Telix Pharmaceuticals Limited (TLX) Q4 2025 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Telix Full Year 2025 Results and Investor Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kyahn Williamson, SVP of Investor Relations and Corporate Communications. Please go ahead.

Thank you, and thank you to everybody for joining us on this call this morning, this evening, wherever you are in the world. We launched our annual report and full year results on the ASX about 30 minutes ago. We also have the slides on the screen via webcast for you to see today. I'm just going to take you through a brief introduction and some disclaimer statements before handing over. If you just move to the Slide 2. Very pleased to have on the call with us today, Chris Behrenbruch, our CEO and Managing Director; Darren Smith, our CFO; and Kevin Richardson, our CEO of the Precision Medicine business. I should also mention that we have Dr. David Cade, our Chief Medical Officer, on the line for the Q&A session. We'll be running through today our strategy, financial results, and update on our Precision Medicine and Therapeutics business. If you can move to the next slide, please. I am required just to give you an excerpt from our forward-looking statement disclaimer statement. So please note that on today's presentation includes forward-looking statements, including within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, anticipated future events, financial performance, plans, strategies, and business developments. These forward-looking statements are based on current information, assumptions and expectations of future events that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our filings with the ASX and SEC, including on our half year annual report. You are cautioned not to rely on forward-looking statements, which are made only as today's date, and the company disclaims any obligation to update such statements. Please refer to the disclaimer slide in the presentation for further information. With that, I'm very pleased to hand over to Chris to kick off the call.

Thanks very much, Kyahn, and I hope that my audio is nice and clear, and I certainly appreciate the introduction. Before Darren Smith, our Chief Financial Officer, goes into the numbers, I thought a bit of strategic framing would be useful for investors to understand where the company is heading and, of course, our key accomplishments in 2025. Next slide, please, Slide 5. Over the last 12 months, we started to put the depth and execution around what has been a multiyear corporate development strategy. It's useful to think of Telix as a platform with these 5 major segments, as illustrated on this slide. Moving from left to right, first up of key focus is our therapeutics pipeline, which has grown significantly and now features 3 programs in pivotal studies, as well as several high potential earlier-stage programs in rare diseases. I'm going to come back a little bit towards the end of the presentation on this topic. Because of the explosive growth of activity in the radiopharma landscape, we have also pivoted to some extent to an internal innovation model alongside our business development activities. Clearly, when big pharma is willing to pay $1 billion for an asset that has been in a few mice, there's clearly an incentive to do in-house innovation. And so we now have a significant set of technical and clinical capabilities around fundamental R&D and discovery technologies. In the middle of this vision and the engine room of the commercial business today is what we call the Precision Medicine business. This is far more than just an ATM machine that throws off a couple of hundred million of cash each year. It's a strategic validation of the targets we develop our therapeutic drugs for. It is more robust and streamlined clinical trials because we can see where our drug goes, and it's an early opportunity to build deep relationships with the physician stakeholders that underpin the future of the business. Fourth, one can obviously look at sales and a commercial team simply as SG&A. We view it as building a specialty sales organization that very few companies have. Selling nuclear medicine is not selling a vial or a blister pack. It involves selling complex clinical workflows. And as our product portfolio expands, this is a strategic differentiator because it enables us to build depth with key referral physicians and drive preference towards our product. It's also fair to note that in the major markets, this is a significant financial investment that most of our competition, both present and emerging, cannot afford to undertake. Lastly, you can develop all the great ideas you want and convince people to buy them, but if you can't deliver them reliably every single day, you aren't going to succeed. In most industries, vertical integration is probably wasteful and doesn't offer much of a moat. In radiopharmaceuticals, where you are dealing with products that have shelf life of hours to days at most, there's a huge amount of market share ownership dynamic, intellectual property, and customer differentiation in how you deliver. This is why we have invested over $0.5 billion in the last years to better control our destiny and pave the way for high-value therapeutic products. Next slide, please. To do all these things, you need cash, and we have a very high-growth business that made a step change this year, both through organic growth of our Precision Medicine business and through acquisition. We expect all of our revenue streams to continue to diversify and grow in 2026 and beyond, and Darren will cover this off on guidance later in this presentation. Kevin is also going to frame this in terms of the core growth of the Precision Medicine portfolio, which is extremely exciting. The key point is we have a hyper-growth business, and it generates the cash we need to aggressively expand, further diversify our revenue and dominate the field. Slide 7, please. This slide puts the whole strategy into perspective. As I've already said, to deliver on our bold vision for being the dominant player in radiopharma, we need a cash-generative business. We have one, and we grew it significantly this year with revenues exceeding USD 800 million or over AUD 1.2 billion for anyone that prefers their green back surge with shrimp on the barbie. Our margins have remained extremely stable despite competition, and this excellent commercial performance enabled us to invest $0.5 billion into growing our product pipeline, funding the best commercial team in the industry, and building our infrastructure and supply chain. Think about that. $0.5 billion to grow the future value of the company from earnings without shareholder dilution. Telix is a very unique and valuable story. Moving on to Slide 8, please. Before handing over to Darren, I thought it would be useful to give you a condensed view of our priorities for 2026. I get a lot of feedback that Telix is complicated, but it really isn't. This year is about doing three things and hopefully doing them better than we did last year. One, we are going to continue to grow our core business around our approved products. We actually did get a new and innovative product approved by the FDA last year in Gozellix that also leverages the ARTMS isotope production acquisition. The launch of Gozellix has been successful and is not only growing our ASP and market share, it will pave the way for many future products through both the RLS network and partner distributors with Zircaix being the next prime example of this technology platform. Two, we have 2 new products to launch, Pixclara, which is known as Pixlumi in Europe. This is for glioblastoma and Zircaix for renal cancer. We understand the disappointment that these did not get approved last year, but this is the price of being at the forefront of innovation in new technology areas. While people are well aware, it has been a tumultuous period within the FDA itself, we also made certain we took valuable learnings from the experience. We have made extensive changes to the management team. We boosted our regulatory affairs capabilities, and these programs are in good shape for resubmission and approval this year. They are highly anticipated products and will become significant revenue streams, and we have not taken our foot off the gas pedal in terms of market readiness for these products. We are preparing to launch, and I want to make that very clear. Last of all, we have several very high-value clinical programs. This is not an exhaustive list. In fact, we have over 30 sponsored and collaborative studies running from early stage to pivotal trials. But these are the ones that are going to generate the greatest commercial and financial inflection points this year and are the priority in terms of our resources and R&D investment. I note that 4 out of 5 of these studies are pivotal or Phase III studies. We have imminent data point coming out on ProstACT Global, which we will take to the FDA to gain clearance to commence Part 2 in the United States. I remind you that the study has already progressed to randomizing patients ex-U.S. for Part 2 of the study and talk a little bit about this later in the presentation. Our BiPASS biopsy study will complete enrollment this year, and we expect to generate significantly enhanced revenue in 2027 as a consequence of this Phase III study. Our current late-stage clinical studies pave the way to our first therapeutic commercial inflection point likely in 2028. So these are not distant thoughts. They are all near-term catalysts. And I will come back at the end of presentation to some of the broader sets of upcoming catalysts. Now Darren, over to you for the numbers.

Thank you very much, Chris. We have today reported a 56% growth in revenue to $804 million. This is in line with our revenue guidance. Notably it's our third consecutive year of double-digit revenue growth. Revenue from Precision Medicine business year-over-year. Can I just ask, I think that the... [Technical Difficulty]

Please check your mute button.

This year -- sorry, can people hear me now?

Yes, we can hear you.

So this is in line with our uplifted full year guidance. And notably, it's our third consecutive year of delivering double-digit growth -- revenue growth. Revenue from our Precision Medicine business increased 22% year-over-year with EBITDA improving 25% to $216 million, driven by strong demand of Illuccix and the launch of Gozellix. The Precision Medicine commercial performance permitted Telix to self-fund and derisk our investment into our R&D pipeline and commercial infrastructure to drive future growth. Further, 2025 was a year of significant investment, yet we maintained a solid cash balance of $142 million. We achieved this while exercising disciplined cost management. Next slide, please, which is Slide 11. Thank you. We've added this slide for our non-account investors. As at a glance, this slide presents the strength of our business model. The left side of the chart shows our revenue sources and their materiality. The middle of the graph highlights our gross margin in the green and that 94% of the GM is generated from our Precision Medicine business. That is approximately $400 million. As you can see, about half of the gross margin, the red flows om right are invested into our commercial sales and marketing capability, our global supply chain and our corporate functions. But more importantly, flowing right at the top half of the gross margin is approximately $200 million. That's 25% of revenue. And with this, we decide to either invest it in our development pipeline to create future value or recognize it as operating profit. So as business models go, a business that throws off 25% of revenue as operating profit to reinvest in value creation or the bank is pretty damn attractive. Now moving to our traditional P&L. I've spoken to most of the financial highlights on the previous slides, but will take some time to talk to further highlights. The group's gross margin of 53% remained consistent with the first half performance. We invested $157 million into product development, in line with 2025 guidance and mainly focused on our late-stage pipeline. General and administration expenses decreased to 12% of revenue from 17% last year, reflecting the efficiencies of scale achieved as the company continues its strong growth trajectory. As a result, we posted an adjusted EBITDA of $39.5 million, in line with market consensus. Now moving to our next slide. Telix Precision Medicine business is clearly our cash machine. Its financial metrics demonstrate its excellent performance. Precision Medicine delivered an additional $113 million in revenue, representing 22% year-on-year growth alongside a 28% increase in operating profit and a 25% increase in its EBITDA. This demonstrates the high-growth business with capacity to generate significant funds to invest in long-term value creation. Sales and marketing investments supported the launch of Gozellix, the geographic expansion of Illuccix and the launch readiness activities of Pixclara and Zircaix. As a side comment, if this was a stand-alone business growing at 20% plus per annum on an extrinsic value basis, it would be worth up to 8x revenue. This is a huge value creation for shareholders. Now moving to our next slide, in Telix Manufacturing Solutions or TMS. We've provided this level of detail on TMS in our half year results for two reasons. Firstly, to give investors and analysts clear visibility into the financial impact of the RLS acquisition; and secondly, to provide transparency into the cost base of the remaining TMS business, helping with financial modeling. As you can see, RLS delivered positive EBITDA for the first 11 months post-acquisition. At the remaining TMS facility, we increased investment compared to last year to permit us to advance operational activities facilitating clinical and commercial supply. As we now close out the full year of having RLS in the business, we will revert back to reporting TMS as one segment for commercial and competitive reasons. Now moving on to cash flow. As you can see in this cash bridge, Telix continued to generate strong operational cash flows, which we then invest into our pipeline. In 2025, Telix generated $206 million from operations, enabling the investment into progressing the R&D pipeline. Excluding our last contingent consideration earn-out payment of $52 million for Illuccix, we produced a net positive operating cash flow of $35 million. I reiterate that our investment into R&D is discretionary and can be flexed depending on our commercial performance, permitting us to effectively manage our cash position. Additionally, Telix utilized cash on hand to support targeted strategic investments such as RLS, ImaginAb, and in our FAP asset. As a result, we ended the year with a prudent cash position of $142 million. Next slide, please. As we prepare for our next phase of growth, we continue shifting allocation of R&D investment into our therapeutic pipeline. In 2026, R&D investment is planned to be in the range of $200 million to $240 million, with the largest allocation directed to the therapeutic development. This highlights our focus to transition to a high-value therapeutic business. I'd like to take the opportunity to reiterate our investment strategy. Over the next 2 to 3 years, we expect to grow revenues by advancing assets from clinical development to commercialization, expanding indications and geographic reach. We will invest the funds from this commercial growth into our portfolio and ensure that we have the capabilities, infrastructure, and readiness to deliver on our therapeutic programs. Our focus will remain on reinvesting revenues back into the business over the next couple of years rather than optimizing near-term earnings per share. We are committed to building long-term value. We believe prioritizing earnings too early can impede the strategic investments required to fully unlock the potential of our pipeline. Next slide, please. Telix has a disciplined capital allocation approach that is aligned to our corporate strategy, and it has matured a great deal over the last 12 months. We have previously spoken about our 4 areas of focus, and they are investing into our R&D, optimizing our commercial performance, strategic growth opportunities through M&A, and supply chain resilience and production capacity. We believe these 4 areas of focus will underpin our growth long term. We have continued to deliver on our strategy in a disciplined way, ensuring that we have a prudent cash buffer on the balance sheet. Next slide, please. Looking forward, we see strong momentum heading into 2026 with another year of roughly 20-plus percent revenue growth anticipated. Our full year 2026 revenue guidance is set at $950 million to $970 million, and this is based on current approved products in approved jurisdictions. This range does not include revenue contributions from pending product approvals, which will be incremental. This growth implies up to 25% growth in our Precision Medicine business and a full year of RLS revenue. Our corresponding R&D investment will be in the range of $200 million to $240 million and will be dependent on the achievement of certain clinical outcomes and development milestones. In conclusion, we delivered another year of double-digit revenue growth, made high-value strategic investments across the business, and maintained a prudent cash position. Looking ahead, 2026 is set to be an inflection year with numerous important milestones. Our revenue guidance reflects the confidence we have in the business, and we remain committed to disciplined financial management throughout 2026. I'll now hand you over to Kevin Richardson, Precision Medicine CEO. Thank you.

Thank you, Darren. My first slide, please. Last year, our Precision Medicine portfolio delivered $622 million in revenue, up 22% year-over-year. Importantly, we delivered sequential growth every single quarter. That includes Q3, our most challenging quarter, which was the first full quarter following the expiration of Illuccix transitional pass-through status and the transition to MUC, MUC or mean unit cost reimbursement for a subset of Medicare patients. Q3 allowed us to see the full impact of that change on the business. Even in that environment and despite ongoing competitive pressure, we still delivered 3% quarter-over-quarter dose growth and 1% sales growth. That performance speaks to our disciplined approach to business fundamentals and the strength of our customer-facing team. We continue to gain share based on clinical differentiation and operational reliability, our PSMA agents demonstrates fewer indeterminate bone lesions and higher inter-reader agreement compared to F-18 assets, driving confidence in clinical decision-making. We pair that clinical value with highly specialized commercial organization that engages customers every day and consistently differentiates Telix in the market. Our reputation as an innovator also positioned us for a successful launch of Gozellix. Gozellix was FDA approved in April of 2025, and transitional pass-through status became effective in October, enabling a transitional pass-through supported full launch in Q4 of 2025. We are very pleased with the early uptake and our 2026 full year guidance underscores our strong conviction in the growth outlook for our Precision Medicine portfolio. Today, we are the only company with 2 PSMA agents on the market. This dual product strategy is a competitive advantage, offering different types of customers meaningful choice across economics and scheduling flexibility while reinforcing our commitment to meeting diverse clinical and operational needs. In short, resilient growth, clinical differentiation, disciplined execution and a platform built for sustained growth. Next slide, please. What does it take to win in a maturing PSMA market? Winning in a mature PSMA market is no longer about being first. It's about executing at scale. Clinical credibility is nonnegotiable. Products must deliver consistently high image quality, strong inter-reader agreement and reliable detection at low PSA levels across all patient types. Incremental claims aren't enough. Confidence in clinical decision-making is what sustains adoption. Workflow integration matters. In a high-volume market, solutions must fit seamlessly into established clinical pathways, enable same-day imaging and support high patient throughput without disrupting nuclear medicine operations. Reimbursement sophistication is a competitive advantage. Success requires multiple product strategies that give customers economic flexibility while navigating complex and evolving reimbursement frameworks over extended period of times. Commercial infrastructure is a must. This is a contract-driven market that demands experienced field teams, market access expertise, compliance rigor, and long-standing customer relationships. These capabilities take a large investment in years, not quarters to build. Supply chain excellence separates winners from participants. Reliable, flexible dose production and delivery at scale, supported by high service nuclear pharmacy last mile experts is critical. There is no proven shortcut to mass market large volume coverage. Sustained investment fuels durability, indication expansion, life cycle management and camera technology advances all require ongoing clinical and operational investment to maintain leadership. In short, leadership in PSMA is earned through clinical trust, operational reliability, commercial scale and disciplined investment, not novelty. Next slide, please. We continue to execute our strategic plan to grow the Precision Medicine business by expanding our product offering, expand our indications on those products and expand the geographies where we market those products. Global expansion is a priority for Precision Medicine here at Telix. Illuccix is now available in 17 countries with reimbursement secured, and we hold marketing authorizations in more than 24 markets. In 2025, we focus on country-by-country access. In '26, we pivot to driving uptake, particularly across key markets, including the U.K., France, Germany, Italy, and Spain. In China, we delivered strong Phase III results with 94.8% positive predictive value, including patients with very low PSA levels. We submitted the NDA to the regulators with our partner, Grand Pharma. And with prostate cancer incidence rising and PET/CT infrastructure expanding rapidly, China represents a significant growth opportunity. While in Japan, our 105-patient Phase III study is progressing well with the first patient dose. This positions us well in the world's second largest pharmaceutical market where prostate cancer remains a leading cause of mortality. New products and new indications enhance our ability to take share and grow the market and Gozellix is off to a strong start, and we are focused on accelerating commercial momentum in 2026, and you can see that is reflected in our 2026 guidance. BiPASS is a Phase III study that represents the next wave of innovation, combining PSMA imaging, Illuccix or Gozellix with MRI to improve diagnostic accuracy and potentially reduce or eliminate invasive biopsies. This is about moving earlier in the care pathway, reducing patient risk, lowering system costs, and expanding the total addressable market to include frontline biopsy candidates. We believe moving to the front line where patients are diagnosed will give us a competitive advantage, both as the lead PSMA in diagnosis, but also in sequential scans that happen later on in the patient journey as physicians want to see consistency scan to scan. For Zircaix, we've completed 2 Type A meetings with the FDA and believe we have full alignment on key resubmission requirements. We are now focused on completing the agreed deliverables and documentation required for the resubmission. With breakthrough therapy designation, supportive ZIRCON-X data and the inclusion in major international guidelines, this remains a top priority for approval and launch this year. This is a really exciting and highly anticipated product. Moving on to our neuro platform. We are pursuing complementary submissions in both the EU and the U.S. TLX101-Tx was filed with the European regulators recently, and the U.S. submission will follow closely. As a reminder, the FDA has granted both orphan drug and fast track designation for Pixclara. Our commercial, medical, and supply chain teams are launch ready. Our expanded access programs serve patients and our customers very well, and they anticipate commercial use of Pixclara. In short, we built a global commercial platform, delivered successful launches, taken share, penetrated the available market and advanced multiple late-stage assets in high unmet needs markets. We are entering our next phase of growth with momentum and discipline. Next slide, please. So what does this strategy mean in terms of financial impact? Our current baseline business with some further life cycle management, which we've talked about, should be able to sustain a 15% to 20% annualized growth. This partially reflects the growth of the field overall, as well as our ability to continue to capture market share as the size of the market expands. The recent addition of Gozellix certainly derisked this. With indication expansion in prostate cancer alone, particularly a major opportunity in the BiPASS study, this growth over the 5 years can be closer to a 30% CAGR. And then when you add in Pixclara and Zircaix, this growth rate defensively looks more like 40% compounded annual growth, especially with metastatic indication expansions that further drive procedural volume. In short, our current product strategy, which is fully baked from a clinical perspective, just needs to clear a few more regulatory hurdles as it represents future upside for the company. It is a direct consequence of the market presence we are building, the depth of our pipeline and the quality of service we are able to deliver to the patients. This is really an exciting business with a bright future. The growth in Precision Medicine gives us the ability to finance the growth potential of our Therapeutics business. On that note, I'll hand it back over to Chris, to give you a bit of perspective on that.

Thanks very much, Kevin. Great update, and congratulations on all the success that your team had this year. It was a really remarkable year of accomplishment. So moving on to Slide 25, please. In a way, this slide is a simplified version of my opening slide, a highly profitable cash-generative business that would garner, as Darren said, a very healthy revenue multiple. It was a stand-alone business, but it's our engine room. And the future growth trajectory of the business will come from how that cash is invested. Kevin has already shown you very clearly, I think, how the Precision Medicine business alone can grow expansively over the next 5 years based on clinical, regulatory, and commercial inflection points that we expect to achieve this year. So again, I just want to reemphasize the point that the growth trajectory that Kevin has talked about comes from events that will be completed this year. I think it's also important to reinforce our commitment to manufacturing and supply chain. But in the context of our Therapeutics business, it's more than just reliable and on-time dose delivery. It's about R&D cost and efficiency and perhaps most importantly, intellectual property capture. We've learned over the last decade that when we use contract manufacturing organizations, do product scale up, that we simply educate the ecosystem in a way that potentially empowers competition, and we no longer wish to do that. So especially, as our therapeutics go into late-stage trials, this has become an important strategic objective of the company. To be clear, we still use CMOs, but where there's key IP around platforms, targeting agents and certain key isotopes, we are increasingly tackling this in-house or with selected partners. Moving on to the next slide, please. And this slide shows the reason why. As I've said, Kevin has already talked about what share of the Precision Medicine side of the business we think we can tackle over the next 5 years or so. And on a TAM basis, it's actually pretty conservative. But the therapeutics opportunity is about 3x or 4x bigger for the targets and indications that we are already pursuing. This doesn't even capture the potential for indication expansion into new disease areas that some of the pan-cancer targets we are developing, like carbonic anhydrase IX and FAP can potentially expand into. So it's a really bright future for the theranostics strategy. Moving on to Slide 27, please. Over the last 5 years, we've built a very strong pipeline with some key disease focus areas, and you're going to increasingly hear us talk about these disease areas as multiproduct concentration areas, frankly, much as we have done with Gozellix and Illuccix on the Precision Medicine side of the business. Indeed, to tackle some of these major unmet clinical needs, it's going to, in some cases, require a multi-asset approach at different stages in the clinical development or in the clinical patient journey. And so -- and also well-considered combination therapies with standard of care medical oncology. This is evident already, for example, in the design of the ProstACT GLOBAL and IPAX-BrIGHT studies. There are three particular attributes of our pipeline that I'd like to specifically comment on. Firstly, by taking a theranostic approach, we built a very deep relationship with the referral and prescribing physician in each of these disease areas. This is a competitive advantage, and this relationship depth has already started with our existing commercial product portfolio and will only intensify over the next 12 months. Investors often view the Precision Medicine and Therapeutics business areas as adjacent, but they are clearly not. Secondly, while we have some very high potential early-stage programs, and this has not exhausted this list because we have a pretty decent preclinical portfolio coming in behind, we have 3 late-stage programs in prostate, renal, and glioblastoma that will generate significant data over the next 12 months. Based on the current valuation of the company, these programs are essentially a free option, but we think that the data and clinical basis of these programs are very compelling. Most importantly, while 2026 and 2027 financials will reflect the commercial expansion of the Precision Medicine business, 2028 is our commercial launch year for our Therapeutics business. So it's not far away. This is why we have so much execution focus on the [Technical Difficulty] targets, learning about disease extend, exploring new patient populations and ultimately increasing the market size and market share. For the therapeutics, when they become available, the Precision Medicine business will pave the way. And so notwithstanding a few challenging but also educational regulatory speed bumps we've had, our commercial imaging gives us the skills and confidence that we can deliver on the therapeutic programs in the future. We've learned a lot this year, especially last year. Can you hear me, okay? All right. Moving on to the next slide, please. As I noted earlier, we have many different clinical studies running, some company-sponsored, some in collaboration with key opinion leaders around the globe. But the 4 major trials to watch this year are outlined here. I'm not going to go blow by blow on these because this is an earnings call, but I think it's important for shareholders to understand where the research priorities are and what the development goals and catalysts are. We are collecting a ton of patient data this year, and it's very exciting to have 3 programs in pivotal studies. This is important for patients and important for shareholders, and it's taken a lot of work and investment to get here. Moving on to Slide 29. Of course, front of mind for patients and shareholders alike is the ProstACT GLOBAL study. The study is now recruiting into Part 2 randomized part of the study ex-U.S. and is ramping up very nicely. Unlike Part 1, which is a safety dosimetry run-in study that the FDA required in order for us to include U.S. patients in the randomized part of the study, Part 2 is very streamlined and straightforward. Part 2 commenced recruitment last year following an independent data safety review that determined that Part 1 data met prespecified safety criteria to progress. We will be shortly releasing the details of the Part 1 study concurrent with our submission to the FDA to request approval to add U.S. patients into the study. We are looking forward to getting these results out into the market and to show the great progress we are making, particularly given the unique combination therapy design of the ProstACT GLOBAL study. To remind you, the data we will be putting out from Part 1 will be safety data on the 3 standard of care combinations in the global study, as well as comparative dosimetry data, which will be very interesting to see, particularly for the 2 different androgen deprivation therapies used in the study. So this is coming soon. Moving on to Slide 30. Before I wrap up with a summary of the catalysts, I thought I would share a montage of patient case studies to really tie together the company's strategy and to illustrate how integrated the Precision Medicine, Therapeutics, and Manufacturing businesses are. In short, why we are here. This slide illustrates 4 patients in 4 different cancers, all of which are advanced, extremely difficult-to-treat cases. Every day across the entire portfolio, we see examples of where our development and commercial pipeline changes lives. Sometimes it's a better understanding of the extent of disease. Sometimes it's a profound disease modification, such as the metastatic prostate and breast cancer examples on this slide. And at times, it's the glioblastoma or the kidney cancer patient that has stabilized disease or enough reduction in pain to be able to return to work. These are the real outcomes from our research, and they deliver profound and life-changing outcomes for patients. This is what motivates us and why we believe that investing our hard-earned cash into this future is so important. The technology works and will get better as we learn more and get more clinical experience. I'm also obliged to point out that for the most part, what you're seeing here are images created with the companion diagnostic imaging agents that we are also developing and highlights that this -- that not only is imaging technology critical for diagnosing and staging patients, but will play a fundamental role in predicting and measuring disease control as well. Moving to the last slide. To wrap up, this slide summarizes the year ahead. It is a big year with many inflection points across the entire business. I will not go line by line, but we have a lot to talk about in 2026, with the next 3 major catalysts being resubmission of Pixclara and of course, Zircaix and the release of the Part 1 global data. We are looking forward to delivering these important milestones to patients and shareholders as the year progresses. With that, I will pause and hand it over for questions.

[Operator Instructions] Our first question comes from Laura Sutcliffe with Citi.

At the risk of potentially making myself a bit unpopular, I think we'd like to understand a bit more about when we might see some data for 591, the safety data. And perhaps given that you said you will disclose at the same time that you go to the FDA, whether the next steps are things that you need to do at Telix or whether you're waiting for the FDA to do something on their end to be able to get to that point?

Laura, thanks for your question. It's not a bad question or an unpopular question at all. So we have had an independent data safety review board that has under the clinical charter of the study has reviewed the data and progressed to randomization ex-U.S. However, in order for us to send the information to the FDA and disclose the information publicly, we need just to complete the clinical case report forms and formally close out and quality control and validate the data because that's obviously what the FDA wants to see. As soon as we have that data -- and I haven't seen it, I'm not privy to it. But as soon as it's available, we will simultaneously disclose it and submit it to the FDA. So we're not waiting on anything from the FDA. It's all on the company side, and you will not have long to wait.

Our next question comes from Tara Bancroft with TD Cowen.

This is Nick on for Tara. Congrats on the progress and the strong guidance for 2026. We were hoping that you can dive in a little more on what you've seen in the early innings of the 2-product strategy for Illuccix and Gozellix and how you anticipate that will evolve this year to reach the 25% growth in the precision medicine revenue?

Yes. Thanks very much for the question. Kevin, do you want to pick this one up for your wheelhouse?

Sure. Yes. Thank you for the question. So the 2-product strategy is -- enables us to really manage the economic needs of HOPPS accounts and the way that they perceive and their preference for a reimbursed product over really a non-reimbursed product. As you know, MUC or Main Unit Cost has really kind of changed the environment and the reimbursement environment there as well as the way that the pricing happens in the HOPPS accounts. So being able to have a 2-product company enables us to manage that particular customer type and the self-standing -- or we call them IDTF group -- in a different way as we manage the preference they have for a reimbursement price or one that might be a little more price sensitive. So and then, of course, we have a longer view of the precision medicine business and PSMA specifically, as we think through what over time can happen and what will happen with CMS as they continue to evolve and change reimbursement. So that enables us to kind of manage the ASP, if you will, as the CMS may or look more towards the ASP reimbursement model. So it gives us options in the future without locking down a singular product on that.

Our next question comes from Shane Storey with Canaccord Genuity.

Kevin, I'm going to stick with you, if that's okay. Question on Pixclara. Just maybe some descriptive piece, I guess, around the customer channel there. It's quite different from your PSMA urology presence. Is that potentially a first work example for how the Varian relationship might evolve? Just some thoughts on that, please.

Kevin, are you there?

Yes. So I'll take that first then, Chris. So Varian is -- we're really excited about the possibilities in that, a lot focused, of course, on PSMA and Illuccix, Gozellix. And so as we think about that from a commercial perspective, we have a -- what we call a Ninja team. As you know, there's not as many sites as there are that do PSMA prostate scanning as there are that are going to do neuro scanning. So we have a smaller team that's focused on the referral, the neurologist. And the idea behind that is we already have the relationship at the NucMed level. So we're able to drive those patients into the scanner, if you will. And then we have a team that already has the relationships at the other end of that where they're reading it. So the idea is it's a referral and then into the existing relationship we have at the nuclear medicine side. And of course, if that is not an Illuccix or Gozellix site, it gives us good access into those sites, and it's a real competitive advantage to be able to offer these more orphan drug type technologies because of that. Does that answer your question, Shane? Okay. Chris, anything to add?

All right. No, that's good.

Our next question comes from David Stanton with Jefferies.

I might be following a dead horse here, but I just want to make it clear and help you to make it clear. You'll be reinvesting earnings to get close to 0 NPAT for F '26, F '27 and F '28. Is that what the market should be thinking going forward, please? I ask because it's a question I get asked the most.

Yes, that's fine. No horse is flogged, David. Happy you asked the question. So we're not giving guidance beyond 2026, but it's a reasonable expectation that in 2026 and 2027 that we will be investing -- other than for risk management and for appropriate balance sheet management purposes, we'll be investing the majority of our earnings back into the company, okay? So that's in a number of different areas. That's in R&D. That's also in growing and developing our commercial team. And of course, we continue to also invest in infrastructure and capital works to support the business. So it's not all just R&D, but a profit objective for this year and next year is not the name of the game.

Our next question comes from David...

Do you have a further comment, David, that you'd like to ask? All right. Well, we'll move on. This is a very challenging conferencing service, and I apologize to those that are participating.

It's a follow-on from Dr. Stanton's question. Just from Darren, there was a clear comment there that I think that the investment in growth will consider the commercial performance. I think that was interesting from our perspective. Just as we look at the sales guidance for '26 and the R&D guidance for '26, should we think that if the commercial performance is at the upper and lower end of those ranges, the R&D will follow? As an extension of that, within the R&D spend, is the earlier stage clinical trials, are they the ones that would potentially be put on hold for a little bit to the extent that the commercial performance doesn't meet expectations?

I can start, Darren, and then maybe if you want to add anything. I mean -- so yes, we've focused -- we've chosen in this presentation to highlight the clinical studies that are the real priorities for the company. So that's the 5 studies, including the BiPASS study. We are obviously going to be investing in other clinical studies this year. And to the extent that we need to make adjustments -- it will be outside of that sort of ring-fenced 5 studies, the 4 therapeutic studies and the BiPASS study. We clearly expect that 2026 is going to be a strong year. We don't expect to have any difficulties in financing our R&D pipeline. But as you have noted, and as Darren, I think, made it very clear, generally, we take the view that our R&D investment is discretionary, and we can make adjustments as required. Darren, do you want to add anything? Okay. I'll take that as a no.

Our next question comes from Craig Wong-Pan with RBC.

Just a question on the 25% growth in Precision Medicine. I was wondering how much growth was coming from markets outside of the U.S.

Sure. I'll answer that one and then maybe, Darren, if you want to chime in on anything that I've missed. Right now, because we only achieved our European reimbursements towards the back end of last year, it's a very small proportion of the revenue is currently ex-U.S. The majority of it is -- 95% of it is U.S.-based. We obviously expect that mix to change over the course of this year and also as we add in other markets, such as Japan, which has a high-value PET -- advanced PET procedure code that's quite internationally competitive. But for the moment, for the most part, the majority of our revenue is U.S.-based.

Our next question is coming from Andy Hsieh with William Blair.

Chris, I want to ask you about the recent collaboration with Atley and Stanford, focusing on astatine-211. So in your pipeline, you have 3 alpha emitters: Actinium-225, you have lead generator that's in progress, and then now astatine having a California supply chain. So I'm curious about your view on this isotope, another short half-life. Just wondering about how it fits into your product portfolio.

Yes. It's a bit of sort of outside of the major sort of activity area. But essentially, we do see value in alpha emitters. The majority of our late-stage programs, as you know, are beta-emitting isotopes. We think that they're going to be a workhorse for the foreseeable future, but we can see ALPHIX coming over the horizon. As you know, most of our clinical stage programs are with actinium. It's probably from a supply chain perspective, the lowest hanging fruit. We have one program, TLX102, which is with astatine that's in early clinical translation. We think that for applications where a targeting agent needs to cross the blood-brain barrier that radiohalogens are a better perhaps a more practical pathway than a radio metal with a chelator. So we are exploring astatine mostly in the CNS setting. Then we do, as you know, have a lead generator that we've developed. It's a very novel and very compelling generator design that we think can be rolled out for large-scale lead production. We currently today do not have any clinical programs using Lead-212, but we have a number of preclinical programs that we expect to take into patients by the end of this year that are not currently disclosed, and they have the potential to use Lead-212. We are exploring several different isotopes. But I think as a company, we've elected to put a proportion -- not a large proportion, but a modest proportion of our R&D expenditure into understanding the future landscape of alpha because we think it has some potential. I hope that answers your question.

Our next question comes from David Dai with UBS.

Just on the gross margin for the business, it seems like it's remaining stable at 53%. But then the RLS business, the gross margin has been quite poor. So just thinking about the gross margin for RLS business moving forward, what are some of the key drivers of gross margin expansion for the RLS business that you can provide?

Well, I'll just make a comment, and then I'll invite Darren to chime in. So the RLS business -- so just to be clear, when we report the RLS segment, we report the RLS segment purely in terms of third-party products. So these are not Telix products. These are, for the most part, fairly generic nuclear medicine products. And RLS' operating cost is largely covered by delivering those third-party products. So a useful way to think about it is as a subsidized -- third-party subsidized manufacturing infrastructure. When we report the products that go through the RLS network that are Telix products, they are captured in the segmental reporting for precision medicine. So I just really want to make that very clear. So when you say the gross margins for RLS are not very good, it's got nothing to do with Telix's product portfolio. RLS margins -- because these are generic sort of fairly commoditized nuclear medicine products, they have a much, much lower margin. We provided an average margin last year, which I think frees a lot of people out because all of a sudden, we went from mid-60s margins down to mid-50s margins or low 50s margins. That was an average effect across all of the products in the group, including the RLS products. Does that make sense?

Yes, that makes sense. Yes.

So yes, so don't be sidetracked by RLS. The most important thing is that when we put our products through RLS, we -- that gross margin number, which we report faithfully for the Precision Medicine business as sort of mid-60%. That's our -- that above-the-line cost is our distributor margin, which clearly is different when we run a product through our own pharmacy network. Now it's critically important for us to maintain key distribution partnerships in key markets. So we obviously, do pay that above-the-line cost. But when we produce a product that goes through our nuclear pharmacy network, the gross margin is rather different. So you should expect to see, as we have a larger share of our product volume going through our in-house pharmacy network that, that gross margin number has the potential to improve and trend towards 70%.

Our next question comes from Andrew Paine with CLSA.

Maybe one for Kevin, but you mentioned winning in the PSMA is about executing at scale, and we've seen that in the growth and the challenges you've overcome in that market so far. You spent a bit of time talking about this, but how clear is it that moat -- how clear is that moat there for you given the potential competition on the horizon? And also, can you just dig into the changes in camera technology and how you see that as supportive to the sensitivity of PSMA imaging, which may not be fully appreciated?

Well, I think Kevin has done a great job of running through what the competitive barriers to entry, and there are multiple. I mean it's not just product, it's also clinical, it's also manufacturing and supply chain. So I'm not sure what competitor you're talking about that's coming immediately on the horizon. But nonetheless, we see those as, I mean, pretty well enumerated sort of barriers to entry for competition. On the topic of camera technology, generally speaking, we've seen a step change in sensitivity on PET cameras over the last 3 to 5 years because of the demand for PET imaging, not just in prostate cancer, but across a whole lot of indications, including neuro-oncology, neurodegeneration, cardiovascular disease. We're seeing a lot of camera installation going in and the next generation of scanners are in order of magnitude more sensitive. And so that just means that we have to keep abreast of it. We need to make sure that we're running clinical trials and clinical studies that demonstrate the improved utility. We are clearly detecting disease early and earlier. I mean, we have our most recent studies that were done in China, for example, with absolutely state-of-the-art scanners because they're brand-new scanners. We're seeing PSA levels down to fractions of a nanogram per ml. And so the camera technology is part of the complementary story to Tracer development that should not be forgotten about. I think I'll pause there in terms of that particular topic. There isn't too much more else to say. Is there another question?

Our next question comes from Melissa Benson with Barrenjoey.

So Kevin mentioned you had a full alignment on the agreed deliverables with the FDA for the...

Melissa, I'm sorry, I can't hear you. Now I can hear you. Go on.

I'm sorry. So I think Kevin was mentioning there was alignment on the agreed deliverables with FDA, [ per the K ]. So I was just wondering if there's anything you can share regarding what those agreed deliverables are, but specifically, if there's any new clinical data required or if it's more preclinical analytical data only?

Yes. Most of the CMC remediation topics are around laboratory documentation, manufacturing documentation and process documentation. We do have a deliverable to the FDA around comparability between the research grade material that we used in the Phase III trial and the commercial scale-up material. But we have that data set well in hand, and it's not a material time delay to the resubmission.

Our next question comes from Steve Wheen with Jarden.

It's Steve here. So my question was just a bit of an extension of some of the others. But I guess for Kevin, I'm just trying to understand the European market with regards to Illuccix and Gozellix, I guess. Just they've been approved for some time. The launch in the U.S., obviously was incredibly rapid. And just trying to understand what's holding it back or slowing it to not really be much of a feature for your growth in the next 12 months?

Kevin, I can start and then maybe you can finish. I mean, it's not that it's not a feature. It's just that the European market has a very different reimbursement landscape. The U.S. has a much more immediacy between product approval and reimbursement, whereas in Europe, sometimes there can be as long as 9 or 12 months delay between product approval and reimbursement. And there's simply no material product sales until you have reimbursement. It's also not a class reimbursement. It's an individual product reimbursement in most countries. So until you have reimbursement, you simply don't have material sales. So for the -- what you would classify as the traditional EU 5 countries, we have only just received reimbursement in some of them. Kevin, I don't know if you want to add anything there?

Yes, there's very little other color to add in my prepared remarks, which was really 2025, the international team under that direction was really focused on gaining market access through reimbursement. And now we in that EU 5, the plans now are to execute those market launches. And so you'll see that as we continue to grow in 2026 as we execute against that launch. But Chris is right, in each country is different, each product is different. So it takes a bit to get that approved in the system and then begin the launch. So we're in the midst of that right now.

Can I just ask an unrelated question just with regards to your R&D the expensing of Zircaix through the R&D line, is there a shelf life for that particular inventory just with regards to just noticed your comment that there is the potential once it's approved by the FDA that, that could then come back and be backed out of the P&L?

Yes, that's right. That's our expectation. And the shelf life goes far beyond the launch time of the product.

Our next question is a follow-up from Shane Storey with Canaccord Genuity.

Sorry for extending the time, everyone. My question was going to come off the back of Melissa's question actually on Zircaix and except everything you've just said there. But just as far as how we should think about FDA's review phase once the resubmitted BLA is accepted, we've been sort of assuming 6 months. I just unsure how the breakthrough status and priority review might influence that, if at all?

Yes. We don't know yet for Zircaix. For Pixclara, we have a reasonable idea that it's going to be a rapid review also because it's a single a single issue CRL. We could imagine for the Zircaix review because there is a number of issues that it may take longer, but we haven't received guidance yet from the FDA on this topic. We will be engaging with the agency shortly on this topic as we are preparing to resubmit, but we won't know that information for a little bit when it comes to Zircaix. No worries. But I do note that it has a breakthrough designation. And I actually want to compliment the agency. They've been highly engaged, very helpful, very proactive. They gave us a lot of extra time around the Type A meeting that they really didn't need to do. So we feel like it's a pretty good collaboration, and we're working with the agency towards the drug approval and nothing less than that. Okay. I think I have a feeling that we're wrapping it up there. I don't know if there's any more questions coming through.

We do have a final question, a follow-up from David Stanton with Jefferies.

Saving the best for last. Chris, just I note that you've talked to a Part 2 interim analysis in calendar '26. I wonder if you could sort of give us any kind of timeline as to when that might be? Is it third quarter? Is it fourth quarter? What should we be thinking there?

Yes. Obviously, I get increasingly reluctant to estimate timelines on clinical trials because [Technical Difficulty] by like to the day or to the week rather than to the quarter. But right now, the Part 2 study is recruiting really nicely. We're seeing good site expansion and getting plenty of patients consented into the study. That interim analysis is based on about 80 or 90 events, I don't know the exact number, sometime -- somewhere around that. And we would expect that, that should lead based on the current recruitment trajectory for some time in Q4 of this year for that futility analysis to read out. So that's the reason why we have it sitting there in the calendar for this year. Well, I think that was the last question. I just want to apologize profusely to all the attendees for the audio challenges we've had today. It's a new conference provider. I'm not sure we'll be using it again in the future. But I just wanted to thank you for your questions and for your attention. Obviously, if there are follow-up questions, we'll be happy to receive them directly and follow up in due course. Thank you for your time today.

This concludes today's conference call. Thank you for participating. You may now disconnect.