Telix Pharmaceuticals Limited

TLX Details

TLX and ATS Together Won Awards: Telix Pharmaceuticals Limited (ASX: TLX) is in the development and commercialisation of molecularly-targeted radiation products for the treatment of cancer. On 7 June 2021, TLX’s wholly-owned European subsidiary, Advanced Nuclear Medicine Ingredients S.A. (‘ANMI’), and Alpha Therapy Solutions (‘ATS’) jointly won a €990K (A$1.56M) ‘Eurostars-2’ research grant award from the EUREKA Association. 

TLX Inks Deal with EZAG: On 3 June 2021, the company inked a co-promotion deal with Berlin-based Eckert & Ziegler Strahlen und Medizintechnik AG (EZAG) in the US for the combination of EZAG’s GalliaPharm® (gallium-68 generator) and TLX’s investigational prostate cancer imaging product Illuccix® (Kit for the preparation of 68Ga-PSMA-11 injection). 

Patients Treated with TLX591-CDx in Japan: On 25 May 2021, the company informed the market that its first patient has been treated with TLX’s investigational prostate cancer imaging product TLX591-CDx (Illuccix®) in a clinical study in Japan. In collaboration with Kanazawa University, the analysis will register 10 patients with enhanced prostate cancer and will be the first clinical assessment of gallium-based PSMA imaging in Japan.  

TLX Receives Clearance from TGA: On May 10, 2021, the company informed the market that it has received clearance from Australian Therapeutic Goods Administration (TGA) to begin the Phase III clinical trial of the company’s PSMA targeted prostate cancer therapy candidate TLX591 (177Lu-DOTA-rosopatamab), in patients suffering from metastatic castrate-resistant prostate cancer (mCRPC). 

Managerial Changes: On 3 May 2021, the company informed the market regarding the appointments of numerous key executive leaderships, including the launch of an Asia-Pacific (APAC) operating region, depicting the continuous rapid commercial growth of the company. TLX appointed Dr. David Cade as the President of the company’s APAC region. He earlier served as TLX’s Chief Business Officer and Head of Investor Relations. Further, the company appointed Dr. Tracey Brown as the Global Senior Vice President of Product Portfolio Management.

March 2021 Quarter Update: In the 1QFY21, the company remained on track to progress well on its objective of transitioning to a commercial-stage pharmaceutical company. At the end of 31 March 2021, the company reported cash reserves of $61.42 million. During the quarter, the company reported, operating expenditure of $17.13 million, with $11.49 million invested in R&D and clinical development activities. It is worth mentioning that the company has sufficient cash reserves at hand to fund the commercial release of Illuccix® (TLX591-CDx). Cash receipt from customers during the quarter stood at $0.731 million.

Revenue Trend (Analysis by Kalkine Group) 

Key Risks: On the flip side, the company is exposed to stiff competition from peers, COVID-19 led uncertainties and the global threat environment. The company is also exposed to various risks such as foreign currency risk, interest rate risk, liquidity risk and credit risk.

Outlook: The company plans to launch TLX591-CDx product in the US in FY21 post the grant of USFDA approval for the NDA currently lodged. It has also submitted TLX591-CDx for market authorisation approval in EU and expects to receive medical consensus in early FY21.

Stock Recommendation: Currently, the stock is trading close to its 52-week’s high level of $4.8. The stock of the company went up by ~156.11% in the past nine months and ~224.65% in the past one year. On a technical analysis front, the stock has a support level of ~$3.825 and a resistance level of ~$4.779. On a TTM basis, the stock is trading at a price to book multiple of 16.6x, higher than the industry median of 5.4x, thus seems overvalued. Considering the company’s decent returns in the past months, its current trading levels, approval, and clearance from TGA, risks associated with COVID-19 pandemic and valuation on TTM basis, we suggest investors to book profit and give a “Sell” rating on the stock at the current market price of $4.63, down by ~0.857% as on 7 June 2021.

TLX Daily Technical Chart, Data Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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