Does MM see future in Telix Pharma (TLX)?
What would be the catalyst to change MM’s view on TLX from the neutral stance to a buy and does MM think that this company has potential to develop into a large business?
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Answer
Hi Nathan,
Telix Pharmaceuticals (TLX) is already a $2.1bn biotech business making it a decent size compared to many, which has surged ~70% since late June, including over +20% on Thursday as it took line honours for the entire ASX200.
The biotech space is historically extremely volatile and honestly, I’ve never had much success investing in it. TLX has experienced this in both directions so far this year i.e. initially falling -60% before recovering 91% from its low to be down -13% for the year. The catalyst for the recovery, apart from an improving ASX, has been the company delivering $22.5mn revenue over the last quarter from global sales of illuccix i.e. the companies prostate imaging product.
If the current launch of illuccix in the US can continue to gather momentum plus the company enjoys successful results from its kidney imaging cancer trials we feel it could be more than enough for the stock to rally towards fresh highs ~$10 i.e. another 50% higher, but if they don’t have the success, it could easily be 50% lower. As I said above, I’m not big into biotech’s having had my fingers burnt a few times.
