Strong Result, Can Telix Continue To Deliver?

This story features TELIX PHARMACEUTICALS LIMITED.
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Telix has continued to outperform operationally in 2026, but future upside is increasingly dependent on pipeline execution, regulatory approvals and therapeutic progress

• PSMA imaging continues to gain market share
• Higher R&D spending accelerates pipeline development
• Regulatory catalysts could drive the next re-rating

By Danielle Ecuyer

Telix’s re-rating as much global as earnings driven

The fourth quarter update did not result in a substantial re-rating of Telix Pharmaceuticals’ ((TLX)) share price, but neither did it trigger the sort of brutal sell-off that has become commonplace following company updates.

One might say that was a positive outcome for shareholders, given how volatile market reactions to earnings updates have become.

By way of context, Telix, like many global biotechs, has experienced a valuation re-rating since its shares sank to a 52-week low in January.

RBC Capital, in its half-year analysis of the biotech sector, notes a resurgence in M&A activity and more supportive macro tailwinds have supported a broad re-rating in valuations.

M&A deal flow has reached US$78bn, almost double the US$42bn recorded for all of 2025. RBC also points out around US$400bn of large biopharma revenue carries lower earnings risk over the next decade, alongside some US$180bn in aggregate cash flow that can be deployed to offset future sales declines.

In the case of Telix, the two founders, Dr Christian Behrenbruch, who is also Managing Director and CEO, and former executive director Dr Andreas Kluge, own around 12% of the biotech.

While Telix may not be an obvious takeover target, its share price is likely being influenced, at least in part, by improving global capital flows into the biotech sector and broader investor sentiment.

After a challenging 2025, the latest quarterly update suggests the company continues to execute well operationally.

Short interest remains stubbornly high at 11.70% (as at 16 July), although this has eased from 12.92% a month earlier. The share price also continues to trade well below the FNArena consensus target price of $26.225.

At current levels, the stock has rallied more than 83% from its January 52-week low. Yet since October 2025, when the consensus target price stood at $27, neither earnings forecasts nor consensus target prices have shifted materially.

In other words, much of the share price recovery appears to reflect an expansion in the valuation investors are prepared to pay for the company, rather than a material change in Telix’s earnings outlook, with shorters betting against regulatory success.

How did the second quarter update stack up?

For RBC Capital, Telix delivered a strong second quarter result, with revenue of US$247m, beating both consensus and the broker’s forecasts, representing growth of 21% y/y and 7% q/q.

Precision Medicine generated the bulk of group revenue at US$202m, up 30% y/y and 9% q/q.

Notably, prostate imaging dose volumes grew 7% q/q and realised prices increased 5.2% from the first quarter. Realised prices comfortably exceeded consensus expectations of no increase, with RBC attributing the beat to product mix.

Bell Potter believes the “whopping” growth in Precision Medicine reflects market share gains, most likely at the expense of Lantheus, whose imaging revenues are expected to decline in 2Q2026 due to an ongoing pricing disadvantage.

Canaccord Genuity agrees, arguing pricing and contracting strategies, rather than clinical differentiation, are driving gains in PSMA imaging.

This was first flagged by Canaccord in January, when Telix was the only PSMA imaging agent with Transitional Pass-Through (TPT) status over the first three quarters of 2026. The broker estimated outpatient hospitals account for around 40% of PSMA utilisation by volume.

More details on the December 2025 update can be found here: https://fnarena.com/index.php/2026/01/22/focus-on-telix-guidance-post-annus-horribilis/

Gozellix continues to expand its share of the HOPPS (Hospital Outpatient Prospective Payment System) segment, while Illuccix is also gaining traction.

Canaccord points to structurally lower average selling prices while capturing incremental margin through point-of-care gallium dose preparation, and expects the PSMA portfolio’s market share gains to continue building momentum through the remainder of 2026.

Broker forecasts have also moved higher. JP Morgan sees upside risk to management’s FY26 revenue guidance range of US$950m-US$970m and increased FY26 Gozellix revenue forecasts by US$10m, underpinning a 1%-2% revenue upgrade across 2026-2028.

Canaccord also notes communication by management is tracking towards the upper end of guidance and lifted its FY26 revenue forecast to US$1,025m, incorporating the second quarter beat and the non-refundable US$40m payment from the partnership with Regeneron.

Morgan Stanley makes a similar observation and now forecasts FY26 revenue of US$1,011m, comfortably above the US$1bn mark.

Importantly, Telix is no longer simply an Illuccix story. Broker attention is increasingly shifting towards the next wave of value creation through Pixclara, Zircaix and the therapeutic pipeline.

Looking to future as R&D spend rises

Like most biotechs, Telix’s long-term growth depends on continued product innovation, so analysts also focused on management’s revised FY26 R&D expenditure guidance of US$230m-US$270m, up from US$200m-US$240m.

RBC notes the increase reflects higher R&D spending to support the advancement of clinical programs beyond original expectations.

Morgan Stanley expects the additional expenditure to be funded through free cash flow and the one-off US$40m Regeneron payment, which will support the expansion of the BiPass study to 338 patients from 204 patients, according to ClinicalTrials.gov.

The increased investment is also expected to support the submission of an Investigational New Drug (IND) application to the US FDA for Pixclara to expand its indication to include the diagnosis of brain metastases, while also advancing TLX597 into Phase II trials in patients with metastatic hormone-sensitive prostate cancer.

Morgan Stanley notes documentation supporting the Zircaix Biologics License Application (BLA) resubmission is nearing completion and is expected to be submitted in the near term. Separately, the US FDA is expected to make its regulatory decision on Pixclara by 11 September.

For JP Morgan, a reasonable proportion of R&D expenditure remains discretionary. Accordingly, when revenue is tracking ahead of expectations, this analyst expects management to increase investment in clinical programs. Conversely, R&D expenditure could be moderated should revenue growth disappoint.

Focusing on BiPass, which has the potential to significantly expand Telix’s total addressable market, JP Morgan believes management will adopt a more conservative approach following the regulatory challenges of 2025, with discussions with the FDA expected to focus primarily on trial design.

The higher R&D investment is expected to result in a forecast after tax loss of -US$2m in both FY26 and FY27.

JP Morgan believes investors are increasingly looking for updates on Telix’s clinical programmes and regulatory milestones following the setbacks experienced during 2025, while also commending management for the ongoing strength of the PSMA imaging franchise and disciplined operational execution.

Breaking down the value of upcoming regulatory catalysts, JP Morgan ascribes $6.20 per share to FDA approval of the IND amendment for Part 2 of ProstACT Global, $0.80 per share to US approval of Pixclara, and $2.10 per share to the Zircaix BLA resubmission.

Target prices continue to reflect meaningful upside

JP Morgan lifted its risk-adjusted valuation by 3% to $24.40 per share.

Canaccord Genuity retains a Buy rating and $30 target price.

Citi remains Buy rated with a $32 target price, attributing around $1 per share of its valuation to Pixclara.

Morgan Stanley retains an Overweight rating and $23.90 target price, valuing Precision Medicine and Therapeutics Manufacturing Services at around $15.50 per share within its base valuation.

Bell Potter retains a Buy rating and $19 target price, viewing a potential FDA approval of Pixclara in September as the next major catalyst following the interim result release in August.

RBC Capital retains a Sector Perform rating and an $18 target price.

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