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Melbourne-based biotech Telix Pharmaceuticals (ASX: TLX) has expanded its North American manufacturing base through the acquisition of RLS (USA) Inc for up to US$250 million ($366.5 million).
The deal gives Telix access to 31 licensed radiopharmacies operated by RLS across the US that the company says will create a next generation production and distribution network.
The Florida-based RLS is the only Joint Commission-accredited radiopharmacy network distributing diagnostics and therapeutic radiopharmaceuticals in the US.
Telix says the acquisition allows the company 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 has close to 10,000sqm of licensed expansion space that Telix says can be used to meet rapidly growing production demand.
The acquisition, which comes just three months after Telix withdrew plans for a $300 million listing on the Nasdaq, also provides a clear pathway for the group to extensively deploy its ARTMS QUANTM Irradiation System cyclotron technology, which enables standardised, high-efficiency and cost-effective production of radiometals.
“Our vision is to build a radiometal production and distribution network fit for the future,” says Telix CEO Dr Christian Behrenbruch.
“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.
“Telix is a trusted brand, recognised for our technical expertise, product quality, scheduling flexibility and delivery reliability.
“As we grow and commercialise new products, this investment ensures we can continue to deliver to this standard, alongside our key trusted distribution partners.”
Telix notes that the acquisition aligns with its investment strategy around vertically integrated supply chain, manufacturing and distribution, further enabling the delivery of future clinical and commercial radiopharmaceutical products.
By augmenting its existing distribution network, Telix aims to provide additional supply chain backup and improve capacity to meet future demand, while broadening access for patients across the US market, including under-served populations.
RLS will continue to service its existing customers and operate as an independent business unit under Telix Manufacturing Solutions (TMS), which includes other key Telix brands with multi-vendor and third-party relationships such as ARTMS, IsoTherapeutics and Optimal Tracers.
RLS delivered revenue of US$158 million ($231.7 million) in FY24, and the transaction is expected to be cost-neutral to Telix from an operating cash flow perspective.
The CEO of RLS, Stephen Belcher, says the group looks forward to becoming part of the Telix 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,” says Belcher.
“We see this as a very positive step for the company, our people and our customer base.”
The Telix acquisition comprises an upfront cash payment of US$230 million and a deferred cash consideration of up to US$20 million via an earn-out arrangement.
Telix says the deal is expected to be funded from existing cash reserves with the acquisition still subject to regulatory and RLS shareholder approvals.
The deal is expected to be finalised in the first quarter of 2025.
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