Why is the Telix Pharmaceuticals share price rocketing 15% to a record high?

Good news out of the United States is giving this radiopharmaceuticals stock a boost.

| More on:
Young doctor raising arms in air with hands in fists celebrating a new development

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Telix Pharmaceuticals Ltd (ASX: TLX) share price is having a very strong session on Thursday.

In morning trade, the radiopharmaceuticals company's shares are up 15% to a new record high of $20.16.

Why is the Telix Pharmaceuticals share price rocketing?

The catalyst for this strong gain has been the release of a very positive announcement this morning relating to its United States business.

According to the release, the company stands to benefit from proposed changes announced by the Centers for Medicare & Medicaid Services (CMS).

These proposed changes are for the Hospital Outpatient Prospective Payment System (OPPS) rule to improve payments for diagnostic radiopharmaceuticals for Medicare patients in the United States, facilitating continued patient access after transitional pass through payment status expires.

Management notes that under the proposed changes, diagnostic radiopharmaceuticals, including its Illuccix product, will continue to be paid separately by the CMS for traditional Medicare Fee for Service patients in the hospital outpatient setting following the expiry of transitional pass-through payment status.

Another positive is that this would also apply to new diagnostic products being developed by Telix, if and when they are approved.

Why is this important?

Currently, in the United States, the costs associated with diagnostic radiopharmaceuticals are included in the payment for nuclear medicine tests (scans).

The CMS is proposing refinements to this policy to improve the accuracy of overall payment amounts by paying separately for any diagnostic radiopharmaceutical with a per day cost greater than US$630.

The CEO of Telix Americas, Kevin Richardson, was pleased with the proposed changes and appears to believe it could be a boost to Illuccix demand. Richardson commented:

Telix welcomes the proposed rule, which will facilitate more equitable and reliable access to advanced imaging for all patients and support physicians to prescribe the most clinically appropriate solution.

We commend the vision of CMS and the coalition, along with patient groups, for raising awareness about the necessity to reform the payment system to enhance patient outcomes and access.

Telix is committed to continued innovation in the field of radiopharmaceutical diagnostics to provide new solutions to further patient access, especially for underserved patient populations and in areas of high unmet clinical need.

Following today's gain, the Telix Pharmaceuticals share price is now up a whopping 82% since this time last year. To put that into context, a $10,000 investment a year ago would have grown to become just over $18,000 today.

Motley Fool contributor James Mickleboro has positions in Telix Pharmaceuticals. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Record Highs

A piggy bank on the cloud in the blue sky symbolising a record high share price.
Record Highs

Here's why the Vanguard Australian Shares Index ETF (VAS) just hit an all-time ASX high

If you own this ETF, you've had a great day.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Record Highs

ASX 200 hits record high, UBS keeps end of year target steady

It's the second all-time high for the benchmark index this week.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Record Highs

ASX 200 shatters record. Why it could still be 'relatively cheap' to invest

For the first time ever today, the ASX 200 is leading with an '8'.

Read more »

A woman wearing a bright multi-coloured dress, blue sunglasses and hat stands on a beach laughing with her arms outstretched enjoying herself
Record Highs

ASX 200 re-writes history. Which companies are leading the charge?

The ASX 200 is finishing the week with a bang.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Record Highs

CBA and 7 other ASX 200 shares smashing new highs on Thursday

Shareholders of these stocks will be smiling widely today.

Read more »

Four young friends on a road trip smile and laugh as they sit on roof of their car.

Records tumble! Hot ASX ETFs smash all-time highs again on Friday

It's a little strange to see these ETFs hit new highs on a red day for the ASX...

Read more »

ETF spelt out on cube blocks with rising arrows.

iShares S&P 500 ETF (IVV) inks all-time ASX high! Too late to buy?

Here's my take on this ETF's new record.

Read more »

ETF on white blocks with a rising arrow on top of coin piles.

3 popular ASX ETFs smashing record highs today

Do you own any of these lucky ETFs?

Read more »