Telix Pharmaceuticals Ltd (AX:TLX): Novartis’s US$2.1bn acquisition of Endocyte highlights the considerable potential upside that exists for Telix, if it can successfully develop its pipeline of molecularly targeted radiation (MTR) therapeutic and imaging products. It continues to make rapid progress across the portfolio, with the Atlab acquisition completed, Cardinal Health (NYSE:CAH) appointed as a sales and distribution agent for illumet (TLX591-CDx) in the US, a Phase I/II study of TLX101 in brain cancer initiated and the confirmatory Phase III study of TLX-250-CDx for imaging kidney tumours about to commence. Our valuation is unchanged at A$303m; value per share increases to A$1.43.
Novartis/Incyte deal highlights potential value
Novartis agreed earlier this month to acquire Endocyte for ~US$2.1bn. Endocyte is developing PSMA-617, a small molecule MTR therapeutic that, like Telix’s TLX591, targets PSMA in prostate cancer tumours. Endocyte started a 750-patient Phase III trial of PSMA-617 in prostate cancer patients earlier this year. The US$2.1bn price that Novartis has offered for Endocyte suggests that a successful TLX591 Phase II study would add significant value to Telix.