Since it hit the ASX boards back in November 2017 the Telix Pharmaceuticals Ltd (ASX: TLX) share price has gone nowhere from its 65 cents per share initial public offer price, but the oncology researcher claims it’s making progress on its plans to hit the big-time.
At the IPO staged it raised $50 million from various institutional investors including Acorn and Fidelity with plans to use the proceeds to fund clinical trials from the Phase I to III stages into the efficacy of its radiotherapeutic cancer therapies in treating metastatic prostate, renal and brain cancers.
It has also made a couple of acquisitions in 2018 of European cancer research start-ups that it believes will help its research and development programs.
Naturally the company reports its research pipeline presents multi-billion dollar opportunities, but it posted zero revenue for the quarter ending September 30 2018 with an operating cash outflow of $4.87 million for the quarter and $12.1 million for the first 9 months of 2018.
It still had $42 million cash in hand as at the last quarter’s end, but running multiple clinical trials at the same time is a very expensive business, with one option being to expand existing partnerships or create new partnerships with big pharmaceuticals that can help fund trials in exchange for a share of any commercial benefits.
Share markets worldwide are full of capital-hungry biotech research businesses boasting big potential, but little in the way of revenue as such they remain a high-risk bet that often lead nowhere. On the ASX for example Nanosonics Ltd (ASX: NAN) and Sirtex Medical are two recent success stories, but there are far more failures that have destroyed investors’ capital.
As such anyone betting on Telix needs to understand the very high risks.
You can find Tom on Twitter @tommyr345
The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.