Telix to acquire ITM for $1.6 billion, taking aim at Novartis radioligand therapies

Australian radiopharmaceutical company Telix will acquire Germany’s ITM Isotope Technologies Munich (ITM) for $1.65 billion (approximately 2.21 trillion won).

According to Fierce Biotech on the 21st local time, Telix signed an agreement to acquire ITM for an upfront payment of $1.65 billion. The acquisition will give Telix a drug candidate that competes with Novartis’ radioligand therapy Lutathera, as well as a radiopharmaceutical supply chain.

The purchase price includes up to $700 million in milestones tied to ITM-11’s performance. ITM-11 is a candidate treatment for gastroenteropancreatic neuroendocrine tumors (GEP-NETs) that the US Food and Drug Administration (FDA) rejected last month because of manufacturing issues.

Telix will pay $100 million if the FDA approves ITM-11 for a GEP-NET indication by the end of next year. An additional $100 million will be paid if it is approved for another GEP-NET indication by the end of 2030. Telix will pay a further $50 million if it is approved for pulmonary neuroendocrine tumors by the end of 2031.

As a result, ITM investors could receive up to $250 million related to regulatory approvals for ITM-11. Sales-based milestones total up to $450 million and will be calculated as three times the amount by which ITM-11’s global net sales exceed $150 million in 2030.

Christian Berenbruch, Telix’s chief executive officer (CEO), said during an analyst conference call, “This product has a differentiated clinical profile” and is “an asset that can support a unique commercial strategy.”

William Blair analysts said in an investor note that they were “very optimistic about the future growth prospects of the combined Telix-ITM entity.” They cited the potential for ITM to vertically integrate Telix’s manufacturing network and add research and development assets such as ITM-11.

The FDA rejected ITM-11’s approval, citing chemistry, manufacturing and controls issues and findings from an inspection of a third-party commercial facility. ITM plans to resubmit the application, but the timing depends on corrective actions and discussions with the FDA.

An agreement between the two companies on resubmission or the future direction of the program is a condition for closing the acquisition. Berenbruch said, “We know this third-party facility and the regulatory environment well,” adding that Telix’s experience with the imaging diagnostic Pixclara had demonstrated that “when the product profile is strong, a complete response letter (CRL) is not the end.”

Telix sells radioisotopes for prostate cancer and brain tumor imaging and is developing radioligand therapies. Its phase 3 pipeline includes TLX591, a PSMA-targeted candidate that could compete with Novartis’ prostate cancer treatment Pluvicto.

The combined company plans to pressure Novartis’ radioligand therapy business from both sides, based on radiopharmaceutical production and distribution facilities. ITM supplies lutetium-177, which is used in Pluvicto; the isotope is also used in Lutathera, ITM-11 and TLX591.

ITM generated $273 million in revenue last year. Telix expects the combined company to generate $1.3 billion in revenue this year.