Welcome back, everyone. Next, we have ASP Isotopes, Inc. It trades on the NASDAQ under the ticker ASPI. It is developing a differentiated isotope enrichment platform to strengthen global supply chain access to critical materials used in nuclear medicine, next-generation semiconductors, and nuclear energy. Happy to welcome its CEO, Paul Mann. Welcome, Paul. We are looking forward to your presentation today. Whenever you are ready.
Thanks, Anna. It is great you are back, and thanks everyone for their interest. We will start the presentation now, and there are a couple of slides here, forward-looking statements and disclaimers, and if you could just look at our filings on the SEC, which on our website are 8-Ks and our annual filings first for summary of risk factors, that would be great. Our goal is to strengthen access to critical materials. What are critical materials? Well, they are many different types of metals and minerals, as well as things like isotopes. These are used in everyday electronics, everyday goods you buy in the shop, and we are seeing real challenges in the supply chains at the moment. We have built three manufacturing plants here in South Africa. We have also got a very large, exciting as well.
This kind of shows the corporate structure of ASP Isotopes, and last time I spoke at Emerging Growth Conference, we focused on Renergen and the helium play and how that is going to really change the supply challenges we are seeing in helium markets. Today I am going to focus on PET Labs and our nuclear medicine business. So this is the four verticals that we have. Quantum Leap Energy we expect to spin out quite soon. We have always going to spin out Quantum Leap Energy. We have always said that nuclear fuels has little to do with nuclear medicine and electronics and what have you. So, that is going to be spun out as soon as we practically can. Then in the middle, you see we focus on next-generation electronic gases, really.
That is helium, which is used in a number of different parts of the semiconductor manufacturing chain, as well as enriched silicon-28 for next-generation, faster semiconductors. Supplying thousands of doses of radiomedicines every year, as well as three emerging biotech companies, IsoBio, Opeongo, Alpa Theranostics , and we own various amounts of each of those. Just to show you the plants we have constructed in South Africa. This is operating, but not yet generating commercial revenues. So on the left you see our carbon-14 plant, and carbon-14 goes into development of new medicines. Silicon-28 in the middle, you will see that is a plant that is designed to produce faster, better next-generation semiconductors. To the right, you see ytterbium-176, which is essentially the feedstock for Novartis' drug called PLUVICTO. You will hear more about that later on today. These three assets here are generating revenues today.
Noble Africa is our helium and LNG asset in South Africa, and we started producing liquid helium just a couple of days ago, and we will start building inventory there before our first commercial shipments very shortly. PET Labs supplies thousands of doses, tens of thousands of doses every year of nuclear medicine products to patients in South Africa. Then we have two radiopharmacies in the U.S., NuMed and East Coast Nuclear Pharmacy, and they are both generating revenues as well. As you can now see, right now demand is set to grow. There is very little new capacity, and we are here to try and fill that gap, basically. The main production milestones for the second half of the year is our first helium production. That kind of happened a few days ago. Our first commercial isotope shipments, which should happen between now and the end of the year.
Then we intend to list Noble Africa on NASDAQ, and also list QLE on NASDAQ as well. So two separate listed entities. We are going to talk about our technologies quickly and what are isotopes. Isotopes are basically elements that have different numbers of neutrons. Take, for example, carbon. Carbon has three elements, carbon-12, carbon-13, and carbon-14, and they have different numbers of neutrons in the nucleus. The same number of protons and electrons. It is different number of neutrons. Chemically, they are almost identical. You cannot separate them using chemical means, so we have to find other ways to separate them, and that is what our business is about; it is about separating these isotopes, which have useful certain properties. This is one of the reasons why our supply chain has been so challenged. There is zero domestic U.S. production of the isotopes that we are looking at.
Russia is largely the supplier of these products, and it has not been a very regular supplier over the last 20 years or so. There has been imminent regular supply-side shortage. We have two enrichment processes. The ASP process, the genesis of which was South Africa's nuclear enrichment program back in the 1980s, where South Africa built a number of nuclear weapons and enriched its own uranium for its nuclear reactor. We have obviously improved the process greatly since then, and we have two plants using the ASP process, and the second process is a quantum enrichment process that uses a laser. We pass a vapor of gas through a laser beam; we are able to excite one particular isotope, which we can then collect on a charge collector plate. That is the background of our technology. Today, the focus is on nuclear medicine.
As I said last time, it was on helium and Renergen. Today, it is on nuclear medicine to give you guys a deeper understanding of two verticals of what our company does. Our goal is to build a vertically integrated radiopharmacy, whereby we are producing both the stable isotopes and ASP isotopes and then converting them into a radioisotope at PET Labs. Converting a stable isotope into a radioisotope, you either hit the stable isotope with either a proton, an electron, or a neutron, and that destabilizes it and converts it into a radioisotope. Those radioisotopes decay, and they give off energy and radiation, and we can use that energy and radiation to diagnose tumors and treat tumors. You see at the top, you will see the radioisotopes that PET Labs is interested in.
We're going to focus more on the higher-value cancer treatment isotopes as opposed to more commoditized isotopes. Take, for example, lutetium-177. That's used in Novartis' PLUVICTO. PLUVICTO is a drug for prostate cancer. To produce lutetium-177, you take ytterbium-176, hit it with a neutron. That converts into ytterbium-177, which then decays to produce lutetium-177. That lutetium-177 has about a seven-day half-life, and during that seven days, it decays, giving off radiation and energy. PLUVICTO, the drug, attaches that lutetium-177 to a vector, and that vector takes that lutetium-177 to a tumor, and it kills the tumor but keeps the rest of the body unharmed. We think the global market for ytterbium and gadolinium is about $100 million in the future, and we're excited to try and enter these markets.
Our radiopharmacy, PET Labs, does this part of the business here. First of all, we create the radioisotope. We typically use a cyclotron, which is a proton accelerator, and we accelerate that proton in a magnetic field, and then it smashes into the target and yields a radioisotope. For example, we produce a lot of fluorine-18. We then put that fluorine-18 into a hot cell. A hot cell is a protective environment whereby a worker on the outside of the protection environment can attach it to a vector, for example, glucose or something like that. Potentially four hours, that kind of thing. Every 110 minutes, it halves in activity. The minute you produce that fluorine-18, it's a race to get it to the patient.
When the dose gets to the patient, it's injected into the patient, and the vector then attaches to the faster-growing cancer cells, and then the radioisotope concentrates in the tumor cell, and then you can take a picture of the patient using a PET scanner or a SPECT scanner, and that then allows you to identify the tumor. There's various different vectors for things like prostate cancer, breast cancer, lung cancer, or just general cancers. The global nuclear medicine market's about a $33 billion. We're interested in the global radiopharmaceutical market, which is about $13.5 billion. Of that, the commercial radiopharmacy market's about $6 billion. You'll see all of these benefit from very attractive gross margins. This market's growing fast. It's expected to grow about 8% between 2026 and 2031. I actually think this may well even understate the potential growth.
This growth, it's aging populations. As people get older, there are more age-related diseases such as cancer, and there's a lot of new drugs coming to market. Over 100 new therapeutics in pipelines; they're expected to come to market over the next several years. As you'll expect, the faster-growing parts of the market are the emerging markets, but even the developed markets, U.S.A., Canada, and Europe, are still growing at two to three times GDP. We have three radiopharmacies, and we have one in South Africa and two in the U.S. Our goal is to roll up and expand this business over the next several years, so we can increase our footprint. Typically, we buy a radiopharmacy that is a very basic one, which doesn't have any ability to produce advanced new molecules. We can invest in that radiopharmacy.
We can bring the equipment and know-how it needs to produce the advanced molecules. By doing so, we really expand the company's EBITDA capability by multiple folds. We find this is a very attractive business model. We are basically buying a distribution list. We are adding into it the advanced molecules that sell at much higher prices. Our goal over the next five years is to acquire a few more to make maybe 10 in five years' time, and then maybe have 30 in 10 years' time. We are looking at various regions around the world. Within PET Labs, we have a subsidiary called Alpa Theranostics, and this has been in stealth mode for the last. This is a really novel set of radioisotopes and radiotheranostics, which we can use to treat cancer.
Our first drugs go into patients later this year, and we should have clinical trial data, phase I data, during next year. We use a VHH platform of anti-cancer theranostics. These are very unique in how they work, and I will explain more in a moment how they work. This is a very hot area of the pharmaceutical industry right now. There has been over $9 billion of radioligand therapy M&A during the past few years. How do we make this work? First of all, we take an alpaca. They look cute. I am told they vomit if you get too close to them, but they look cute. Alpacas are a form of camelid, part of the camelid species. Camels are exceptionally robust. They very rarely ever get ill, very rarely get sick.
They can live in very hostile environments, and they have got a great immune system. We target that immune system, or we use that immune system to create a VHH nanobody against various antigens we put into the alpacas. We infect the alpaca with what we want to find a response to, and about 60 days later, we have our very basic VHH. We then put it, we can improve what we get from the alpaca, and then we send that up to a laboratory or a pharmacy manufacturer in Northern Europe, and they are able to create a synthetic version of what we have produced in the alpaca. We can then take that VHH nanobody, and we can label it with various types of radioisotope.
We can use one radioisotope in order to diagnose a patient of a particular tumor, and then we can attach a different type of radioisotope to the antibody to treat the tumor. It is a really novel way of creating new therapeutics. We think this is a really exciting way of creating new theranostics. Traditionally, people have used monoclonal antibodies. You can see those on the left, and they are very large proteins. They have been around for about 25, 30 years. This is what original biotech companies worked on in the early 2000s, around the turn of the century. Our nanobodies are about a 10th of the size that a monoclonal antibody is, and what that means is that we can get to cellular surfaces that antibodies cannot get to. A cancer cell or a cell that has got cancer is not just a smooth surface.
It's got ripples and bumps and crevices and cracks, and it doesn't always present to the antibody where the antibody can get to it. Because our nanobodies are so much smaller, they can get to a lot of places monoclonal antibodies can't get to. Also, they're a very cost-effective way to treat patients or to create them, and we're seeing incredible efficacy, incredible binding power of the nanobodies to well-known receptors such as HER2 and things like that. Just to summarize, these nanobodies, they're clear in hours, so they're not hanging around for a long time. The dose stays in the tumor to destroy the tumor. Because they're so small, we get really deep tumor penetration. Also, because they're so small, they're able to transmigrate the blood-brain barrier, which opens up a number of tumors that traditional monoclonal antibodies can't treat.
Brain metastases have become a real problem, and they can potentially treat brain metastases as well. This page just shows our pipeline. We have three assets going into the clinic in the next six, nine months or so. Triple negative breast cancer and osteosarcoma indications. Both these diseases affect young people. I've had two friends die of triple negative breast cancer in the last two or three years, both ladies in their 40s or early 50s. Osteosarcoma affects very young patients, and there's no approved therapy for these two indications. The world's looking for a new therapy, and so we're very excited about this pipeline, and we'll see how it goes over the next 12 months or so. We can do things in South Africa a lot quicker than we can in the U.S., and also a lot cheaper.
We think we can go from a concept to IND in about two years in South Africa. That's really because things just happen quicker there. There are more patients. In the U.S., I swear there are more drugs looking for patients than patients looking for drugs, and so it's a real challenge finding patients to go into a phase I clinical trial. Whereas in South Africa, we can enroll in a phase I trial in something like a month, maybe two months, which is extremely quick, just because there are so many patients there that need being treated. Also, we can get treatment-naive patients, which you can't get in the U.S. either. That's a real benefit. Our goal is to run our phase I trials in South Africa and then have our first U.S. IND filing during 2027.
Just to summarize what I said a moment ago, RLTs work. It's the future of cancer, in my opinion. We've seen two approvals so far. There's about 100 products in pipelines. We think we have a really unique way of targeting these tumors. There's one other company out there looking at this method, one large cap pharma company looking at this method. As I say, obviously if this works, this transaction at some point between phase I and phase II. Just coming down now to corporate milestones and corporate stuff as well. This is the operation updates and how we expect the news flow to play out between now and the next six months or so. Expect to ship our first silicon-28 between now and the end of the year.
That's been delayed due to a number of technical problems in the plant, but the plant is now operational. They've conducted over half the batch runs they need to do in order to complete their first batch. Helium, we actually started producing helium just about a week ago, and we need to fill up the inventory behind the manifold, and then we can fill our first product and get that shipped in the not-too-distant future. Then obviously Alpa Theranostics, we're going to see our first candidate go into human clinical trials, and we should get results during the first half of 2027. Initial results, looking at response rates and that kind of thing. We have plenty of cash within ASP Isotopes to achieve these milestones. As of June 30th, there's over a quarter billion dollars of cash sitting on our balance sheet.
What we've said is that one of our targets for the company is to achieve over $300 million of EBITDA by 2031. Natural gas and electronic gases. Electronic gases being a combination of liquid helium and silicon-28. As I say, you can see the breakdown there, the low end and the high end. Obviously the big drivers there are helium and LNG. Our phase II helium and LNG project could easily do $300 million by itself, quite frankly. Obviously pricing environment right now in that part of the industry is extremely supportive. Then nuclear medicine is a fairly stable growth for us. Its PET Labs continue to grow, adding more radiopharmacies, more advanced diagnostics, those radiopharmacies, and that should get us to the $40 million-$100 million. Probably the hardest boxes to grow are the smallest ones, which is medical isotopes and silicon-28.
It's difficult to know how the silicon-28 market evolves over the next five years or so. Typically, semiconductor markets move more like a glacier rather than a river, so we'll have to see how that develops. We're certainly there ready to supply the industry as and when they know what they need. Just to summarize, we have a unique investment, unique opportunity, a very unique company with a clear path to deliver long-term growth and exceptional shareholder returns. I think the hard part is now behind us. It's been a tough five years getting to where we are. The plants are now built. The plants are now in operation. Now we move from and we scale up over the next five years to try and achieve that $300 million EBITDA target in 2031. I'll stop there.
All right. Hi, Paul. The connection is just a little bit shaky. Can you hear me okay?
I can, yes. Yeah, apologies. I'm in a hotel in London, and clearly my—
Yeah. Well, let's see what we can get through. We've got lots of questions for you. Okay. Your October 15 agreement gives Quantum Leap Energy approximately 80% of a proposed JV with Necsa to develop HALEU production in South Africa. What are the three most important milestones remaining before you can begin actual uranium enrichment testing?
Yeah, okay, thanks. Pelindaba is permitted to enrich uranium already, and by entering into a definitive agreement with Necsa, we basically have the permits and license we need to enrich uranium using the ASP process. There is also a building there that is licensed to enrich using lasers as well. I guess, in terms of the main milestones, we have to get the definitive agreement signed or the final documentation signed. Entering into agreements with governments can often take longer than it can with a public or private company. Obviously, it's reconditioning the test bench. We've built the ASP test bench. We can build the laser test bench. The critical components are on their way. Then, I guess we've got to source a feedstock, and we're looking for a supply of UF6 at the moment.
Okay. For the helium contracts you're signing, is there a possibility you can get some upfront cash to help fund the build-out of phase II?
Yeah, absolutely. I would expect to, quite frankly. I think most customers want to receive a shipment of, or potential funders for phase II would like to receive a shipment from phase I. That is a shipment in an iso container, so it is quite a large quantity. We expect to ship our first iso container probably during December, and our second iso container most likely in January of next year. They will receive that iso container about 18 days later. They will test it, put it through their facility, check they are happy with what we send them. Assuming that goes well, then we can start discussing investment opportunities for phase II. That investment may take a form of a debt, it may take a form of prepayment, it may take a form of equity investment, one of the above.
I think there are some Asian suppliers, some Asian customers who would quite frankly like to take half, actually the whole of phase II volume. Obviously, we cannot supply it from a risk and a mix standpoint. We want to spread our risk with different customers. But yeah, there is certainly a lot of interest in Asia right now [inaudible].
All right. It is just cutting out just a little bit.
Apologies, yeah.
Let's keep going. How is uptime on the silicon-28 plants? Are you still on track?
Yeah, we are on track. As I said earlier, they've completed over half the batch runs they need to complete to get to the first shipment. It just takes time, I'm afraid. It just takes time, and if I could do time travel, it'd be great, but I don't, so you have to just wait to get final batches done.
All right.
But the good news is, the plant's operating exactly in line with our expectations, exactly in line with theoretical calculations, and so we know the plant works. It's just got to wait now.
On Monday, you announced Renergen's Virginia Gas Project has achieved stable liquid helium production, with the first deliveries contracted customers being arranged. Once the facility reaches its planned capacity, what annual revenue and operating cash flow could phase I realistically generate?
Yeah. So it's actually quite meaningful. So after phase I, obviously, I don't know yet where our prices are going to be, but most of our customers we're talking to are between 600 [inaudible] $14 to $18 per gigajoule. So if we take the bottom end of that, so 614, the plant should do about $28 million in revenue and about $8 million in gross profit. If I take, say, $800 per MCF and it's still $14 per gigajoule, talking about $33 million in revenue, $13 million in gross profit. So, it's quite meaningful, and there's a lot of room to move to the upside, given where hydrocarbon prices are right now and given where helium prices are.
How is commissioning of the ytterbium-176 continuous processing vessel? Can you talk a little bit where that is as opposed to silicon-28 is expected? The viewer wants you to run us through the nuance in language between targeted and expected.
So, targeted and expected in my view is probably the same thing. I generally don't write the press releases, but it depends who writes it. But I'm guessing to me, they're kind of the same thing. Ytterbium-176, right now the continuous processing vessel is in the facility. They've pulled vacuum on it. I believe it is vacuum tight, and they're now starting going through the commissioning process of that vessel. We should have some results coming from that probably in the next few weeks or so. I'm very excited by that because it should allow us to get to about 330 grams per year of production per vessel, and we expect to have about three vessels per system. So it's about a kilogram per year.
[crosstalk].
So expect it's going—
[crosstalk].
Sorry, I lost you for a second there. Can you repeat the question, please?
I was just waiting for you to complete your answer.
Sure. Yeah, listen, we're just waiting for the commission. It's in commissioning right now, but the vessels are in the plant.
Okay. Is it harder to purify Si-28 to 98% or from 98% to 99%?
It's actually the same. It just takes longer. If you can enrich to 98%, you can enrich to 99%, you can enrich to 99.9%. It looks like our process is more linear than nonlinear as you go up. Technically, gravity shouldn't change. Obviously, it's going to be more and more work to get there, and it just takes more time and more money.
What is the current liquid helium production rate which is filling the containers, and what is the size of these containers, and how much volume are you looking to ship in the first shipment?
Yeah, so phase I is about 70 MCF a day of helium and 2,500 gigajoules per day. Like myself, who are more used to using MMBTU, a gigajoule is equal to an MMBTU. So I will just repeat that. 70 MCF of helium and 2,500 MMBTU of LNG. In terms of the size of the containers, so a dewar, which is a fairly small container, we can fill that in about two hours, and that is suitable for domestic use in MRIs and that kind of stuff. We have got a lot of demand for local demand, and those prices are actually pretty high, more like $800 per MCF. Then, as we ship internationally, they go into a large iso container, and the iso container keeps the liquid helium liquified, and that takes a bit under two weeks to fill an iso container.
So we ship two and a half iso containers per month.
All right. Well, Paul, do you have any closing remarks for our viewers today?
Excellent. Thank you all for your interest. As always, it has been an exciting next few months, and I look forward to presenting in two or three months' time. Thank you.
Perfect. We look forward to seeing you again soon. Thank you so much.
Bye.
All right, everyone, we will be right back.