Telix Pharmaceuticals Ltd (ASX: TLX) shares could be seriously undervalued and destined to deliver market-beating returns.
That's the view of analysts at Bell Potter, who are tipping the radiopharmaceuticals company as an ASX share to buy now.
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What is the broker saying about Telix?
Bell Potter was pleased with the release of an update on part 1 of the ProstACT Global study on Wednesday. It said:
The good news is that there were no new safety signs. Grade 4 thrombocytopenia 11/36 (31%) and neutropenia 9/36 (25%) occurred at higher rates than in previous studies, however, these are manageable, particularly if the therapy benefits are realised. Most patients recovered without intervention, however, two required platelets and a further two required red blood cells. Non hematological events were fairly benign with organ radiation exposure well below established safety levels. The dosimetry data was encouraging.
There was no significant difference in the toxicity profile between the three arms of the study. There was no evidence of cross drug interaction. Radioactivity absorption rates in serum and tumour were also consistent between the three arms of the trial. No efficacy data reported.
The broker appears optimistic that the US FDA will view this data positively. It adds:
The data presented today was a snapshot of the full data package to be presented and discussed with the FDA in the coming weeks. The rate of grade 4 events was higher than expected, nevertheless these are known side effects and patients recovered well. It is not unreasonable to consider a patient otherwise in good health would be able to tolerate these events. We consider the hematological adverse events as far more tolerable than chemotherapy.
Are Telix shares a buy?
According to the note, Bell Potter has retained its buy rating and $19.00 price target on Telix shares.
Based on its current share price of $10.35, this implies potential upside of almost 85% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
We consider the FDA will take a neutral view on this data and allow part 2 of ProstACT Global to commence recruitment. It seems reasonably clear that the TLX591 has a manageable side effect profile and there remains the potential of a long survival benefit. Other than the amendment of the IND, the pivotal point for the trial is expected by end CY26 when the futility analysis is due to read out.
