Initiation Research Report Radiopharm (ASX:RAD) Near to market imaging drug

The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, indepe ndent and objective views about any and all the companies and securities that are the subject of this report discussed herein. For important information, please see the Important Disclosures on page 17 of this document. P a g e | 1 RAD 101 – Near to market diagnostic Radiopharm Theranostics (RAD, or ‘the Company’) is working on bringing a new imaging drug to the market within the field of nuclear medicine. Nuclear medicine is a relatively new field within cancer diagnostic/therapeutic. This specialty field used radioactive tracers which are a combination between a molecule and a radioactive isotope. These are bonded together to form a tracer which are injected into the patient for the purpose to either diagnose or treat a specific disease, mainly cancer. Specialised scans such as a Positron Emission Tomography (PET) allow the doctor to track these radiotracers. Radiopharm has one phase 2b ready to begin this year in imaging for brain metastases (mets) cancer which has spread from other organs to the brain. This multicenter trial aims to recruit 30 patients and test safety and imaging with full recruitment by end 2024. The trial uses the radiotracer F18-Pivalate, a small molecule that targets fatty acid synthetase. Upon success a phase 3 trial can immediately afterwards with a path to commercialization potentially by end 2026. Potential market size for brain mets imaging in the USA is fairly large with 390,000 new cases per annum. Encouraging Phase 2A results The Imperial College of London conducted an open label phase 2a trial using F18-Pivalate in 17 patients with one or more cerebral metastases. Using PET/MRI high contrast images were seen at the 60-minute timeframe after F-18-Pivalate injection. The scans showed high uptake of F-18-Pivalate in the origin of primary tumor which indicates the radiotracer can be used to detect and monitor cerebral metastases. RAD is in process of transferring the data from the UK to the USA to be used in the phase 2b trial. Two ongoing phase 1 trials RAD has two ongoing phase 1 trials targeting pancreatic cancer (RAD 301 - imaging trial) and non-small lung cancer ( RAD 204 - therapeutic). RAD 301 is recruiting 9 patients to evaluate the detection of lesions in patients with Pancreatic Cancer by using the peptide -based molecule Trivehexin bound with the isotope 68 Gallium. RAD 204 is recruiting 21 patients across two sites in Australia to t est the safety and efficacy of a proprietary nanobody combined with the isotope Lu-177. Valuation We have valued RAD at $0.26 using a future and probability -weighted discounted cash flow model based on revenue potential, given the current treatable market for RAD’s lead product RAD 101 for imaging brain metastases. Bringing a new imaging drug to market is a slightly less daunting path than a new therapeutic drug. Should the upcoming phase 2b trial be successful a phase 3 trial would follow immediately, and we could see first revenues in 2027. RAD 101 is RAD’s most advanced product, and therefore, we ha ve focused on it for our valuation. Currently, there are 390,000 cases USA, and we expect case numbers to grow by 2% per year. The addressable market is 265,000. To be as conservative as possible, we have estimated an initial market penetration of 10% and a treatment cost of US$4,730, rising to a market share of 60% by 2033 with revenue to RAD of AU$555m. This puts RAD on a similar path to market as comparable companies in other imaging cancer drugs. Company Data Recommendation: Speculative Buy Shares on Issue: 439.359m Market capitalization: $26m Enterprise Value: $22m Board Structure Paul Hopper: Chairman Ian Turner: Non-Exec Director Dr Michael Baker: Non-Exec Director Dr Leila Alland: Non-Exec Director Hester Larkin: Non-Exec Director Riccardo Canevari: Managing Director & CEO Major Shareholders Paul Hopper: 27.77% Nanomab Technologies: 8.34% Total Top 20: 57.22% Chart Initiation Research Report Radiopharm (ASX:RAD) Near to market imaging drug RAD Price: $0.06| RAD Valuation: $0.26 | Implied Return: 333% | 12 March, 2024 27 Source: Iress Radiopharm Theranostics is a biotechnology company in the field of nuclear medicine. The company currently has 2 running trials, an imaging trial targeting pancreatic cancer and a therapy trial targeting NSLC, and an imaging trial to begin this year in brain mets. Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 2 Contents Executive Summary ...................................................................................................................................... 3 Radiotheranostics ......................................................................................................................................... 4 Drug snapshots ............................................................................................................................................. 5 Trivehexin, avβ6-Integrin, RAD 301, RAD 302 .............................................................................................. 7 Nanobody, PD-L1, RAD 204, RAD 203 .......................................................................................................... 8 Pivalate, Fatty Acid Synthethase, RAD 101 ................................................................................................ 10 Valuation .................................................................................................................................................... 11 Investment Risks………………………………………………………………………………………………………………………………..…14 Board of Directors………………………………………………………………………………………………………………………..………15 Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 3 Executive Summary After raising $ 50 million, RAD listed on the ASX via an IPO in late 2021 with a focus on radiopharmaceuticals products. Radiotheranostics is a field of nuclear medicine which combines a molecule with a radioactive isotope via linker. Once administered into a patient’s body, these molecules will target the proteins of a cancer cell with the aim of penetrating these cells. Once inside, they emit low level alpha or beta rays with the focus of killing the cancer cells. As it is targeted medicine the surrounding healthy cells are ignored which helps in limiting the usual side effects, such as hair loss, we see in other cancer treatments. Radiopharmaceutical can either be used to treat or diagnose the cancer (imaging). As of writing , Radiopharm has three ongoing trials. A phase 1 imaging trial in pancreatic cancer which uses Trivehexin, a peptide -based molecule, to target av β6-integrin, a cellular market associated with tumor and is highly present in most pancreatic cancers. 9 patients will be enrolled in the trial which will be conducted at the Albert Einstein College in New York. The study will access safety, radiation dosimetry and imaging characteristics. This year RAD is ready to begin a phase 2b trial in brain metastases, which will be conducted at multiple centers in the US and recruiting 30 patients. This follows from phase 2a data which was conducted by the Imperial College of London in 17 patients with brain metastases. The trial showed PET scans with high uptake in the metastases. Data is currently being transferred from the UK to the USA and IND approval for the phase 2b trial to start is expected after the tech transfer is finalized. The trial uses pivalate, a small molecule that targets fatty acid synthetase and Flourine-18 a radioisotope with a particularly short half-life. Radiopharm is also conducting a phase 1 therapeutic trial in Non-Small Lung Cancer in 21 patients across two sites in Australia. A radioisotope Lu177 will be combined with RAD’s proprietary nanobody and will evaluate the safety and efficacy of the novel radiotherapeutic. A phase 1 imaging study was conducted in 2021 in NSLC by Lantheus (NASDAQ:LNTH) which used a single domain antibody, NM-01, against PD-L1 to assess safety, radiation dosimetry, and imaging characteristics in 16 patients. The study showed no adverse effects and tumor uptake to be readily visible against background tissue especially at 2-hour mark. A phase 2 is currently being conducted with read-out by mid-2024. Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 4 Radiotheranostics Radiotheranostics can be defined as a form of precision medicine within the field of nuclear medicine and molecular imaging which is used to treat or diagnose cancer at a molecular level. Nuclear medicine comes in two parts and can be either diagnostic (imaging) or therapeutic with the link between them being that both ways are using the same targeting molecule. It is defined as targeted medicine as the aim is to treat the cancer cells while leaving healthy tissues alone. The targeting molecule is combined with a radioactive isotope and attaches itself to the cancer cells and delivers a cytotoxic dose of radiation. This differs from traditional radiation therapy which has the potential to harm healthy tissues and cause the side effects which we usually associate with cancer treatments such as hair loss. The breakdown of the radioactive compound releases energy which damages the DNA of the cancer cells which then begin to die. Radiation-induced DNA damage is particularly powerful against cancer cells. Once the cancer cells are exposed to radiation, they begin to release proteins as well as DNA which are then be recognized by the patient’s immune system which give additional help killing other cancer cells throughout the body. Without this process the immune system would be unable to attack cancer cells. In other words, the cancer cells go from be ing invisible to the immune system to being recognizable and able to be attacked. Radiotheranostics has been in use since as far back as 1941 and has been an integral part of nuclear medicine and molecular imaging ever since. It has become more popular since the turn of the century as technology has improved. The most important part of radiotheranostics is the appropriate selection of which molecule to use, or radionuclide. Radiotheranostics consists of three components • A radionuclide – radioactive element that contain some form of nuclear energy • A targeting molecule – varies depending on the cancer indication • A linker, or probe – that attaches the molecule to the radionuclide The result is a radiotracer which is the combination of the molecular probe and radionuclide which is either used to identify potential molecular targets (usually cancer) throughout the body or conduct radiopharmaceutical therap y (therapeutic). Both imaging and therapeutic uses the same molecular probe attached to a radioisotope. Different radiopharmaceutical isotopes (radioactive compound) release energy in different ways. Source: National Cancer Institute Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 5 The main challenges facing radiotherapy are the process of bringing the molecules close to the cancer cells and making sure they can penetrate the cells and stay there long enough to release radiation and cause damage. Sometimes cancer cells can throw these molecules right back out again before they can cause damage to the cancer cells. Another issue is the lack of required infrastructure in many parts of the world which limits the use of such drugs. Radiotherapy requires expensive and cutting-edge technology which is not yet available in all corners of the world. Biotechnology companies involved in clinical trials in radiotheranostics require reliable supply of isotopes. In FY23, RAD secured agreements for supply of Lutetium‐177 from both Australia's Nuclear Science and Technology Organisation (ANSTO) and SHINE Technologies. RAD also signed supply agreements with TerThera for the Terbium‐161 isotope and with NorthStar Medical Radioisotopes for Actinium‐225. The radiopharmaceutical market has become more recognised in recent years due to technological advancement, a population which is ageing and increased cancer incidents. Currently there are more than 50 radiopharmaceutical drugs on the market, and it is a fast growing sector at an annual CAGR of about 10%. The market is predicted to be worth more than $13 billion by 2030. Currently the diagnostic segment attracts most revenues within the radiopaharmaceutical space, however the therapeutic segment is projected to grow at a faster compound annual growth rate going forward. Snapshot of current drugs on the market While there are other drugs on the market , these are a few we have singled out to provide a picture of the potential to Radiopharm should the company be successful in bringing a new diagnostic or therapeutic radiopharmaceutical drug onto the market. The below table gives a summary following short descriptions of the drugs. Drug Company Indication Type Revenue (US$m) Pluvicto Novartis Prostate Therapeutic 980 Luthathera Novartis NET Therapeutic 458* Pylarify Lantheus Prostate Diagnostic 851 Illucix Telix Prostate Diagnostic 318 *Revenue for 9 months Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 6 Pluvicto Pluvicto is a nuclear medicinal drug which targets prostate cancer. Pluvicto is manufactured by Novartis (SWX:NOVN) and had its first full year of sales in 2023 with US$980m in revenue. Pluvicto is currently approved for patients with PSMA -positive metastatic castration -resistant prostate cancer following taxane -based chemotherapy. It is not a cure but aims to help people live longer. The drug works by using radiation to shrink the cancer cells. By being a targeted treatment, it does not harm nearby healthy cells. Treatments last for about 8 months with patients receiving 6 separate treatments every 6 weeks. Novartis is in filing to move the drug up the treatment sequence before chemo. Currently Pluvicto is used as a 2nd line treatment Luthathera Luthathers is manufactured by Novartis and consists of a radioactive isotope, Lu -177, attached to a pharmaceutical, dotatate, which is a molecule that binds to GEP -NET cells that have a molecule called a somatostatin receptor on their surface. The drug enters these somatostatin receptor−positive tumor cells after which radiation emitted by Lu -177 helps kill the cancer cells . Luthathera treats progressive Neuroendocrine tumors (NET) as a 2nd line treatment. NET are rare cancers that begin in specialized cells and can begin anywhere in the body. The first 9 months of CY2023 Luthathera made US$458 million in sales in the USA. Pylarify Pylarify is manufactured by Lantheus and saw revenue of US$851m in 2023. Pylarify is is a radioactive diagnostic agent and is used in men with prostate cancer. During a PET scan the radioactive tracer , fluorine-18, targets the cancer cell and attaches itself to prostate specific membrane antigen (PSMA) and once found lights up and helps the PET scan reader to locate the cancer cells at an earlier stage than other imaging scans. These imaging scans work even when Prostate-Specific Antigen (PSA) is low. Other imaging scans need high levels of PSA. Illucix Illucix, owned by Telix ( ASX:TLX) is a diagnostic drug which targets PSMA for prostate cancer imaging. The radioactive tracer, in this case Illuccix, attaches itself to PSMA proteins which then light up during a PET scan. Illuccix had revenues of about US$318m in the USA last calendar year. Current Clinical Developments As of writing , Radiopharm has t wo ongoing phase 1 trials and one IND preparation for a phase 2b multicenter trial. RAD also has three approvals in progress for clinical trials, FDA IND’s or other jurisdictions (EU, AUS, UK). The two ongoing trials are a phase 1 imaging trial in pancreatic cancer and a phase 1 therapeutical trial in non-small lung cancer. The IND preparation is for a phase 2b imaging trial in brain mets. Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 7 Molecule and Target – Trivehexin; aVβ6-Integrin Trivehexin is an arginylglycylaspartic acid (RGD) peptide. RGD are known to be highly effective in binding numerous cell types to many diverse materials. 68Ga-Trivehexin was developed by TRIMT GmbH in Germany for imaging a Vβ6-Integrin expression. Integrins are cell surface receptors and aVβ6-Integrin is an antigen over -expressed in tumours . Trivehexin targets a Vβ6-Integrin which is found in high density in pancreatic carcinoma cells. RAD has signed the rights to aVβ6-Integrin under an exclusive license agreement. Indication – Pancreatic Cancer Pancreatic Cancer affects the pancreas which lies in the lower part of the stomach. It is a type of cancer which is often difficult to detect early and thus harder to cure. When it comes to cancer it is highly advantageous to detect the disease as early as possible. Pancreatic Cancer often doesn’t cause symptoms until the disease is in an advanced stage. Pancreatic Cancer is particularly deadly. Only 12% of patients are diagnosed early and the 5-year survival rate is 44%. This drops to 15% if the cancer has spread to surrounding tissues or organs. 52% of patients are diagnosed at a more advanced stage when the cancer has already spread to other parts of the body and by that stage the 5 -year survival rate drops to a mere 3%. Early diagnosis due to i mproved imaging is paramount. Pancreatic cancer affects about 65,000 people in the USA each year. Trivehexin. Source: RAD Picture 1: Radiopharm’s Clinical Developments Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 8 Mechanism of Action – RAD 301 – Phase 1 Radiopharm has recently started an imaging trial in pancreatic cancer. A phase 1 trial is currently enrolling 9 patients in the USA with read - out expected by mid-year 2024. The company received FDA Orphan Drug designation for RAD301 in May 2023. Orphan drug designation may indicate tax credits for qualified clinical trials, exemption from user fees and potential seven years of exclusivity if the drug is approved. The phase 1 study is being conducted at the Albert Einstein College of Medicine in New York, which will evaluate the detection of lesions in patients with Pancreatic Ductal Adenocarcinoma (PDAC) by using the peptide-based molecule Trivhexin, which is a small molecule designed to bind to a unique cancer antigen. Trivehexin will be linked with Gallium-68 which is a positron-emitting radioisotope The study will also access safety, radiation dosimetry and imaging characteristics. The first participant has been dosed with 68Ga-Trivehexin at the Montefiore Medical Center, Albert Einstein College in New York. European partner TRIMT conducted a n imaging study using 68Ga -trivehexin in 66 patients, of which 60 had pancreatic cancer and GI tumours. The trial analysed selective detection of av β6-integrin expressed in tumor lesions. Findings were that RAD 301 can be used to detect and monitor pancreatic cancer. In a separate study, also conducted by TRIMT, 33 patients were administered RAD301. The study compared 68Ga - trivehexin PET/CT imaging versus F18 -FDG and showed superior resolution with no adverse effects. Mechanism of Action – RAD 302 – Pre-clinical RAD302 targets pancreatic cancer and is currently in pre-clinical stage awaiting IND approval for a phase 1 study which is expected to be received in Q4, 2024. Once the study begins Radiopharm will use the peptide Trivehexin which will be labeled with the isotope Lu177. RAD signed a supply agreement with Isotopia Molecular Imaging (Isotopia) for the supply of Lutetium -177. Lu177 is preferred for therapeutic as it can penetrate tissues at a maximum width of 2mm which gives it an efficient deposition of energy in tumour lesions and minimizes damage to surrounding healthy tissues. The key for any Radiotheranostics trial is combining the right molecule with the right isotope. Ga68-Trivhexin to target cancer cells. Source: RAD Sharper imaging compared to F18- FDG. Source: RAD Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 9 Molecule and Target – Nanobody; PD-L1 PD-L1 is a protein which is usually found on healthy cells . Their function is to stop T cells from attacking healthy cells and keep the body’s immune response under control . However, it has an adverse effect in cancer cells as it turns off T -cells which are then unable to attack the cancer cells. This occurs when PD -L1 binds to other proteins called PD-1 which are found on T cells and thus these T cells are being kept from killing cells containing PD-L1. Indication – Non-Small Cell Lung Cancer (NSLC) Lung cancer comes in two forms, Non-small lung cancer and small lung cancer. Lung cancer refers to cancer cells in the tissues of the lung. Non-small lung cancer comes in three different types. Each of these types have cancer cells that grow and spread in different ways. Squamous cell carcinoma forms in cells lining the inside of the lungs. Large cell carcinoma are cancers that begin in several types of large cells. Adenocarcinoma are cancers that begins in the cells that line the alveoli and make substances such as mucus. 300,000 new lung cancer cases are diagnosed every year in USA. 81% of them are non-small lung cancer cases. Smokers are at main risk of developing NSLC and symptoms include a cough that won’t go away and shortness of breath. Currently there is only limited treatment for NSLC. Mechanism of Action – RA204 – Phase 1 Radiopharm is currently conducting a Phase 1 therapeutical trial in Australia. The company received approval from the Human Research Ethics Committee (HREC) to commence the phase 1 trial which will be a First-in-Human trial in Australia. 50% recruitment is expected by Q4, 2024. Overall, 27 patients will be recruited which will evaluate the safety and efficacy of 177Lu-RA204 in PD-L1-positive NSLC. The indication being targeted is non-small cell lung cancer and the molecule being targeted is PD -L1. A supply agreement has been signed with Australia’s Nuclear Science and Technology Organisation (ANSTO) for the supply of Lu -177 for these trials. Lu-177 will be combined with RAD’s propriety nanobody. The trial is designed to evaluate the safety and efficacy of the novel radiotherapeutic. The trial will be conducted at two sites in Australia, the Princess Alexandra Hospital in Brisbane and Hollywood Private Hospital in Perth. The study is designed to test the safety and tolerability of 177Lu-RAD 204 in patients with metastatic non -small cell lung cancer. Read-out is expected in 2025. Afterwards a phase 2 combo therapy trial with checkpoint inhibitor is expected in 50 patients lasting from end 2025 to Q3, 2027. PD-L1 Nanomab. Source: RAD RAD204 targeting NSLC. Source: RAD Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 10 Mechanism of Action – RAD 203 – Phase 2 ongoing This trial is not being conducted by RAD but Lantheus. RAD owns the rights to China and after the read-out of the current ongoing phase 2 imaging trial, which is expected mid-2024, RAD can begin licensing in China. In 2021, a phase 1 imaging study was completed in 16 patients of which 11 were men with a mean age of 61.7. A single domain antibody, NM -01, was used against PD -L1 to assess the safety, radiation dosimetry, and imaging characteristics of this radiopharmaceutical and correlate tumor uptake with PD-L1 immunohistochemistry results. Scans were obtained at 1 hour and 2 hours after injection in all patients. 5 patients underwent additional imaging at 10 minutes, 3 hours and 24 hours for radiation dosimetry calculations. The study showed no adverse effects and tumor uptake to be readily visible against background tissue especially at 2-hour mark. Molecule and Target – Pivalate; Fatty Acid Synthetase Pivalate is a radiotracer which has shown superior imaging performance and promise in two breast cancer models. It was invented at Imperial College London and is based on short chain carbohydrate which utilizes the early steps of fatty acid oxidation. Combined with the isotope F18 it selectively targets fatty acid synthetase which is overexpressed in brain cancer but not normal brain cells. Indication – Brain Mets Brain metastases occurs when cancer cells spread to the brain. This can come from any type of cancer but the cancers most likely to spread to the brain are lung, breast, colon, kidney and melanoma. The origin of the cancer also defines the name, for example kidney cancer which has spread to the brain is called metastatic kidney cancer. Once the cancer spreads to the brain the survival rate usually shrinks to mere months hence earlier detection is crucial. Mechanism of Action – RAD 101 – Phase 2b (beginning this year) RAD 101 is a proprietary imaging agent composed of F18 radioisotope and pivalate, a small molecule that targets fatty acid synthetase. 18F-FPIA carries the radioisotope into brain metastases. Current standard of care such as PET FDG and MRI have some limitations due to necrotic, inflammatory and high sugar uptake confounding factors. F18 -Pivalate attempts to overcome these limitations. RAD has met with the FDA to determine regulatory pathway to accelerate development for Pivalate for imaging. Rad will file an IND application to initiate a multi -center trial for imaging brain metastasis during the first quarter of 2024 which is looking to recruit 30 patients with read- out by start of 2025. Afterwards a phase 3 trial is planned to begin in 2025 with read-out by 2026. F18-Pivalate. Source: RAD Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 11 An open label phase 2a trial was performed by the Imperial College London using F18-Pivalate PET/MRI in patients with one or more cerebral metastases from different primary tumours of origin: breast, lung, melanoma and colorectal cancer. The trial analysed if F18 -Pivalate uptake is higher over background in cerebral metastases and whether Stereotactic Radiosurgery (SRS) impacts F18 -Pivalate uptake at early time points . 17 patients were enrolled into the trial, 11 patients’ treatment naïve and 6 patients SRS treated (4-8 weeks post treatment). High contrast images were seen at the 60-minute time-frame after radiotracer injection. The trial showed F -18 Pivalate PET scans with high uptake of origin of primary tumor. The trial s howed that Pivalate can be used to detect and monitor cerebral metastases. Patients without previous external beam radiation showed higher tumor uptake of the radiotracer, while previously treated patients show a trend towards lower uptake of the radiotracer. Valuation RAD’s nearest path to market is RAD101-Pivalate targeting Brain Mets which is poised to begin a phase 2b trial. There are 390,000 new brain mets cases in the USA every year of which 265,000 would be eligible for an imaging test should RAD get approved to market. Price per dose is hard to quantify but we have taken the price used by Telix (TLX.ASX) which uses a price point of US$4,730 per dose. We think this is a good enough comparison. Brain Mets is a relatively large market, and the diagnostic market has an unmet need for a new drug . The phase 2a data showed promise and the path to market for a new imaging drug is a bit less daunting than for a new therapeutic drug. We have focused on the American Brain mets market for RAD101 Pivalate. Key assumptions are: ✓ 390,000 Brain Mets sufferers in the USA, currently. ✓ Target market is 265,000 patients identified as being eligible. ✓ Growing at 2% per annum. ✓ RAD to initially capture 10% of the market by 20 27 and grow to 60% by 2033. This growth trajectory is very similar to what Telix has managed to achieve, however, while TLX has competitors RAD currently has none. ✓ It is assumed dosing would be priced at US$4,730. ✓ Assuming a 20% EBITDA margin, using a discount rate of 15%, and using after-tax profits to further de-risk our assumptions. ✓ As imaging trials are currently in phase 2b we believe assigning a 45% probability to success which would rise to more than 60% should Pivalate move toward phase 3. We are comfortable assigning a slightly higher probability of success to an imaging trial as opposed to a therapeutic trial. Should RAD101 make it all the way to the market it will no doubt be very lucrative and a company maker. The below chart shows a reasonably revenue scenario on the prospect that RAD101 makes it past FDA approval and begins sales from 2027. In such a scenario we forecast revenue of A$555m by 2033 as RAD would face very limited competition within the imaging space for brain mets. Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 12 While filled with assumptions we believe it shows the earnings potential to be very large should further trials be successful. Given the plethora of assumptions, it is worth noting this is a speculative valuation, however we believe a valuation of $0.26 per share is reasonable. If we add potential success of other trials such as RAD301 and RAD204 the valuation would undoubtedly increase however these trials are at a slightly earlier stage than RAD101 and we would be more comfortable including them into our model once we get more data on their progress. It is also worthwhile l ooking at comparable companies . Most biotechnology companies in cancer research are based in the United States which tends to value early-stage science companies a fair bit higher than would be the case on the Australian Exchange. It is clear to see that RAD is trading at quite a large discount to its peers. Total NPV (millions) $249,779,965 Shares (millions) 439,359,724 Value/share $0.57 Risk adjusted value/share $0.26 Radiopharm Perspective Fusion Convergent Precirix Mariana Therapeutics Therapeutics Therapeutics Oncology Clinical trial pipeline 3 3 4 1 3 - Phase 1 imaging ongoing 1 1 - Phase 2 imaging ongoing 1 2 - Phase 1 therapy ongoing 1 2 2 1 1 - Phase 2 therapy ongoing 1 - Market cap in USD (millions) 20 450 970 90 130 250 RAD undervalued compared to other early-stage radiopharmaceuticals. Source: Lodge We forecast revenue of AU$370 million by 2033 for RAD101 imaging. Source: Lodge Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 13 Year ending June 2023A 2024E 2025E 2026E 2027E Year ending June 2023A 2024E 2025E 2026E 2027E NPAT (34.4) (41.7) (47.7) (52.6) 46.4 Operating revenue 0.3 0.0 0.0 0.0 204.6 EPSadj (¢) (0.1) (0.1) (0.1) (0.1) 0.02 EBITDA (40.3) (44.6) (49.1) (54.0) 45.0 EPS growth 0.0% 0.0% 0.0% 116.6% D&A 0.0 0.0 0.0 0.0 0.0 EBIT (34.3) (41.7) (47.7) (52.6) 46.4 Net interest income 0.0 0.0 0.0 0.0 0.0 P/E ratio -0.8 x -0.7 x -0.6 x -0.5 x 3.1 x NPBT (34.3) (41.7) (47.7) (52.6) 46.4 Enterprise Value (m) 16 27 26 25 (35.7) Tax Expense (benefit) (0.0) 0.0 0.0 0.0 0.0 EV/Sales (x) 53.16 x 0.00 x 0.00 x 0.00 x -0.17 x EV / EBIT (x) -0.5 x -0.6 x -0.5 x -0.5 x -0.8 x NPAT (34.4) (41.7) (47.7) (52.6) 46.4 EV / EBITDA (x) -0.4 x -0.6 x -0.5 x -0.5 x -0.8 x Significant Items 0.0 0.0 0.0 0.0 0.0 NPAT (34.4) (41.7) (47.7) (52.6) 46.4 DPS ($) 0.00 0.00 0.00 0.00 0.00 Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0% EBITDA Margin N/A N/A N/A N/A 22.0% Payout Ratio 0.0% 0.0% 0.0% 0.0% 0.0% EBIT Margin N/A N/A N/A N/A 22.7% Franking N/A N/A N/A N/A N/A NPAT Margin N/A N/A N/A N/A 22.7% FCFPS (₵) (0.08) (0.09) (0.11) (0.12) 0.02 P/FCFPS (0.79) (0.65) (0.57) (0.52) 3.12 Balance sheet (A$m) Year ending June 2023A 2024E 2025E 2026E 2027E Cashflow (A$m) Bank Balance 11.7 0.1 1.4 2.4 63.0 Year ending June 2023A 2024E 2025E 2026E 2027E Receivables 4.5 4.5 4.5 4.5 4.5 Receipts 0.29 0.00 0.00 0.00 204.64 Inventories 0.0 0.0 0.0 0.0 0.0 Payment to suppliers (25.19) (29.25) (33.72) (38.63) (144.23) Other liabilities 0.13 0.13 0.13 0.13 0.13 Interest on lease 0.00 0.00 0.00 0.00 0.00 Current assets 16.30 4.59 5.83 6.85 67.43 Interest received 0.15 0.15 0.15 0.15 0.15 Net PPE 0.1 0.1 0.1 0.1 0.1 R&D 1.56 3.00 1.56 1.56 1.56 Intangibles 58.54 60.03 61.51 63.00 64.48 Income Tax 0.00 0.00 0.00 0.00 0.00 Other liabilities 0.04 0.04 0.04 0.04 0.04 Operating cashflow (23.20) (26.11) (32.02) (36.93) 62.11 Non-current assets 58.65 60.13 61.62 63.11 64.59 Investing cashflows Total assets 74.95 64.73 67.45 69.95 132.02 Purchase of intangibles (1.49) (1.49) (1.49) (1.49) (1.49) Payables 5.12 5.12 5.12 5.12 5.12 Purchase of PPE (0.05) (0.05) (0.05) (0.05) (0.05) Other liabilities 7.82 7.82 7.82 7.82 7.82 Financing activities Employee benefits 0.29 0.29 0.29 0.29 0.29 Proceeds of shares 10.07 16.30 37.00 42.00 0.00 Share issue costs (0.85) 0.00 (2.22) (2.52) 0.00 Total liabilities 29.37 29.94 29.94 29.94 29.94 NET ASSETS 45.58 34.79 37.51 40.01 102.08 Balance Sheet Ratios Year ending June 2023A 2024E 2025E 2026E 2027E Net cashflow (15.51) (11.34) 1.23 1.02 60.58 Net Debt (4) 8 6 5 (55) Cash at beginning year 26.98 11.46 0.13 1.36 2.38 NTA 45.58 34.79 37.51 40.01 102.08 Cash at 30/06 11.46 0.13 1.36 2.38 62.96 Price / NTA (x) 0.001 x 0.002 x 0.002 x 0.002 x 0.001 x Return on assets -45.8% -64.5% -70.7% -75.2% 35.2% Revenue Split (A$m) Return on equity -75.4% -120.0% -127.2% -131.5% 45.5% Year ending June 2023A 2024E 2025E 2026E 2027E Valuation Sales Revenue 0.29 - - - 204.64 Year ending June Other 6.06 3.00 1.50 1.50 1.50 Discounted Cash Flow WACC 12.30% Beta 1.92 Discount Period 5 years Group Revenue 6.35 3.00 1.50 1.50 206.14 Cost of Equity 13.59% DCF/Price Target 0.26$ Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 14 Investment Risks Access to intellectual property rights to develop and commercialise radiopharmaceutical products is predicated on the continuing operation of the Licence Agreements. Radiopharm is reliant on each of the Licensors to have in place the relevant protection and rights to the technology, as well as the authority to enter into the relevant Licence Agreements. Pipeline product in development . Radiopharm’s ability to achieve profitability is dependent on a number of factors, including its ability to complete successful clinical trials, obtain regulatory approval for the radiopharmaceutical technology and successfully commercialise that product. There is no guarantee that Radiopharm’s product will be commercially successful. Clinical Trial Risks . The Company may be unable to secure necessary approvals from regulatory agencies and institutional bodies (clinics and hospitals) to conduct future clinical trials. There is also no assurance that products developed using the Company’s technology will prov e to be safe and efficacious in clinical trials, or that the regulatory approval to manufacture and market its products will be received. Clinical trials might also potentially expose the Company to product liability claims in the event its products in dev elopment have unexpected effects on clinical subjects. Clinical trials undertaken by the Company have many associated risks which may impact the Company’s profitability and future productions and commercial potential. They may prove unsuccessful or non - efficacious, impracticable or costly. The clinical trials could be terminated which will likely have a significant adverse affect on the Company, the value of its securities and the future commercial development of its technology. Dependence upon key personnel. Radiopharm depends on the talent and experience of its personnel as its primary asset. There may be a negative impact on Radiopharm if any of its key personnel leave. It may be difficult to replace them, or to do so in a timely manner or at comparable expe nse. Additionally, any key personnel of the Company who leave to work for a competitor may adversely impact the Company. Risk of delay. Radiopharm may experience delay in achieving a number of critical milestones, including securing commercial partners, completion of clinical trials, obtaining regulatory approvals, manufacturing, product launch and sales. Any material delays may impact adv ersely upon the Company, including the timing of any revenues under milestone or sales payments. Competition. Radiopharm may face competition from parties who have substantially greater resources than RAD. Requirements to raise additional funds. Radiopharm is likely to require substantial additional financing in the future to sufficiently fund its operations, research and development. Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 15 Board of Directors Paul Hopper – Executive Chairman Paul has over 25 years of experience in the biotech, healthcare and life sciences sectors serving as the Chairman, non-executive director or CEO of more than fourteen companies in the United States, Australia and Asia. Paul has extensive experience fund raising in Australia, Asia, the US and Europe along with proven expertise in corporate governance, risk and strategy. Paul was the former Chairman of Viralytics when it was acquired by Merck in 2018 and is currently on the board of 3 ASX listed companies. Riccardo Canevari – CEO and Managing Director Mr Canevari joined the group in September 2021 as Radiopharm’s CEO and Managing Director. Mr Canevari has broad and deep experience across specialty pharma, oncology and radiopharmaceuticals. He was most recently Chief Commercial Officer of Novartis company Advanced Accelerator Applications, one of the leading radiopharmaceutical and nuclear medicine companies globally. Dr Michael Baker – Non-Executive Director Dr Baker has over 15 years of experience in scientific research, drug development and venture investing. He was an Investment Manager with leading Australian life science fund, BioScience Managers, responsible for deal sourcing form networks, conferences, universities, and research institutes. He also conducted due diligence to shortlist investment opportunities and played an active role in managing portfolio companies. He is currently the CEO and Managing Director of Arovella Therapeutics, a biotechnology company focused on developing cell therapies to treat cancer . Ian Turner – Non-Executive Director Mr. Turner is a globally experienced C-level executive with a 25-year record of corporate success in the radiopharmaceutical, nuclear medicine, and life science technology industries, specialising in the leadership of global organizations undergoing change. He has served as Chairman, Executive Director, Non-Executive Director, Chief Executive Officer or General Manager of more than ten companies in the US, Australia, Europe and Asia including CEO at Siemens Radiopharmaceuticals which operated the world's largest nuclear PET radiopharmacy network. Hester Larkin – Non-Executive Director Ms Larkin has a 30-year career spanning both pharmaceuticals and nuclear medicine across Europe, Middle East & Africa, including over 12 years’ experience in senior leadership roles in the industry. Ms Larkin is currently Managing Director of Hester Larkin Associates Consulting where she consults to diagnostic imaging, pharmaceutical and biotech companies on pre-clinical, clinical, European Medicines Agency (EMA) submission, EU medical advisory boards, EU manufacturing and commercial partnerships. Ms Larkin holds a BSc Hons and an LLB Hons in Law and she has held several Director and Trustee positions in the UK and Belgium. Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 16 Dr Leila Alland – Non-Executive Director Dr Alland is a pediatric hematologist-oncologist with a strong track record in developing oncology drug products. She has held leadership positions at AstraZeneca, Bristol-Myers Squibb, Novartis and Schering-Plough, where she contributed to multiple successful drug approvals. Dr Alland is currently Chief Medical Officer of PMV Pharmaceuticals, a clinical stage precision oncology company. During her academic tenure, she was awarded the James S McDonnell Foundation Scholar Award and pursued basic cancer research while also caring for children with cancer and blood disorders. Radiopharm Theranostics (ASX:RAD) Revenue potential by 2027 P a g e | 17 Rating BUY – anticipated stock return is greater than 10% SELL – anticipated stock return is less than -10% HOLD - anticipated stock return is between -10% and +10% SPECULATIVE BUY – high risk stock with price likely to fluctuate by 50% or more and anticipated return is greater than 10% Disclaimer In accordance with section 949A of the Corporations Act 2001, any recipient of the information contained in this document sho uld note that information is general advice in respect of a financial product and not personal advice. Accordingly the recipient sh ould note that: (a) the advice has been prepared without taking into account the recipient’s objectives, financial situations or needs; and (b) b ecause of that, the recipient should, before acting on the advice consider the appropriateness of the advice, h aving regard to the recipient’s objectives, financial situation and needs. Although Lodge Partners Pty Ltd (“Lodge”) consider the advice and information contained in the document is accurate and relia ble, Lodge has not independently verified information contained in the document which is derived from publicly available sources. Lodge assumes no responsibility for updating any advice or recommendation contained in this document or for correcting any error or admission which may become apparent after the document has been issued. Lodge does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this document. Except in so far as liability under any statute cannot be excluded , Lodge, its employees and consultants do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this document or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this document or any other person. General Securities Advice Warning This report is intended to provide general securities advice. In preparing this advice, Lodge did not take into account the i nvestment objectives, the financial situation and particular needs of any particular person. Before making an investment decision o n the basis of this advice, you need to consider, with or without the assistance of a securities adviser, whether the advice is appropriate in li ght of your particular investment needs, objectives and financial circumstances. Disclosure of Interests Lodge directors, consultants and advisers currently hold less than 1% of total shares in the Company and may buy or sell the shares from time to time. Lodge has earned and will continue to earn broking commissions by acting for individual clients that are buying or selling their shares in company. Analyst Verification I verify that I, Sven Restel, have prepared this research report accurately and that any financial forecasts and recommendati ons that are expressed are solely my own personal opinions. In addition, I certify that no part of my compensation is or will be directly or indirectly tied to the specific recommendation or financial forecasts expressed in this report. I do not currently own any shares in the Company. Contact Lodge Partners Lodge Partners Pty Ltd ABN: 25 053 432 769 AFSL: 246271 Melbourne office: Sydney office: Level 40, 80 Collins Street, Melbourne VIC 3000 Suite 1002, Level 10, 46 Market Street T +61 3 9200 7000 Sydney, NSW, 2000 lodgepartners.com.au T +61 2 9225 4433

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