Cancer is one of the most interesting areas of work of the ASX’s growing cohort of life sciences companies. Here are three of the fascinating stories emerging from this area.
- Clarity Pharmaceuticals (CU6, $2.20)
Market capitalisation: $707 million
12-month total return: –46.7%
3-year total return: 73.9% a year
Analysts’ consensus price target: $6.74 (Stock Doctor/Refinitiv, five analysts), $6.95 (FN Arena, two analysts)
Floated at $1.40 per share in August 2021, Clarity Pharmaceuticals enjoyed early momentum, with the share price peaking in September 2024 at $8.79, but it has retreated to $2.20 – ironically, as the story has got better. Clarity works in the field of radiopharmaceuticals, which uses the radiation emitted by different radioisotopes to allow diagnosis and treatment of disease. Clarity creates what it calls ‘targeted copper theranostics’ – theranostics is the combination of both therapeutic and diagnostic radiopharmaceuticals in the one platform, enabling precision therapy.
The technology came out of the University of Melbourne and the Australian Nuclear Science and Technology Organisation (ANSTO). At the heart of Clarity’s proprietary theranostic SAR Technology platform is a highly specific and very stable bifunctional ‘cage’ (a chelator) that retains copper isotopes within it and prevents their leakage into the body. The cage is linked to a targeting molecule, which finds and binds tumour-specific receptors on cancer cells. Together with the targeting molecule and the isotope, the technology enables the development of radiopharmaceuticals for diagnosis and therapy in oncology.
Clarity’s products use the “perfect pairing” of copper isotopes, copper-64 for imaging and copper-67 for therapy, which deliver a compelling combination of high accuracy and high precision in the treatment of a range of cancers. Clarity’s proprietary SAR technology can be employed for diagnostic imaging using positron emission tomography (PET) cameras as well as for targeted cancer therapy.
The lead product is the diagnostic copper-64 SAR-bisPSMA. This product is at various stages of several clinical trials, including the CLARIFY trial for diagnostic imaging in prostate cancer, and the AMPLIFY Phase 3 trial looking at diagnosis recurrence of prostate cancer. Data ‘readouts’ (when the results of a clinical trial are made public) have been good so far. Copper-67 SAR-bisPSMA is looking a good chance of becoming the best-performing diagnostic, identifying lesions before the standard-of-care prostate-specific membrane antigen (PSMA) positron emission tomography (PET) scans can. On top of the potential in prostate cancer imaging, the SECuRE trial is also showing very positive results in terms of copper-67 SAR-bisPSMA for the treatment of prostate cancer.
The company has received three ‘Fast Track Designations’ from the US Food & Drug Administration (FDA) for SAR-bisPSMA, underscoring the potential of this novel approach: fast track designation is designed to speed-up the development and regulatory review of novel drugs that address serious conditions with significant unmet medical needs. In granting an FTD, the FDA assesses preliminary results to date.
The company’s pipeline extends beyond prostate cancer to neuroblastoma, neuro-endocrine tumours, and HER2-positive breast cancer, among others. News flow on its trials – in particular the pivotal CLARIFY and SECuRE studies – will be the prime influence on the CU6 share price from here. And analysts are very bullish on where Clarity Pharmaceuticals is heading.
- Telix Pharmaceuticals (TLX, $25.49)
Market capitalisation: $8.6 billion
12-month total return: 63.5%
3-year total return: 80.7% a year
Analysts’ consensus price target: $34.50 (Stock Doctor, nine analysts), $35.00 (FN Arena, two analysts)
Radio-pharmacology developer Telix Pharmaceuticals has been a great success on the ASX: the company listed in November 2017, after issuing shares at 65 cents a share. The shares rocketed 21% to 79 cents on their first day, but that was small beer – TLX has traded as high as $29.34, in January this year.
Telix is somewhat similar to Clarity Pharmaceuticals, because it also uses radioactive isotopes: Telix’s lead product is Illuccix, a prostate cancer imaging agent based on the element gallium. Illuccix – which has been commercialised – is specifically designed to detect and locate prostate-specific membrane antigen (PSMA)-positive lesions in patients with prostate cancer: the radiopharmaceutical is administered to patients, then a PET scan is performed, and the tracer highlights areas of high PSMA expression, indicating the presence of prostate cancer, more precisely than with other diagnostics.
Illuccix is used to help determine if cancer has spread to other parts of the body (metastasis); detect or assess the recurrence of prostate cancer after initial treatment; and to help doctors determine if a patient is suitable for PSMA-directed therapy, a type of treatment that targets PSMA-positive cancer cells. Illuccix was approved by the FDA in 2021 and is also approved by Australia’s Therapeutic Goods Administration (TGA) and Health Canada.
Illuccix now contributes the bulk of Telix’s revenue, with sales growing sharply as it secures broader reimbursement and expands distribution. But the company sees a future firmly beyond diagnostics: Telix is developing a pipeline of theranostic products – combining diagnostic and therapeutic capabilities – targeting kidney, brain, and glioblastoma cancers. These include TLX591 (prostate cancer therapy) and TLX250 (kidney cancer imaging and therapy), currently in Phase II and III trials.
The company’s second product, Gozellix, a prostate cancer imaging agent for patients with suspected metastases or recurrence, had its new drug application (NDA) approved by the FDA in March. Gozellix has a longer shelf life, of up to six hours, meaning it can reach a wider geographic range of patients, bringing the accuracy and clinical utility of gallium-based imaging to more patients across the US. Gozellix builds on the success of Illuccix, and will be available alongside the first-generation product, providing choice for customers and patients.
Telix envisages an industry-leading PSMA imaging franchise, but it hit a bump in the road in April, in the approval process for the third product, Pixclara, an investigational agent for the imaging of glioma, a rare and life-threatening brain cancer. The company received a complete response letter (CRL) from the FDA for its NDA for Pixclara, meaning the NDA could not be approved in its current form. The FDA stated additional confirmatory clinical evidence is required to progress the application, despite a robust consultation process prior to submission and during review of the NDA. As is its right, Telix has requested a hearing with the FDA to review the basis for the decision and is assessing clinical strategies available to improve the application. Potential next steps could include re-analysis of existing data or submission of additional retrospective data, and a registration delay of up to 12 months is expected.
Next along the approval pipeline will be the company’s kidney cancer imaging agent Zircaix, and then it will move into its array of potential therapeutic products, starting with the Phase 3 ProstACT GLOBAL4 trial of TLX591, a therapeutic agent for prostate cancer. An interim read-out of Part 1 of this trial is expected this year.
In November 2024, Telix made a major expansion, acquiring and licensing a group of new cancer-targeting drugs focused on a protein called FAP (fibroblast activation protein)—a promising target found in many types of cancer. These drugs were developed by a leading German scientist, Professor Frank Rösch, and bring new possibilities for both cancer imaging and treatment.
Uncommon for an ASX life sciences company, Telix is profitable. In 2024 (it uses the calendar year as its financial year), Telix increased its operating profit almost ten-fold, to $49.9 million, on the back of total revenue of $783.2 million, which was a rise of 55.8%. (All subsequent results will present the company’s accounts in US$). The company talked of a strengthened R&D pipeline, featuring the launch of three new drugs and a baseline revenue forecast for 2025 of $1.18 billion–$1.23 billion.
That optimistic outlook mainly depends on the continued growth of Illucix, which has been fully reimbursed in the US since July 2022. In the short term, however, regulatory uncertainty looms over the healthcare industry, as Robert F. Kennedy Jr. continues to be a relatively unpredictable US Secretary of Health and Human Services, and the Trump administration’s cost-cutting measures, such as its DOGE program, shake-up the industry. Indeed, Telix hit the skids in May, falling 17% after President Trump flagged potential drug price cuts.
But on the whole, analysts are positive on Telix Pharmaceuticals, believing that the growth story is strong – and that the commercial opportunity for Pixclara is, as broker UBS puts it, “delayed, not derailed.”
- Race Oncology (RAC, $1.42)
Market capitalisation: $247 million
12-month total return: –2.4%
3-year total return: –6% a year
Analysts’ consensus price target: n/a
Race Oncology is developing its anti-cancer drug bisantrene (also called RC220) both as a low-dose targeted precision oncology agent as well as a cardio-protective chemotherapy drug; the drug is aimed at melanoma and clear cell renal cell carcinoma, as well as acute myeloid leukaemia (AML), breast, and ovarian cancers, which is in Phase 2/3 clinical trial. Race has 20 years of intellectual property (IP) protection for its RC220 formulation, in which bisantrene is the active drug.
The cardio-protective aspect is coming to the fore. Bisantrene is a potent inhibitor of the fat mass and obesity-associated protein (FTO), and FTO over-expression is linked to various cancers. Almost all cancer treatments can cause damage to the heart, but bisantrene not only has anti-cancer benefits, but it has also reduced cardiotoxicity – meaning it is less likely to cause heart dysfunction.
Bisantrene has been investigated in more than 50 clinical trials where it was found to be effective in a range of solid and haematological cancers including breast, ovarian, kidney, lung and various leukaemia, including acute myeloid leukaemia (AML).
Bisantrene is being trialled in combination with other drugs. In May 2024, Race reported that trials had found that bisantrene and the existing chemotherapy drug decitabine used together offered significantly improved cancer-cell killing across a broad panel of 143 tumour cell lines, compared to when either drug was used alone. These results supported the use of decitabine in combination with bisantrene as a potential treatment for many cancers including solid tumour types such as lung, head and neck, prostate, pancreas and breast.
Race is also looking at the anti-cancer effectiveness of bisantrene and the existing chemotherapy drug doxorubicin (the most widely used chemotherapy agent) against a range of advanced and metastatic solid tumour cancers, including breast cancer, small cell lung cancer, ovarian cancer, bladder cancer, liver cancer, endometrial cancer, upper gastro-intestinal cancer, thyroid cancer, non-small cell lung cancer, and prostate cancer. Pre-clinical studies by Race Oncology have identified bisantrene enhancing doxorubicin’s cancer-killing activity in 85% of 143 cancer cell lines screened.
In June 2024, RC220 achieved a significant breakthrough with the FDA awarding it ‘orphan drug’ designation (ODD) for AML. The objective of the Orphan Drug program is to provide incentive to companies to bring medicines for a small population – defined as those affecting fewer than 200,000 people within the US – to the market; the designation qualifies Race for various benefits including tax credits, fee exemptions, market exclusivity and regulatory assistance from the FDA throughout the drug development process.
Bisantrene RC220 has also received Rare Paediatric Disease Designation (RPDD) from the FDA for the treatment of childhood (paediatric) subtypes of AML. RPDD is a designation designed to incentivize drug development for rare paediatric diseases; it is granted for new treatments of serious or life-threatening diseases which affect fewer than 200,000 people in the US and which primarily affect people under 18 years of age. Approximately 70% of rare diseases are exclusively paediatric in onset, with 95% of rare diseases having no approved treatments. The RPDD paves the way for potential clinical trials and faster regulatory review in the US.
Earlier this month, Race Oncology announce the successful and safe dosing of the
first patient in its Phase 1 clinical trial of RC220, in combination with doxorubicin, in patients with advanced solid tumours. The study has been designed to allow the company to glean human safety and pharmacokinetic statistics, identify the maximum tolerated combined dose of RC220 and doxorubicin, and provide a first glimpse of clinical data on the cardio-protective, anti-cancer activities of RC220, and its potential to modulate the m6A RNA pathway, which is a driver implicated in multiple cancer types.
RAC is not well-followed by analysts, but that should change. There is growing understanding of the damage that cancer treatments can cause the heart. Apart from its effects against cancer, Race’s RC220 is right at the centre of the emerging field of cardio-oncology, which is focused on reducing heart damage from cancer therapies. Cardiotoxicity, which includes heart failure, is one of the main side effects limiting the use of the most effective cancer therapies – if that could be reduced, more cancer patients could be treated and treated more effectively. Race Oncology is in that sweet spot.
