Is the Market Missing Telix’s Long-Term Potential after 63% Revenue Growth?

Telix Pharmaceuticals: Controversy, Growth, and the Road Ahead

Every investor knows the uneasy feeling of watching a stock fall, not because of poor earnings, but because of controversy. That is the position Telix Pharmaceuticals (ASX: TLX) finds itself in today. After headlines about an FDA subpoena related to how it communicated drug progress to investors, Telix’s share price stumbled. Yet beneath the noise, the fundamentals of the business remain strong.

Its flagship product, Illuccix, an imaging agent that helps doctors detect prostate cancer, is now approved in 23 countries and supported by a network of 38 global manufacturing and distribution sites.

 On top of this, Telix has been expanding aggressively through acquisitions. The most recent milestone was the purchase of RLS in January 2025, giving Telix access to more than 30 radiopharmacies across the United States and over 100,000 square feet of expansion-ready space. This move is central to its vision of building an integrated radiopharmaceutical ecosystem.

The question now is whether Telix can turn these strategic wins into lasting shareholder value. In this analysis, we explore the company’s growth strategy, its risks, and whether the market is underestimating its long-term potential.

What are the Best Healthcare stocks to invest in right now?

Check our buy/sell stock tips

Telix Pharmaceuticals Explained 

Telix is a radiopharmaceutical company at the forefront of nuclear precision medicine, developing treatments and imaging tools that help doctors both see and treat cancer. The company’s technology works by attaching small amounts of radiation to drugs that can either light up cancer cells in medical scans or deliver targeted radiation directly to tumors. 

This is achieved by using isotopes that seek out biomarkers, the tiny proteins found on the surface of cancer cells, allowing for precise diagnosis and treatment.

RLS Explained

A key part of Telix’s growth strategy is the integration of RLS Radiopharmacies, now part of its distribution pipeline. RLS operates a nationwide network of radiopharmacies in the United States, giving Telix direct control over distribution in its largest and most important market. 

This acquisition not only strengthens Telix’s commercial reach but also improves its ability to deliver products efficiently to hospitals and patients across the country.

Inside Telix’s FY25 Performance

RLS Acquisition Begins to Pay Off

The acquisition of RLS is already contributing meaningful value to Telix by diversifying its revenue base. In the most recent year, the company added 79 million in sales from RLS, lifting total revenue to 390 million, a 63 percent increase. 

This signals to investors that the acquisition-led strategy is beginning to translate into tangible growth. Telix paid roughly 250 million for RLS, which equates to about 1.5 to 1.6 times revenue. While no detailed valuation metrics were disclosed, this multiple is considered reasonable for a high-growth strategic asset.

One area of note is profitability. Gross margins declined from 66 percent to 53 percent year-on-year, largely due to the inclusion of RLS and other newly integrated assets. Importantly, margins from Telix’s precision medicine products remained steady at 63 percent, suggesting that the decline reflects business integration rather than a deterioration in core profitability. 

Over time, investors will want to see management improve operational efficiency across these acquisitions to restore higher margins. Encouragingly, operating profit still increased despite a substantial rise in R&D spending.

Capital Allocation: Fueling the Next Stage of Growth

On the capital allocation side, the company invested 82 million back into the business, with 43.9 million directed toward advancing its late-stage and early pipeline therapies, including Zircaix and Pixclara. 

A further 49 million was deployed to support commercial expansion, particularly in preparation for U.S. launches. For investors, this reinvestment underscores management’s focus on balancing near-term growth with long-term value creation through its pipeline.

The investor’s takeaway

For investors, the key takeaway is that TLX’s recent price decline, which was unrelated to earnings, may offer an entry point into a company with strong fundamentals. TLX has expanded its reach with new distribution networks and is advancing several therapies that are close to commercialization. While there are execution risks to consider, management has so far guided the business in line with its long-term growth strategy, reinforcing confidence in its ability to deliver value over time.