My favourite profile for a drug development company is one which has enough revenue coming in to cover its drug development programs, with the latter providing the potential to really boost the stock price.
Two of the companies I'm looking at today fit that bill nicely, while one is pre-revenue. Not surprisingly, that's the one which Bell Potter has tipped for the potential to be a multi-bagger.
The first cab off the rank is Telix Pharmaceuticals Ltd (ASX: TLX), which full disclosure, I have owned for a while.
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Telix revenues edging towards US$1 billion
The Telix share price has pretty much traded sideways over the past year, down about 8% over the period, while it has swung in a large range over that time, from as low as $8.26 to as high as $18.22.
Despite this lacklustre performance over the past year, I'm encouraged by the company's November guidance for US$950 to US$970 million in revenues for the calendar year, up from US$803 million in 2025, off the back of its Illuccix, Gozellix, and Pixclara drugs.
During a recent capital markets day presentation, the company said it had the potential to add three high-value commercial products in 2027, and more excitingly, it had four drugs targeting various uses in prostate cancer, kidney cancer, and brain cancer in late stage trials.
Brokers have long been bullish on Telix shares, and that hasn't changed, with UBS issuing a research note on 4 November after the capital markets day, with a buy rating and a price target of $26 compared with $13.84 at the time of writing.
If achieved that would be an 87.8% return.
Neuren shares trading near 12-month highs
There's a similar thesis, with revenue funding ongoing research, at Neuren Pharmaceuticals Ltd (ASX: NEU).
Neuren's shares have added 27.1% over the past year on the back of strong global sales of the drug Daybue, which Neuren licensed out to US company Acadia Pharmaceuticals.
Neuren said last week that Daybue net sales were up 39% in the third quarter over the same period last year to US$140 million, with Acadia increasing full-year sales guidance from US$480 to US$510 million to US$505 to US$520 million.
Daybue was also in the process of being launched in Europe and approved for use in Japan, which would add further sales.
While these results are undeniably good, what's also interesting to me is that the company is progressing a drug candidate for its use in multiple ailments, including Phelan-McDermid syndrome, Pitt Hopkins syndrome, and Angelman syndrome.
The company has been granted orphan drug status across these potential use cases, which is a special status that the Food & Drug Administration can grant to a drug to treat a rare disease or condition with fewer than 200,000 patients in the United States.
Macquarie on 5 November issued a new research note on Neuren, with an outperform rating and a price target of $26, compared to $23.62 at the time of writing.
High-potential new therapy
And finally to the last company, Amplia Therapeutics Ltd (ASX: ATX), which Bell Potter believes could jump more than 400% to 42 cents per share, up from 8.3 cents at the time of writing.
The broker makes the case that Amplia is just one of three companies globally which has a compound called an FAK inhibitor at the clinical trial phase, with a recent study showing a combination of an FAK inhibitor with a RAS inhibitor worked well in a lung cancer trial.
The broker added:
If the FAK + RAS combo approach is validated in Phase 3 trials then ATX would be one of only three companies with a clinical-stage product likely in high demand by the broader oncology industry. To cap things off, ATX signed a clinical collaboration with Eli Lilly(!) in August to evaluate narmafotinib plus Lilly's KRAS inhibitor olomorasib in a Phase 1/2 lung cancer clinical trial.
Bell Potter has a speculative buy rating on Amplia shares.
