Daily Brief Health Care: TSE Tokyo Price Index TOPIX, Telix Pharmaceuticals, Basilea Pharmaceutica Ag, AFT Pharmaceuticals and more

• Many of the companies that didn’t meet the listing criteria for the prime market still failed to gain market recognition over an 18-month period and moved to the standard market.
• It is believed that TSE expects more companies to gradually drop out of Prime Market by raising the hurdle for effort targets that aren’t explicitly stated in the listing criteria.
• As quality differences gradually emerge between the Prime and Standard markets, the rift between management awareness and shareholders of Standard market-listed companies is likely to deepen in the future.

• Telix Pharmaceuticals (TLX AU) reported net operating cash inflow for 3Q23 of A$21.4M, a A$10.6M improvement on the prior quarter and fourth consecutive quarter of positive operating cash flow.
• In 3Q23, revenue from U.S. sales of Illuccix improved 13% QoQ to A$130.6M. Telix is progressing new marketing authorizations for Illuccix in several jurisdictions, including the U.K., EU, and Brazil.
• Telix announced preliminary results of its phase I ProstACT SELECT study. Although the study achieved primary endpoints, the findings noted grade 3 and 4 hematologic events.

Basilea presented a combination of eight presentations and abstracts on its antibiotic ceftobiprole (at the Infectious Diseases Week 2023 conference in Boston), which support its ongoing regulatory application with the FDA. The new data provide additional evidence on the drug’s utility and highlight ceftobiprole’s antimicrobial activity against clinically relevant pathogens, including MRSA, and support the dosing regimens utilised in the three Phase III studies for the three indications currently undergoing priority review by the FDA. As a reminder, the FDA has set a PDUFA date of 3 April 2024, which suggests that Basilea could potentially receive a regulatory decision for its lead antibiotic asset in the US in early-Q224. The FDA’s decision would be a significant catalyst for Basilea, considering the high prevalence of MRSA in US. The new data provide incremental support to the FDA application and instil confidence in a favourable outcome, in our view.

AFT Pharmaceuticals announced FDA approval for Maxigesic IV, an intravenous form of its flagship pain relief prescription medicine. The FDA approval of the post-operative pain alternative to opioids marks a material win for AFT, given the US is the largest analgesic market (estimated at nearly $7bn) and the current US regulatory hurdles in addressing pain in light of the opioid abuse epidemic. The launch at end FY24 or early FY25 is anticipated to trigger a US$6m milestone payment from Hikma Pharmaceuticals, the US licensee for Maxigesic IV. AFT’s 65% share of this milestone has the potential to provide upside to its NZ$22–24m FY24 operating profit guidance if Maxigesic IV is launched in FY24. We note that Maxigesic IV is already registered in 43 countries and is available in 21 countries (including key markets of Germany, France and Italy). The US approval is a key addition to the AFT portfolio, providing further confidence in the company’s ability to reach its previously stated near-term rolling 12-month stretch revenue target of NZ$200m, which we anticipate to be achieved on an annual basis by FY25.