In major Australian stock news, Telix Pharmaceuticals LimitedAU:TLXTLX rose 10.5% in today’s trading session, hitting an all-time high of A$19.39. The surge came after TLX welcomed proposed changes by the Centers for Medicare and Medicaid Services (CMS) aimed at strengthening payment mechanisms for diagnostic radiopharmaceuticals used by Medicare patients in the United States.
Medicare is a federal health insurance plan administered by CMS for people over the age of 65. The company believes the proposed rule will ensure that all patients have fair and consistent access to advanced diagnostic imaging and allow physicians to prescribe the most appropriate clinical solutions.
Telix Pharmaceuticals is a biotechnology company developing diagnostic and therapeutic radiopharmaceuticals with operations in Australia, the United States, Belgium, Switzerland and Japan.
Key Insights for CMS Proposals change point
According to the company’s announcement, its diagnostic radiopharmaceuticals, including Illuccix, will continue to be paid separately by CMS as a patient-of-service Medicare fee after the end of transitional pass-through payment status. CMS is proposing changes to provide separate payment for diagnostic radiopharmaceuticals that cost more than $630 per day. These changes apply to the Hospital Outpatient Prepaid Payment System (OPPS).
Currently, in the United States, the cost of diagnostic radiopharmaceuticals is included in the payment for nuclear medicine scans.
In addition, the changes will also apply to any new diagnostic products Telix is developing, once approval is granted.
Telix reports strong first quarter results
The company derives the majority of its revenue from the U.S., highlighting how important these changes are to its business. In the first quarter of 2024, Telix’s U.S. revenue increased 18% to $111.8 million, up from $95.1 million in the previous quarter. Overall, the company reported that total revenue increased 18% to $115 million.
Telix reiterated its full-year 2024 revenue guidance, expecting it to be in the range of $445 million to $465 million, an increase of approximately 35-40% compared to 2023.
Is Telix Pharmaceuticals a buy or sell?
The TLX has surged more than 90% year to date, mainly due to strong first-quarter 2024 performance.
According to TipRanks consensus, TLX stock has a Strong Buy rating based on all Buy recommendations from 5 analysts. The price target for Telix is A$19.12, which is 0.95% below current trading levels.
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