Now could be a good time to buy Telix Pharmaceuticals Ltd (ASX: TLX) shares.
That's the view of analysts at Bell Potter, who are tipping the radiopharmaceuticals company as a top buy this week.
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What is the broker saying?
Bell Potter notes that Telix has announced the refinancing of its convertible note facility. It is pleased with the decision and believes it removes an overhang on its shares. It explains:
TLX has refinanced its A$650m convertible note (CN) facility with a freshly negotiated US$600m CN facility. The major advantage for TLX is the long term deferral of the pending investor put option on the original facility. The put option had an exercise date in July 2027 with the share price currently well below the estimated conversion price of A$24.75, hence it is reasonable to believe note holders could have taken cash rather than continue to hold the notes. The refinance has been completed to remove this overhang, providing shareholders with greater certainty.
The expanded principal balance also provides the company with greater flexibility on its future funding requirement. The new facility also has a 5- year term with a put option after 3 years and coupon of 1.5%. The use of debt to partly fund the drug development program remains a higher risk strategy. Approval of both Pixclara and Zircaix later this year remain important catalysts for note holders. The key risk is the prospect of further delays to approvals which would inevitably cause earnings downgrades and downward pressure on the share price.
The broker was also pleased with news that Telix has signed a co-development and co-commercialisation agreement with Regeneron Pharmaceuticals Inc (NASDAQ: REGN). It adds:
The CN refinance comes fast on the heels of the co-development and co-commercialisation deal with Regeneron announced earlier this week. Regeneron are a tier one pharma company in the US with revenues exceeding US$14bn in 2025 and market cap of US$80bn. Nevertheless, Regeneron is like most other large pharma – seeking to replace lost revenues from recent patent cliffs.
It does not currently have revenues from any molecularly target radiation, however, it does have a large oncology franchise. TLX will receive a US$40m upfront fee which we expect it will amortise over several years. First indication could include a combination with Regeneron's Libtayo for the treatment of Non-small Cell Lung Cancer.
Are Telix shares heading to $19?
According to the note, the broker has retained its buy rating and $19.00 price target on Telix's shares.
Based on its current share price of $15.00, this implies potential upside of almost 27% for investors over the next 12 months.
The broker concludes:
TP remains unchanged at $19.00. No changes to revenues. FY26 EBITDA is increased by $8m being the estimated FY26 revenue from the Regeneron agreement. There are minor changes to the finance charge in line with revised terms on the CN facility. We retain our Buy rating.
