The Telix Pharmaceuticals Ltd (ASX: TLX) share price is one to watch in early trade after the company announced a new market acquisition this morning.
What did Telix Pharmaceuticals announce?
Telix announced that it has entered into a conditional purchase agreement with German-based Eckert & Ziegler Strahlen und Medizintechnik Aktiengesellschaft (EZAG) to buy a licensed radiopharmaceutical production facility in Belgium.
The Aussie clinical-stage biopharmaceutical company said it expects its future European manufacturing needs will be met by this acquisition.
This latest acquisition comes as Telix looks to complete two European product launches in the next 2 years, subject to regulatory approvals.
Telix said it expects to continue working with its existing European manufacturing partners for backup manufacturing and product delivery while transitioning to using the new site.
The Aussie pharma group will acquire the brownfield Belgian site (assuming it meets the required regulatory approvals) in 1H 2020.
Does this put the Telix share price in the buy zone?
This latest development looks set to significantly change the structure of Telix's operations in Europe.
The Telix share price has been a strong performer so far in 2019, climbing from $0.65 per share at the start of January to its current $1.42 level.
Even in the context of the broader ASX 200 performance, this more than doubling of the company's share price represents significant outperformance over many of its healthcare peers.
With a market cap of $359.7 million, Telix is still a small-cap but this can represent a chance for further share price growth in the coming decade.
There's no doubt its targeted molecular radiation therapy is a market niche within the Healthcare sector, but it can also represent a "boom or bust" type of investment.
If Telix can make progress towards the treatment of brain, kidney and prostate cancers in the coming years, I think its current valuation will look a little on the cheap side.
However, I prefer to look at companies with strong positive cash flow numbers so I think I'd be turning my attention to the likes of CSL Limited (ASX: CSL) or a similar large-cap just at the minute.
