Dr Boreham’s Crucible: Radiopharm Theranostics

Small Caps | Jul 03 2024

By Tim Boreham

ASX code: ((RAD))

Shares on issue (pre capital raising): 460,367,051

Market cap: $20.7m

Chief executive officer: Riccardo Canevari

Board: Paul Hopper (executive chair), Mr Canevari, Ian Turner, Hester Larkin, Dr Leila Alland, Phillip Hains

Financials (March 2024 quarter): receipts $291,000, operating cash outflows -$4.2m, cash balance $2.93m (ahead of circa $70m capital raising)

Identifiable major holders: (post-capital raising) Paul Hopper 7.8%, Lantheus emerges as 6.9% shareholder with options to increase to 19.9%  

Is the Telix glow' finally starting to illuminate its ASX-listed peers?

We're referring of course to the stupendous success of radio-pharmacy play Telix Pharmaceuticals ((TLX)), which now bears a $6bn-plus market valuation on the back of its approved prostate cancer imaging agent.

Shares in the down-in-the-dumps Clarity Pharmaceuticals ((CU6)) started moving six months ago and last week it was the now cashed-up Radiopharm Theranostics' ((RAD)) turn.

The catalyst for Radiopharm's Tuesday's share jump of up to 35% was the announcement the company would raise $70m of capital, by way of a $62.5m institutional placement and an initial $7.5m strategic investment from Nasdaq-listed radio imaging giant Lantheus Holdings.

Lantheus also relieves Radiopharm of two pre-clinical assets for another $3m

Put in context, the 1.7 bn extra shares boosts Radiopharm's shares on issue by 372%, but happily the deal was struck at a premium to the prevailing price. Lantheus emerges with a 6.9% undiluted stake, but has the option to climb to 19.9% later on by way of $7.5m of unlisted options and listed options on top of that.

A recent precedent bodes well: In January this year, Lantheus took a US$33m, 19.9% stake in US radio-pharmacy peer Perspective Therapeutics, with Perspective shares since climbing 150%.

About Radiopharm

Radiopharm operates in nuclear medicine, which is about combining a molecule and an isotope to form a radioactive tracer which is then detected by scans such as positron emission tomography (PET).

Radiopharm has programs covering the use of several different isotopes with agents to target cancer biomarkers including PDL-1, HER-2, the integrin alpha V beta 6 peptide (AVB6) and the fatty acid synthase.

A creation of biotech entrepreneur Paul Hopper, Radiopharm listed on the ASX in November 2021, with assets acquired from Imperial College London, New York's Sloan Kettering Memorial Hospital and the Technical University of Munich.

Radiopharm has tweaked targeting agents and isotopes to address multiple indications, notably brain cancer, non-small cell lung cancer and breast, gastric and pancreatic cancers.

"The thinking was to do something different in the space and bring innovation to the market," CEO Riccardo Canevari says.

Complementing the company's own programs, two years ago Radiopharm formed a private joint venture with the Texas-based MD Anderson Cancer Center (MDACC) to in-licence MDACC technologies. Radiopharm owns 51% of the JV with the first program in pre-clinical stage, a molecule targeting B7H3 in multiple cancers.

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