Telix shares lower on RLS acquisition
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More news: Shares in Telix Pharmaceuticals fell in morning trade after the biopharmaceutical company announced the acquisition of US radiopharmacy network RLS.
Telix shares dropped 2.3% to $19.84 by 11:05am AEST, having nearly doubled in value since January.
Telix buys US radiopharmacy network RLS for US$250m
The news: Telix Pharmaceuticals has agreed to buy US radiopharmacy network RLS from its parent company RLS Group, to expand its North American manufacturing and distribution platform.
The numbers: The purchase price consists of an upfront cash consideration of USD230 million ($338 million), and a deferred cash consideration of up to a maximum of USD20 million, contingent on the achievement of certain financial and operational performance milestones.
Telix said it will leverage RLS' 31 licensed radiopharmacies located in major metropolitan areas across the US to build a radiometal production and distribution network for key therapeutic and diagnostic isotopes, alongside last-mile delivery of finished unit doses in relevant markets.
The RLS footprint includes over 100,000 square feet of licensed expansion space that can be utilised to meet "rapidly growing production demand", the company said.
RLS is America's only joint commission-accredited radiopharmacy network, covering 85% of the country's population.
Telix noted that RLS' revenue for FY23 was USD158 million, and the transaction is expected to be cost-neutral to Telix from an operating cash flow perspective.
The context: Telix said the acquisition "significantly expands" the company's North American manufacturing footprint and establishes the basis of a "next generation radiometal production network".
The deal is expected to be funded from existing cash reserves and due to close early in the first quarter of 2025.
It follows Telix's acquisition of Canada-based radioisotope production technology firm ARTMS, announced in March.
What they said: Telix managing director and group CEO Christian Behrenbruch said: "Our vision is to build a radiometal production and distribution network fit for the future".
"By combining the ARTMS platform and the RLS network, we can scale up the production of key isotopes and build a stable and consistent supply of PET and SPECT diagnostic tracers, along with therapeutic radiopharmaceuticals across the US for the benefit of Telix, our partners and the patients we serve," he said.
RLS CEO Stephen Belcher said: "We look forward to becoming part of the Telix Group ecosystem".
"The RLS management team has emphasised quality, reliability and flexibility, and by leveraging Telix's support, we will be able to expand our capabilities further and, together, build the radiopharmaceutical company of the future," he said.
The source: ASX announcement
