Telix Pharmaceuticals — A new theranostic with a clinical readout in days

On 30 November 2020, Telix announced its intent to acquire Swiss radiopharmaceutical and radiodiagnostic company TheraPharm, a subsidiary of Scintec Diagnostics. TheraPharm is a small (three employee) company focused on developing the monoclonal antibody besilesomab. The antibody is directed against the CD66 family of proteins also known as carcinoembryonic antigens. Members of this family of proteins are found in high concentrations on certain immune cells, and this can be used to direct the diagnostic or therapeutic radiation at these cells. This positions the product well withing Telix’s ‘theranostic’ strategy to develop products simultaneously for diagnostic and therapeutic uses.

The 99mTc-derivative of the mAb is approved in Europe as a diagnostic for the detection of osteomyelitis, or infection of the bone. This is achieved because the inflammation in the bone drives the migration of immune cells to the site of infection, which can be visualized radiographically. Osteomyelitis has an estimated incidence of 24.4 per 100,000 person-years in the US. The incidence has been increasing in more recent decades due at least in part to the increased prevalence of diabetes in the US, which is a major co-morbidity. Diabetes is cited as etiology of the disease in 27% of cases, whereas 19% are caused by a blood infection, and 19% are related to trauma. The infection itself is most commonly caused by Staphylococcus aureus (44% of cases), which raises concerns from epidemiologists due to the increasing prevalence of methicillin resistant S. aureus (MRSA). The diagnostic product is marketed as Scintimun by Curium Pharma, and Telix has noted that it has a ‘few million’ in sales (no additional sales data provided).

However, Telix appears to see the greatest potential for this antibody in the therapeutic setting as a myeloablative therapy for HSCT conditioning. Myeloablation is the process of killing off a person’s existing bone marrow (and by extension hematopoietic stem cells) in preparation for the body to receive a stem cell transplant. This is typically achieved using either high doses of chemotherapeutic agents (eg melphalan) or total-body irradiation. However, conditioning regimens are very high risk: for instance total-body irradiation has a mortality rate of 20–30% (aside from the risk of relapse).1 This leaves ample room for improvement with new products, and perhaps a more directed source of radiation like 90Y-anti-CD66-MTR could improve outcomes.

There were 22,863 HSCT procedures performed in the US in 2017 (from the most recent report from the Health Resources & Services Administration). The vast majority of these are associated with hematologic malignancies, but Telix will be investigating the rare disease SALA as the primary indication for the therapy. SALA (also known as AL amyloidosis) is a rare disease caused by the overexpression of the light-chain portion of antibodies by aberrant B-cells. This protein forms deposits in critical organs such as the heart and kidneys. The treatment in patients who can tolerate it is HSCT to ablate the problematic B-cells in the bone marrow. However, a significant portion of patients are considered high risk due to existing cardiac or renal damage, and considered unfit for HSCT, and more tolerable regimens could improve outcomes in these cases. An estimated 4,500 new cases of the disease are diagnosed in the US per year.2 The product candidate is already in a Phase I clinical study expected to read out very soon, in mid-December 2020. The study will assess the safety and toxicity of 90Y-anti-CD66-MTR as the sole conditioning regime for autologous HSCT in patients with SALA, and the endpoint will be engraftment success of the product as a monotherapy. The trial is a dose-escalation study with three dosing arms – 30, 40, 45 MBq/kg (of lean body weight). In 2018, the company presented the results from the first four patients enrolled in the study, in which two had a complete response and two had partial responses.

We expect Telix to seek initial approval with SALA as the target indication and to expand into other HSCT indications like hematologic cancers in follow-up approvals. HSCT is used for the treatment of a range of hematologic cancers, most commonly for multiple myeloma where it is a first-line treatment. An estimated 32,270 patients will be diagnosed with multiple myeloma in the US in 2020 according to the NIH. The product has already received an orphan drug designation in Europe for bone marrow conditioning for any type of HSCT-related indication.

90Y-anti-CD66-MTR has previously been examined in a number of clinical studies, although only some of these data have been published in peer-reviewed journals. Dosing was initially established in a Phase I study (n=55), which did not find a maximally tolerated dose under 45 MBq/kg (in combination with high-dose melphalan).

The safety and efficacy of the product was examined in a randomized phase II study in which patients either received either high dose melphalan in combination with 90Y-anti-CD66-MTR (Arm A n=12) or high dose melphalan alone (Arm B n=12). All patients on the study received a sufficient melphalan for a normal conditioning procedure, but an improvement in outcomes was still seen in Arm A, which saw twice as many complete responses (CR, 6 vs 3). All patients on both arms engrafted, and there were no meaningful differences in toxicities between the arms.

Altogether, 90Y-anti-CD66-MTR has the potential to provide a more tolerable conditioning regimen for patients that might otherwise be unfit for HSCT. This was also tested in a Phase I/II study, where 20 elderly (55–65) patients with myeloma or acute myelogenous leukemia (AML) were treated with the drug in combination with other conditioning agents to provide a reduced intensity regimen. Strong marrow targeting was seen, with no off-target radiation toxicity seen, and no graft failures. 20% of patients acquired graft versus host disease (GvHD), and there was a non-relapse mortality of 25%. Two-year survival was 52%, which is an improvement over historical figures in this age group (only 10–20% of AML patients over age 60 are long-term survivors).

Telix announced in early December 2020 the results from an earlier meeting with the FDA to discuss the clinical protocol for its planned ProstACT Phase III study of the prostate cancer therapeutic TLX591. Several important parameters were agreed to during the meeting. The study will enroll 390 patients with metastatic castration resistant prostate cancer (mCRPC) that have previously been tested with a novel androgen axis drug, like Xtandi (enzalutamide, Pfizer). The primary endpoint of the study will be radiographic progression-free survival (rPFS), which has become a normal endpoint for this patient group. Measuring overall survival (OS) can be difficult in prostate cancer because patients tend to be long lived even with a significant disease burden. This being said OS will be a secondary endpoint along with quality of life and safety measures.

Importantly, the company will be able to enrich its patient selection population by pre-emptively screening them for PSMA expression. This will be done using the company’s own TLX591-CDx. This decision to allow patient selection enrichment is an important outcome of discussions with the FDA because it may enhance the effect of the treatment by excluding those patients unlikely to respond to TLX591.

The company is intending to begin enrolling patients in Australia and Europe starting in Q121 and for enrolment in the US to begin in mid-2021. Telix also mentioned the possibility of enrolling patients in China given its recent deal with China Grand Pharmaceutical (CGP) for the Greater Chinese rights to its products. CGP has committed US$65m is development support for TLX591 (and TLX250) in China.

In related news Telix also announced that it would be initiating Phase I clinical studies of its second-generation PSMA target therapeutic TLX592. TLX592 has the potential of addressing a similar market to TLX591, while also potentially expanding it to earlier stage patients with smaller tumors. The product is engineered to have a lower residence time in the body compared to other monoclonal antibodies, which can provide more precise control over radiographic dosing. TLX592 has a serum half-life of 12 hours compared to 133 for TLX591. Telix calls this technology the RADmAb platform, and it might have other therapeutic applications with other targets. The lower residence time allows the product to employ a more potent nuclide, 225Ac, so higher doses of radiation can be delivered in a tissue specific manner. This initial study will be using the 64Cu nuclide, which can be detected via PET unlike 225Ac, to examine the biodistribution of TLX592. The trial is a 3x3 dose-escalation/expansion study, which the company believes can be run very quickly (it estimates completion in six months). Patient enrolment is expected to start shortly. The company states that once preliminary data are acquired with 64Cu, confirming the predicted biological properties of TLX592, they can be substituted with 225Ac in subsequent studies.

We are withholding a valuation update at this time because of the imminent closing of the transaction and the readout of the Phase I study of 90Y-anti-CD66-MTR in SALA. Our previous valuation was A$671.0m or A$2.44 per share.

The transaction (expected to close five to seven days following the announcement) includes €10.0m payable in stock determined by the volume weighted average price over the previous week of trading, which would translate to approximately 4.4m shares at the current price (A$3.75). The results of the SALA study will fundamentally guide which indications the product will be pursued in and its timeline for approval. If the trial is successful, we also expect the company to provide an update on the size and scope of future development programs for the asset.

The company estimates that there is a US$600m market to treat SALA in the US and EU5 countries, which appears reasonable based on our estimates. If we assume similar disease rates in Europe and the US, and a 40% discount to price in Europe, this corresponds to a US cost of US$85,000 per procedure. This would bring a total procedure cost to approximately US$226,000 when paired with autologous transplant (US$141,000),3 which we believe the market can bear for a rare disease. The company may face increased pricing pressure if 90Y-anti-CD66-MTR is approved for multiple myeloma, where the market is dominated by commoditized chemotherapies and volume is substantially larger.

We are not updating our financial forecasts at this time, but we expect to provide an update following the SALA clinical readout. The company provided some preliminary guidance that it expects the product to add A$5m to 2021 expenses.