Latest in Health Care Space- ELX, TLX

The Australian markets are trading in green zone on 27 December 2019; S&P/ASX 200 witnessing a rise of 19.2 points or 0.3% at 6813.4.

The S&P/ASX 200 Health Care index is trading at 41539 with a dip of 0.15%.

Of late, leading health care players Ellex Medical Lasers Limited (ASX:ELX) and Telix Pharmaceuticals Limited (ASX:TLX) have been under the spotlight after the recent announcements made by the companies.

Let’s dig deep into the latest developments of these ASX listed stocks.

Ellex Medical Lasers Limited (ASX: ELX)

World-leading MedTech company Ellex Medical Lasers Limited is engaged in designing, development, manufacturing and sale of innovative ophthalmic lasers and devices, thereby helping eye surgeons across the globe to effectively and efficiently treat eye disease such as glaucoma, retinal disease (primarily caused by diabetes, secondary cataract & vitreous opacities), as well as age-related macular degeneration.

Dated 28 November 2019, the company made an announcement to suspend the securities from official quotation effective immediately under the listing rule 17.2, pending the release of an announcement regarding a proposed sale of Ellex's Lasers and Ultrasound business segment following receipt of an unsolicited non-binding conditional offer. It was further informed that trading of securities will be commenced on Thursday 12 December 2019.

The company further announced an extension to suspension of its securities.

The stock resumed trading on 24 December with the business sale update.

ELX stock traded at $0.755, down 10.12% on 27 December 2019 (1:40 PM AEDT). The 52 weeks high and low of the stock was noted at $0.900 and $0.500, respectively.

Execution of a Binding Share Sale and Purchase Agreement (SPA)

Ellex Medical announced on 24 December 2019 that it has executed a binding Share Sale and Purchase Agreement (SPA) for $100 million in cash to Lumibird Group SA (Lumibird) for sale of the Ellex Lasers & Ultrasound business.

The agreement is subjected to adjustments with respect to Ellex’s iTrack, 2RT and corporate costs allocated at the time of completion. This Proposed Transaction explicitly excludes the Ellex 2RT®and Ellex iTrack™ business segments.

Synopsis of the Proposed Transaction

Upon successful completion of the transaction, Lumibird would be acquiring all Ellex Lasers & Ultrasound product including-

· Glucoma- Tango™ and Tango Reflex™ Selective Laser Trabeculoplasty (SLT) lasers (FY2019 revenues: $32.4 million).

· Secondary Cataracts and Vitreous Floaters- Ultra Q™ and Ultra Q Reflex™ lasers (FY2019 revenues: $12.6 million).

· Diabetic Eye Disease- Integre Pro™ and Integre Pro Scan™ lasers (FY2019 revenues $14.4 million).

· Ultrasound Products- Ellex Eye Prime™, Eye One™ and Eye Cubed™ (FY2019 revenues: $4.3 million); collectively.

This accounts for a total of $66.5 million in FY2019 revenues and $9.5 million in FY2019 EBITDA.

Besides, Lumibird would also assume proprietorship of the Ellex Adelaide manufacturing facility in Australia.

Transaction Key Highlights

In a nutshell, Ellex would be free of debt and would be mainly focused on devices to treat glaucoma in a flourishing, underpenetrated global market and 2RT for macular degeneration post the transaction.

Telix Pharmaceuticals Limited (ASX:TLX)

Headquartered in Melbourne with its international operations in U.S., Belgium and Japan, clinical-stage biopharmaceutical company Telix Pharmaceuticals Limited (ASX:TLX) is engaged in the developing diagnostic and therapeutic products employing Molecularly Targeted Radiation (MTR). Addressing a significant unmet medical need pertaining to renal, prostate & brain cancer, Telix’ focus is on the development of clinical-stage oncology products portfolio.

With a market capitalization of 407.78 million and 253.28 million outstanding shares, TLX stock traded at $1.622, up by 0.75% on 25 December 2019 (1:40 pm AEDT). The 52 weeks high and low of the stock was noted at $1.95 and $0.620.

Telix Submitted ZIRCON Phase 3 Investigational New Drug (IND) application to US FDA

Telix, in a recent announcement dated 24 December 2019, updated the market that as a part of the international Phase 3 ZIRCON study it has submitted a Phase 3 Investigational New Drug (IND) application to the US FDA for TLX250-CDx.

TLX250-CDx is 89Zr-girentuximab which is used to image renal cancer with PET (Position Emission Tomography). The company anticipates commencement of enrolling US patients in the ZIRCON study during the first quarter of fiscal year 2020.

As informed by Telix CEO Dr. Christian Behrenbruch, that in Europe and Australia presently 19 sites are registering patients into the ZIRCON study and additional six cancer centres in US to have been planned to enroll at least 50 US patients that would in turn enable the study to be fully recruited by first half of fiscal year 2020.

TLX250-CDx (89Zr-girentuximab)

An antibody-based imaging agent that is used with Positron Emission Tomography (PET), TLX250-CDx targets Carbonic Anhydrase IX (CAIX) which is a cell surface antigen expressed on the vast majority of the most common form of renal (kidney) cancer known as clear cell renal cell cancers (ccRCC).

Besides developing TLX250-CDx for CAIX-expressing cancer imaging, Telix is also involved in the development of TLX250 (177Lu-girentuximab) to treat CAIX-expressing cancers.

ZIRCON

ZIRCON stands for Zirconium Imaging in Renal Cancer Oncology, is an international, confirmatory Phase 3 trial to image ccRCC by using TLX250-CDx with PET. It is estimated that approximately 250 patients will be enrolled in this trial. The study also compares PET imaging with histology outcomes from the surgically resected tumour.

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