Phase III
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Phase III
NUKED: Access is everything, with GlyTherix and Telix Pharmaceuticals
In early 2023, one of the first two really big radiopharmaceutical drugs ran into a problem. Novartis' prostate cancer therapy Pluvicto, released only the year before, was suddenly in short supply, snarling up just in time treatment schedules.
In 2024 the supply chain problem is with the isotope Actinium 225, which *everyone* wants for clinical trials. RayzeBio has been a very famous victim, delaying a clinical trial because of the shortages.
In episode 2 of NUKED we explore where the nukes come from, and how biotechs large and small get their hands on them.
With GlyTherix CEO Dr Brad Walsh and Telix Pharmaceuticals CEO Dr Chris Behrenbruch, we look at a potential new front in the US-China tariff war, the Russia question, and how an early stage biotech and one with a product in the market organises its nuclear material supplies.
Produced by Rachel Williamson and Charis Palmer. Music and effect credits to Ziso, Inspector J, Seth Parson and Boom Library.
Rachel Williamson: 0:00
Who knew those cold war nuclear waste stockpiles would come in so handy? They've gone from worthless to almost priceless in a few years. I'm Rachel Williamson, and this is Phase III.
In early 2023, one of the first two really big radiopharmaceutical drugs hit a problem. The brand new prostate cancer treatment, Pluvicto, was suddenly in short supply, snarling up just in time treatment schedules. The cause? Radiopharmaceutical company Novartis, its owner, had just one manufacturing site. And that was in Italy. For a drug that needs to be delivered within five days. So this was causing some big logistical challenges.
And yet, Pluvicto still made Novartis almost $US1 billion that year.
Fast forward to 2024. This year's supply chain scandal is around isotopes and specifically actinium 225, which has a 10 day half life before it decays. This time, supply is under pressure because so many companies want it for clinical trials. In June, biotech RayzeBio famously hit pause on part of its phase 3 cancer clinical trial. It simply couldn't get enough actinium from its Russian supplier. Um, Russia, you say? Yes, medical exemptions allow Russia to export nuclear material despite the Ukraine war sanctions, and much to the relief of the biotech industry, which is deeply in need of its nuclear resources.
RayzeBio is owned by Bristol Myers Squibb, so it is part of a huge pharmaceutical company. If they can't get hold of the stuff they need, what does that mean for a tiny biotech at the start of its career? Australian company GlyTherix is just such a tiny biotech, using zirconium 89 for an upcoming Phase 1b clinical trial. I asked the CEO, Dr. Brad Walsh, how they're negotiating supplies.
Brad Walsh, thanks for joining me.
Brad Walsh: 2:27
An absolute pleasure. Thank you, Rachel.
Rachel Williamson: 2:30
As a biotech, normally all you need to think about is making sure your biological science works, and that's tough enough. But in radiopharmaceuticals, you also need to make sure you are deeply embedded in the fragile isotope supply chains from before day one. So Brad, how are you managing that high wire act?
Brad Walsh: 2:50
Our key focus is in developing the drug. So to that end, strategic alliances and supply agreements are the current pathway. We can focus on developing the drug, which is something unique to us. And we can make sure that that drug is manufactured all the way through. So the isotope supply is a key, but then in the future, once you, I think, really get to kind of a phase 2, you know, your, your drugs looking good, then you might want to start to think about a strategic alliance or even an acquisition of someone that can actually supply that downstream material that you need.
Rachel Williamson: 3:32
I would love for you to give me a breakdown of where GlyTherix gets its isotopes.
Brad Walsh: 3:39
So at the moment, GlyTherix gets its isotopes in Australia, because of the stage we're at. We're still in those phase 1 studies and Australia is a great place for that. So we have a supply agreement with ANSTO and that is for lutetium and this is the the beta emitter that you use for therapy. So that's of key importance and, um, really when we started this, the supply of lutetium was much more sparse. Um, so this is, is very important to lock that in. So we, we've had that locked in for a little while.
Rachel Williamson: 4:11
How long?
Brad Walsh: 4:14
Um, it would be about three years now that we've done that.
Rachel Williamson: 4:18
And of course that's challenging when you're still such a young company and don't know what your needs will look like. I imagine big commercial suppliers may ignore you in favour of biotechs with larger volume needs. I guess you could go down that route of building your own cyclotron, would you do that?
Brad Walsh: 4:37
Building your own is doable to an extent. So, you know, there are many, uh, companies who have built cyclotrons. There is a substantial capital commitment to do that, and there's nothing wrong with that, uh, at the right phase of the company, but we feel that at the moment our phase is better served by working with, good partners who can help provide those things for us.
Rachel Williamson: 5:02
What do you think it would cost to build your own?
Brad Walsh: 5:05
Look to the estimate for building such a facility where you can, make isotopes and, put them on to drug is anywhere between $20 and $100 million. And so they are really, um, saying, okay, we want to be in control of our supply chain right through the vertical. The challenge with that, of course, is, um, uh, cyclotrons break down.
Rachel Williamson: 5:33
That is terrifying.
Brad Walsh: 5:34
Well, it doesn't blow up though. That's a good thing.
Rachel Williamson: 5:37
But also a major problem if you're a biotech and now you also have to deal with a production line malfunctioning and throwing off your clinical trial schedule.
Brad Walsh: 5:48
So, you know, in terms of that, is there some redundancy? So, that middle ground, um, I guess is, where we've, we've actually started to play. So the other isotope that we need in Australia is zirconium 89. And we have partnered with CycloWest. So CycloWest have built a cyclotron in Western Australia. They are in the throes of rolling out cyclotrons in other places. So that's quite exciting. So, you know, they're looking for regional capability and perhaps beyond that in the future. And The other side of that, I guess, is how does an isotope supplier capture some of the value that is in those reagents that become the drug, and that's where we have formed an alliance with CycloWest and excitingly, uh, they have invested in us. So we're working very closely together, uh, with Dr. Nat Lenzo and, Thomas Tuchner and the team at CycloWest, to really bring that opportunity forward.
Rachel Williamson: 6:51
Accessing the isotopes needed for clinical trials or commercialisation is a knife edge game globally. Even the workhorse of cancer diagnostics, technetium, is in short supply in Australia.
Actinium 225 is the latest example of what happens when too much demand meets physics. It is made from radioactive thorium 229, mostly found in dwindling nuclear waste stockpiles. Russia's state owned nuclear agency, Rosatom, has invested heavily in being a key supplier.
Nuclear medicine consultant Richard Zimmerman wrote in a paper last year that Germany and the US are the only other high quality producers. He says there are plans afoot around the world to beef up manufacturing using new methods, but he estimates these will need to deliver five to six times more of the stuff by 2032. That's just eight years away.
These new methods are using a different thorium isotope and some radium isotopes. It means isotope makers are fighting over nuclear landfills to get enough precursor material. For example, British startup PanMediso tried to convince the UK government to sell it radium 226 from decommissioned nuclear submarines. They couldn't agree on price. A gram of radium decays into enough actinium to treat 1, 000 people. it is potentially worth about $10 million today. according to a Financial Times article in July.
Brad, the fact that biotechs are leaning on Russia for nuclear material is pretty concerning, you're sourcing all of your isotopes in Australia, but what are the geopolitical pressure points that you and your peers have to deal with in this industry?
Brad Walsh: 8:46
Yeah, it is true. We're one step away, but nonetheless, it does impact. And so, in particular, what's interesting is the US looking at Chinese suppliers. So if we go upstream to where we're talking about making the biologics, the conjugations, there are some fantastic companies there like Genscript and Wuxi. And in fact, the US Is pushing back now and saying, well, you know, we see there's some sovereign risk. We see that, we have, local industry that we should be supporting so there may be some legislation coming through with regard to that to stop manufacturers like ourselves from actually utilising the Chinese capability. On top of that, of course, you do have that issue with Russia in terms of supplying things like actinium. Now, people are thinking about that. So companies like Nusano in the US are building out capability to make actinium. People are also forced to look at new isotopes that are alpha emitters like terbium, like lead. Uh, and of course, in Australia, we have AdvanCell who, um, uh, working, in the lead space. Yh, terbium is an up and coming radio isotope.
Rachel Williamson: 10:00
The Australian Nuclear Science and Technology Agency, which is better known as ANSTO, is working on getting a reliable supply of Terbium 161 from its reactor in Sydney. Another alternative to Actinium is Lead 212. It has fewer risks. For one, it doesn't have long lived daughter isotopes that can theoretically unlink from the biological tracer it's attached to and harm other cells in the body. It can also be made much more cheaply in a generator. But there are even fewer suppliers. But Brad says if biotechs can make different isotopes work as treatments or diagnostics. the demand will drive people to fill the supply gap.
Brad Walsh: 10:46
The issue that's coming up now, of course, Rachel is, you know, do we have enough trained people to actually, meet the needs of those facilities? And I see this as an opportunity. Not just in the US but in Australia that, you know, in terms of training skilled people in a burgeoning field, there's a great opportunity there for universities to look at, and, of course, give people a fantastic career path.
Rachel Williamson: 11:13
Yeah, this is where the nuclear physicists are really needed in Australia, I guess. So we've talked around what GlyTheri is doing, you're designing a theranostic, you're in a phase 1B right now, so tell me where your science is at. Tell me about this, diagnostic therapy combination that you're making and what you need zirconium 89 for.
Brad Walsh: 11:39
It's this whole idea of personalised medicine. Because zirconium is, uh, it's a low level beta emitter, but it's, very good for PET CT imaging. So that will allow us to, number one, see that the protein antibody that we use is targeting the tumour. And number two, this is a very much a personalised medicine, a theranostic where the image tells you, yes, this patient will be suitable and then allows you to also have some idea of the amount of dose that they might need with a stronger radioisotope. And I guess that what's really important is that also we may not target all patients. We're going to see a spectrum of patients and we know from the data we have that probably 75 percent of patients will respond, but 25 percent won't. And what you don't want to do is waste the valuable time of a patient that has a metastatic cancer in trying a therapy that's not going to work for them.
Rachel Williamson: 12:41
And what kinds of cancers are you focusing on?
Brad Walsh: 12:46
So we have a number of solid tumours where we see, an upregulation or an increased expression of GPC 1 or Glycogen 1, which is our tumour target. And so to begin with, we're focusing on bladder and also what we call PSMA cold. So this is the prostate cancer patients that do not have a high expression of PSMA. Often they have failed PSMA, treatment, but beyond that, some really exciting ones with high unmet needs. So glioblastoma, uh, non small cell lung cancer, pancreatic cancer, esophageal cancer, and and a number of others, but you know, just within those, there's a wealth of things we can do.
Rachel Williamson: 13:32
That was GlyTherix CEO, Dr. Brad Walsh. They're doing side deals with upstart suppliers to get the parts they need to build the medical engine. Our next guest, Dr. Chris Behrenbruch, is running a company at the other end of the spectrum. It's building a global in house manufacturing supply chain, partly off the revenue from its first product.
Charis Palmer: 13:59
Hi there, I'm Charis Palmer, producer of Phase III. When Rachel and I set about building a new podcast for life science leaders, scientists, and long suffering biotech investors, we looked at what was missing in this space. We believe Phase III serves an unmet need for in-depth conversations in a world where nuance matters and AI-written investment articles simply won't cut it. If you agree, please follow us and sign up to our newsletter via LinkedIn, pledge financial support at phasethree.Buzzsprout.com and rate and review the podcast on the podcast platform you use, to help bring it to the attention of others. Now, back to the show.
Rachel Williamson: 14:36
Pharmaceuticals is a $6 billion company, thanks to its prostate cancer diagnostic, Illuccix. The revenue from that one product is expected to be about $500 million this year. And that has allowed Telix to expand massively. It has 18 clinical trials underway. It is publicly working with 11 isotopes and testing even more. But this is all bread and butter biotech stuff.
With the revenue from its first product, it is also positioning itself as a new pharma company, complete with manufacturing and distribution. This year, it bought a Canadian isotope maker called ARTMS and a Californian radiochemistry company called IsoTherapeutics. But since 2020, it's been building a footprint of factories around the world. Starting with a site in Brussels, South Belgium. That site has been upgraded to make isotopes as well as clinical products and is just waiting on its last official sign off to get cracking. The boss of Telix, Dr. Chris Behrenbruch, believes that outsourcing isotope supply early in a biotech's life is a necessary evil, but one that hands delivery of a crucial product part to another company. Taking the keys back as early as possible was critical for Telix.
Thank you very much for joining me today, Chris.
Dr Chris Behrenbruch: 16:00
Thank you for having me, Rachel. It's nice to see you.
Rachel Williamson: 16:03
The landscape for radiopharmaceuticals and ownership of companies is changing so fast. Why was it so important for Telix to invest deeply in manufacturing before even getting its first product on the market?
Dr Chris Behrenbruch: 16:18
Now, if a big pharma company, which they on the balance of probability will decide to vertically integrate, one of the drivers for doing that is obviously to control supply chains to somebody else's detriment. So we've made an effort. In fact, when we acquired the Seneffe site in Belgium four years ago, nearly five years ago now, part of the business case was to build technological autonomy so that we know how to make lutetium. And if we need to scale up in house production, we can do it because we've got a cookie cutter that we can apply.
We are also a very large buyer of raw materials. We regularly purchase large quantities of ytterbium. Well, we started early. So that means that we're on purchase plans. In some cases, uh, you need to have a pretty significant balance sheet to make a dent. Not all buyers are equal, in terms of, their commercial value to a supplier. And then, yeah, in some cases we've even made strategic investments into production capabilities to say, okay, yeah, we need to see some of these materials, um, more widely available, you know. Also, we're a big enough company now that we care about the environmental footprint of isotope production. So, um we have, for example, a really exciting project around looking at non proliferative sources of, to your comment, Cold War stockpiles. There are non proliferative sources of many of these, um, of these isotopes, but they require refinement or processing or novel production techniques. But if you're, if you're in a position to make some of those investments, you can really pick up um, some unique and perhaps even exclusive supply chains.
Rachel Williamson: 18:27
I imagine you're also running into some pretty interesting sellers too. Where are you really having to make sure that you're staying on the right side of non proliferation laws and the laws of the countries that you're operating in?
Dr Chris Behrenbruch: 18:42
Obviously, we don't buy radionuclides from, you know, Iran or something like that. But, although I'd like to, they have one of the most impressive, uh, nuclear medicine infrastructure because they've had to be self sufficient, and it's a shame in a way they can't participate in global supply chains. But when we think about countries like Russia, which is obviously very contentious at the moment, there are humanitarian exemptions. You know, at the end of the day, I do think healthcare has to be one of those things that is allowed to be successful. But we and others take the viewpoint that those supply chains are probably not tractable. Long term, there are stockpiles of Russian radionuclides outside of Russia. Now, um, that are controlled and are lawfully exported or imported, but, you know, we can't rely on those forever. And I think the good news is that, we won't have to, I mean, we have in our commercial product portfolio we have no reliance on them sort of challenging jurisdictions.
Rachel Williamson: 19:40
So where are the next sourcing locations then? If not Russia, given they have been investing in building out radioisotope capacity for much longer than anyone else.
Dr Chris Behrenbruch: 19:50
Um, as a field, it's maturing there are parts of the world where, you know, if you look at some of the Latin American countries, some of the Asian economies that are investing heavily in nuclear, we are going to see some other user friendly technologies. Not Western countries, but other sort of fairly friendly countries that are producing material. You know, you look at countries like India, has a quite a substantial isotope production capability. It's just not very mature and not very quality controlled yet. China, I mean, China is investing, five years from now, I'd say less three years from now. You won't import any isotopes into China anymore. They're going gangbusters and making that infrastructure domestically available.
Rachel Williamson: 20:35
Is it just that China has that health capacity, or is there some other reason they're keen on nuclear medicine?
Dr Chris Behrenbruch: 20:42
China is going gangbusters because they have an oncology problem. You know, the massive industrialization of China means that it's one enormous cancer cluster, and they have a problem if they can't solve that Cost effective delivery of oncology services. They have a really significant social problem. What is, you know, going to be a cost effective way to treat cancer in China? And I believe it's going to be radiation oncology and nuclear medicine. It's going to be really fundamental. In fact, and that's the government's view.
Rachel Williamson: 21:14
Stories like China rushing to build out its own radioisotope supply chain, and of course Telix and pharmaceutical companies moving to do the same at a corporate level, it really does send a message that control is so vitally important. What are you worried about?
Dr Chris Behrenbruch: 21:32
There is no magical isotope store in the sky. I've seen, with some amusement, I mean, I'm a 25 year veteran of nuclear medicine space and kind of seen it all in my career. We've had this Cambrian explosion of new companies in the radiopharma space because VCs have sort of cottoned on that this might be important. And you've got people that think that just because they can run a preclinical or a clinical experiment with a certain isotope that it's going to be magically waiting there for them when they go to market, and it won't be. And along with the Cambrian explosion comes a Darwinian selection and the Darwinian selection is can you or can you not commercialise a product.
Rachel Williamson: 22:14
So what, in your opinion, is commercially viable right now?
Dr Chris Behrenbruch: 22:18
So really anything other than F18, gallium on the diagnostic side, lutetium, iodine 131 on the therapeutic side, really don't have a commercially scalable supply chain and even isotopes that you and I would take for granted, like iodine 131. This is a real workhorse radionuclide. If you have thyroid cancer, that's what you're going to get treated with, that actually has currently a non commercial supply chain. So even though it's an isotope that is produced in every nuclear reactor around the world, every single day, you can't actually buy GMP I9 131 at commercial scale at the moment. That's how critical this topic is.
Rachel Williamson: 23:00
Telix is making or otherwise seriously working with 11 different isotopes. But a lot aren't on that list that you just gave me as the ones that have commercial scale. Zirconium 89, that's going in your almost on market kidney diagnostic. Alpha emitter astatine 211 is one of the more speculative ones you're working on, as is actinium. Does that mean that products using these are more commercially speculative?
Dr Chris Behrenbruch: 23:28
We, we play around with all these different radionuclides. Um, some of them make it into a pipeline some of them don't, you know, you mentioned astatine, you know, astatine is on paper, you know, it's almost the perfect radionuclide. You know, it's got a very simple decay profile. Um, it has one, daughter decay. It decays into something harmless. But the challenge is that, it is hard to scale up, it requires reasonably high energy cyclotrons to get good yields and to cover a major market like the US somebody is going to have to invest in you know, somewhere between 5 and 10 installation points, to manufacture drug and you're looking at $50 to $70 million realistically at a commercial scale with backup and stuff like that, per facility. So that means somebody has to take a leap of faith and spend $3 to $500 million on manufacturing infrastructure to take a drug to market. And that's an interesting chicken and egg sort of question.
Rachel Williamson: 24:28
I've got to ask an obvious question, radiopharmaceuticals is a land grab right now for isotope supply. Even Telix is doing it for those two acquisitions this year. Are you a buyer, like an Eli Lilly or a Novartis, or are you a takeover target?
Dr Chris Behrenbruch: 24:46
Well, look, I, I never really cared. I think when you get out of bed every day to build a pipeline to flip it at some point in time, you get out of bed with certain decisions in mind, and it actually limits your appetite to scale.
I've had the opportunity to sell Telix, you know, multiple times since I started it and just, uh, sail away into the sunset and not worry about the stress and hassle of running what's become a fairly large and complicated business. So I started the company with my co founder, Andreas Kluge, and you know, we started the company because there were great technologies that had been developed and even pretty much clinically validated that nobody was commercialising.
I mean, take Illuccix as an example, right? This year we will do half a billion US dollars in sales for a product that nobody was interested in commercialising in the United States. So you have to ask the question, why was that? The answer is you have to be excited about embracing complexity. If you want to flip a product pipeline, you're not embracing complexity. So, I mean, it's a very long winded way of answering your question, but I think at the end of the day, what I'm interested in doing, and I think what my team is interested in doing, and I think what our shareholders are backing is that I don't care whether a big company buys us out or not, if we do one day, it's because we will have executed spectacularly, and I, I do think we are executing very well. So it really comes down to, you know, you know, what's the goal? And the goal is to make sure that these medicines get into patients and and we have the appetite to tackle that complexity.
Rachel Williamson: 26:17
TeLix opened commercially with Illuccix, its prostate cancer diagnosing tool that uses gallium 68. And your next products into the market are a kidney and a brain diagnostic. Diagnostic tools do not get the same kind of reimbursements as treatments. Even still in radiopharmaceuticals where they're becoming a two hander, where you seek with one isotope and destroy with another. So why not focus on pushing harder on a better paying treatment first? Your lutetium 177 prostate cancer therapy is, it's pretty close. And I've already mentioned in the show how Novartis very famously made almost one billion US dollars in its first year from its prostate therapy.
Dr Chris Behrenbruch: 27:01
Um, you know, what we're doing is we're building the engine of capability, but we're also making sure that we're developing a product that enhances and speeds our ability to develop the therapeutics. When we have a patient selection tool for a target, we can run more compact clinical trials. We can select patients better. We have a higher probability of a successful trial. and we can, we can usually run faster, more compact trials if we can do patient selection. So we, you know, every single one, we have 18 clinical trials running around the globe. Um, two thirds of those are therapeutic studies. Every single one of our therapeutic studies uses either approved or investigational imaging agents for patient selection. And eventually in the limit, I think that we're going to use dosimetry. And, you know, at the moment when we deliver a therapeutic radionuclide product, it's just like a fixed dose, but eventually it's going to be a much more tailored dose and the imaging will have, you know, a maturation step to go through to really deliver on that capability.
Rachel Williamson: 28:04
For our lay listeners, what this means is that because you know what the isotopes are going to do, you can do the trials testing the biology side for diagnostic tools, almost as an early trial for the treatment version.
Dr Chris Behrenbruch: 28:18
Yeah, I mean, even just fundamentally, like our first actinium product, TLX592, we actually did a surrogate, study, mass dose, dose escalation, and biodistribution with a, non actinium radionuclide, in order to feel confident that we, from a safety perspective and a dosimetry perspective, that we could switch to a radionuclide that doesn't have an emission profile that makes it easy to image, right? We understand all the off target effects. We understand where it does go. It doesn't go what the clearance organ burden is going to be. So we know all of that before we take a very expensive, very potent radionuclide and and drop it on that targeting agent.
Rachel Williamson: 28:58
That was Telix Pharmaceuticals CEO Dr. Chris Behrenbruch. Health systems are no strangers to complexity. But radiopharmaceuticals takes that to another level. And what is even scarier is that supply chains are likely to limit the number of companies that can be truly successful. The raw materials for the isotopes, the limited locations where they can be made and the logistical capability needed to move it around the world make for, what can I say? Complexity. In our next episode, we'll return to the level of complexity biotechs are more used to, making drugs and wrangling investors.
