Telix to buy radiopharma rival ITM for $1.65bn upfront
Australian radiopharma specialist Telix Pharma has reached a deal to acquire Germany's ITM Isotope Technologies Munich (ITM), extending a wave of consolidation in the category over the last couple of years.
Telix is offering $11.84 per share for ITM, valuing its German peer at $1.65 billion, with ITM shareholders expected to receive about $1.25 billion after taking into account debt and cash reserves.
Telix said that adding ITM to its business will enhance its international capabilities in development, isotope production, and manufacturing, particularly for lutetium-177 (177Lu), as the company is the only producer of "globally scaled commercial-grade" supplies.
It also manufactures actinium-225 (225Ac) and terbium-161 (161Tb) isotopes, and has seen revenues rocket in the last few years, achieving a compound annual growth rate (CAGR) of 40% since 2021 to reach $273 million last year.
The bid comes just a few weeks after ITM suffered a setback in its radiotherapeutics ambitions, with the FDA issuing a complete response letter (CRL) for ITM-11 (177Lu-edotreotide), a somatostatin receptor-targeting therapy for gastroenteropancreatic neuroendocrine tumours (GEP-NETs).
ITM is confident it can satisfy the FDA's queries about manufacturing details in its CRL, and Telix appears to be optimistic that will be the case, noting that, if approved, ITM-11 will "accelerate [its] entry into the commercial therapeutic market."
The deal also includes a contingent value right (CVR) of up to $700 million, payable upon achievement of specified regulatory approvals and sales milestones for ITM-11, which could swell the value of the deal to $2.35 billion.
Adding ITM will also give Telix a pipeline of follow-up radiopharma candidates, including clinical-stage diagnostics and therapeutics for kidney, brain, prostate, and ovarian cancers, and will create a combined company with annual revenues of around $1.3 billion.
There has been a string of M&A deals involving radiopharma companies of late, with the Telix move for ITM coming just weeks after two companies in the sector, Curium and Lantheus, agreed to merge in a deal valued at around $8 billion.
Pharma companies have also been moving into the fast-evolving category, often signing big-ticket takeover agreements to stake their claim. Some of the larger deals signed include Bristol Myers Squibb's $4.1 billion acquisition of RayzeBio, AstraZeneca's $2.4 billion takeover of Fusion Pharma, and Novartis' $1.75 billion play for Mariana Oncology.
"This merger positions Telix at the forefront of the consolidation that is occurring as the industry matures," said the Australian company's chief executive, Dr Christian Behrenbruch.
"We have enjoyed a close working relationship with ITM for many years and there is strong management alignment for the rationale behind this transaction," he added. "By combining our complementary strengths, we will create a company with commercial scale, world-leading supply and the most exciting theranostic drug portfolio in the sector."
Telix's investors seemed somewhat less confident about the rationale for the takeover, and shares in the company were trading down nearly 12% at the time of writing.
