Is Telix Pharmaceuticals (ASX:TLX) Now Undervalued With Phase 3 China Clinical Success?

Why Telix Pharmaceuticals Pullback Could Be a Second Chance

Telix Pharmaceuticals (ASX:TLX) has faced a challenging year, particularly for a company that previously delivered consistently strong growth. Disclosure issues and delays around FDA progress for its brain cancer imaging asset have clearly weighed on sentiment and reset near term expectations. As a result, the stock now trades well below its five year average price to sales multiple at around 5.6x, compared with an average biotech peer group closer to 12.6x. From our perspective, this valuation gap matters.

It suggests the market has moved from pricing execution strength to pricing risk, perhaps too aggressively. While regulatory uncertainty remains a real factor and should not be dismissed, the current setup materially improves the risk to reward for growth focused investors who are prepared to look through short term noise. Today’s portfolio update is therefore important, not because it removes all uncertainty, but because it helps investors recalibrate expectations around pipeline depth, optionality, and the company’s ability to rebuild momentum from here.

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Telix Delivers Strong China Phase 3 Data

The first major announcement was the positive Phase 3 readout for Illuccix in China, which positions Telix to pursue a near term NDA submission in a large and strategically important growth market. This is particularly relevant given Illuccix’s strong commercial success in North America. The China Phase 3 study enrolled 140 patients and delivered a patient level positive predictive value of 94%, indicating that positive scans were highly reliable for clinical decision making.

This matters because high PPV directly supports regulatory confidence, as better imaging accuracy leads to better treatment decisions. Importantly, the results translated into real world clinical impact, with 67% of patients experiencing a change in treatment plan based on Illuccix imaging compared with traditional methods. In practical terms, this reinforces that Illuccix is not just statistically effective, but clinically meaningful, strengthening the case for approval and broader adoption.

What investors need to know about the FDA updates

The second update focused on Pixclara, Telix’s PSMA imaging asset for detecting brain cancer, specifically glioma. The NDA resubmission is now being finalised following detailed FDA interactions, which centred on the need for additional clinical data and a revised statistical analysis plan. While this has extended timelines, it also provides clearer regulatory direction and reduces the risk of further procedural setbacks once resubmitted.

A key driver of Telix’s negative rerating this year has been Zircaix, its kidney imaging PET agent for clear cell renal cell carcinoma. The issue here was not clinical efficacy, but manufacturing. The FDA requested greater clarity and supporting data around the asset and its manufacturing process.

Is TLX a good investment?

For investors, Telix Pharmaceuticals has lost roughly 60% from its all time highs, largely driven by regulatory hurdles and approval slowdowns that are common bottlenecks across the biotech sector. In our view, this drawdown matters because it has reset expectations at the same time the company is rebuilding momentum. Progress in China, combined with clearer regulatory guidance from recent FDA interactions, improves visibility around the pathway forward, even if execution risk remains.

For growth focused investors, this creates a more attractive entry point than we have seen in some time. More conservative investors may prefer to wait for further FDA milestones and feasibility clarity. With consensus analyst price targets around A$26, the current setup offers a compelling risk to reward balance, provided investors are comfortable with the inherent volatility that comes with late stage biotech.