Telix eyes strong growth in 2025, but RFK Jr. poses a wildcard: Shane Fitzgerald

Telix Pharmaceuticals (ASX: TLX / NASDAQ: TLX) is firing on all cylinders, reporting a surge in full-year 2024 revenue, to $783.2 million alongside a strengthened R&D pipeline featuring the launch of three new drugs and a baseline revenue forecast of $1.18-$1.23 billion.

However, that outlook heavily depends on the continued growth of its core drug, Illucix, a radiopharmaceutical diagnostic agent used in imaging to precisely detect prostate cancer in patients.

Shane Fitzgerald, Portfolio Manager at Monash Investors, remains a strong backer of Telix, keeping it as one of the top holdings in the Monash Investors Small Companies Fund, a position the firm has maintained for an extended period.

Yet, regulatory uncertainty looms over the healthcare industry following the appointment of Robert F. Kennedy Jr. as U.S. Secretary of Health and Human Services. Coupled with the Trump administration's cost-cutting measures, such as its DOGE program, the approval landscape for companies like Telix could face new challenges.

Telix 2024 results - key takeouts

• Profit after tax: $49.2 million, up 860% from 2023
• Revenue: $783.2 million, up 56%
• Adjusted EBITDA: $99.3 million, up 70%
• R&D investment: $194.6 million
• 2025 product pipeline: TLX007-CDx (Gozellix), TLX101-CDx (Pixclara), and TLX250-CDx (Zircaix)
• 2025 revenue guidance: $1.18 billion – $1.23 billion (above consensus of $1 billion)

What was the key takeaway from Telix’s result?

It was, quite frankly, the revenue guidance that blew the market away...

The $1.2 billion they're forecasting doesn't include any of the new product launches that are scheduled for this year. So, it's going to be $1.2 billion-plus. We just don't know how big the plus will ultimately be. 

The guidance also doesn't include any real revenues coming out of Europe because the marketing approvals are just starting to come through in those markets.

How much of this growth is tied to Illucix?

Most of it. Illucix remains the core driver. It went from zero revenue three years ago to nearly $1 billion today, showing how quickly they can take off.

Were there any surprises in this result that investors should note?

Nothing shocking, but one area that needs more clarity is how Telix’s expense base will flex up during this period. I would fully anticipate that their R&D is just going to track up with their revenue growth ... but the company really hasn't provided any sort of indication on what that looks like.

Telix’s stock price reacted strongly to the result. Are you buying, holding, or selling?

Rating: BUY

We’re absolutely holding. In fact, we’re at a full weight in the Monash Investors Small Companies Fund. I would definitely be happy to buy this stock.

You mentioned risks, including regulatory uncertainty under Robert F. Kennedy Jr. as U.S. Secretary of Health and Human Services. What’s the concern?

What's going on at the cabinet level in America is very disruptive. You've got Elon Musk and his DOGE boys doing whatever they're doing to cut costs from the government.

Now, I don’t expect RFK Jr. to actively target radiopharmaceutical cancer treatments, but we’ve already seen cancer research grants being pulled in the U.S. for seemingly political reasons.

That raises the question: Could regulatory timelines get pushed out? If so, that could affect how quickly Telix gets approvals for its next wave of products.

That uncertainty alone could lead to approval delays or unexpected disruptions for biotech firms like Telix.

How big is the long-term opportunity for Telix?

Ultimately, I expect the revenues of this business to triple from just their imaging products, I would say, in four years.

The challenge is, what's the path to that? Does it step up, or is it just a nice steady grind? But you're going to get very, very strong revenue growth out of this business for a very long time. And then you mentioned it earlier about the R&D pipeline. 

They are spending lots of money on R&D and they could have a shot at gold on these new products they're going to launch.

For investors unfamiliar with Illucix, what does it actually do?

Think of it like this: Traditional prostate cancer tests tell you that you have cancer, but not where it is. Illucix solves that problem.

It’s an imaging agent that, when injected, binds to cancer cells and emits a signal. When the patient is put into a PET scanner, the cancer lights up like a Christmas tree, showing doctors exactly where it is.

This makes treatment far more precise. Instead of guessing or doing unnecessary biopsies, doctors know exactly what to target.

From 1 to 5, where 1 is cheap and 5 is expensive, how much value are you seeing in the ASX Small Ords today?

Rating: 2.5 to 3.

There’s good value in pockets of the market, especially in small caps. With interest rates trending lower, we should see longer investment horizons and better valuations for growth-focused companies.

The wildcard is the Trump administration’s policies, particularly around tariffs and healthcare regulation. That could introduce unexpected risks or opportunities—but it’s still too early to tell.