One can always speculate about takeovers, it's just a question of price.
This is going to repeat things I've said before but maybe worth thinking about again as end of year approaches.
TLX will likely have a lot going on in 2024, there's a lot for long term holders/ fans of the company to keep an eye on.
But to the broader market I see three key narratives:
- expansion of the Illucix market
- progression of 250 to market.
- expenses
The question of how Illucix will fare is quite interesting- as well as the ProstACT program more generally. At the moment TLX is heading towards US$100m/q and that's a key benchmark for me. Can TLX reach that- and maintain it in the longer term?
With 250 the odds are (I hope) good that it will get to market, it's just a matter of how long things will take. My worst case target is to reach US$50m/q by end 2025(!) and I think it's safe to say that eventually sales will reach $US100m/q
Finally, there's been a lot of discussion here about expenses, and it's clear that TLX management have prioritised expanding the company (and boosting R&D) over making an overt profit. Having said that, if I look at non-manufacturing expenses (R&D, staff, admin, marketing) the progression is quite interesting. In 2021 expenses were ~AUS20m/q. In 2022, after the raise and product launch, they jumped to AUS 40m/q. This year they jumped to 60m/q. At the same time , from 2022 revenues jumped from nothing to ~AUS80m/q net.
So let's make some simple-minded projections. Sometime in the next 2-3 years:
TLX pulls in US$100m/q from Illucix and US$100m from 250. After manufacturing/ currency conversion this is AUS$200m/q. Expenses stabilise at $80-100m. At this point TLX looks like COH- making 400m/ yr, so about $300m/yr after tax. That gives it a market cap of ~$15b. (COH is currently $20b so I'm being conservative.
There are risks- eg if Illucix revenue drops off for some reason- but I can't see a major TLX shareholder being happy with a takeover at less than double digit market cap. And if you're think that $15b is a reasonable probability- wouldn't you want a premium as a takeover?
Mind you, if someone came and offered $16b tomorrow, I'd have to say: I'd be a bit interested. I'd have to be convinced though.
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