Telix Pharmaceuticals (ASX:TLX) Through the Commercialisation Chasm

The Market Lost Patience, the Strategy Did Not

Telix Pharmaceuticals (ASX:TLX) is one of the more compelling examples of a biotech company pushing through the commercialisation chasm, often the most difficult phase in the sector’s lifecycle. This is the point where companies transition from deep, equity-funded cash burn into sustainable revenue generation, and many fail to execute.

Telix has taken a disciplined and strategic approach, first establishing Illuccix, its PSMA PET imaging agent used to detect prostate cancer, as a commercial foundation. With Illuccix now well embedded, the company is preparing to commercialise Gozellix, another PSMA imaging agent designed to be radiolabelled and used in PET scans to better identify PSMA positive prostate cancer in men.

With Telix set to present at the JP Morgan Healthcare Conference in San Francisco, we think this is a timely moment to step back and assess where the company sits today and what the next phase of growth could look like.

This is particularly relevant given the stock has fallen around 53% over the past year (mainly because of FDA setbacks in its manufactoring line), despite continued progress on the commercial and clinical fronts.

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips

Execution Over Hype as the Next Phase Begins

Let’s start with Illuccix, which remains the commercial engine of the business. The PSMA PET imaging agent is now commercially available in 17 countries, with marketing authorisations secured across 24 countries globally. Importantly, Telix has already filed its NDA in China, effectively the country’s equivalent of the US FDA. Once approved, this opens the door to commercialising Illuccix in one of the largest and fastest growing healthcare markets in the world.

From a growth perspective, momentum remains intact. In the most recent quarter, Illuccix revenue grew 17%, and in our view it is reasonable to assume high double digit growth can continue as global commercial rollout expands and utilisation deepens across existing markets. Supporting this, the RLS radiopharmacy network contributed A$126 million of the group’s A$596 million in total revenue as at Q3 FY25, highlighting both the scale already achieved and the operating leverage still to come.

The Next Phase of Growth

The next leg of growth for Telix Pharmaceuticals is building commercial momentum for Gozellix. Importantly, this is not a replacement strategy. Telix is not swapping Illuccix for Gozellix. Instead, it is extending its PSMA imaging franchise by offering customers choice across different clinical and operational needs.

Because Illuccix has already been highly successful, Telix enters this phase from a position of strength. The company is now a trusted supplier, embedded in hospital workflows and radiopharmacy networks, which materially lowers the barriers to adoption for Gozellix. That existing footprint should translate into faster uptake and more efficient scale compared with a first launch scenario.

Gozellix also brings practical advantages. It has a longer shelf life and already established reimbursement pathways, both of which reduce friction for customers. In practice, this allows imaging sites to choose what best suits their operations. Some sites will continue to favour Illuccix due to its established workflow and familiarity, while others benefit from Gozellix’s extended shelf life and higher throughput. Telix captures both segments, strengthening its commercial position and reinforcing the durability of its PSMA imaging platform.

The RLS acq was a good one, but risks still loom

This has been materially strengthened by the acquisition of RLS Pharma. Today, Telix’s manufacturing network has the capacity to deliver up to 2.9 million doses per year, while the RLS network adds deep infrastructure with around 225 points of distribution. That level of control and scale is difficult to replicate and provides a meaningful competitive advantage as volumes grow.

Looking ahead, we expect Telix to remain in a high reinvestment phase through to around 2027, before transitioning into a period of stronger earnings growth from 2028 onwards. That said, investors should be realistic about the path. Biotech history shows how quickly sentiment can shift following FDA setbacks or regulatory delays, and this remains a key risk. Volatility is likely along the way.

What’s the Upside?

However, from a long-term perspective, we see a clear pathway to profitability and commercial scale. Consensus also supports this view. Twelve analysts currently rate the stock a buy, with an average price target of A$25, implying upside of around 129%. After a steep sell off, the risk to reward profile looks materially more attractive for investors willing to take a longer term view.