The Telix Pharmaceuticals Ltd (ASX: TLX) share price is turning a deep crimson share today.
Shares in the radiotherapeutics company are down 5% to $19.27 today despite the healthcare sector clawing into positive territory.
The clear departure from its industry peers follows Telix's completion of a significant funding exercise. However, the substantial sum raised did not come from the usual dilutionary capital raising, so it will not immediately dilute the value of existing shares.
Tapping $650 million for next steps
As of 31 March 2024, Telix flexed around $111 million of net cash on its balance sheet. Better still, the company climbed out of loss-making, posting a net profit after tax (NPAT) of $31.7 million for the 12 months ended March 2024.
So why would the almost $7 billion company need additional funds?
Today, Telix revealed the successful pricing of a $650 million convertible bond offering. The convertible debt is said to have received 'strong support from eligible investors globally'. Participants will receive 2.375% interest per annum beginning 20 October 2024 until maturity of 30 July 2029.
The debt can be converted to Telix Pharmaceutical shares at a price of $24.78.
Telix says the funds will be used to 'bring forward proposed investment'. Expanding on this, Telix managing director and group CEO Dr Christian Behrenbrunch explains:
The convertible bonds provide us with attractive, low-cost financing at a clear inflection point in Telix's journey. The proceeds deliver financial flexibility to execute on our strategic priorities, while reducing dilution of existing shareholders.
We have been able to capitalise on strong business execution and market conditions to deliver attractive financing terms. We are very pleased with the strong support that we received from global investors in relation to the offering.
The debt-raising was initially sized at $600 million. However, demand exceeded expectations, and the deal was upsized.
Lastly, the announcement mentioned the potential of pursuing 'strategically significant' mergers and/or acquisitions.
What else is driving the Telix Pharmaceuticals share price?
A mega-funding move isn't the only news making waves today. Shareholders also have fresh U.S. Food and Drug Administration (FDA) information to snack on.
As per the release, the FDA has accepted a new drug application for Telix's TLX007-CDx. For context, TLX007-CDx is being submitted as a 'cold kit' for PSMA-PET imaging of prostate cancer. The company is targeting 24 March 2025 for a decision from the FDA.
The Telix Pharmaceuticals share price is up 73% over the last year.
