Undervalued ASX Gems In Precision Medicine

This story features TELIX PHARMACEUTICALS LIMITED, and other companies. For more info SHARE ANALYSIS: TLX

The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

Flighty investors have caused share prices to fall in 2025, but MPC Markets' Mark Gardner sees better futures ahead for two ASX-listed companies involved in cancer prevention and testing.

By Mark Gardner, CEO, Head of Equities, MPC Markets

If you’ve been glued to the endless chatter around AI diagnostics or the next wave of obesity blockbusters, you might have overlooked one of healthcare’s most under-the-radar revolutions: radiopharmaceuticals.

Markets love their emotive, simplistic binaries – chasing the shiny new thing while ignoring structural shifts like this one. But here’s the revelation: this sector isn’t just growing; it’s exploding, projected to balloon from around US$7.5bn in 2025 to US$14.4bn by 2034 at a solid 7.5% CAGR.

Precision oncology is the rocket fuel, with radioisotopes delivering targeted zaps to tumors while sparing healthy tissue – think diagnostics and therapy in one elegant package. It’s resilient, defensive against economic wobbles, and laced with M&A tailwinds as big pharma piles in.

At MPC Markets, we see the disconnect loud and clear: global giants like Novartis and Eli Lilly command eye-watering premiums for their diversified empires, yet ASX pure-plays Telix Pharmaceuticals ((TLX)) and Clarity Pharmaceuticals ((CU6)) are trading at discounts that scream opportunity, due to the sector’s macro magic, valuation against global peers, and explain why they’re primed for a re-rating.

The Global Thesis: High Barriers, Hot Demand, and Hidden Upside

Radiopharmaceuticals aren’t your average pharma play. They sit at the nexus of nuclear tech and molecular imaging, tackling surging chronic diseases like prostate and kidney cancers that affect millions worldwide.

Demand is structural: cancer cases alone are climbing 2-3% annually, per recent oncology reports, driving the need for early detection and theranostics that slash side effects compared to blunt chemo.

What makes this compelling for investors? High moats, for starters. Short-half-life isotopes demand just-in-time manufacturing, specialized logistics, and nuclear-grade regs – barriers that keep wannabes at bay and let leaders price like premiums.

Layer on tailwinds: FDA fast-tracks (hello, Breakthrough designations), AI boosting drug design and scan analysis, and expansion beyond oncology into neurology and cardiology. Emerging markets like Asia-Pacific add geographic spice, with infrastructure spend ramping adoption.

Sector revenue should double by 2030, outpacing traditional pharma’s sleepy 5-7% CAGR.

Recent catalysts? Novartis’ Pluvicto just topped US$1.2bn in Q2 sales, while Eli Lilly’s US$1.4bn Point Biopharma buyout shows M&A frenzy. Yet price action in top global radiopharmaceutical plays, listed  on the ASX are at multiples that make global peers look bloated, due to investor panic and short-sellers

Telix Pharmaceuticals: Growing Strong with New Opportunities at a Great Value

Telix is a company making big waves in the world of cancer and rare disease treatments, working across the globe in places like the US, Europe, and Asia.

In the first half of 2025, they raked in $390m in sales, a fantastic 63% increase from last year, and they’re aiming for $770-800m by year’s end. This boost comes mainly from their star product, Illuccix, a special imaging tool for prostate cancer that’s now approved and popular in many major countries.

But the real excitement is in what’s coming next. Their TLX591 treatment for prostate cancer is in the final testing phase, with important results due later in 2025 – it could become a huge hit worth over $1bn.

Recently, the FDA put a hold on two other products, Zircaix (for kidney imaging) and Pixclara (for brain tumors), which caused the stock price to dip to $14.53 as of today, September 22, 2025.

However, these delays are just about small manufacturing tweaks, not issues with how well the treatments work, and Telix is set to resubmit them by the end of 2025.

Experts remain upbeat: Citi predicts the stock could rise to $34 (a 134% jump), UBS sees $36 (148% up), and the average target is $29.65 (104% increase). Plus, they just started a new major trial last week, which has everyone talking.

Compared to other big players, Telix feels like a hidden gem. It’s growing faster than Novartis, which has a broader business slowing it down, and it’s catching up to Lantheus, a US company with steady sales but less rapid progress.

Eli Lilly’s stock is pricey mostly for other drugs, not radiopharma, and Bayer’s low price comes with legal troubles and slow growth.

Telix offers a focused approach with solid sales already covering costs and no extra distractions. The main worry is possible further delays with approvals, but with plenty of cash and no safety concerns, we’re optimistic about its future.

Clarity Pharmaceuticals: Cutting-Edge Treatments with Big Promise and Buyout Buzz

While Telix is thriving with current sales, Clarity is the exciting newcomer bringing “theranostics” to the table – a clever way to both diagnose and treat cancer in one go using copper-based technology for faster, more accurate results.

The stock is currently at $3.74 (down -19% recently and -22% this year), giving the company a market value that seems like a steal, especially after raising $203m from big investors in July. This money will fund their key trials without needing to sell more shares anytime soon.

Clarity’s lead product, SAR-bisPSMA, is in advanced testing for prostate cancer – they started imaging the first patients in May and finished recruiting for another study in July, showing great progress.

Another product, SARTATE, targets neuroendocrine tumors and has earned special fast-track approvals from the FDA. What sets Clarity apart is its copper tech, which could outperform older methods and faces little competition right now. Experts are excited, with an average stock target of $7.63 (a 104% rise).

This makes Clarity look like a bargain compared to the big names. It’s not making sales yet, so it’s a bit riskier, but it stands out against Eli Lilly, which is pricey for other drugs, or Novartis with its wide-ranging business.

Lantheus and Bayer are more established but lack the same “next big thing” feel. With strong investor support (they own 49%) and a manufacturing deal from June, Clarity could catch the eye of a bigger company looking to buy it out.

Trials always carry some uncertainty, but early results are encouraging, and this could lead to huge growth in the next few years.

Recently, Investors and “Fintwits” have run around like Chicken little in regard to these two stocks, panicking about everything from nuisance class-actions, FDA setbacks and SEC Subpoena’s that are nothing but routine enquiries.

Meanwhile, all the analysts that cover Telix and Clarity on FNArena have held strong with their outlooks given the tailwind of the sector and we agree this is an opportunity, not the sky falling.

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see the chart included, we apologise, but technical limitations are to blame.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms