Telix Pharmaceuticals Ltd (ASX: TLX) had some big news this week, releasing results showing that its potential prostate cancer drug, TLX-591, was safe to use.
It's a significant milestone for the company, which has an established revenue-generating business but is also shooting for a potentially large market with this new compound.
Unsurprisingly, then, brokers have noticed the results and have bullish price targets for the company, well above the current share price of $11.11, which we'll get to later.
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Safety sign off
Firstly, what was released this week?
Telix said that Part 1 of the ProstACT Global Phase 3 study, "has achieved its primary objectives, demonstrating an acceptable safety and tolerability profile with no new safety signals observed''.
The key findings included that there were no adverse drug interactions and that "hematologic events" were in line with expectations and were "transient and manageable''.
Telix Chief Medical Officer David Cade said the results "build on prior findings and highlight the potential for TLX591-Tx in combination with contemporary standard of care, to become a new first-line option for patients facing this aggressive disease''.
Telix shares looking cheap
The team at Jarden said this week's news was positive.
As they said:
Telix appears to have taken another step forward in its pursuit of becoming a true "thera-nostic" company, which would allow them to diagnose, monitor and treat prostate cancer.
The Jarden team noted there were several hoops to jump through to get TLX-591 into the next phase of testing and eventually commercialisation.
Telix are now preparing a package to submit to the Food and Drug Administration (FDA). The recruitment process for Part 2 has already begun outside of the US but they require a green light from the FDA (based on Part 1 safety and dosimetry data) to obtain an investigational new drug amendment to include US patients. If successful, Telix expect the recruitment process to ramp up quicker than Part 1. Ultimately, a commercial approval will also be highly predicated on TLX591 demonstrating strong efficacy on top of a favourable safety profile and dosimetry.
The Jarden team have a $21 price target on Telix shares.
The team at Morgan Stanley believe there are a number of reasons Telix shares are looking cheap.
As they said:
While acknowledging previous delays in commercialisation for several candidates, we see the current share price as implying limited value to late-stage Precision Medicine candidates/indication expansion and no value to the Therapeutics portfolio. As such, we see the risk-reward outlook as favourable at current levels.
Morgan Stanley said the base business alone, including the approved products Illuccix and Gozelliz, as well as risk-weighted contributions from other compounds, was worth $15.50 per share, while on an unrisked basis, assuming compounds in Telix's pipeline were approved, this jumped to $19.20 per share.
Overall, Morgan Stanley has a $24.60 price target for Telix shares.
Telix was also named this week by Wilsons Advisory as one of a number of healthcare stocks that are looking cheap.
