Telix Pharmaceuticals (ASX:TLX) Down 55% Amid Lawsuit: Is It Time to Buy or Sell?

Telix Pharmaceuticals (ASX: TLX) has been crushed in 2025. The stock has fallen roughly 55% from its February high of A$32 to around A$12.50 today. The damage came from three blows: an SEC subpoena in July, an FDA Complete Response Letter (CRL) in August, and now a US class action lawsuit. We believe this selloff has created a genuine opportunity for risk-tolerant investors, but the situation demands careful analysis.

Here’s what makes this interesting. While the share price has collapsed, most analysts still rate the stock a buy, with price targets suggesting 116% upside. This gap between market panic and analyst confidence creates a clear bull versus bear debate worth examining.

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What the Lawsuit Claims and What It Means for Investors

The class action covers investors who bought Telix shares between 21 February and 28 August 2025. The lawsuit alleges two main issues: first, that Telix overstated progress on its prostate cancer drugs TLX591 and TLX592; and second, that it presented an overly optimistic view of its supply chain. Investors wishing to join as lead plaintiff must file by 9 January 2026.

Two events triggered the sharp selloff. On 22 July, Telix disclosed an SEC subpoena requesting documents related to its prostate cancer drug development, sending shares down about 15%. Then, on 28 August, the bigger setback arrived: the FDA issued a Complete Response Letter (CRL) for TLX250‑CDx, Telix’s kidney cancer imaging agent, citing manufacturing deficiencies at third‑party suppliers. Shares fell another 21%.

The key point for investors is that the FDA’s CRL was about manufacturing quality, not the drug’s effectiveness. CEO Dr Christian Behrenbruch has stated these issues are fixable. If that proves correct, Telix could aim to resubmit in the first half of 2026, reopening the path to approval.

Why Analysts Remain Bullish Despite the Headlines

That may sound surprising given the negative headlines, but the commercial business tells a different story. Ten analysts covering Telix have an average price target of about A$27, suggesting 116% upside from current levels. Citigroup, UBS, and Wedbush all maintain buy ratings with targets between A$20 and A$22.

The reason is simple: Telix’s core business continues to grow strongly. Full‑year 2024 revenue reached A$783.2 million, up 56% from 2023, driven mainly by Illuccix- its prostate cancer imaging product used by doctors to detect cancer spread. The company also delivered its second consecutive year of profit, with adjusted EBITDA of A$99.3 million, a 70% year‑on‑year increase.

Recent results confirm this momentum. Q3 2025 revenue came in at US$206 million, up 53% from the prior year. Management has reaffirmed FY2025 guidance of A$1.18-1.23 billion in revenue. In our view, this demonstrates that Telix’s commercial engine remains healthy despite ongoing regulatory noise.

The Investor’s Takeaway for Telix Pharmaceuticals

This is a high-risk, high-reward situation. The bull case is simple: the market has overreacted to fixable manufacturing problems. If Telix resolves the FDA issues and resubmits successfully, the stock could jump sharply towards analyst targets.

But the bear case matters too. The SEC investigation remains ongoing. Class action lawsuits drain management attention and cash. And there’s no guarantee the FDA problems get fixed quickly.

Our view: this stock is not for conservative investors. However, for growth-focused investors comfortable with volatility, current prices may offer good value if you believe the regulatory setbacks are temporary speed bumps rather than roadblocks. Watch closely for SEC updates, FDA resubmission news, and quarterly earnings to gauge whether management is navigating through successfully.