Up 50% in a month: Why all these fundies predict more greatness for the Telix Pharmaceuticals share price

Three Archer Materials scientists wearing white coats and blue gloves dance together in their lab after making a discoveryThree Archer Materials scientists wearing white coats and blue gloves dance together in their lab after making a discovery

The Telix Pharmaceuticals Ltd (ASX: TLX) share price finished the session on Friday up 0.52% to $7.79. Over the past month, the ASX healthcare share has risen in value by an extraordinary 50.1%.

Contributing to this gain was the investor response to the company’s June quarter report on 21 July.

As my Fool colleague Zach reported, it was the cancer diagnostic and treatment business’s “first commercial quarter”, during which time they launched the Illuccix prostate cancer treatment in the US.

The Telix share price rose by 5.51% on the day of the news.

Fund managers backing Telix share price for growth

Telix treatment technology delivers radiation directly to tumours by putting radiopharmaceuticals into the bloodstream to find and target the cancers.

Illuccix is designed to find prostate cancers in high-risk men before surgery. It is also used to detect prostate-specific antigens (PSAs) in men deemed at risk of the cancer returning after surgery.

According to reporting in the Australian Financial Review (AFR), a bunch of professional fund managers are backing the Telix share price for growth.

They include Antares Capital Broadcap Australian Equities Fund, Platinum Asset Management, Perennial Partners, Fidelity, Acorn Capital, and Wilson Asset Management.

Jefferies, Wilsons, Taylor Collison, and Bell Potter all rate Telix a buy with share price valuations between $8.50 and $10.70.

Maiden profit ahead for Telix

According to the article, Wilsons expects Telix to make a $32.8 million loss in FY23 before a maiden profit of $7.7 million in fiscal 2024.

Healthcare analyst Andrew Hamilton from the Antares Capital Broadcap Australian Equities Fund said:

We still think [Telix] shares have further upside. I think that first [June] quarter of commercial sales in Illuccix show it’s a great product. It entered the market and got very good awareness of PSMA (prostate-specific membrane antigen) imaging. They’ve done a great job on execution, manufacturing, logistics, awareness and the commercial pipeline. For it to all work is a fantastic effort, we expect sales will accelerate.

Platinum Asset Management bought Telix at its initial public offering (IPO) in October 2017. At the time, Telix was selling at a price of 65 cents per share.

Platanium Healthcare analyst Dr Bianca Ogden said:

We’ve always been fans of using imaging as a diagnostic. Because it’s the easiest way to visualise something. We liked the idea when Telix started out to do this properly and consolidate the industry. And we’ve always invested in the targeted radiotherapy industry as a whole.

Is Illuccix approved for prostate cancer therapy in Australia?

Yes — the Therapeutic Goods Administration (TGA) gave commercial approval for Illuccix in November 2021. It’s the first prostate-specific radioactive imaging agent to get approval here.

The Telix share price gained 8.13% on the day of the announcement.

According to the article, Telix has another treatment for prostate cancer. It also has treatments for brain cancer and renal cancer that are in Phase 2 or Phase 3 clinical trial stage.

Hamilton said:

From a valuation perspective the biggest thing in their locker is their prostate cancer therapy drug, TLX 591. That’s just at the start of Phase 3 trials, so it’s obviously a number of years away. But it still has global leadership in an emerging field, so it’s not a one trick pony. It has a deep pipeline, and we think other products coming behind look good.

The Telix share price is down 4.7% in 2022. This compares to an 8.5% dip in the S&P/ASX All Ordinaries Index (ASX: XAO).

The post Up 50% in a month: Why all these fundies predict more greatness for the Telix Pharmaceuticals share price appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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