Telix Pharmaceuticals "AUD2b+ pipeline underappreciated" (Buy)...

Telix Pharmaceuticals "AUD2b+ pipeline underappreciated" (Buy) SutcliffePrice target to AUD26Telix's share price accounts only for already-marketed prostate cancer diagnostic Illuccix, in our view. Imminent phase I data from the prostACT SELECT trial for TLX591 (pipeline therapeutic, prostate cancer) will provide some visibility of prospects in the phase III prostACT GLOBAL trial, and we think will point towards an approvable drug. Once the data is known we think investors will treat 591 as a late-stage asset and start to assign value. We add AUD1.4b in peak sales with this update. 591 now accounts for AUD3 of our new AUD26 PT (small placeholder prior). 591 is an important waypost in the equity story because is it is potentially TLX's first therapeutic, but also because we think the SELECT data marks the point investors will start to focus more on the pipeline as a whole. The pipeline, including two diagnostics that could launch in the next 12m (Zircaix for kidney cancer, Pixclara for brain cancer) and 591, plus other therapeutic projects, now makes up AUD8 of our PT, and is not priced in at current levels. Buy.UBSe AUD1.4b peak sales forecast for TLX591, exp. 6.9-7.6 mo PFS in SELECTThe phase I SELECT trial for 591 does not have directly comparable data. We do not think investors are benchmarking to Novartis' VISION trial for Pluvicto (8.7mo PFS), being a larger, phase III study, but think the efficacy bar for "good" is still a little in flux. We are expecting 6.9-7.6 months PFS based on historical data for both 591 and Pluvicto (more detail pg 4), and think that will have what looks like an approvable product. Without the data, building a bottom-up patient model is difficult and for now we reach our AUD1.4b peak sales estimate by assuming 591 can achieve 25% of Pluvicto's sales (VA; c.USD4b, end of decade). 591 has some advantages via more patient-friendly dosing (two doses 14 days apart vs 4-6 doses at 6w intervals), but will need manageable hematotoxicity.AUD2b of sales and AUD8 per share in our valuation for the pipelineWe have also added first forecasts for brain cancer diagnostic Pixclara - peak sales AUD300m - tweaked our pricing estimates for Zircaix by +c.USD100 per dose to USD5k to match Illuccix and included small placeholder forecasts for TLX300/300-CDx (soft tissue sarcoma) and TLX592 (alpha-emitting prostate cancer therapeutic, distinct from 591). Promising early data from TLX592, enough to motivate advancement to a phase I/II trial, were reported by Telix earlier today and our valuation for this asset is conservative. Collectively the pipeline adds c.AUD2b+ of sales and AUD8 per share to our estimates.Valuation: PT up from AUD19.30 to AUD26We value TLX shares using an NPV SOTP. EPS changes are substantial from FY26 (+31%/37%/52% in 26/27/28E) due to new launches. The biggest portion of our PT increase is AUD3 from new 591 forecasts, then c.AUD1.60 from Pixclara.