In the key news on Australian stocks, Telix Pharmaceuticals Limited (AU:TLX) gained 10.5% in today’s trading session, reaching an all-time high of AU$19.39. The surge came after TLX welcomed the proposed changes by CMS (Centers for Medicare & Medicaid Services), aimed at enhancing payment mechanisms for diagnostic radiopharmaceuticals used by Medicare patients in the U.S.
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Medicare is a federal health insurance plan for seniors aged 65 and above, managed by CMS. The company believes the proposed rule will ensure fair and consistent access to advanced imaging for all patients, enabling physicians to prescribe the most suitable clinical solutions.
Telix Pharmaceuticals is a biotechnology company that develops diagnostic and therapeutic radiopharmaceuticals. The company operates in Australia, the U.S., Belgium, Switzerland, and Japan.
Key Insights into CMS’s Proposed Changes
According to the company’s announcement, its diagnostic radiopharmaceuticals, including Illuccix, will continue to receive separate payments from CMS for Medicare fees for service patients after the transitional pass-through payment status ends. The CMS is suggesting changes to provide separate payments for diagnostic radiopharmaceuticals costing over $630 per day. These changes will apply to the Hospital Outpatient Prospective Payment System (OPPS).
Currently, in the U.S., the costs of diagnostic radiopharmaceuticals are bundled with the payment for nuclear medicine scans.
Additionally, the changes would apply to new diagnostic products being developed by Telix once they receive approval.
Telix’s Strong Q1 Performance
The company derives the majority of its revenue from the U.S., highlighting the significance of these changes for its business. In the first quarter of 2024, Telix’s U.S. revenues grew by 18% to $111.8 million, up from $95.1 million in the previous quarter. Overall, the company reported an 18% increase in its total revenue, reaching $115 million.
For the full year of 2024, Telix reiterated its revenue forecast, expecting it to be in the range of $445 million to $465 million. This represents a projected increase of approximately 35-40% compared to 2023.
Is Telix Pharmaceuticals a Buy or Sell Stock?
Year-to-date, TLX has surged by more than 90%, mainly driven by its robust performance in Q1 2024.
According to TipRanks consensus, TLX stock has received a Strong Buy rating based on all Buy recommendations from five analysts. The Telix share price target is AU$19.12, which is 0.95% below the current trading level.
