The Telix Pharmaceuticals Ltd (ASX: TLX) share price has started the week with a bang, rocketing by more than 30% today in welcome news for shareholders.
Telix released a positive announcement during mid-afternoon trade, sending its shares to a new record. Shares in the biopharma company later pulled back just slightly to close the day up 28.96% at $2.16.
Let's take a look and see why the market responded so positively to Telix today.
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Landmark deal
According to the release, Telix advised it has entered a strategic commercial partnership with China Grand Pharmaceutical and Healthcare Holdings (CGP). The milestone agreement will see China Grand Pharmaceutical have access to Telix's portfolio of molecularly-targeted radiation products (MTR).
China Grand has been chosen as Telix's exclusive partner for the Greater China market. The deal includes the development and commercialisation rights to Telix's prostate, renal and brain cancer imaging and therapeutics MTR products.
The deal in detail
Under the agreement, China Grand will provide an up-front payment of US$25 million to Telix. The credit does not consist of any future regulatory and commercial milestone payments.
Up to US$225 million is available in payments relating to key targets being met. They include up to US$69 million in attaining marketing authorisation from the National Medical Product Administration in China. Furthermore, up to US$156 million will be paid to Telix if net sales performance across the region is met during the term of the agreement.
China Grand Pharmaceutical will invest US$65 million in clinical costs to help develop Telix's prostate and renal cancer products in China.
Royalties on therapeutic product sales will paid in addition to the milestone payments.
The initial term of the deal is valid for 10 years from the commencement date of each product being granted marketing authorisation.
Strategic equity investment
China Grand will make a strategic equity investment of US$25 million in the private placement of 20,947,181 fully paid ordinary Telix shares. The shares will be issued at a price of $1.69 and locked to a holding period of no less than 12 months.
Management commentary
Telix CEO Dr Chris Behrenbruch commented on the partnership:
Telix's mission is to be a leading global oncology company and China is an important future market for our products. We are pleased to be working with CGP to deliver our diagnostic imaging and therapeutic products to cancer patients in China.
We believe that CGP possesses the technical experience and execution infrastructure to be an ideal clinical and commercial partner for Telix in China.
China Grand executive deputy officer Mr Frank Zhou added:
China Grand Pharma has a strong commitment to oncology, including radioactive products, in China and around the globe.
We firmly believe in the potential of Telix's product portfolio to have a significant clinical impact in China. It is an honour for us to have the right to bring Telix's unique product range to our doctors and patients with major unmet medical needs. At the same time, our close clinical involvement will help bring strength to Telix's product development and reach. We are very excited about this long-term partnership.
