Telix Pharmaceuticals (ASX: TLX) (OTCPK: TLPPF) shares are down 16%. The TLX share price fall is odd as the results announcement was pretty good. One possibility is that the after hours, last night, discussion revealed some gremlin in there. But more likely is that the market was expecting something better and when it didn;t get it decided to have a huff.
As we say, the results were good at Telix: “Total revenue up 21% quarter-on-quarter to $120.7M driven by global product sales. Positive operating cash flow ($10.8M, an improvement of $8.4M on the prior quarter). Cash receipts from customers were $112.2M (up 35% from $83.2M in the prior quarter). Closing cash balance of $131.7M (compared to $121.4M at prior quarter end). There's nothing particularly wrong with any of that. In fact most companies would be very pleased with that performance. However, the share price is already - even after this fall - up 40% on the year so rather a lot of that performance has already been discounted. And, given that 16% fall, perhaps the market was expecting even better.
Telix Pharma share price from ASX
The basics at Telix are that the company is a one product wonder. Which is fine, but does leave them vulnerable to competition. The one product that produces most of the revenue is Illucix. This is an imaging product for prostate cancers. Which, given the ageing of the population, sounds like a good business to be in. The majority of men who make it to old age do end up with prostate cancer after all - even if most of those die of something else first. So, a growing market one would think. Further, as treatments are getting better so the demand for imaging products should grow.
But that also means, as a one product company, that Telix is vulnerable to competition. Someone comes up with a better idea and they're rather in difficulties.
However, while it's amusing to think that someone let slip something during the earnings call we think that's unlikely. Instead we're running with the idea that while the earnings were good they weren't as good as the market was expecting. Another example of buy the rumour of good performance and sell the fact then. As we all should know by now markets can get too excited about the prospect of good news.
