Telix Pharmaceuticals (ASX:TLX): Is there further upside to be excited for in FY25?

What would you have thought if you were told 5 years ago you would see Telix Pharmaceuticals as a successful story? It would have been possible believe back in those days, but it has been a long journey to get to this market.

All about Telix

Telix Pharmaceuticals is one of the few biotechs that has gone from a microcap clinical stage company to a fully commercial company. Telix’s flagship product is Illuccix, which is used for the imaging of prostate cancer and is FDA approved. It is working on a second product for imaging renal cancers, but for now, Illuccix is the primary source of its revenue.

Telix Pharmaceuticals listed on the ASX in 2017 at 65 per share, valuing it at $150m. At the time, it was the biggest biotech IPO in over 20 years (since CSL’s privatisation). But, Telix has grown nearly 40x larger, at $6bn.

Telix Pharmaceuticals (ASX:TLX) share price chart, log scale (Source: TradingView)

Telix is now one of the largest radiopharmaceutical companies globally, trailing only behind giants such as Switzerland’s Novartis AG, Germany’s Bayer AG, and U.S.-based Lantheus. Yes, even though it has just one product.  

Telix Pharmaceuticals taking more than four years post-listing to obtain approval for Illuccix depicts the difficulty of these steps. But its share price rise illustrates that if a company can overcome all the obstacles, the gains can be large. 

Telix is going from strength to strength

Telix’s revenues have kept growing exponentially ever since Illuccix was commercialised. In the June quarter of CY22, it made A$22.5m in revenue, up 10x from the quarter before. The cash just kept coming in:

• A$55.3m in the September quarter of CY22
• A$78.2m in the December quarter of CY22
• A$100.1m in the March quarter of CY23
• A$120.7m in the June quarter of CY23
• A$133.6m in the September quarter of CY23
• A$148.1m in the December quarter of CY23
• A$175.0m in the March quarter of CY24
• A$189.0m in the June quarter of CY24

For the full year, the company has guided to A$745-776m. This would equate to another $198.3m in both the September and December quarters of CY24, as well as being 48-54% higher than CY23.

Investors also expect the company can commercialise more products in the future and Illuccix in other jurisdictions. It is pursuing marketing authorisation applications for TLX591-CDx (Illuccix) in over a dozen countries as well as seeking further FDA approval to expand its indication for patient selection for radioligand therapy.

Investors can be confident, but not complacent 

Telix shareholders are clearly excited, but we think they should keep one thing in mind: 

Namely, its revenues won’t keep growing at the same pace forever. That’s not to say sales won’t keep growing. Consensus estimates for CY25 expect $971.2m, followed by $1.17bn in CY26 and $1.29bn in CY27. The mean target price amongst the analysts that cover the stock is $21.50, up only 10% from the current share price. There are 7 analysts and the estimates range between $30.90 and $16.

Telix won’t be able to maintain the current growth just with one product in one country. It is looking to change this, filing for Illuccix in the EU, UK and Brazil. Answers should be received during the coming quarter.

It is conducting a Phase III clinical trial for TLX591 in prostate cancer and preparing to conduct trials for other assets including TLX007-CDx in prostate cancer and TLX250-CDx in kidney cancer. These will be eagerly watched in the coming months.

Telix is well-positioned

Telix is one of the few biotechs on the ASX with a commercialised product. It can inevitably gain more revenue as it continues commercialising Illuccix in the USA and elsewhere. And if it can commercialise TLX250-CDx, that could be further good news. 

So long as investors recognise the risks above, we think this company is one of the best-positioned biotech stocks on the ASX.  

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