief Commercial
Officer (Richard Valeix) would also be considered key management personnel (KMP) effective from 17 August 2022 and
5 December 2022, respectively.
Company performance and 2022 remuneration outcomes
Telix’s performance for the financial year ended 31 December 2022 (delivering $149,800,000 revenue from the sales of
Illuccix in the United States (U.S.), $160,100,000 revenue from total Group sales, and $116,329,000 closing cash balance),
reflected positive momentum in the Company’s transition to a commercial revenue-generating Company, with a financially
sustainable business to fund the development of its core product pipeline.
Telix’s global leadership team (of which the CEO and other Executive KMP as defined in this Report form a subset)
are rewarded for annual performance against key corporate objectives approved annually by the Board, and from longer-
term returns for shareholders. Total remuneration package targets the median (percentile P50) of a peer group, which
includes at risk components – short-term variable remuneration (STVR) rewarded in cash as a percentage of fixed pay
for achievement of annual core objectives, and equity awards for achievement of longer term objectives under Telix’s
long-term variable remuneration (LTVR) plan.
For 2022, Executive KMP received 60% of their STVR eligibility to reflect significant commercial achievements in the year
(including revenue generated from the sales of Illuccix in the U.S.), balanced against delays in achieving product pipeline
development objectives. The remaining 40% of STVR entitlements allocated to corporate objectives was forfeited.
Effective 1 January 2022, we made changes to Telix’s LTVR plan to reflect the emerging maturity of the Company.
Performance share appreciation rights (PSARs) are the only form of equity grant under the Company’s LTVR plan,
and share rights are awarded to retain selected employees. PSARs minimise dilution to shareholder value and enable
executives to acquire shares in Telix without the need to fund the purchase. Telix’s LTVR plan requires achievement of
performance conditions measured over three years for PSARs to vest. As LTVR was introduced in FY21, no LTVR awards
were vested to executives this year.
During the year, long-term equity incentives issued to the CEO and other Executive KMP during FY21 vested and
became exercisable following the achievement of the performance metric of $100,000,000 in cumulative revenue from
1 January 2021.
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Changes to remuneration for the financial year effective 1 January 2023
In line with the Board’s decision in 2021 to target remuneration levels for Executive KMP and other global leadership team
members towards the market median (P50) (using comparison by market capitalisation and to industry peers) the CEO,
other Executive KMP and members of the Telix global leadership team received a fixed pay increase of 5.0% for FY23.
To ensure alignment between executive and shareholder interests, the Board has once again approved key corporate
objectives for the year ahead for the award of STVR, and robust performance conditions linked to longer term sustainable
business performance and strategic outcomes for vesting of LTVR (measured over a three year period).
The CEO and other Executive KMP will be eligible to receive PSARs equivalent to 50% of their Fixed Pay (FP) if the
performance metrics are achieved (with the exception of Colin Hayward who will be eligible to receive 35% of his FP to
maintain Total Target Remuneration Package parity), in line with PSARs granted across the Group. The proposed FY23
LTVR grant for the CEO will be subject to shareholder approval at the 2023 Annual General Meeting.
No changes will made to Non-Executive Director fees for the 2023 year, other than as a result of legislative requirements,
and payment of a $10,000 allowance (in addition to reimbursement of travel costs) to overseas-based Non-Executive
Directors to attend two meetings or other Board-related matters in Australia per year, to recognise substantial travel time
that may be required.
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 purpose, mission and values."
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Remuneration report (audited)
This remuneration report provides a summary of Telix’s remuneration policy and practice for KMP for the financial year
ended 31 December 2022. This report has been prepared as required by the Corporations Act 2001 (Cth) (Corporations
Act) for the Company and its controlled entities (collectively Telix, or the Group) and has been audited by Telix’s external
auditor. This remuneration report forms part of the Directors’ report.
Key Management Personnel
For the purposes of this remuneration report, KMP include Executive and Non-Executive Directors (NED) and nominated
senior executives who have authority and responsibility for planning, directing and controlling the activities of the Group,
either directly or indirectly (who, collectively with the CEO, comprise Executive KMP). For the year ended 31 December
2022, the KMP were:
Name
Position
Term as KMP
Non-Executive Directors
H Kevin McCann AO
Director and Chairman
Oliver Buck1
Andreas Kluge MD PhD
Mark Nelson PhD
Tiffany Olson2
Jann Skinner
Executive Director
Christian Behrenbruch PhD
Executives
Doug Cubbin3
Darren Smith4
Director
Director
Director
Director
Director
Managing Director and Group Chief
Executive Officer
Group Chief Financial Officer (CFO)
Group Chief Financial Officer (CFO)
Gabriel Liberatore PhD5
Group Chief Operating Officer (COO)
Full year
Partial year
Full year
Full year
Partial year
Full year
Full year
Partial year
Partial year
Partial year
Partial year
Colin Hayward6
Richard Valeix7
Group Chief Medical Officer (CMO)
Group Chief Commercial Officer (CCO)
Partial year
1. Oliver Buck retired as Director on 18 May 2022
2. Tiffany Olson was appointed as Director on 31 March 2022
3. Doug Cubbin resigned as Group Chief Financial Officer on 31 July 2022
4. Darren Smith was appointed as Group Chief Financial Officer on 1 August 2022
5. Gabriel Liberatore resigned as Group Chief Operating Officer on 31 July 2022
6. Colin Hayward’s position of Group Chief Medical Officer was determined as KMP on 17 August 2022
7. Richard Valeix was appointed as Group Chief Commercial Officer on 5 December 2022
Remuneration governance
The Board maintains overall accountability for the oversight of Telix’s remuneration approach for Executive KMP (including
the CEO), regional CEOs and NEDs, having regard to the recommendations made by the PCNRC. The PCNRC reviews
and makes recommendations to the Board on remuneration and at-risk remuneration policies, taking into account Telix’s
strategic objectives, corporate governance principles, market practice and stakeholder interests.
More information on the Board’s role and Telix’s corporate governance policies for NED, Executive KMP and Telix
executives (including securities trading, and the prohibition of hedging or margin lending in respect of Telix securities)
can be found on Telix’s website at: https://telixpharma.com/investor-centre/corporate-governance/.
During the reporting period, the PCNRC did not receive any remuneration recommendations (as defined by the
Corporations Act) from external consultants.
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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 strategy
• ensuring variable remuneration is contingent on outcomes that grow and/or protect shareholder value
• ensuring a suitable proportion of remuneration is received as an equity-based award so that reward is earned by
achievement and performance over the longer term.
Telix’s Executive KMP are 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 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 and
rewards outcomes.
Policy and process for remuneration setting and review
The Group aims to reward the Executive KMP and other members of global 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
• build a strong cohesive leadership team which can deliver execution excellence against the strategy
Remuneration consists of:
• Fixed Pay (FP), including Benefits, as applicable
• Short-term Variable Remuneration (STVR)
• Long-term Variable Remuneration (LTVR)
The sum of the above 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, while FP aims to
recognise the competence and calibre of the individual relative to the requirements of the role. FP, and changes to it,
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 of the CEO and other Executive KMP plus oversight
of the Regional CEOs. As occurred during the year ended 31 December 2021, the PNCRC may seek external advice to
determine the appropriate level and structure of the KMP remuneration packages.
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Principals
Attract and retain
appropriately capable
and talented individuals
to the Company
Components
Fixed Pay (FP)
Determinant
Any increases in salary are
• Base Pay (BP) – targeting P50 salary for
• market based, in line with experience
positions in comparison to peer group select by
market capitalisation and industry
•
country specific pension
and expertise
•
in-line with the current stage of the Company
Reward
corporate performance
Short-term Variable Remuneration (STVR)
Align the interest of
employees with those
of shareholders
Build a strong cohesive
leadership team which
can deliver execution
excellence against
the strategy
•
percentage of BP as cash for achievement of
short term performance for the financial year
Long-term Variable Remuneration (LTVR)
•
percentage of BP as Performance Share
Appreciation Rights (PSARs)
Sign-on Incentives
•
a percentage of BP granted near
commencement of employment as PSAR’s with
three year vesting – supports retention for initial
employment period
Retain high
potential employees
Retention Incentives
•
long-term incentive share rights may be awarded
as a further retention tool for high performing/
high potential non-executive employees
Remuneration components
Fixed Pay
•
•
•
•
•
•
percentage determined by achievement of
Board approved corporate objectives
achievement of Group level cumulative three
year performance metrics set at time of grant
for all equity issued in the financial year
individual contracts may include additional/
different performance metrics as appropriate
for the position
achievement of three year performance
metrics set at Group level for all equity issued
in the year
the signing bonus is used to offset lost
entitlements at previous companies for very
high-potential candidates
share rights vest following continued
employment for a period of three years
To ensure that the Company continues to attract, retain and motivate its global leadership team, the Board decided in
2021 that remuneration of the Executive KMP and other members of global leadership team would over three years move
towards targeting the mid-point of market data (P50) of comparable peer groups by market capitalisation and industry
peers. There may be deviations to P50 for some Executive KMP or global leadership team members, including to account
for comparable roles in local jurisdictions.
Four main factors are considered when determining FP:
• competence of the incumbent
• incumbent’s current FP in the +/- 20% range (i.e. 80% to 120%) of P50 of FP data
• motivational and retention impact of an adjustment or lack of adjustment to the executive’s FP
• cash cost to Telix of increases in FP and flow on impacts to the cost of STVR and LTVR awards which are expressed as
percentages of FP.
Remuneration reviews are conducted concurrently with the annual performance review cycle which runs from 1 January
to 31 December each year. Achievement of objectives is assessed against the position description for each individual role.
These are reviewed as necessary due to internal or external changes.
Short-term Variable Remuneration
STVR rewards performance against annual financial and non-financial corporate objectives – maintaining a focus on
underlying value creation within the business operations. Corporate objectives, weightings and targets are approved by
the Board on the advice and recommendation of the CEO at the commencement of each year, and awards are based
on achievement of these metrics. Corporate objectives are set with the primary purpose of incentivising the Executive
KMP and other members of global leadership team to work together to achieve the key objectives annually in line with
Telix’s Code of Conduct and corporate values. STVR rewards reflect a Board approved percentage of FP payable in cash
to Executive KMP and other Telix executives following assessment of achievement of the corporate objectives for each
applicable year and Board approval.
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Long-term Variable Remuneration
LTVR is offered as part of TTRP to build alignment between the Company’s global leadership team (including Executive
KMP) and the Company’s shareholders and other stakeholders over the long term. LTVR is remuneration that may vest
subject to the achievement of performance conditions which are set annually by the Board in February for all PSAR’s
issued in the year with a measurement period of three years.
PSARs provide the same value to the employee as options – being the difference between the notional exercise price and
the share price at the time of exercise. They are used in place of options to minimise dilution to shareholder value and
remove the need for participants to fund an exercise price, thereby encouraging executives to acquire shares in Telix.
PSARs have a term of five years from the grant date and will be issued with a notional exercise price calculated as a
volume weighted average price of shares (VWAP) over the 20 trading days following the announcement of the applicable
full year annual results. PSARs are independently valued in accordance with the Black Scholes methodology.
As LTVR for the Executive KMP and global leadership team is considered remuneration in the year that it is awarded, in
cases of cessation of employment, pro-rata forfeiture of the rights occurs reflecting the remaining portion of the first year,
and any complete years of the measurement period that will not be served. In the event of termination of employment
by the company for cause, all granted equity is dealt with under Malus and Clawback provisions which apply before and
after termination.
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.
Malus and Clawback 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 Group employees
Retaining and attracting outstanding talent is central to our growth and success. Telix is committed to a remuneration
framework for employees who are not part of the global leadership team 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.
The Board has therefore approved the use of LTI as a sign-on bonus to incentivise high quality candidates to join Telix; the
use of LTI to award annual performance of employees who are not part of the global leadership team; and the creation of a
retention bonus scheme for critical talent in pivotal roles.
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Sign–on equity is a one-off grant of equity designed to provide an opportunity for new employees to hold equity in the
Company from close to the beginning of their tenure. Sign-on equity is granted to employees as PSARs and includes
performance and service vesting conditions.
Performance LTI is considered by the PCNRC on an annual basis based on the recommendation of the CEO regarding
the issue of LTI to 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. LTI is granted to employees as PSARs and includes performance and service vesting conditions.
Additional LTI (share rights) may be awarded as a further retention tool for high performing/high potential employees.
Retention LTI is designed to incentivise high performing/high potential employees and includes service vesting conditions.
The terms of any LTI grant are determined by the Board and there will be no automatic grant. LTI grants are normally
issued under the Company’s Equity Incentive Plan (EIP) rules.
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. As at 31 December 2022, the number of equity incentives on issue under the EIP (for LTVR
and LTI awards) was 3.7% (2021 6.0%).
Remuneration review and awards for the financial year ended 31 December 2022
In line with the objective of achieving P50, the CEO received a 12% increase in FP in 2022. Other Executive KMP did not
receive a FP increase during the time they were designated KMP in 2022.
For the year ended 31 December 2022, STVR eligibility was 32% of FP for the CEO and between 25-27% for other
Executive KMP.
Achievement against 2022 corporate objectives was assessed and awarded at 60% of FP for the CEO and other full year
term Executive KMP, reflecting significant achievements in 2022 (including revenue generated from the sales of Illuccix in
the U.S.), but balanced against delays in achieving product development pipeline objectives. The remaining 40% of STVR
entitlements allocated to corporate objectives was forfeited.
No other performance-related LTI or LTVR was awarded to the CEO and other Executive KMP vested during the year.
Prior to FY22, LTVR was awarded as unlisted marked-priced share options. For FY21, LTVR were issued as options
with performance metrics of achievement of $100,000,000 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, with the
achievement of $100,000,000 in cumulative revenue during FY22, vesting has occurred.
As disclosed in last year’s report, LTVR issued to Executive KMP (including the CEO) and other members of the global
leadership team during the year ended 31 December 2022 have a three year performance measurement period and will be
tested prior to 31 December 2024.
Reflecting Telix entering into a revenue generating, commercial phase, the Board determined to implement performance
metrics that will bring long-term growth and value to the Company and has split the performance measures between
financial metrics and value-adding program-related milestones – for example, product regulatory approvals or material
clinical development milestones. LTVR for the year ended 31 December 2022 have the following performance conditions
before vesting can occur in FY24:
Tranche 1 – Financial metric – 50% weighting at target
Performance level
Adjusted EBITRD (Adjusted Earnings before Interest, Taxes and
R&D expense) on a three year cumulative basis
% Vesting of target LTVR grant
Stretch
$120 million
Between Target and Stretch
Pro-rata
Target
$100 million
Between Threshold and Target
Pro-rata
Threshold
Below Threshold
$80 million
< $80 million
100%
Pro-rata
50%
Pro-rata
25%
0%
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Tranche 2 – Value adding performance milestone 1 – 25% weighting at target
FDA or European Medicines Agency (EMA) granting marketing approval for TLX101-CDx (Glioblastoma diagnostic).
Performance level
Approval for marketing for TLX101- CDx by the FDA or EMA
% Vesting of target LTVR grant
Target
Approval is granted
Below Threshold
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
Approval for marketing for TLX250-CDx by the FDA or EMA
% Vesting of target LTVR grant
Target
Approval is granted
Below Threshold
Approval has not been granted
25%
0%
Changes to remuneration for the financial year effective 1 January 2023
To continue the approach to target remuneration levels for the Executive KMP to P50, for the year commencing 1 January
2023, the Board approved the following TTRP (subject to shareholder approval in respect of the CEO LTVR grant at the
2022 AGM (May 2023)):
• FP increase of 5% for the CEO and other executive KMP
• STVR eligibility of 32% of FP for the CEO and 26-27% of FP for other executive KMP
• LTVR eligibility of 50% of FP for the CEO and other executive KMP (excluding the CMO who is eligible to receive 35% of
FP to maintain TTRP parity)
Corporate objectives were approved by the Board in January 2023 for the financial year ending 31 December 2023. STVR
awards for the year ending 31 December 2023 are applicable to the CEO, other executive KMP and other members of the
global leadership team and will be assessed and awarded following the achievement of targets determined by the Board.
In 2023, the Executive KMP will be eligible to receive PSARs under the LTVR plan to the value of between 35 – 50% of their
FP, depending on TTRP parity.
PSARs to be granted for the year ending 31 December 2023 to Executive KMP will be subject to performance conditions
of a similar structure to those issued for the year ended 31 December 2022. Performance metrics will be related to
both commercial (Adjusted earnings before interest, taxes, depreciation, amortisation and research and development
(Adjusted EBITDAR)) and product development performance, reflecting the current emerging status as a sustainable
revenue generating Company.
PSARs issued in 2023 have a measurement period that is three financial years commencing within the year of the offer
(thus the measurement period for an FY23 offer would cover FY23, FY24 and FY25). PSARs have a term of five years from
the grant date and will be issued with a notional exercise price calculated as a VWAP over the 20 trading days following
the announcement of FY22 annual results.
LTVR for the year ending 31 December 2023 have the following performance conditions before vesting occurs in FY25:
Tranche 1 – Financial metric – 50% weighting at target
Performance level
Adjusted EBITDAR on a three year cumulative basis
% Vesting of target LTVR grant
Stretch
$403 million
Between Target and Stretch
Pro-rata
Target
$332 million
Between Threshold and Target
Pro-rata
Threshold
Below Threshold
$227 million
< Threshold
100%
Pro-rata
50%
Pro-rata
25%
0%
80
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2 02 2 ANNUA L RE PORT
Tranche 2 – Value adding performance milestone 1 – 25% weighting at target
ProstACT Global Phase III interim read-out completed, which will provide important information on the progress of the trial.
ProstACT Global is part of Telix’s Prostate Cancer Therapy Program, and involves global Phase III study in patients with
metastatic castration-resistant prostate cancer.
Performance level
ProstACT Global Phase III interim read-out completed
% Vesting of target LTVR grant
Target
Phase III interim read-out completed
Below Threshold
Phase III interim read-out not completed
25%
0%
Tranche 3 – Value adding performance milestone 2 – 25% weighting at target
Pre-pivotal trial (pre-IND) meeting completed with a major regulator for one of Telix’s rare disease therapy programs,
required before further studies can commence. Current rare diseases candidates in the core or research pipeline are
TLX66 for systemic amyloid light chain amyloidosis (SALA), TLX101 for glioblastoma therapy and Eli Lilly’s olaratumab
antibody (in-licensed by Telix in 2022) for diagnosis and treatment of soft tissue sarcoma.
Performance level
Pre-pivotal trial (pre-IND) meeting completed with a major regulator for one of
Telix’s rare disease therapy programs
% Vesting of target
LTVR grant
Target
Pre-pivotal trial (pre-IND) meeting completed
Below Threshold
Pre-pivotal trial (pre-IND) meeting not completed
25%
0%
81
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Telix Pharmaceuticals Limited performance and shareholder wealth
Revenue, cashflow from operations, Adjusted EBITRD1, Adjusted EBITDAR1, Loss before income tax, Basic earnings per
share, Net tangible assets per share1 and Dividend per share (cents per share) are as follows. Year end share price has
been included as one measure of shareholder wealth:
Revenue from contracts with
customers ($'000)
Net cash used in operating
activities ($'000)
Adjusted EBITRD ($’000)
Adjusted EBITDAR ($'000)
2,849
8,228
Loss before income tax ($’000)
(98,622)
Basic loss per share (cents)
Net tangible assets per
share ($)
Dividend per share ($)
Closing share price ($)
Increase/(decrease) in share
price (%)
(33.5)
0.03
-
7.27
(6)
2022
160,096
2021
7,596
2020
5,213
2019
3,485
2018
195
(63,970)
(59,328)
1,960
(23,333)
(20,749)
(35,622)
(30,448)
(80,465)
(28.5)
(0.20)
-
7.75
105
(14,804)
(9,922)
(47,935)
(17.5)
6.44
-
3.78
144
(12,300)
(8,064)
(31,122)
(11.9)
11.83
-
1.55
138
(5,486)
(5,479)
(15,714)
(6.8)
0.06
-
0.65
5
Market capitalisation ($'000)
2,299,812
2,209,315
1,059,932
392,584
141,938
Non-Executive Director remuneration
All NEDs 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.
Fees to NEDs reflect the obligations, responsibilities and demands which are made on Directors. The Board has resolved
that the remuneration of NEDs 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.
In accordance with the Constitution of the Company and ASX Listing Rules, the aggregate remuneration of NEDs is
determined from time to time by General Meeting. The last determination for Telix Pharmaceuticals Limited was made at
the AGM of shareholders held on 12 May 2021, where shareholders approved an aggregate annual remuneration pool for
NEDs of $700,000.
NEDs receive a base fee for being a Director of the Board, and additional annual fees for:
• chairing a Committee of the Board: $15,000 per annum
• membership of a Committee of the Board: $7,500 per annum
The Chairman of the Board is not to be compensated for Committee Membership but is compensated for his role as Chair
of the PCNRC.
No increase was made to fixed-base NED fees or Committee fees during the financial year ended 31 December 2022. A
minor adjustment (0.5%) was made in July 2022 to superannuation for all NEDs located in Australia to align with the
increased Superannuation Guarantee rate effective 1 July 2022.
Annualised fees recorded below are base remuneration fees inclusive of superannuation (where applicable).
1. Refer to the Glossary for a definition of this alternative performance measure
82
TE LIX P HA R MA CE UT ICALS
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Annual fees
H K McCann, Chairman
O Buck, Non-Executive Director1
A Kluge, Non-Executive Director
M Nelson, Non-Executive Director
T Olson, Non-Executive Director2
J Skinner, Non-Executive Director
2022
$
2021
$
187,423
137,188
42,750
86,000
102,833
70,725
82,313
65,850
82,313
-
111,052
90,544
600,783
458,208
1. Fees paid to O Buck up to his retirement on 18 May 2022
2. Fees paid to T Olson from her commencement as Director on 31 March 2022
It is recognised that as an Australian headquartered business, overseas-based NEDs may be required to undertake
substantial additional travel to attend meetings or other Board-related matters in Australia. Effective 1 January 2023, a
travel allowance of $10,000 is in place for internationally based NEDs who travel to and from Australia to attend two
Board and/or committee meetings or other Board-related matters during the year. The allowance is in addition to the
reimbursement of travel costs.
Ms Tiffany Olson joined the Board as a NED on 31 March 2022. Following shareholder approval at the 2021 AGM, in 2022,
Ms Olson was issued with 52,070 PSARs with a notional exercise price of $4.95 expiring 17 May 2026 (TLXO0014).
On 9 November 2022, Ms Jann Skinner exercised 495,000 options granted to her for joining the Board following
shareholder approval obtained at the 2019 AGM.
83
TE LIX P HA R MA CE UT ICALS
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KMP remuneration for the year ended 31 December 2022
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
Termination
benefits
Total
STVR and
option
Salary /
fees
Leave
Super
accruals1 Other
STVR2
$
$
$
$
$
$
Non-
Executive
Directors
H K McCann
O Buck4
A Kluge
M Nelson
T Olson5
J Skinner
Executive
Director
169,998
17,425
42,750
86,000
93,273
70,725
-
-
9,560
-
100,727
10,325
563,473
37,310
-
-
-
-
-
-
-
C Behrenbruch
422,345
27,500
62,405
422,345
27,500
62,405
Other KMP
D Smith6
R Valeix7
C Hayward8
D Cubbin9
G Liberatore10
172,708
11,458
21,361
39,295
224,560
219,961
218,585
2,432
9,068
6,138
39,526
16,042
16,042
-
-
875,109
52,112
69,955
Share-
based
payment3
$
-
-
-
-
22,679
2,536
25,215
$
-
-
-
-
-
-
-
86,976
265,311
86,976
265,311
24,616
4,987
8,923
3,685
37,088
269,415
-
-
(17,152)
(12,941)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
%
-
-
-
-
187,423
42,750
86,000
102,833
93,404
22,679
24.28
113,588
2,536
2.23
625,998
25,215
864,537
352,287
40.75
864,537 352,287
239,066
33,539
14.03
59,467
8,672
14.58
576,727
306,503
53.15
218,851
(17,152)
(7.84)
-
-
-
-
-
-
-
-
-
-
-
-
-
66,691
251,930
38,714 1,354,511 318,621
38,714
260,400
(12,941)
(4.97)
Total for all KMP
1,860,927
116,922 132,360
- 153,667
542,456
38,714 2,845,046 696,123
1. Remuneration includes movement in annual leave provisions during the year.
2. C Behrenbruch is eligible to receive an annual STVR of up to 32% of remuneration. D Smith is eligible to receive an annual STVR of up to 27%
of remuneration, C Hayward and R Valeix are eligible to receive an annual STVR of up to 26% of remuneration. Non-Executive Directors are not
eligible to receive an STVR amount. In the year to 31 December 2022, based on actual achievement against corporate objectives, 60% of STVR
entitlement due to each eligible KMP for the year was awarded. The remaining 40% of STVR entitlement due to each eligible KMP for the year
was forfeited. The issue of LTI awards for performance in the year ended 31 December 2021 occurred on 5 April 2022.
3. 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.
4. Fees paid to O Buck up to his retirement on 18 May 2022.
5. Fees paid to T Olson from commencement as Director on 31 March 2022.
6. D Smith joined the Group on 31 January 2022 as Deputy Chief Financial Officer and was appointed as Chief Financial Officer on 1 August 2022.
7. R Valeix was appointed as Chief Commercial Officer on 5 December 2022.
8. C Hayward’s role as Chief Medical Officer was designated a KMP role from 17 August 2022.
9. D Cubbin retired from his role as Chief Financial Officer on 31 July 2022. As part of his exit agreement, it was agreed that 140,000 TLXO006
options would remain on foot. The negative share-based payment remuneration reflects the reversal of previously recognised share-based
payment expense arising from the lapse of options due to not meeting the continuous service condition associated with certain options held at
the time of his exit.
10.G Liberatore’s position as Chief Operating Officer was made redundant on 31 July 2022. As part of his redundancy agreement, it was agreed
that 140,000 TLXO006 options would remain on foot. The negative share-based payment remuneration reflects the reversal of previously
recognised share-based payment expense arising from the lapse of options due to not meeting the continuous service condition associated
with certain options held at the time of his exit.
84
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
KMP 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
STVR and option
Salary /
fees
Super
Leave
accruals1
Other2
STVR3
Share-
based
payment4
Non-
Executive Directors
$
$
H K McCann
125,000
12,188
O Buck
A Kluge
M Nelson
J Skinner
82,313
65,850
75,000
82,500
-
-
7,313
8,044
430,663
27,545
$
-
-
-
-
-
-
Executive Director
C Behrenbruch
374,146
26,250
46,350
374,146
26,250
46,350
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
$
137,188
82,313
65,850
82,313
$
-
-
-
-
%
-
-
-
-
35,393
125,937
35,393
28.10
35,393
493,601
35,393
82,086
91,509
620,341
173,595
27.98
82,086
91,509
620,341
173,595
Other KMP
D Cubbin
G Liberatore
275,913
280,492
26,250
21,221
15,000
26,250
20,643
-
51,628
52,144
90,716
86,172
480,728
142,344
29.61
465,701
138,316
29.70
556,405
52,500
41,864
15,000
103,772
176,888
946,429
280,660
Total for all KMP
1,361,214
106,295
88,214
15,000
185,858
303,790
2,060,371
489,648
1. Remuneration includes movement in annual and long service leave provisions during the year.
2. 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.
3. 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 STVR 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.
4. 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.
85
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
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 2022 and 2021.
Other transactions: Non-Executive Director, Dr Andreas Kluge, is the principal owner and Geschäftsführer (Managing
Director) of ABX-CRO, a clinical research organisation (CRO) that specialises in radiopharmaceutical product development.
Telix entered into a master services agreement with ABX-CRO in 2018 for the provision of project management, clinical and
analytical services for its ZIRCON clinical trial. During 2022, the ZIRCON trial was extended to increase patients from 248
to 300 and ABX-CRO resumed key site monitoring activities when COVID restrictions were lifted at hospitals.
During the year ended 31 December 2022, the total amount paid was $3,411,019 (2021: $1,512,452) and the amount
payable to ABX-CRO at 31 December 2022 was $274,524 (2021: $485,384) respectively. ABX-CRO's fees and charges for
activities undertaken in 2022 were on an arm’s length basis and competitive with quotes obtained from other CRO’s for
similar services.
Other than those noted above, there were no related party transactions with any KMP in the year ended
31 December 2022.
86
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Employment contracts
Executive KMP 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
Christian
Behrenbruch –
MD and Group CEO
Base salary of
$475,650 subject
to annual review.
Appointed
3 January 2017
Exclusive of
superannuation
paid
at government-
determined levels.
Darren Smith –
Group CFO
Appointed
1 August 2022
Richard Valeix –
Group COO
Appointed
5 December 2022
Colin Hayward –
Group CMO
Determined
KMP effective
17 August 2022
Base salary of
$420,000 subject
to annual review.
Exclusive of
superannuation
paid at
government-
determined levels.
Base salary of
CHF $295,000
subject to
annual review.
Exclusive
of country
determined
pension plan.
Base salary of
USD $449,604
subject to
annual review.
Exclusive
of country
determined
pension plan.
3 months’ notice of
termination by either party.
All payments on termination
will be subject to the
termination benefits cap
under the Corporations Act.
Shareholder approval was
obtained prior to listing for
the provision of benefits on
cessation of employment.
4 months’ notice of
termination by either party.
All payments on termination
will be subject to the
termination benefits cap
under the Corporations Act.
3 months’ notice of
termination by either party.
All payments on termination
will be subject to the
termination benefits cap
under the Corporations Act.
3 months’ notice of
termination by either party.
All payments on termination
will be subject to the
termination benefits cap
under the Corporations Act.
STVR and treatment of
STVR on termination
LTVR and treatment of
LTVR on termination
Eligible to receive annual
STVR of up to 32% of
base remuneration.
Eligible to receive a FY23
LTVR of 50% of FP upon
target achievement.
Payout of any STVR
is at the discretion of
the Board.
The treatment of STVR
on termination is at
Board discretion.
Issue of LTVR is at the
discretion of the Board.
Any issue of securities
is subject to
shareholder approval.
The treatment of LTVR
on termination is at
Board discretion.
Eligible to receive an
annual STVR of up to 27%
of base remuneration.
Eligible to receive a FY23
LTVR of 50% of FP upon
target achievement.
Payout of any STVR
is at the discretion of
the Board.
The treatment of STVR
on termination is at
Board discretion.
Issue of LTVR is at the
discretion of the Board.
The treatment of LTVR
on termination is at
Board discretion.
Eligible to receive an
annual STVR of up to 26%
of base remuneration.
Eligible to receive a FY23
LTVR of 50% of FP upon
target achievement.
Payout of any STVR
is at the discretion of
the Board.
The treatment of STVR
on termination is at
Board discretion.
Issue of LTVR is at the
discretion of the Board.
The treatment of LTVR
on termination is at
Board discretion.
Eligible to receive an
annual STVR of up to 26%
of base remuneration.
Eligible to receive a FY23
LTVR of 35% of FP upon
target achievement.
Payout of any STVR
is at the discretion of
the Board.
The treatment of STVR
on termination is at
Board discretion.
Issue of LTVR is at the
discretion of the Board.
The treatment of LTVR
on termination is at
Board discretion.
87
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
KMP shareholdings for the year ended 31 December 2022
H K McCann
O Buck
A Kluge
M Nelson
T Olson2
J Skinner
C Behrenbruch
D Smith3
R Valeix4
C Hayward5
D Cubbin6
G Liberatore7
Shares issued
from Options
exercised
Net
acquired/
(disposed)
Other
changes1
Balance
31 December
-
-
1,150,000
250,000
(1,802,500)
-
Balance
1 January
1,150,000
1,552,500
24,675,000
3,628,750
-
-
-
-
-
-
(2,000,000)
-
43,930
-
100,000
495,000
24,675,000
400,000
(2,000,000)
-
-
-
-
6,500
125,000
-
-
-
726,740
400,000
(115,000)
(1,011,740)
-
400,000
-
(400,000)
-
-
-
-
-
-
-
-
22,675,000
3,628,750
43,930
595,000
23,075,000
6,500
125,000
-
-
-
1. Amounts presented here represent the number of shares held immediately preceding commencement or prior to ceasing respective KMP roles
56,507,990
1,820,000
(3,814,570)
(3,214,240)
51,299,180
2. Appointed as Director on 31 March 2022
3. Appointed as Group Chief Financial Officer on 1 August 2022
4. Appointed Group Chief Commercial Officer on 5 December 2022
5. Designated KMP effective 17 August 2022
6. Resigned as Group Chief Financial Officer on 31 July 2022
7. Role as Group Chief Operating Officer was made redundant on 31 July 2022
KMP shareholdings for the year ended 31 December 2021
H K McCann
O Buck
A Kluge
M Nelson
J Skinner
C Behrenbruch
D Cubbin
G Liberatore
Balance 1 January
Shares issued from
Options exercised
Net
acquired/(disposed)
Balance 31 December
160,000
1,552,500
24,675,000
2,638,750
100,000
24,675,000
49,298
-
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
88
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
KMP option holdings for the year ended 31 December 2022
T Olson
J Skinner
Grant date
of options
Number
of options
granted
18-05-22
52,070
22-05-19
495,000
C Behrenbruch
23-05-19
400,000
Exercise
price ($)
Expiry
date
Fair value
per option
at grant
date $
Vesting
date
Vesting
number
Vested
during
the year
Lapsed or
forfeited
during
the year
Exercised
in current
or prior
year
Eligible to
exercise at
31 December
2.1865
31-12-24
52,070
-
13-01-20
200,000
26-01-21
100,708
5-04-22
139,672
24-10-22
24-10-22
21-07-21
45,449
32,463
75,000
4.95
1.09
1.09
2.23
4.38
4.95
6.15
6.15
5.37
18-05-27
24-01-23
24-01-23
12-01-24
26-01-26
4-04-27
24-10-27
24-10-27
20-07-26
21-07-21
125,000
-
20-07-26
5-04-22
89,300
1-07-20
400,000
26-01-21
140,661
5-04-22
85,185
24-01-19
400,000
12-01-20
150,000
26-01-21
5-04-22
92,153
48,148
24-01-19
400,000
12-01-20
150,000
26-01-21
5-04-22
81,455
48,971
3,751,235
4.95
1.83
4.38
4.95
1.09
2.23
4.38
4.95
1.09
2.23
4.38
4.95
4-04-27
1-07-24
26-01-26
4-04-27
24-01-23
12-01-24
26-01-26
4-04-27
24-01-23
12-01-24
26-01-26
4-04-27
0.23
0.23
0.46
2.12
2.19
3.08
3.08
2.62
5.35
2.43
0.42
2.12
2.43
0.23
0.46
2.12
2.43
0.23
0.46
2.12
2.43
24-01-22
495,000
495,000
24-01-22
400,000
400,000
12-01-23
200,000
-
28-10-22
100,708
100,708
31-12-24
139,672
24-10-25
24-10-25
28-10-22
45,449
32,463
75,000
-
-
-
75,000
28-10-22
125,000
125,000
31-12-24
89,300
1-07-23
400,000
-
-
28-10-22
140,661
140,661
31-12-24
85,185
-
24-01-22
400,000
400,000
12-01-23
140,000
28-10-22
31-12-24
-
-
-
-
-
10,000
92,153
48,148
24-01-22
400,000
400,000
-
400,000
12-01-23
140,000
28-10-22
31-12-24
-
-
-
-
-
10,000
81,455
48,971
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
495,000
400,000
-
-
-
-
-
-
125,000
-
-
-
-
400,000
-
-
-
Unvested at
31 December
52,070
-
-
200,000
-
139,672
45,449
32,463
-
-
89,300
400,000
-
85,185
-
140,000
-
-
-
140,000
-
-
-
-
-
-
100,708
-
-
-
75,000
-
-
-
140,661
-
-
-
-
-
-
-
-
-
D Smith
R Valeix1
C Hayward1
D Cubbin2
G Liberatore3
3,460,508
2,136,369
290,727
1,820,000
316,369
1,324,139
1. Option balances disclosed represent number of options held prior to commencing as a KMP
2. D Cubbin option balances disclosed represent the number of options that remain on foot at the time of ceasing to be a KMP.
3. G Liberatore option balances disclosed represent the number of options that remain on foot at the time of ceasing to be a KMP.
The disclosures in the Consolidated Financial Statements of shares and options held by key management personnel are determined in accordance with the requirements of AASB
124 Related Party Disclosures, which requires that KMP holdings also include the holdings of "close family members". Disclosure of "close family member" holdings is not required by
the Corporations Act, therefore the figures shown above may differ from those holdings reported in at Note 32 to the Consolidated Financial Statements.
89
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
KMP option holdings for the year ended 31 December 2021
Grant date
of options
Number
of options
granted
Exercise
price ($)
H K McCann
15-10-17
329,670
O Buck
A Kluge
M Nelson
15-10-17
329,670
15-10-17
330,660
15-10-17
164,835
15-10-17
164,835
15-10-17
165,330
-
-
15-10-17
329,670
15-10-17
329,670
15-10-17
330,660
J Skinner
22-05-19
495,000
C Behrenbruch
23-05-19
400,000
D Cubbin
13-01-20
200,000
15-10-17
263,070
15-10-17
263,070
15-10-17
263,860
24-01-19
400,000
13-01-20
150,000
G Liberatore
24-01-19
400,000
13-01-20
150,000
5,460,000
0.85
0.85
0.85
0.85
0.85
0.85
-
0.85
0.85
0.85
1.09
1.09
2.23
0.85
0.85
0.85
1.09
2.23
1.09
2.23
Fair value
per option
at grant
date $
0.23
0.23
0.23
0.23
0.23
0.23
-
0.23
0.23
0.23
0.23
0.23
0.46
0.23
0.23
0.23
0.23
0.46
0.23
0.46
Expiry
date
15-10-21
15-10-21
15-10-21
15-10-21
15-10-21
15-10-21
-
15-10-21
15-10-21
15-10-21
24-01-23
24-01-23
12-01-24
15-10-21
15-10-21
15-10-21
24-01-23
12-01-24
24-01-23
12-01-24
Vesting
date
Vesting
number
15-10-18
329,670
15-10-19
329,670
15-10-20
330,660
15-10-18
164,835
15-10-19
164,835
15-10-20
165,330
-
-
15-10-18
329,670
15-10-19
329,670
15-10-20
330,660
24-01-22
495,000
24-01-22
400,000
12-01-23
200,000
15-10-18
263,070
15-10-19
263,070
15-10-20
263,860
24-01-22
400,000
13-01-23
150,000
24-01-22
400,000
13-01-23
150,000
5,460,000
Vested
during
the year
Lapsed or
forfeited
during
the year
Exercised
in current
or prior
year
Eligible to
exercise at
31 December
Unvested at
31 December
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
329,670
329,670
330,660
164,835
164,835
165,330
-
329,670
329,670
330,660
-
-
-
263,070
263,070
263,860
-
-
-
-
-
-
-
-
-
-
-
-
-
495,000
400,000
200,000
-
-
-
400,000
150,000
400,000
150,000
-
-
-
-
-
-
-
-
-
-
495,000
400,000
200,000
-
-
-
400,000
150,000
400,000
150,000
3,265,000
2,195,000
2,195,000
The disclosures in the Consolidated Financial Statements of shares and options held by key management personnel are determined in accordance with the requirements of AASB
124 Related Party Disclosures, which requires that KMP holdings also include the holdings of "close family members". Disclosure of "close family member" holdings is not required by
the Corporations Act, therefore the figures shown above may differ from those holdings reported in at Note 32 to the Consolidated Financial Statements.
90
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
This Directors’ report is approved in accordance with a resolution of the Directors.
H Kevin McCann AO
Chairman
27 February 2023
Christian Behrenbruch
Managing Director and Group CEO
27 February 2023
91
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
92
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. Auditor’s Independence Declaration As lead auditor for the audit of Telix Pharmaceuticals Limited for the year ended 31 December 2022, 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 Melbourne Partner PricewaterhouseCoopers 27 February 2023 Financial
report
5TELIX PHARMACEUTICALSANNUAL REPORT XXXX 5TELIX PHARMACEUTICALS2022 ANNUAL REPORT Contents
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
96
97
98
99
100
145
146
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Consolidated statement of comprehensive income
or loss
for the year ended 31 December 2022
Continuing operations
Revenue from contracts with customers
Cost of inventory sold
Research and development costs
Selling, general and administration costs
Employment costs
Remeasurement of provisions
Depreciation and amortisation
Finance costs
Other income and expenses
Loss before income tax
Income tax expense
Loss from continuing operations after income tax
Loss is attributable to:
Owners of Telix Pharmaceuticals Limited
Loss for the year
Other comprehensive income/(loss):
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 year attributable to:
Note
5
6
7
8
26
9
10
11
12
2022
$’000
160,096
(61,556)
2021
$’000
7,596
(2,548)
(57,857)
(34,135)
(43,999)
(16,882)
(64,485)
(30,104)
(17,724)
(14,855)
(5,379)
(6,693)
(1,025)
(5,174)
(5,218)
20,855
(98,622)
(80,465)
(5,457)
(45)
(104,079)
(80,510)
(104,079)
(80,510)
(104,079)
(80,510)
591
(1,452)
(103,488)
(81,962)
Owners of Telix Pharmaceuticals Limited
(103,488)
(81,962)
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
38.1
38.2
2022
Cents
2021
Cents
(33.5)
(28.5)
(33.5)
(28.5)
The above consolidated statement of comprehensive income or loss is to be read in conjunction with the notes to the
consolidated financial statements.
96
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Consolidated statement of financial position
as at 31 December 2022
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Trade and other receivables
Deferred tax assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Current tax payable
Contract liabilities
Lease liabilities
Provisions
Employee benefit obligations
Total current liabilities
Non-current liabilities
Borrowings
Contract liabilities
Lease liabilities
Provisions
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Employee share trust reserve
Foreign currency translation reserve
Share-based payments reserve
Accumulated losses
Total equity
Note
13
14
15
16
14
17
18
19
21
22
23
24
25
26
27
23
24
25
26
27
28.1
28.2
28.3
2022
$’000
116,329
39,354
8,477
9,073
173,233
327
3,971
12,032
6,806
58,984
82,120
2021
$’000
22,037
19,420
3,454
2,632
47,543
212
-
3,951
2,378
55,729
62,270
255,353
109,813
49,519
19,040
-
7,320
4,940
641
15,585
7,551
85,556
3,312
22,522
6,493
57,248
215
89,790
175,346
80,007
370,972
(26,909)
(562)
9,321
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
(272,815)
(173,471)
80,007
2,158
The above consolidated statement of financial position is to be read in conjunction with the notes to the consolidated
financial statements.
97
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Consolidated statement of changes in equity
for the year ended 31 December 2022
Share
capital
Employee
share trust
reserve
Foreign
currency
translation
reserve
Share-
based
payments
reserve
Accumulated
losses
Total
equity
Note
$’000
$’000
$’000
$’000
$’000
$’000
Balance as at
1 January 2022
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
Transfer on exercise
of options
Share based payments
28.3
Balance as at
31 December 2022
Balance as at
1 January 2021
Loss for the year
Other comprehensive loss
Total comprehensive loss
Issue of shares on exercise
of options
Share based payments
28.3
Balance as at
31 December 2021
170,840
-
-
-
175,000
(7,816)
-
-
-
-
-
-
32,948
(26,909)
-
-
-
-
200,132
(26,909)
(1,153)
5,942
(173,471)
2,158
-
591
591
-
-
-
-
-
-
-
-
-
-
-
-
(104,079)
(104,079)
-
591
(104,079)
(103,488)
-
-
-
175,000
(7,816)
6,039
(4,735)
4,735
-
8,114
3,379
-
8,114
4,735
181,337
370,972
(26,909)
(562)
9,321
(272,815)
80,007
167,058
-
-
-
3,782
-
3,782
170,840
-
-
-
-
-
-
-
-
299
4,620
(92,961)
79,016
-
(1,452)
(1,452)
-
-
-
-
-
-
-
1,322
1,322
(80,510)
(80,510)
-
(1,452)
(80,510)
(81,962)
-
-
-
3,782
1,322
5,104
(1,153)
5,942
(173,471)
2,158
The above consolidated statement of changes of equity is to be read in conjunction with the notes to the consolidated
financial statements.
98
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Consolidated statement of cash flows
for the year ended 31 December 2022
Cash flows from operating activities
Receipts from customers
Receipts in relation to R&D tax incentive
Payments to suppliers and employees
Income taxes paid
Interest received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Payments for acquisition of subsidiary, net of cash acquired
Purchases of intangible assets
Purchases of plant and equipment
Payments for decommissioning liability
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
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 increase/(decrease) in cash held
Net foreign exchange differences
Cash and cash equivalents at the beginning of the financial year
Note
2022
$’000
124,095
18,909
2021
$’000
4,158
12,123
(204,566)
(75,420)
(2,278)
1
(131)
-
-
(189)
29
(63,970)
(59,328)
(973)
(6,823)
(7,038)
(2,163)
-
-
(1,339)
(1,387)
(16,997)
(2,726)
3,014
(13)
(1,264)
181,039
(7,816)
-
(340)
(596)
3,782
-
174,960
2,846
93,993
(59,208)
299
22,037
3,300
77,945
Cash and cash equivalents at the end of the financial year
13
116,329
22,037
The above consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements.
99
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Notes to the consolidated financial statements
1. Corporate information
2.2. Basis of preparation
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.
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.
All amounts have been rounded to the nearest thousand,
unless otherwise indicated.
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 2022 was
authorised for issue in accordance with a resolution of the
Directors on 27 February 2023.
2. Summary of significant accounting
policies
The significant accounting policies that have been used
in the preparation of these financial statements are
summarised below.
2.1. Going concern
For the year ended 31 December 2022, the Group incurred
a loss for the year of $104,079,000 (2021: $80,510,000)
and cash used in operating activities of $63,970,000 (2021:
$59,328,000). As at 31 December 2022 the net assets of
the Group stood at $80,007,000 (2021: $2,158,000), with
cash on hand at $116,329,000 (2021: $22,037,000).
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. In addition, sales of Illuccix
generated receipts from customers of $124,095,000 (2021:
$4,158,000) during the year.
Cash on hand following the institutional placement and
future cash inflows from commercial activities is considered
sufficient to meet the Group’s forecast cash outflows in
relation to 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 2022.
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.
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 adopted all relevant new and amended
standards and interpretations issued by the Australian
Accounting Standards Board which are effective for annual
reporting periods beginning on 1 January 2022. The new
standards and amendments did not have any impact on the
amounts recognised in the current and prior 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
2022 reporting periods and have not been early adopted
by the Group. These standards are not expected to have
a material impact on the Group in the current or future
reporting periods or on foreseeable future transactions.
f. Alternative performance measures
The Group has identified certain alternative performance
measures (APMs) that it believes will assist the
understanding of the performance of the business.
The Group believes that Adjusted earnings before interest,
tax, depreciation and amortsation (Adjusted EBITDA),
Adjusted earnings before interest, tax and research and
100
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
development costs (Adjusted EBITRD), Adjusted earnings
before interest, tax, depreciation and amortsation and
research and development costs (Adjusted EBITDAR), net
working capital and net tangible assets per share provide
useful information to users of the financial statements.
The terms are not defined terms under IFRS and may
therefore not be comparable with similarly titled measures
reported by other companies. They are not intended to
be a substitute for, or superior to, IFRS measures and are
discussed further in the Glossary.
2.3. 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.
2.4. Foreign currency translation
a. Functional and presentation currency
Items included in the financial statements of each of
the Group's entities are measured using the currency of
the primary economic environment in which the entity
operates (the functional currency). The consolidated
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, and
• 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 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.
2.5. 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
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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 Group'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.
2.6. 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.
2.7. 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.
2.8. 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
(when it is available) and are regularly reviewed and
updated. They are subsequently measured at amortised
cost using the effective interest method, less loss
allowance. See note 30.4 for further information about the
Group’s accounting for trade receivables and description of
the Group’s impairment policies.
2.9. Inventories
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 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.
2.10. 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
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and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
• any lease payments made at or before the
commencement date less any lease incentives received
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.
2.11. Lease liabilities
Liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present
value of the following lease payments:
• fixed payments (including in-substance fixed
payments), less any lease incentives receivable
• variable lease payments that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable by the Group under
residual value guarantees
• the exercise price of a purchase option if the Group is
reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the
lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain
extension options are also included in the measurement of
the liability.
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.
2.12. Right-of-use assets
Right-of-use assets are measured at cost comprising
the following:
• the amount of the initial measurement of lease liability
• 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.
2.13. 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, licenses and customer contracts
Separately acquired trademarks and licenses are shown
at historical cost. Trademarks, licenses 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 arising from business combinations is
recognised at fair value when separately identifiable from
goodwill. Intellectual property is recorded as an indefinite
life asset when it is not yet ready for use. At the point
the asset is ready for use, the useful life is reassessed
as a definite life asset and amortised over an appropriate
period. All assets are tested annually for impairment and
subsequently carried at cost less accumulated impairment
losses and/or accumulated amortisation. An impairment
trigger assessment is 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
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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.
2.14. 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 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.
2.15. 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.
2.16. Provisions, contingent liabilities and contingent
assets
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 will be capitalised or expensed
based on the nature of the asset acquired (refer above),
except for the effect from unwinding discounts. Interest
rate effects from unwinding of discounts are recognised as
finance costs.
b. Decommissioning liability
The Group has recognised a provision for its obligation to
decommission its radiopharmaceutical production facility
at the end of 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 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 26.3.
2.17. 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 liability for long service leave are not expected to
be settled wholly within 12 months after the end of
the period in which the employees render the related
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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. Remeasurements
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 12 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.
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.
2.18. 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.
2.19. 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.
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.
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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
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 45 days, which is consistent
with market practice.
b. Licenses of intellectual property
When licenses of intellectual property are distinct from
other goods or services promised in the contract, the
transaction price is allocated to the license as revenue
upon transfer of control of the license to the customer. All
other promised goods or services in the license 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 license performance
obligation is recognised based on the nature of the license
arrangement. The transaction price is recognised over time
if the nature of the license is a ‘right to access’ license. This
is where the Group performs activities that significantly
affect the intellectual property to which the customer has
rights, the rights granted by the license 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 licenses do not meet the criteria to be a right
to access license, the license is a ’right to use’ license,
and the transaction price is recognised at the point in time
when the customer obtains control over the license.
c. Research and development services
Where research and development (R&D) services do not
significantly modify or customise the license nor are the
license 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.
d. Financing component
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.
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 15 Revenue from
Contracts with Customers 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 licenses of
intellectual property (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
Licenses 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 license 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
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some or all of the sales-based or usage-based royalty has
been allocated has been satisfied (or partially satisfied).
recognised as current amounts receivable or payable from
the other entities within the tax consolidated group.
2.20. Government grants
2.22. Goods and Services Tax (GST)
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.
2.21. Income tax
The income tax expense or credit for the period is the
tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused
tax losses.
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
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.
2.23. 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 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.
2.24. 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.
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Management considered the impact of climate change
on a number of key estimates within the financial
statements, including:
• the estimates of future cash flows used in impairment
assessments of the carrying value of non-current assets
(such as intangible assets, and goodwill)
• the assumptions used in measuring
decommissioning liabilities.
The considerations did not result in a material impact
on the financial reporting judgements and estimates,
consistent with the assessment that climate change is not
expected to have a significant impact on the Group’s going
concern assessment to February 2024 nor the viability of
the Group over the next five years.
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.
2.25. 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.
Impairment assessment – carrying value of goodwill and
intangible assets
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 21.
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 26.
2.26. Climate change
In preparing the consolidated financial report management
assessed the impact of climate change, particularly in the
context of the disclosures included in the Environmental,
Social, Governance and Sustainability (ESGS) report this
year and the Group's commitments.
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3. Segment reporting
The Group has operations in the Americas, Asia Pacific, and Europe, Middle East and Africa. During 2022, the Group
achieved a major commercial milestone with the launch of its prostate cancer imaging product Illuccix in the U.S. and the
subsequent receipt of first commercial revenues from sales of Illuccix in April 2022. Given the commercialisation of Illuccix,
Group performance is evaluated by management and the Board based on commercial sales of Illuccix and the further
development of the Group's pipeline of radiopharmaceutical products.
Reportable segments
The Group operated two reportable segments during the year ended 31 December 2022. The Group’s operating segments
are based on the reports reviewed by the Group Chief Executive Officer who is considered to be the chief operating
decision maker. The prior year comparatives have not been restated. There is no change to the total revenue or loss after
tax of the Group.
Segment performance is evaluated based on Adjusted EBITDA. Finance costs are managed on a Group basis.
Segment assets and liabilities are measured in the same way as in the financial statements. The assets and liabilities are
allocated based on the operations of the segment. Finance costs are not allocated to segments, as this type of activity is
driven by head office, which manages the cash position of the Group.
Reportable segment
Principal activities
Commercial operations Commercial sales of Illuccix and other products subsequent to obtaining regulatory approvals
Product development
Developing radiopharmaceutical products for commercialisation. This segment includes revenue received
from licence agreements prior to commercialisation and research and development services.
Group and unallocated includes head office results.
Revenue
Cost of inventory sold
Research and development costs
Selling, general and administration costs
Employment costs
Commercial
Product
development
Group and
unallocated
$’000
156,369
(61,556)
$’000
3,727
-
(730)
(57,047)
(27,370)
(27,094)
(3,539)
(19,170)
$’000
-
-
(80)
(13,090)
(18,221)
Group
$’000
160,096
(61,556)
(57,857)
(43,999)
(64,485)
Adjusted earnings before interest, tax, depreciation
and amortisation (Adjusted EBITDA)
39,619
(76,029)
(31,391)
(67,801)
Remeasurement of provisions
Depreciation and amortisation
Finance costs
Other income and expenses
(1,020)
(4,610)
-
200
-
(578)
-
10
(16,704)
(17,724)
(191)
(6,693)
(1,235)
(5,379)
(6,693)
(1,025)
Profit/(loss) before income tax
34,189
(76,597)
(56,214)
(98,622)
Income tax expense
(5,707)
-
250
(5,457)
Profit/(loss) from continuing operations after
income tax
Total assets
Total liabilities
28,482
(76,597)
(55,964)
(104,079)
111,619
60,887
44,275
19,272
99,459
95,187
255,353
175,346
109
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Revenue by
location
of customer
Non-current
assets by
location
of asset
$’000
149
1,483
564
3,353
2,496
2,045
$’000
31,815
-
41,174
-
-
-
150,006
160,096
5,160
78,149
Australia
Austria
Belgium
China
Other countries
United Kingdom
U.S.
Total
The total non-current assets figure above excludes deferred tax assets.
4. Reconciliation of alternative performance measures
Outlined below is a reconciliation of the Group's APMs used to measure performance.
Note
Operating segment
2022
$’000
2021
$’000
(98,622)
(80,465)
Metric
Loss before income tax
Adjusting items:
Revenue
Research and development costs
Selling, general and administration costs
Employment costs
Remeasurement of provisions
Finance costs
Other income and expenses
Adjusted EBITRD1
Depreciation and amortisation
Adjusted EBITDAR2
5
3
3
3
Product development
(3,727)
Product development
Product development
Product development
57,047
3,539
19,170
17,724
6,693
1,025
2,849
5,379
8,228
1. Adjusted earnings before interest, tax and research and development costs
2. Adjusted earnings before interest, tax, depreciation and amortisation and research and development costs
(2,698)
34,135
595
13,593
14,855
5,218
(20,855)
(35,622)
5,174
(30,448)
110
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
5. Revenue from contracts with customers
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:
Operating segment
2022
$’000
Sale of goods - at a point in time
Commercial
155,984
Royalty income
Commercial
Licenses of intellectual property - at a point in time
Product development
385
374
Research and development services - over time
Product development
3,353
Total revenue from continuing operations
160,096
6. Research and development costs
Manufacturing
Clinical
Other research and development related costs
Preclinical
2022
$’000
28,339
16,443
8,528
4,547
2021
$’000
4,471
427
-
2,698
7,596
2021
$’000
18,542
10,395
4,991
207
Included within employment costs is $19,170,000 (2021: $13,593,000) of costs related to research and development
activities. Refer to Note 8 for further details.
7. Selling, general and administration costs
57,857
34,135
Marketing and sponsorship
Professional fees
Travel and conferences
IT infrastructure, hosting and support
Rent and insurance
Other administration
Regulatory fees and licences
Other staff costs
2022
$’000
16,187
13,177
4,404
3,224
1,998
1,993
1,803
1,213
2021
$’000
5,891
6,176
622
1,235
1,754
230
595
379
43,999
16,882
111
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
8. Employment costs
Salaries and wages
Share based payment charge1
Short term incentives and commissions
Superannuation
Non-Executive Directors’ fees
2022
$’000
2021
$’000
47,302
24,618
8,114
7,138
1,270
661
1,319
3,060
642
465
64,485
30,104
1.
Includes a charge of $4,700,000 to accelerate the vesting of options when certain performance conditions were met during the year.
Salary and wages of $903,000 are included within the cost of inventory sold line item of the Consolidated statement of
comprehensive income or loss.
9. Depreciation and amortisation
Amortisation of intangible assets
Depreciation
10. Finance costs
Unwind of discount
Interest expense on lease liabilities
Other interest expense
Bank fees
2022
$’000
4,098
1,281
5,379
2022
$’000
6,287
277
46
83
2021
$’000
4,179
995
5,174
2021
$’000
5,029
157
6
26
6,693
5,218
The Group recognised an unwind of discount on provisions of $5,209,000 (2021: $3,881,000) and contract liabilities of
$1,078,000 (2021: $1,148,000).
112
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11. Other income and expenses
Other income
Research and development tax incentive income1
Realised currency loss
Unrealised currency (loss)/gain
Interest income
2022
$’000
91
-
(668)
(449)
1
2021
$’000
583
18,574
(914)
2,612
-
(1,025)
20,855
1. The Group has not recognised any amounts in relation to the R&D tax incentive, as a result of revenue exceeding the threshold of $20,000,000
in the financial year.
12. Income tax expense
12.1. Income tax expense
Current tax expense1
Deferred tax credit
2022
$’000
9,428
(3,971)
5,457
2021
$’000
45
-
45
1. The current tax expense is attributable to Telix Innovations SA and Telix Pharmaceuticals US, Inc and is driven by the individual entity's
taxable profits.
113
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
12.2. Numerical reconciliation of prima facie tax payable to income tax expense
Loss before income tax
Prima-facie tax at a rate of 30.0% (2021: 26.0%)1
2022
$’000
2021
$’000
(98,622)
(80,465)
(29,587)
(20,920)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
R&D tax incentive credit
(30,291)
(4,829)
Eligible expenses claimed under R&D tax incentive
Remeasurement of provisions
AASB 2 Share-based payments expense
Employee Share Trust payments
Deductible transaction costs on share issues
Sundry items
Foreign exchange translation loss
Current year tax losses not recognised
Prior year tax losses recognised
Adjustment for current tax of prior periods
Provisions recognised in international jurisdictions
Difference in overseas tax rates
Income tax expense
23,603
7,423
2,434
(8,073)
-
2
(464)
10,473
3,862
343
-
(305)
(48)
(203)
(34,953)
(11,627)
46,325
10,624
(854)
561
-
(5,622)
5,457
-
581
45
422
45
1. The Group has applied a prima-facie tax rate of 30% in 2022, as it is no longer eligible for the lower corporate tax rate of 26% available to small
company taxpayers in Australia.
12.3. Tax losses
Unused tax losses and carried forward tax credits for which no deferred tax asset has
been recognised:
Australia
Other countries
Unrecognised income tax benefit
13. Cash and cash equivalents
Cash on hand
2022
$’000
2021
$’000
61,330
1,503
17,882
2,538
62,833
20,420
2022
$’000
2021
$’000
116,329
22,037
1. 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.
114
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2 02 2 ANNUA L RE PORT
14. Trade and other receivables
Trade receivables1
R&D tax incentive receivable
Deposits
Current
Non-current
2022
$’000
39,354
-
327
39,681
39,354
327
2021
$’000
730
18,690
212
19,632
19,420
212
Total trade and other receivables
39,681
19,632
1. The Group has not recognised an impairment provision due to the limited historical loss experience available from nine months of
commercial operations.
The Group has not recognised any amounts receivable in relation to the R&D tax incentive, as a result of revenue
exceeding the threshold of $20,000,000 in the financial year. As a result of exceeding this threshold, eligible R&D
expenditure qualifies for a non-refundable tax credit which can be carried forward similar to tax losses to the extent
that it satisfies the continuity of ownership test or failing that, the same business test. Refer to Note 17.3 for further details
of the unrecognised deferred tax assets associated with carried forward tax losses and credits.
In 2021 the R&D tax incentive receivable was determined based on a combination of eligible domestic and international
expenditure of $42,965,000 at a rate of 43.5 cents tax incentive rebate per eligible R&D dollar spent. This amount was
received in cash during the financial year.
15. Inventories
Raw materials and stores
Work in progress
Finished goods
Total inventories
2022
$’000
2,422
3,773
2,282
8,477
The amount of inventory recognised as an expense during the year was $6,232,000 (2021: $2,090,000).
16. Other current assets
Other receivables
GST receivables
Prepayments
Total other current assets
2022
$’000
3,675
2,890
2,508
9,073
2021
$’000
3,283
-
171
3,454
2021
$’000
290
1,135
1,207
2,632
115
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
17. Deferred tax assets and liabilities
17.1. Deferred tax assets
Following the launch of its prostate cancer imaging product Illuccix in the U.S. and the subsequent receipt of first
commercial revenues from sales of Illuccix, the Group reviewed previously unrecognised tax losses and determined that
it was now probable that future taxable profits will be available in the U.S. and Belgium against which tax losses in these
jurisdictions can be utilitised.
The balance comprises temporary differences attributable to:
Tax losses
Intangible assets
Employee benefit obligations
Lease liabilities
Inventories
Other
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
2022
$’000
4,400
2,434
1,052
803
363
157
9,209
(5,238)
3,971
2021
$’000
4,692
-
-
756
-
-
5,448
(5,448)
-
Deferred tax assets movements
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Tax
losses
Intangible
assets
Employee
benefit
obligations
Lease
liabilities Inventories
Other
Total
The balance comprises temporary
differences attributable to:
Balance at 1 January 2022
4,692
-
-
756
-
-
5,448
(Charged)/credited:
to profit and loss
(292)
2,434
1,052
Balance at 31 December 2022
4,400
2,434
1,052
Balance at 1 January 2021
6,066
(Charged)/credited:
to profit and loss
Balance at 31 December 2021
(1,374)
4,692
-
-
-
-
-
-
47
803
555
201
756
363
363
157
157
3,761
9,209
-
-
-
-
-
-
6,621
-
(1,173)
5,448
116
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
17.2. 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
Deferred tax liabilities movements
The balance comprises temporary differences attributable to:
Balance at 1 January 2022
Charged/(credited):
to profit and loss
Balance at 31 December 2022
2022
$’000
3,634
1,604
5,238
2021
$’000
4,734
714
5,448
(5,238)
(5,448)
-
-
Intangible
assets
Right-of-use
assets
$’000
$’000
Total
$’000
4,734
714
5,448
(1,100)
3,634
890
1,604
(210)
5,238
Balance at 1 January 2021
6,094
527
6,621
Charged/(credited):
to profit and loss
directly to equity
Balance at 31 December 2021
(1,351)
(9)
4,734
187
–
714
(1,164)
(9)
5,448
17.3. Unrecognised deferred tax assets
The composition of the Group's unrecognised deferred tax assets is as follows:
Unrecognised deferred tax assets
Tax losses and tax credits
Temporary differences in relation to provisions
Temporary differences in relation to employee benefit obligations
Temporary differences in relation to intangible assets
Temporary differences in relation to lease liabilities
Temporary differences in relation to share based payments
Total unrecognised deferred tax assets
2022
$’000
2021
$’000
62,833
20,420
1,600
898
2,127
838
10,508
78,804
2,560
1,236
6,350
756
1,782
33,104
117
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
18. Property, plant and equipment
Land and
buildings
Plant and
equipment
Furniture, fittings
and equipment
Leasehold
improvements
Balance at 1 January 2022
Additions
Acquisition of business
Reclassifications
Depreciation charge
Exchange differences
Balance at 31 December 2022
Cost
Accumulated depreciation
Net book amount
Balance at 1 January 2021
Additions
Depreciation charge
Exchange differences
Balance at 31 December 2021
Cost
Accumulated depreciation
Net book amount
$’000
2,203
6,717
-
766
(70)
(5)
9,611
9,830
(219)
9,611
2,402
-
(88)
(111)
2,203
2,352
(149)
2,203
$’000
991
152
258
(766)
(63)
4
576
765
(189)
576
250
796
(52)
(3)
991
1,117
(126)
991
$’000
461
203
-
-
(230)
7
441
939
(498)
441
225
396
(161)
1
461
729
(268)
461
$’000
296
1,165
-
-
(57)
-
Total
$’000
3,951
8,237
258
-
(420)
6
1,404
12,032
1,541
13,075
(137)
(1,043)
1,404
12,032
187
147
(38)
-
296
376
(80)
296
3,064
1,339
(339)
(113)
3,951
4,574
(623)
3,951
118
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
19. Right-of-use assets
Balance at 1 January 2022
Additions
Acquisition of business
Depreciation charge
Disposals
Exchange differences
Balance at 31 December 2022
Cost
Accumulated depreciation
Net book amount
Balance at 1 January 2021
Additions
Depreciation charge
Exchange differences
Balance at 31 December 2021
Cost
Accumulated depreciation
Net book amount
Properties
$’000
2,067
5,054
423
(640)
(580)
3
6,327
8,104
(1,777)
6,327
1,380
1,195
(515)
7
2,067
3,204
(1,137)
2,067
Motor
vehicles
$’000
311
384
0
(221)
0
5
479
1,034
(555)
479
377
73
(141)
2
311
645
(334)
311
Total
$’000
2,378
5,438
423
(861)
(580)
8
6,806
9,138
(2,332)
6,806
1,757
1,268
(656)
9
2,378
3,849
(1,471)
2,378
The consolidated statement of comprehensive income or loss shows the following amounts relating to right-of-use assets:
Depreciation charge on right-of-use assets
Properties
Motor vehicles
2022
$’000
640
221
861
2021
$’000
515
141
656
119
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
20. Acquisitions
Optimal Tracers
On 31 December 2022, the Group completed the acquisition of Optimal Tracers, a radiochemistry development business
providing radiochemistry process development services and research tracers for use in clinical trials, from Sacramento-
based Northern California PET Imaging Center (NCPIC).
Optimal Tracers is a specialised business that provides development services and clinical trial doses to pharmaceutical
and biotech companies, as well as academic research institutions. Optimal Tracers is advantageously located to service
leading clinical sites along the West Coast of the U.S., with capability to deliver certain research products across the
entire country.
The following table summarises the consideration paid for Optimal Tracers, the provisional fair value of assets acquired
and liabilities assumed at the acquisition date.
Consideration
Cash paid
Contingent consideration
Total consideration
Recognised amounts of identifiable assets acquired and liabilities assumed
Property, plant and equipment
Right-of-use assets
Lease liabilities
Total identifiable assets
Goodwill
Total
Provisional
fair value
$’000
973
718
1,691
258
423
(423)
258
1,433
1,691
The consideration comprises cash consideration of $973,000 (USD$650,000) and contingent consideration based on a
percentage of sales to existing customers of Optimal Tracers for a period of 24 months. The total consideration and fair
value adjustments to the assets and liabilities assumed are provisional and are management’s best estimates at this time.
The goodwill arising is attributable to the acquired workforce, anticipated future cost savings from utilising Optimal
Tracer's research and radiopharmaceutical development capability and synergies of integrating the business within the
Group. The goodwill arising from the acquisition has been allocated to the Radiopharmaceutical production facility CGU.
Optimal Tracers did not contribute towards revenue or loss before tax attributable to equity holders of the parent given
the acquisition date of 31 December 2022. As a preliminary assessment, had the acquisition of Optimal Tracers been
completed on the first day of the period, Group revenues would have been approximately $1,898,000 higher and Group
loss before tax attributable to equity holders of the parent would have been approximately $60,000 higher.
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TE LIX P HA R MA CE UT ICALS
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Patents
Licences
21. Intangible assets
Balance at 1 January 2022
Acquisition of business
Additions
Amortisation charge
Changes in provisions
Exchange differences
Balance at 31 December 2022
Cost
Accumulated amortisation
Net book amount
Goodwill
$’000
4,097
1,433
-
-
-
(11)
5,519
5,519
Intellectual
property
$’000
44,486
-
-
(3,742)
256
60
41,060
58,875
-
(17,815)
5,519
41,060
Balance at 1 January 2021
4,224
50,377
Transfers
Amortisation charge
Changes in provisions
Exchange differences
Balance at 31 December 2021
Cost
Accumulated amortisation
Net book amount
-
-
-
(125)
(3,823)
(170)
(127)
(1,773)
4,097
4,097
44,486
55,680
-
(11,194)
4,097
44,486
$’000
337
-
-
(34)
-
(3)
300
675
(375)
300
249
125
(66)
-
29
337
672
(335)
337
The allocation of intangible assets to each cash-generating unit (CGU) is summarised below:
CGU
TLX591-CDx (Illuccix)
TLX591
TLX101
TLX66
TLX66-CDx
Olaratumab
Radiopharmaceutical production facility
Patents
$’000
6,809
-
6,823
(322)
(1,120)
(85)
12,105
12,835
Total
$’000
55,729
1,433
6,823
(4,098)
(864)
(39)
58,984
77,905
(730)
(18,921)
12,105
58,984
4,339
59,189
-
(290)
2,975
(215)
6,809
7,301
-
(4,179)
2,805
(2,086)
55,729
67,750
(492)
(12,021)
6,809
55,729
2022
$’000
14,709
12,796
1,676
15,080
898
6,823
6,702
300
2021
$’000
18,316
12,984
1,473
14,824
986
-
6,809
337
58,984
55,729
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Impairment test for goodwill and indefinite life intangible assets
TLX591-CDx (Illuccix®): Goodwill and definite life intangible assets, being intellectual property, were acquired as part of
the acquisition of Telix Innovations (formerly ANMI). At 31 December 2022 the Directors used a fair value less costs to sell
approach to assess the carrying value of 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 2022 as no impairment triggers were noted.
TLX591 and TLX66: Indefinite life intangible assets, being intellectual property, were acquired as part of the acquisitions
of Telix France (formerly Atlab) and Telix Switzerland (formerly TheraPharm) and are required to be annually tested for
impairment. At 31 December 2022, the Directors used a fair value less costs to sell approach to assess the carrying value
of the 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 2022, the Directors used a fair
value less costs to sell approach to assess the carrying value of the goodwill and intangible assets. No impairment was
recognised by the Group.
Olaratumab: The Group entered into a licence agreement with Eli Lilly and Company (Lilly) under which Telix is granted
exclusive worldwide rights to develop and commercialise radiolabelled forms of Lilly’s olaratumab antibody for the
diagnosis and treatment of human cancers. Telix’s initial development focus will be on a rare type of cancer known as
soft tissue sarcoma (STS).
Under the terms of the agreement Telix paid Lilly an upfront payment of $6,823,000 (US$5,000,000) for the grant of an
exclusive licence to Lilly’s intellectual property related to the development of a radiolabelled olaratumab, as well as access
to material for use by Telix in initial pre-clinical and early-phase clinical studies in application to potential uses for the
diagnosis and treatment of human cancers.
Lilly may be eligible for up to US$225,000,000 in payments based upon the achievement of pre-specified development,
regulatory and commercial milestones. Lilly would also be eligible to receive industry standard royalties on net sales. The
agreement also includes an option for Lilly to be granted an exclusive licence to a radiolabelled companion diagnostic
which would be developed by Telix. If exercised, Lilly will pay Telix US$5,000,000 and up to US$30,000,000 in potential
development milestones, as well as industry standard royalties.
Radiopharmaceutical production facility: The Group acquired an isotope licence as part of the Belgium-based
radiopharmaceutical production 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 production facility as a whole.
During the year the Group acquired the assets of Optimal Tracers, the goodwill arising from this acquisition has been
allocated to this CGU. At 31 December 2022, 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 2022. 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 – 15.0% (2021: 12.2%)
• Regulatory/marketing authorisation approval dates
• Expected sales volumes
• Net sales price per unit
• Approval for marketing authorisation probability success factor
• Costs of disposal were assumed to be immaterial at 31 December 2022.
The Group has considered reasonable 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 2022 to exceed their recoverable amounts.
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TE LIX P HA R MA CE UT ICALS
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22. Trade and other payables
Accruals
Trade creditors
Government rebates payable
Other creditors
Accrued royalties
Payroll liabilities
2022
$’000
22,325
16,806
4,349
3,148
1,919
972
2021
$’000
6,468
11,884
-
253
-
435
Total trade and other payables
49,519
19,040
23. Borrowings
Current
Non-current
Total borrowings
2022
$’000
-
3,312
3,312
2021
$’000
19
-
19
All borrowings outstanding at 31 December 2022 are in relation to the build-out of the Brussels South radiopharmaceutical
production facility. Telix entered into loan agreements with BNP Paribas and IMBC Group totalling €10,100,000 on a
10-year term, and a loan with BNP Paribas totalling €2,000,000 on a two-year, extendable term. All loans have a two-year
repayment holiday period, with repayments due to commence from March 2024. The loans are secured by a fixed charged
over the facility. Details of the borrowings are as follows:
Lenders
BNP Paribas
Total
Loan balance
Due < 1 year
Due > 1 year Maturity date
$’000
3,312
3,312
$’000
$’000
-
-
3,312
29-Feb-32
3,312
1. All loans are denominated in Euros and have been translated to Australian dollars at the exchange rate current at
31 December 2022.
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
2022 the Group’s on-balance sheet gearing and leverage ratio was less than 1% (2021: less than 1%).
123
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Reconciliation of liabilities arising from financing activities:
For the year ended 31 December 2022
Borrowings
Lease liabilities
For the year ended 31 December 2021
Borrowings
Lease liabilities
24. Contract liabilities
Opening
balance
Net cash
inflow/
(outflow)
Other non-
cash
movements
Closing
balance
$’000
$’000
$’000
$’000
19
2,520
2,539
359
1,848
2,207
3,293
(1,541)
1,752
(340)
(596)
(936)
-
6,155
6,155
-
1,268
1,268
3,312
7,134
10,446
19
2,520
2,539
The Group has recognised the following liabilities related to contracts with customers in licencing arrangements and
non-reimbursable government grants received:
Balance at 1 January
Consideration received
Revenue recognised
Unwind of discount
Balance at 31 December
Current
Non-current
Total contract liabilities
2022
$’000
2021
$’000
29,199
30,750
537
(3,352)
1,078
-
(2,698)
1,147
27,462
29,199
4,940
22,522
6,143
23,056
27,462
29,199
Grand Pharma strategic partnership
On 2 November 2020, the Group entered into a strategic commercial partnership with Grand Pharmaceutical Group
Limited (Grand Pharma or GP, formerly known as China Grand Pharma or 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 GP. The strategic
partnership with GP includes a licence of existing intellectual property and the provision of research and development
services. The Group has recorded it’s contractual liability to undertake the identified performance obligations relating to
research and development services using a cost plus margin approach.
Walloon Region non-reimbursable grant
On 29 August 2022, Telix Innovations SA received a non-reimbursable government grant to support research efforts
associated with 11At-TLX591/TLX592. The first instalment received was for €365,000, this amount will be released to the
statement of comprehensive income or loss as the associated expenditure is incurred.
124
TE LIX P HA R MA CE UT ICALS
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25. Lease liabilities
The consolidated statement of financial position shows the following amounts relating to leases:
Lease liabilities
Current
Non-current
Total lease liabilities
Balance at 1 January
Additions
Acquisition of business
Interest expense
Lease payments (principal and interest)
Disposals
Exchange differences
Balance at 31 December
2022
$’000
641
6,493
7,134
2022
$’000
2,520
6,164
423
277
(1,541)
(633)
(76)
2021
$’000
613
1,907
2,520
2021
$’000
1,848
1,268
-
157
(753)
-
-
7,134
2,520
The consolidated statement of comprehensive income shows the following amounts relating to leases:
Interest expense relating to leases
Properties
Motor vehicles
Total lease interest
2022
$’000
244
33
277
2021
$’000
126
31
157
The total cash outflow for leases in 2022 comprises $1,264,000 (2021: $596,000) principal and $277,000 (2021: $157,000)
interest payments.
125
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Government
grant liability
Contingent
consideration
Decommissioning
liability
26. Provisions
Balance at 1 January 2022
Remeasurement of provisions
Unwind of discount
Charged to profit or loss
Exchange differences
Acquisition of business
Amounts added to / (deducted from)
intangible assets
Provision utilised
Balance at 31 December 2022
Current
Non-current
Total provisions
Balance at 1 January 2021
Remeasurement of provisions
Unwind of discount
Charged to profit or loss
Exchange differences
Amounts added to / (deducted from)
intangible assets
Provision utilised
Balance at 31 December 2021
Current
Non-current
Total provisions
$’000
1,539
1,017
115
1,132
(120)
-
-
-
2,551
402
2,149
2,551
1,055
587
155
742
(197)
-
(61)
1,539
55
1,484
1,539
$’000
41,910
16,707
4,957
21,664
401
718
256
0
64,949
15,183
49,766
64,949
25,096
14,268
3,283
17,551
(567)
(170)
-
41,910
5,078
36,832
41,910
$’000
8,532
-
137
137
(73)
-
(1,100)
(2,163)
5,333
-
5,333
5,333
6,796
-
443
443
(295)
Total
$’000
51,981
17,724
5,209
22,933
209
718
(844)
(2,163)
72,833
15,585
57,248
72,833
32,947
14,855
3,881
18,736
(1,059)
2,975
2,805
(1,387)
(1,448)
8,532
2,270
6,262
8,532
51,981
7,403
44,578
51,981
126
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
26.1. 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 were designated to be measured 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 discount rate of 3.2% (2021: 0.4%), the expected sales volumes and the
net sales price per unit. The expected sales volumes and net sales price per unit assumptions are consistent with those
utilised by the Group in the calculation of the contingent consideration liability and intellectual property valuation.
26.2. Contingent consideration
Telix Switzerland (formerly TheraPharm)
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:
• €5,000,000 cash payment upon successful completion of a Phase III pivotal registration trial
• €5,000,000 cash payment upon achievement of marketing authorisation in the Europe or the United States, whichever
approval comes first, and
• 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 of 15.0% (2021: 12.2%),
marketing authorisation date, expected sales volumes 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 2022
Risk adjusted post-tax
discount rate
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).
A 0.5% increase in the post-tax discount rate would
decrease the contingent consideration by 2.5%
and a decrease in the post-tax discount rate by
0.5% would increase the contingent consideration
by 2.5%.
Expected sales volumes
This is determined through assumptions on target
market population, penetration and growth rates in
the U.S. 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 10% increase in the sales volumes would increase
the contingent consideration by 1.7% and a 10%
decrease in sales volumes would decrease the
contingent consideration by 1.7%.
A 10% increase in the net sales price per unit would
increase the contingent consideration by 1.7% and
a 10% decrease in net sales price per unit would
decrease the contingent consideration by 1.7%.
An increase in the probability of success factor by
10% would increase the contingent consideration
by 50.0% and a 10% decrease in the probability
of success factor would decrease the contingent
consideration to nil.
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TE LIX P HA R MA CE UT ICALS
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Telix Innovations (formerly ANMI)
The Group acquired ANMI 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 marketing authorisation of the product.
The percentage of net sales varies depending on the net sales achieved in the U.S. 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
marketing 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 risk adjusted post-tax discount rate,
expected sales volumes and net sales price per unit.
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 15.0% (2021: 12.2%),
expected sales volumes over the forecast period and net sales price per unit.
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 2022
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 using actual sales volumes for
2022 and forecasting sales volumes for 2023 and
beyond for each region.
Net sales price per unit
This is determined using actual sales prices for
2022 and forecasting sales prices for 2023 and
beyond for each region.
A 0.5% increase in the post-tax discount rate would
decrease the contingent consideration by 0.6% and
a 0.5% decrease in the post-tax discount rate would
increase the contingent consideration by 0.6%.
A 10% increase in sales volumes across all regions
would increase the contingent consideration by
7.2% and a 10% decrease in sales volumes would
decrease the contingent consideration by 7.2%
A 10% increase in net sales price per unit
across all regions would increase the contingent
consideration by 5.7% and a 10% decrease in sales
prices would decrease the contingent consideration
by 5.7%.
Optimal Tracers
The Group acquired the assets of Optimal Tracers on 31 December 2022. The consideration includes two contingent
payments based on a percentage of revenue from existing customers for the years ending 31 December 2023 and 2024.
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 of 15.0% and expected
revenue from existing customers over the two year period.
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 2022
Risk adjusted post-tax
discount rate
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).
A 0.5% increase in the post-tax discount rate would
decrease the contingent consideration by 0.6% and
a 0.5% decrease in the post-tax discount rate would
increase the contingent consideration by 0.6%.
Expected revenue
This is determined using actual revenue for 2022
and forecasting revenue for 2023 and 2024.
A 10% increase in revenue would increase the
contingent consideration by 10.0% and a 10%
decrease in revenue would decrease the contingent
consideration by 10.0%
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26.3. Decommissioning liability
Telix purchased the radiopharmaceutical production facility in Belgium on 27 April 2020. The site had cyclotrons installed
in concrete shielded vaults which also contained some nuclear contamination associated with past manufacturing
activities. As part of this transaction, Telix assumed the obligation to remove the cyclotrons and restore the site.
The Group removed the cyclotrons from the site during 2022. Other decommissioning activities not required to upgrade
the production 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 using the Belgium risk-free rate of 3.2% (2021:
0.4%) and translated to Australian dollars at the exchange rate at 31 December 2022.
The provision represents the best estimate of the expenditures required to settle the present obligation at 31 December
2022. 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 which alter the level of the provision required are also reflected in adjustments to the intangible
licence asset. 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 in the above table.
27. Employee benefit obligations
Bonus
Annual leave
Long service leave
Balance at 31 December
Current
Non-current
Total employee benefit obligations
28. Equity
28.1. Share capital
2022
$’000
5,101
2,450
215
7,766
7,551
215
7,766
2021
$’000
2,887
1,877
132
4,896
4,764
132
4,896
2022
2022
2021
2021
Number
'000
$’000
Number
'000
$’000
Balance at 1 January
285,073
170,840
280,405
167,058
Shares issued through the exercise of share options and
warrants 1,2
8,543
32,948
4,668
3,782
Contributions of equity 3
22,727
175,000
Transaction costs arising on new share issues
-
(7,816)
-
-
-
-
Balance at 31 December
316,343
370,972
285,073
170,840
1. Options exercised during the year through the employee Equity Incentive Plan resulted in 8,542,589 (2021: 4,667,586)
shares being issued of total value of $32,948,000 (2021: $3,782,000).
2. 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 were exercised on
22 March 2022 at an exercise price of $1.34 per warrant.
3. On 27 January 2022, the Group completed a $175,000,000 institutional placement of 22,727 new, fully paid ordinary
shares at a price of $7.70 per share. As part of this placement, the Group also incurred $7,816,000 of associated
transaction costs.
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TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
The weighted average ordinary shares for the period 1 January 2022 to 31 December 2022 is 310,644,169 (2021:
282,205,557). The Company does not have a limited amount of authorised capital.
Rights applying to securities:
1. 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.
2. 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 32.
28.2. Employee share trust reserve
Balance at 1 January
Treasury shares acquired
Balance at 31 December
2022
2022
2021
2021
Number
’000
-
4,054
4,054
$’000
-
26,909
26,909
Number
’000
$’000
-
-
-
-
-
-
Ordinary shares in the Company were purchased by the Telix Pharmaceuticals Employee Share Trust for the purpose of
issuing shares under the Equity Incentive Plan (see note 32 for further information).
28.3. Share-based payments reserve
Balance at 1 January
Options issued
Options exercised
Options lapsed
2022
2022
2021
2021
Number
’000
17,148
4,436
(8,843)
(1,005)
$’000
5,942
8,114
(4,735)
-
Number
’000
20,226
3,745
(4,716)
(2,107)
$’000
4,620
1,322
-
-
Balance at 31 December
11,736
9,321
17,148
5,942
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TE LIX P HA R MA CE UT ICALS
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29. Cash flow information
29.1. Reconciliation of loss after income tax to net cash used in operating activities
Loss before income tax
Adjustments for
Depreciation and amortisation
Fair value remeasurement of contingent consideration
Unwind of discount
Share based payments
Foreign exchange losses / (gains)
Income taxes paid
Change 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 creditors
Increase in employee benefit obligations
(Decrease) in contract liabilities
Net cash used in operating activities
Note
26
8
2022
$’000
2021
$’000
(98,622)
(80,465)
5,379
17,724
6,287
8,114
433
(2,278)
(19,934)
(5,023)
(6,441)
(115)
30,451
2,870
5,174
14,855
5,029
1,322
(2,612)
-
(7,192)
(2,821)
197
(29)
7,484
2,428
24
(2,815)
(2,698)
(63,970)
(59,328)
131
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30. 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.
30.1. Interest rate risk
The Group’s borrowings that have been drawn down at 31 December 2022 have fixed interest rates, and therefore the
Group is not exposed to any significant interest rate risk.
30.2. Price risk
The Group is not exposed to any significant price risk as contracts are in place to meet current estimated
material requirements.
30.3. 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 operates internationally and is exposed to foreign exchange risk, primarily
the US Dollar and Euro. Foreign exchange risk arises from commercial activities in the U.S. and research and development
activities in Europe and the U.S..
The Group's treasury risk management policy is to settle all US Dollar denominated expenditure with US Dollar
denominated receipts from sales of Illuccix in the U.S.. The Group also manages currency risk by making decisions as
to the levels of cash to hold in each currency by assessing its future activities which will likely be incurred in those
currencies. Any remaining foreign currency exposure has therefore not been hedged.
The Group has both foreign currency receivables and payables, predominantly denominated in US Dollar and Euro. The
Group had a surplus of foreign currency receivables over payables of $24,176,000 at 31 December 2022 (2021: deficit
of $10,081,000).
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 Euro and US Dollar, however given the level of current
investments in foreign subsidiaries, the impact is limited.
As at 31 December 2022, the Group held 44.5% (2021: 1.2%) of its cash in Australian dollars, 52.1% (2021: 93.6%) in
United States dollars, 3.2% (2021: 4.3%) in EUR, 0.1% (2021: 0.9%) in Japanese Yen (JPY) and 0.1% (2021: Nil) in Swiss
Francs (CHF).
Exposure
The balances held at 31 December 2022 that give rise to currency risk exposure are presented in Australian dollars below:
USD
EUR
CHF
JPY
SGD
GBP
CAD
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Cash and cash equivalents
Trade receivables
Trade payables
Government grant liability
Decommissioning liability
Contingent consideration liability
Borrowings
60,659
37,131
3,678
1,168
(9,224)
(4,721)
-
-
-
-
(2,550)
(5,333)
(64,231)
(3,312)
118
133
-
-
-
-
-
-
-
(8)
-
-
-
-
-
-
-
-
-
-
-
-
-
(162)
-
-
-
-
-
-
(8)
-
-
-
-
132
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
The balances held at 31 December 2021 that give rise to currency risk exposure are presented in Australian dollars below:
USD
EUR
CHF
JPY
SGD
GBP
CAD
$’000
$’000
$’000
$’000
$’000
$’000
$’000
20,624
32
947
700
-
-
(5,293)
(5,248)
(14)
-
-
-
-
(1,539)
(8,532)
(41,910)
(19)
-
-
-
-
193
-
(7)
-
-
-
-
-
-
-
-
-
-
(5)
(186)
(60)
-
-
-
-
-
-
-
-
-
-
-
-
Cash and cash equivalents
Trade receivables
Trade payables
Government grant liability
Decommissioning liability
Contingent consideration liability
Borrowings
Sensitivity
Outlined below is a sensitivity analysis which assesses the impact that a change of +/- 10% in the exchange rates as at
each reporting date would have on the Group’s reported profit/(loss) after income tax and/or equity balance.
USD
EUR
CHF
JPY
SGD
GBP
CAD
Total
Impact on post-tax profit
2022
2022
2021
2021
+10%
Profit/(loss)
-10%
Profit/(loss)
+10%
Profit/(loss)
-10%
Profit/(loss)
$’000
(8,051)
6,846
(11)
(11)
-
15
1
$’000
9,841
(8,367)
13
14
-
(18)
(1)
$’000
(1,401)
5,054
1
(17)
-
17
5
$’000
1,712
(6,177)
(2)
20
(1)
(21)
(7)
(1,211)
1,482
3,659
(4,476)
30.4. Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. Credit risk arises from cash and cash equivalents and credit exposures to customers, including
outstanding receivables.
Credit risk is managed on a group basis. If customers are independently rated, these ratings are used. Otherwise, if there
is no independent rating, the Group assesses the credit quality of the customer, taking into account its financial position,
past experience and other factors. Individual risk limits are set based on internal or external ratings. The compliance with
credit limits by customers is regularly monitored. 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.
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the
Group, and the failure to make contractual payments for a period of greater than 120 days past due.
133
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Impairment losses on trade receivables are presented within selling, general and administration costs within profit or loss.
Subsequent recoveries of amounts previously written off are credited against the same line item.
As at 31 December 2022, the expected credit losses are $Nil (2021: $Nil). The following tables sets out the ageing of trade
receivables, according to their due date:
Aged trade receivables
Gross carrying amount
Not past due:
Past due:
30 days
60 days
90 days
120 days
Total
30.5. Liquidity risk
2022
$’000
37,145
1,599
121
34
455
39,354
2021
$’000
-
487
164
79
-
730
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 Group’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.
1-6 months
6-12 months
1-5 years
Over 5 years
Total
contractual
cash flows
Carrying
amount
of liabilities
As at 31 December 2022
$’000
$’000
$’000
$’000
$’000
$’000
Non-derivatives
Trade and other payables
49,519
Borrowings
Lease liabilities
Government grant liability
58
815
330
Contingent consideration
15,331
Decommissioning liability
-
-
58
802
550
-
-
-
5,080
6,419
1,490
63,793
-
-
49,519
49,519
1,800
1,862
368
2,130
9,468
6,996
9,898
2,738
81,254
9,468
3,312
7,134
2,551
64,949
5,333
Total financial liabilities
66,053
1,410
76,782
15,628
159,873
132,798
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TE LIX P HA R MA CE UT ICALS
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1-6 months
6-12 months
1-5 years
Over 5 years
Total
contractual
cash flows
Carrying
amount
of liabilities
As at 31 December 2021
$’000
$’000
$’000
$’000
$’000
$’000
Non-derivatives
Trade and other payables
19,040
Borrowings
Lease liabilities
Government grant liability
Contingent consideration
Decommissioning liability
Total financial liabilities
30.6. Fair value
19
417
-
-
2,271
21,747
-
-
375
55
-
-
1,940
1,022
5,400
64,853
-
-
-
-
330
468
1,549
6,809
19,040
19,040
19
3,062
1,545
71,802
9,080
19
2,520
1,539
41,910
8,532
5,830
67,815
9,156
104,548
73,560
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% while holding all other variables constant
will increase/(decrease) profit before tax by $4,510,000 (2021: $1,006,000).
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.
31. 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, also provide the product for
scale-up and commercialisation.
135
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
At 31 December 2022 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.
On 4 April 2022 the Group announced that it is part of a $71,200,000 Australian Precision Medicine Enterprise
(APME) Project, which has been awarded $23,000,000 in Federal Government grant funding under the Manufacturing
Collaboration Stream of the Modern Manufacturing Initiative (MMI). The APME Project brings together industry partners
Global Medical Solutions’ (GMS) Australia subsidiary, Global Medical Solutions Australia (GMSA) and Telix Pharmaceuticals
with Monash University to address the Good Manufacturing Practice (GMP) manufacturing gap in the Australian
radiopharmaceuticals manufacturing sector. As a project partner, Telix will benefit from the increased capacity to develop
and manufacture theranostic radiopharmaceuticals in Australia, strengthening its global supply chain for both clinical and
commercial products. At 31 December 2022 there is a possible obligation for the Group to contribute $5,000,000 over
the three-year period, subject to the establishment of a formal consortium agreement and receipt of grant funding. 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.
We have entered into a number of agreements with other third parties pertaining to intellectual property. Contingent
liabilities may arise in the future if certain events or developments occur in relation to these agreements and as of
31 December 2022 we have assessed these contingent liabilities to be remote.
32. 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 2022. 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.
Share options contain a cashless exercise clause that allows employees to exercise options for an exercise price of $0.00
in exchange for forfeiting a portion of their vested options.
136
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
2022
Number
2022
2021
2021
Number
‘000
WAEP1
‘000
WAEP1
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
1. WAEP - weighted average exercise price
17,148
4,436
(8,843)
(1,005)
11,736
3,199
2.03
5.10
1.25
3.80
3.62
3.93
Expense arising from share based payments transactions:
Options issued under EIP
Total
20,226
3,745
(4,716)
(2,107)
17,148
1,319
2022
$‘000
8,114
8,114
1.34
4.46
0.85
2.36
2.03
0.85
2021
$‘000
1,322
1,322
Equity Incentive Plan and Options
Details of the number of options issued under the EIP outstanding at the end of the year:
Grant date
Vesting
date
Expiry date
Exercise
price
Options
on issue
at
1 January
2022
Issued
during
the year
Vested
during
the year
Exercised
during
the year
Lapsed
during
the year
Options on
issue at
31 December
2022
11-Jun-18
11-Jun-20
11-Jun-22
11-Jun-18
11-Jun-21
11-Jun-22
24-Jan-19
24-Jan-22
24-Jan-23
4-Nov-19
4-Nov-22
3-Nov-23
13-Jan-20
13-Jan-23
12-Jan-24
1-Jul-20
1-Jul-23
30-Jun-24
27-Jan-21
1
26-Jan-26
27-Jul-21
27-Jul-25
27-Jul-26
27-Jul-21
27-Jul-25
27-Jul-26
5-Apr-22
31-Jan-24
4-Apr-27
5-Apr-22
31-Jan-24
4-Apr-27
24-Oct-22
24-Oct-25
24-Oct-27
0.85
0.85
1.09
2.30
2.23
1.83
4.38
5.37
0.00
4.95
0.00
6.15
’000
831
1,319
5,945
1,310
3,300
1,300
1,900
1,018
225
-
-
-
’000
’000
-
-
-
-
-
-
-
-
-
2,756
220
1,460
-
-
450
430
-
-
1,386
933
-
-
-
-
’000
(831)
(1,119)
(5,495)
(880)
(150)
-
(218)
(25)
(125)
-
-
-
’000
-
(200)
-
-
(70)
-
(296)
(60)
-
(304)
(15)
(60)
’000
-
-
450
430
3,080
1,300
1,386
933
100
2,452
205
1,400
17,148
4,436
3,199
(8,843)
(1,005)
11,736
1. 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. These options vested during the year.
137
TE LIX P HA R MA CE UT ICALS
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The assessed fair value of recent tranches of options granted are outlined below. 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 2022 and 31 December 2021 are included below.
Fair value
Consideration
Exercise price
Grant date
Expiry date
Term
Share price at grant date
Volatility
Dividend yield
Risk-free rate
Jan-21
$2.12
$NIL
$4.38
Jul-21
$2.62
$NIL
$5.37
Jul-21
$2.62
$NIL
$NIL
Apr-22
Oct-22
$2.43
$NIL
$4.95
$3.08
$NIL
$6.15
27-Jan-21
27-Jul-21
27-Jul-21
5-Apr-22
24-Oct-22
1
27-Jul-26
27-Jul-26
4-Apr-27
24-Oct-27
5 years
5 years
5 years
5 years
5 years
$4.36
58%
0.00%
0.38%
$5.35
58%
0.00%
0.56%
$5.35
58%
0.00%
0.56%
$4.53
60%
0.00%
2.62%
$6.97
60%
0.00%
3.52%
1. 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. These options vested during the year.
33. Commitments
At 31 December 2022 and at the date of this Report, the Group had commitments against existing R&D and capital
commitments relating to the construction of the Brussels South manufacturing facility. R&D commitments in future years
are estimated based on the contractual obligations included within agreements entered into by the Group.
At 31 December 2022
Capital commitments
R&D commitments
At 31 December 2021
R&D commitments
Due < 1 year
Due >1 year
$’000
$’000
14,246
15,583
29,829
13,916
13,916
-
2,293
2,293
2,069
2,069
138
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
34. Related party transactions
34.1. Key management personnel compensation
Short-term employee benefits
Superannuation entitlements
Share-based payments
34.2. Transactions with other related parties
2022
$
2021
$
2,146,954
1,635,286
116,922
106,295
542,456
303,790
2,806,332
2,045,371
2022
$
2021
$
Purchases of various goods and services from entities controlled by key management personnel1
3,685,543
1,997,836
1. Non-Executive Director, Dr Andreas Kluge, is the principal owner and Geschäftsführer (Managing Director) of ABX-CRO,
a clinical research organisation (CRO) that specialises in radiopharmaceutical product development.
Telix entered into a master services agreement with ABX-CRO in 2018 for the provision of project management, clinical
and analytical services for its ZIRCON clinical trial. During 2022, the ZIRCON trial was extended to increase patients
from 248 to 300 and ABX-CRO resumed key site monitoring activities when COVID restrictions were lifted at hospitals.
During the year ended 31 December 2022, the total amount paid was $3,411,019 (2021: $1,512,452) and the amount
payable to ABX-CRO at 31 December 2022 was $274,524 (2021: $485,384) respectively. ABX-CRO's fees and charges
for activities undertaken in 2022 were on an arm's length basis and competitive with quotes obtained from other CRO's
for similar services.
139
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
34.3. Interests in other entities
The Group’s principal subsidiaries at 31 December 2022 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.
Place of business/ country
of incorporation
Ownership
interest held by
the Group (%)
Name of entity
Telix Pharmaceuticals (EST) Pty Ltd
Telix International Pty Ltd1
Telix Pharmaceuticals (ANZ) Pty Ltd1
Telix Pharmaceuticals (Belgium) SRL
Telix Innovations SA
Telix Pharmaceuticals (Canada) Inc.
Telix Pharmaceuticals (France) SAS
Telix Pharmaceuticals Holdings (Germany) GmbH
Telix Pharmaceuticals (Germany) GmbH
Therapeia GmbH & Co. KG
TheraPharm Deutschland GmbH
Telix Pharma Japan KK
Telix Pharmaceuticals (NZ) Limited
Telix Pharmaceuticals (Singapore) Pte Ltd
Telix Pharmaceuticals (Switzerland) GmbH
Telix Life Sciences (UK) Ltd
Telix Pharmaceuticals (US) Inc.
Telix Optimal Tracers, LLC
Australia
Australia
Australia
Belgium
Belgium
Canada
France
Germany
Germany
Germany
Germany
Japan
New Zealand
Singapore
Switzerland
United Kingdom
USA
USA
1. Denotes an entity that is a party to a deed of cross guarantee, refer to note 35 for further information
Principal activities
Dormant
Holding company
100
100
100
Commercial operations
100
Manufacturing
and development
100
Commercial operations
100
100
100
100
100
100
100
100
100
100
100
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
Clinical R&D
100
Commercial operations
100
Manufacturing
and development
140
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
35. Deed of cross guarantee
During the year, the Company and certain subsidiaries of the Group entered into a deed of cross guarantee. By entering
into the deed, the subsidiaries who are party to the deed have been relieved from the requirement to prepare and lodge
an audited financial report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785. The subsidiaries
identified with a ‘1’ in note 34.3 are parties to a deed of cross guarantee under which each Company guarantees to each
creditor payment in full of any debt in accordance with the deed of cross guarantee.
The consolidated statement of comprehensive income and statement of financial position of the entities party to the deed
of cross guarantee are provided as follows:
Consolidated statement of comprehensive income
Revenue
Cost of inventory sold
Research and development costs
Selling, general and administration costs
Employment costs
Remeasurement of provisions
Depreciation and amortisation
Finance costs
Other income and expenses
Loss before income tax
Income tax benefit
Loss from continuing operations after income tax
Total comprehensive loss for the year
2022
$’000
3,873
(2,165)
(72,119)
(15,225)
(25,351)
(16,707)
(4,269)
(6,505)
(207)
(138,675)
-
(138,675)
(138,675)
141
TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Consolidated statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Investment in subsidiaries
Intangible assets
Property, plant and equipment
Right-of-use assets
Trade and other receivables
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Provisions
Employee benefit obligations
Total current liabilities
Non-current liabilities
Contract liabilities
Lease liabilities
Provisions
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Employee share trust reserve
Share-based payments reserve
Accumulated losses
Total equity
2022
$’000
62,668
5,942
184
4,493
73,287
43,178
47,868
915
2,752
268
94,981
168,268
18,741
4,402
343
14,811
1,915
40,212
22,522
2,450
49,420
216
74,608
114,820
53,448
370,972
(26,909)
9,326
(299,941)
53,448
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36. 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
Reserves
Issued capital
Other reserves
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss for the year
37. 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
2022
$’000
72,622
60,371
2021
$’000
21,573
37,359
132,993
58,932
18,362
18,362
114,631
14,694
14,694
44,238
344,063
170,840
9,326
5,939
(238,758)
(132,541)
114,631
44,238
(110,944)
(62,655)
(110,944)
(62,655)
2022
$
2021
$
367,200
310,080
156,857
159,657
524,057
469,737
2022
$
89,621
9,435
2021
$
63,132
-
99,056
63,132
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38. Earnings per share
38.1. 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
38.2. 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
38.3. Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic loss
per share1
2022
Cents
(33.5)
(33.5)
2022
Cents
(33.5)
(33.5)
2021
Cents
(28.5)
(28.5)
2021
Cents
(28.5)
(28.5)
2022
2021
Number
Number
’000
’000
310,644
282,206
1. The 4,436,046 options granted in 2022 are not included in the calculation of diluted earnings per share because they
are antidilutive for the year ended 31 December 2022. These options could potentially dilute basic earnings per share
in the future.
39. Events occurring after the reporting period
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 2022.
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Directors’ declaration
1.
In the opinion of the Directors:
a.
the financial statements and notes, and the Remuneration report within the Directors’ report, of the Company and
Group are in accordance with the Corporations Act 2001 including:
i. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
ii. giving a true and fair view of the Company's and Group’s financial position as at 31 December 2022 and of their
performance for the year ended on that date.
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2. Within the notes to the financial statements it is confirmed that the financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board and as disclosed in Note 2.2
3.
In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the
Company and entities identified in note 35 will be able to meet any obligations or liabilities to which they are or may
become subject by virtue of the Deed of Cross Guarantee between the Company and those entities pursuant to ASIC
Corporations (Wholly-Owned Companies) Instrument 2016/785.
4. 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 2022.
Signed in accordance with a resolution of the Directors.
H Kevin McCann AO
Chairman
27 February 2023
Christian Behrenbruch
Managing Director and Group CEO
27 February 2023
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146
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. 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 2022 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 2022 ● 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. TE LIX P HA R MA CE UT ICALS
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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 $3.9m, 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 and significant components, Telix Innovations SA and Telix Pharmaceuticals (US) Inc. given their financial significance to the Group. ● 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 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. TE LIX P HA R MA CE UT ICALS
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● Component auditors performed an audit of Telix Innovations 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: decommissioning liability, 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 and Telix Pharmaceuticals (Belgium) SPRL, as well as the specific out of scope balances for component auditors of Telix Innovations 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 Revenue from contracts with customers - Sales from commercial operations (Refer to note 2.19, note 3, and note 5) $156.4 million The Group recognised its first commercial sales of Illuccix in the year, having received regulatory approval from The United States Food and Drug Administration (‘FDA’) in December 2021. The Group recognised $156.4m of revenue from commercial operations which are coordinated by distributors under distribution agreements. We considered revenue recognition of commercial sales of Illuccix to be a key audit matter for the Group due to: it was the first year of commercial sales ● the financial significance of the balance ● the number of distribution agreements, each with bespoke terms ● the complexity involved in identifying performance obligations and determining transaction price in accordance with Australian Accounting Standards, given the bespoke terms and conditions of contracts with customers. Our procedures over the Group’s revenue recognised for the commercial sales of Illuccix for the year included, amongst others: ● obtaining confirmations from a sample of the Group’s independent distribution partners and agreeing the revenue recorded by the Group to the purchases per the confirmations ● for a sample of distribution agreements: - developing an understanding of the key terms of the arrangements - assessing whether the Group has identified performance obligations and allocated prices, including variable consideration, in accordance with Australian Accounting Standards ● for a selection of manual journal entries and manual adjustments to revenue, identifying those that do not follow the standard settlement mechanism and comparing them to relevant supporting documentation ● considering the reasonableness of associated disclosures in the financial report in light of the requirements of the Australian Accounting Standards. TE LIX P HA R MA CE UT ICALS
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149
Key audit matter How our audit addressed the key audit matter Impairment assessment for goodwill and intangible assets (Refer to note 21) $58.9 million The Group has recognised $5.5 million of goodwill and $53.4 million of other intangible assets as at 31 December 2022. These assets are predominately divided amongst Illuccix ($14.7 million), TLX66 ($16.0 million), TLX591 ($12.8 million), TLX101 ($1.7 million), Radiopharmaceutical production facility ($6.7 million), and Olaratumab ($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 ● 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. Our audit procedures over the Group’s impairment assessments of goodwill and intangible assets included, amongst others: ● 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 the 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 ● 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, assessing 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. TE LIX P HA R MA CE UT ICALS
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Key audit matter How our audit addressed the key audit matter Valuation of contingent consideration (Refer to note 26) $64.9 million The Group values the contingent consideration that arose as part of the acquisition of Telix Innovations SA (formerly ANMI) and Telix Switzerland (formerly TheraPharm) at each balance sheet date. In addition, the acquisition of Optimal Tracers in the year includes two contingent payments which have been recognised in the Consolidated Statement of Financial Position. The initial measurement of contingent consideration was performed at the respective acquisition dates. The Group has remeasured liabilities to reflect post-acquisition changes in circumstances and assumptions in the valuation as at 31 December 2022. We considered the valuation of contingent consideration to be 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) ● 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. Our audit procedures to assess the Group’s valuation of contingent consideration as at 31 December 2022 included, amongst others: ● evaluating the Group’s valuation methodology against the requirements of Australian Accounting Standards ● assessing the mathematical accuracy of the valuation calculation ● comparing the key inputs and assumptions underpinning the valuation to available external market and industry data ● 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, assessing whether the discount rates used in the models were appropriate by comparing them to market data, comparable companies and industry research ● 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 2022, 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. TE LIX P HA R MA CE UT ICALS
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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. 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 75 to 90 of the directors’ report for the year ended 31 December 2022. In our opinion, the remuneration report of Telix Pharmaceuticals Limited for the year ended 31 December 2022 complies with section 300A of the Corporations Act 2001. TE LIX P HA R MA CE UT ICALS
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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 MelbournePartner 27 February 2023 TE LIX P HA R MA CE UT ICALS
2 02 2 ANNUA L RE PORT
Shareholder information
Telix Pharmaceuticals Limited ACN 616 620 369
Registered Office
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 will be held on Wednesday 24 May 2023. Details of how to participate will be included in the
Notice of Meeting lodged with the ASX and distributed to shareholders.
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 2 February 2023.
Total securities on issue
Fully paid ordinary shares
Options to acquire shares
Securities
(Listed)
Securities
(Unlisted)
317,085,083
-
-
10,815,344
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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
% No. of holders
270,497,382
85.41
31,245,983
6,564,043
7,001,222
1,397,464
9.87
2.07
2.21
0.44
316,706,094
100.00
6,494
0.00
170
1,061
854
2,692
3,242
8,019
226
%
2.12
13.23
10.65
33.57
40.43
100.00
2.82
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.
Name
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Pty Limited
Securities
40,150,674
31,011,771
27,441,529
Elk River Holdings Pty Ltd As Trustee For The Behrenbruch Family Trust And C Behrenbruch
22,675,000
Gnosis Verwaltungsgesellschaftm B H
22,675,000
%
12.68
9.79
8.66
7.16
7.16
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.
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Twenty largest shareholders - ordinary shares
Rank
Name
1
2
3
4
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
ELK RIVER HOLDINGS PTY LTD AS TRUSTEE FOR THE BEHRENBRUCH FAMILY TRUST
AND C BEHRENBRUCH
GNOSIS VERWALTUNGSGESELLSCHAFTM B H
NATIONAL NOMINEES LIMITED
GRAND DECADE DEVELOPMENTS LIMITED
UV-CAP GMBH & CO KG
BNP PARIBAS NOMINEES PTY LTD
THE ONCIDIUM FOUNDATION
BNP PARIBAS NOMS PTY LTD
SCINTEC DIAGNOSTICS GMBH
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
MAN HOLDINGS PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
YELWAC PTY LTD
UBS NOMINEES PTY LTD
NETWEALTH INVESTMENTS LIMITED
JEAN-FRANCOIS CHATAL
WARBONT NOMINEES PTY LTD
02 Feb 2023
40,150,674
31,011,771
27,441,529
22,675,000
22,675,000
12,886,518
10,947,181
7,525,000
6,675,428
6,239,360
5,443,420
4,312,151
3,673,399
3,264,410
3,228,750
2,399,466
2,381,804
2,070,025
1,955,439
1,797,069
1,753,946
%
12.68
9.79
8.66
7.16
7.16
4.07
3.46
2.38
2.11
1.97
1.72
1.36
1.16
1.03
1.02
0.76
0.75
0.65
0.62
0.57
0.55
Total
220,507,340
Balance of register
96,198,754
69.63
30.37
Grand total
316,706,094
100.00
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Company directory
Directors
H Kevin McCann AO (Chairman)
Christian P Behrenbruch (Group Managing Director and
Chief Executive Officer)
Andreas Kluge MD
Mark Nelson
Tiffany Olson
Jann Skinner
Company Secretary
Genevieve Ryan
Registered Office
Telix Pharmaceuticals Limited
55 Flemington Road
North Melbourne VIC 3051
info@telixpharma.com
www.telixpharma.com
Australian Business Number
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
www.linkmarketservices.com.au
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Glossary
Alternative performance measures
In reporting financial information, the Group presents alternative performance measures (APMs) which are not defined
or specified under the requirements of IFRS. The Group believes that these APMs, which are not considered to be a
substitute for or superior to IFRS measures, provide stakeholders with additional useful information on the underlying
trends, performance and position of the Group and are consistent with how business performance is measured internally.
The alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other
companies’ alternative performance measures. The key APMs that the Group uses are outlined below.
APM
Closest
equivalent
IFRS
measure
Income statement measures
Reconciling items to IFRS measure
Definition and purpose
Adjusted earnings
before interest,
tax, depreciation
and amortisation
(Adjusted EBITDA)
Adjusted earnings
before interest,
tax, depreciation
and amortisation
and research
and development
(Adjusted EBITDAR)
Adjusted earnings
before interest,
tax, research
and development
(Adjusted EBITRD)
Loss before
income tax
Finance costs,
income tax expense, depreciation
and amortisation, remeasurement of
provisions, other income and expenses.
Loss before
income tax
Finance costs,
income tax expense, depreciation
and amortisation, remeasurement of
provisions, other income and expenses
and costs associated with product
development activities.
Used to help assess current operational
performance excluding the impacts of non-cash
sunk costs (i.e. depreciation and amortisation
from initial investment in tangible and intangible
assets). It is a measure that management uses
internally to assess the performance of the
Group’s segments and make decisions on the
allocation of resources.
Used to assess the Group's performance
excluding non-operating expenditure, finance
costs, depreciation and amortisation, taxation
expense and product development activities.
Included as a metric for LTVR targets in 2023.
Loss before
income tax
Finance costs,
income tax expense, remeasurement of
provisions, other income and expenses
and costs associated with product
development activities.
Used to assess the Group's performance
excluding non-operating expenditure, finance
costs, taxation expense and product
development activities. Included as a metric for
LTVR targets in 2022.
Balance sheet measures
Net working capital
None
Net tangible asset
per share
None
The total of cash and cash equivalents,
inventory and current trade and other
receivables less current trade and
other payables
Net assets excluding intangible assets,
deferred tax assets and right-of-use
assets divided by the Group's weighted
average number of ordinary shares
on issue
Used to monitor the Group's working capital
management and short-term liquidity.
Disclosed in the Group's Appendix 4E as required
by Rule 4.3A of the ASX listing rules.
Abbrevations used in Annual report
We have outlined below the meaning of various abbrevations or acronyms used in the Annual Report.
Abbreviation
Term
AI
ANSTO
APME
APPI
ASX
BCR
BgRT
BLA
BT
Artificial intelligence
Australian Nuclear Science and Technology Organisation
Australian Precision Medicine Enterprise
Japanese Act on the Protection of Personal Information
Australian Securities Exchange
Biochemical recurrence
Biology guided radiotherapy
Biologics License Application
Breakthrough therapy designation
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Abbreviation
Term
CAIX
ccRCC
CDE
CLE
CMS
DEI
DKMA
EANM
EBRT
ERMF
ESGS
EZAG
FADP
FANC
FDA
FSS
GBM
GCP
GDP
GDPR
GLP
GMP
HCP
HCPCS
HIPAA
HSCT
IAEA
ICH
ICRP
IIT
IND
I-O
KMP
LAT-1
MAA
Carbonic anhydrase IX
Clear cell renal cell carcinoma
Center for Drug Evaluation (China)
Confocal laser endomicroscopy
Centers for Medicare & Medicaid Services
Diversity, equity and inclusion
Danish Medicines Agency
European Association of Nuclear Medicine
External beam radiation therapy
Enterprise Risk Management Framework
Environmental, Social, Governance and Sustainability
Eckert & Ziegler Strahlen-und Medizintechnik AG
Swiss Federal Act on Data Protection
Belgian Federal Agency for Nuclear Control
United States Food and Drug Administration
Federal Supply Service
Glioblastoma multiforme
Good Clinical Practice
Good Distribution Practice
General Data Protection Regulation
Good Laboratories Practice
Good Manufacturing Practice
Healthcare practitioner
Healthcare Common Procedure Coding System
US Health Insurance Portability and Accountability Act
Hematopoietic stem cell transplant
International Atomic Energy Agency
International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use
International Commission of Radiological Protection
Investigator Initiated Trial
Investigational new drug
Immuno-oncology
Key management personnel
L-type amino acid transporter 1
Marketing authorisation application
mCRPC
Metastatic castration-resistant prostate cancer
MTR
NDA
NED
NMPA
ODD
P&C
PSA
Molecularly targeted radiation
New Drug Application
Non-Executive Director
Chinese National Medical Products Administration
Orphan drug designation
People and Culture
Prostate-specific antigen
PSMA-PET
Prostate-specific membrane antigen imaging with positron emission tomography
QMS
R&D
RGS
SALA
SET
SPECT
TAT
TME
UK DPA
WHSE
Quality Management System
Research and development
Radio-guided surgery
Systemic amyloid light chain amyloidosis
Senior executive team
Single photon emission computed tomography
Targeted alpha therapy
Tumour microenvironment
UK Data Protection Act
Work, health, safety, and environment
158
Registered Office Telix Pharmaceuticals Limited 55 Flemington Road North Melbourne VIC 3051 Australia If any amendments to this Annual Report are required, they will be disclosed to the ASX and posted on Telix’s website under the “Investor centre” section at telixpharma.com/investor-centre/2022 ANNUAL REPORTTELIX PHARMACEUTICALS