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Health & Biotech
We know a company makes its own luck, but how many times can the fast-growing Telix Pharmaceuticals (ASX:TLX) be hit on the backside by a rainbow?
The radiopharmacy leader’s latest good fortune is by way of a US decree on reimbursement, which preserves separate payment for its commercialised prostate cancer imaging agent, Illucix.
In its final ruling for calendar 2025, the US Centres for Medicare and Medicaid Services (CMS) has deemed that hospitals will continue to be reimbursed separately for high-value radiopharmaceutical diagnostics.
Drugs and devices are usually packaged up in the one reimbursable procedure, which means hospitals are tempted to use the cheapest treatments.
With separate reimbursement, this incentive is removed although it does open the risk of over-use of higher-cost therapies.
Based on a gallium isotope, Illucix already is reimbursed separately via its ‘transitional pass-through’ (TPT) status, applicable to new drugs and devices that meet certain cost thresholds.
This status expires in July 2025, so in effect the company is assured of favourable reimbursement after that.
“This is a major win for the molecular imaging industry, promising relative price stability and continued patient access to radiopharmaceutical diagnostics once their TPT periods expire,” opines Wilsons analyst Dr Shane Storey.
Telix’s CEO for precision medicine Kevin Richardson says the ruling, which applies to outpatients, will “provide certainty for patients and physicians seeking access to safe and effective diagnostic radiopharmaceuticals”.
He says it will also encourage investment in new imaging agents “as there is a clear commercial pathway to recouping the investment.”
On that note, the company expects the ruling to apply to its pipeline of imaging agents, notably a second prostate cancer tool and a kidney cancer diagnostic.
Telix generated US$135 million of revenue in the September quarter – almost all of it from US Illucix sales.
Storey opines that while TPT status alone was not a key driver for Illucix sales, the CMS ruling should prompt Telix to push through price increases. He says industry feedback suggests pricing will settle at around US$4500 per scan.
The ruling potentially also could benefit Clarity Pharmaceuticals (ASX:CU6) – but in a more roundabout way.
Clarity is at phase III stage of trialling developing a copper-isotope based prostate imaging agent. With a longer half-life, this agent could enable detection of additional lesions not apparent on day one.
“[The ruling] brings price stability for incumbents and therefore nullifies opportunities to grab opportunistic adoption or market share based on TPT-status alone,” Dr Storey says.
“But it also amplifies the aggregate value of [Clarity’s diagnostic] as a potential third blockbuster in the [prostate cancer] category – so the asset remains eminently partnerable/licensable/acquirable.”
Telix shares this morning gained 2.75% to $22.04 and Clarity shares rose 4.6% to $7.07.
Still on diagnostics, Optiscan (ASX:OIL) has signed a compact with Monash University to develop a “scope agnostic” gastrointestinal (GI) flexible endomicroscope and AI-enabled products.
Optiscan is a leader in confocal laser endomicroscopy, or CLE, which eliminates the age-old and unreliable method of analysing tissue samples under a traditional microscope.
CLE creates real-time digital microscopic images at a magnification 1000 times that of traditional scans and avoids the need for painful biopsies.
The project is focused on developing a miniaturised flexible digital endomicroscopic probe that integrates with biopsy channels of standard commercially-available endoscopes, “in conjunction with innovative AI-powered endomicroscopy technology”.
As a stand-alone ‘agnostic’ medical system, this next-gen endomicroscope can be adopted more easily by clinicians and hospitals, while also potentially enabling the company to strike commercial arrangements with endoscope manufacturers.
Optiscan will work with the uni to advance AI technology to detect and analyse cancerous and precancerous lesions automatically.
“The ‘blue sky’ packaged up in this project is immense,” says Optiscan CEO Dr Camile Farah.
“Optiscan’s imaging system has the potential to revolutionise GI diagnostics, not only for GI cancers, but also for … conditions such as Crohn’s Disease, ulcerative colitis and irritable bowel syndrome.”
In the US about 21 million GI endoscopies are carried out annually, with colonoscopies accounting for 60% of them.
The project benefits from a $3 million federal Cooperative Research Centres Projects (CRC-P) grant and to date has received $1 million.
The tie-up with Monash is apt, given Optiscan’s tech was developed there in the first place.
Optiscan shares were 3% lower at 16 cents.
With their shares having been suspended for almost a year, shareholders in the failed cannabis play BOD Australia (ASX:BOD) (BOD Science) are a step closer to finding out what value – if any – they can salvage from a proposed back-door listing.
BOD has continued to trade under a deed of company arrangement and joint administrator Andrew Barnden of Rodgers Reidy has told shareholders to expect a notice of meeting by the end of the year.
Presumably to be held early next year, the meeting is to decide whether BOD acquires the unlisted Biortica Agrimed, “Australia’s fastest growing medicinal agriculture and agricultural technology company”.
Biortica grows the green stuff in glass house facilities in regional Victoria and NSW.
In the meantime, BOD reported full-year revenue of $875,559, down 49% partly because of falling prescriptions in the UK. Of the tally, $255,100 was from legacy non-cannabis products.
The company lost $6.41 million compared to $7.953 million previously.
Barnden reports that in the early part of 2024 BOD had “significantly advanced” a placebo-controlled insomnia study that’s being carried out at the Woolcock Institute of Medical Research.
Last year’s top-line results from the 194 evaluable patients showed “statistical significance”, based on smart watch data and questionaries.
While there’s plenty of – er- real world evidence that cannabis induces sleepiness, formal trials are few and far between.
BOD shares have been suspended since November 28 last year, when they last traded at 2 cents.
At Stockhead, we tell it as it is. While Optiscan is a Stockhead advertiser, it did not sponsor this article.
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Health & Biotech
Health & Biotech
Health & Biotech
