Home-grown Australian biomedical companies shine on the global stage
In this week’s video insight David Buckland discusses two Australian biomedical companies, Pro-Medicus (ASX:PME) and Telix Pharmaceuticals (ASX:TLX) which are gaining global recognition. Pro-Medicus specialises in imaging software and has experienced significant growth, while Telix focuses on cancer management technologies with promising market potential. Both companies are poised for further success and expansion.
Transcript
David Buckland:
I just love it when a home-grown Australian company makes it on the global stage. Many have tried and failed, and some have done brilliantly.
Today, I wanted to focus on two biomedical businesses, Pro-Medicus (ASX:PME) and Telix Pharmaceuticals (ASX: TLX).
With its share price increasing eight-fold in the past five years to $66, PME has a current market capitalisation of A$6.9 billion. Founders, Dr Sam Hupert and Mr Anthony Hall, each retain 26.1 million shares, or 50 per cent of the Company. PME specialises in Enterprise Imaging and Radiology Information System software with operations in Melbourne, San Diego and Berlin.
In the 6 months to December 2022, Revenue jumped 28 per cent to $57m, Net Profit increased 32 per cent to $27m and cash on hand was approaching $100m.
With an annuity style revenue stream promoting greater predictability, some large US installations executed in late-2022 and early-2023, and with a highly scalable business model it seems PME is set for exciting operational growth over the medium-term.
Nine of the top 20 US hospitals use Visage 7, the industry’s first cloud-engineered server-side platform for complete picture archiving and communication system (PACS) operations. It offers ubiquitous physician and clinician viewing for radiology, cardiology, breast imaging and ophthalmology and is seen as the number one player for speed, functionality, and scalability.
Telix Pharmaceuticals Limited is a Melbourne-headquartered $3.9 billion company which has very exciting prospects. Its targeted radiation imaging and therapy technologies have potential to transform the way clinicians can find and manage cancer to inform treatment decisions and deliver personalised therapy. Its first commercial product for prostate cancer, Illuccix, was launched in April 2022 after approval for use in Australia, Canada and the US.
Revenue exploded from A$3.7m in the March 2022 Quarter to A$100m in the March 2023 Quarter, whilst EBITDAR jumped from negative $17m to positive $37m. Interestingly, the “R” in EBITDAR stands for Research and Development expenditure, and this accounted for 21 per cent of revenue, or $21m in the March 2023 Quarter.
TLX claims to have the potential to service 90 percent of US PET, or the positron emission tomography, market currently valued at US$1 billion. In addition, the Company anticipates near-term regulatory approval in the UK, the EU, Brazil and South Korea.
Their core pipeline aims to address unmet medical needs in prostate, kidney, brain and blood cancer and this could prove to be an enormous addressable market for TLX. Apart from organic and development growth, TLX has announced some recent complementary acquisitions. More on this in an upcoming blog.
The Montgomery Fund and Australian Eagle Trust own shares in Pro-Medicus and Telix Pharmaceuticals and the Polen Capital Global Small and Mid Cap Fund own shares in Pro-Medicus. This video was prepared 04 July 2023 with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade these companies you should seek financial advice.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
