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Telix Pharmaceuticals (ASX:TLX), the ASX-listed healthcare major that was once almost listed on the Nasdaq composite outright before issuing depositary shares there, has been stung by the U.S. regulator.
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None other than the SEC has hit the company with a subpoena over announcements it’s made to market about its cancer drugs. This comes not long after the most recent earnings update showed revenue up +63% year-on-year.
The Australian company confirmed it has since notified ASIC it’s in trouble with the SEC though painted the inquiries from the latter as low-level.
The company also said on Tuesday it can’t predict what happens next.
Investors aren’t liking the news. While the company has a market cap still firmly above A$7 billion, shares were down -12% on Wednesday to $22.08/sh as at around 1pm Sydney time on $100 million turnover.
One-month returns have been dragged down -11.4% while YTD performance has slumped -10.3%. At the start of this year, TLX shares were up +150% YoY.
Back in April, the FDA knocked back a new drug for imaging a rare brain cancer put forward by Telix despite earlier indicating a more positive reception.
The uncertainty, here, is surely a catalyst for downside – Telix itself can’t really name what exactly the SEC has taken issue with, nor can it point to any firm stance on what it imagines the consequences of this process will be.
Investors, then, are largely left now to probe information on their own. The company works in radiopharmaceuticals, but from the sound of what information exists, it could be the U.S. regulator is taking issue with the nature of claims in its announcements to market.
Because it’s listed on the NASDAQ as an ADS, that puts the company within the purview of the SEC in the first place, for those curious as to how we got here.
Perhaps most interestingly, the subpoena was announced yesterday after market close, more or less buried in an earnings report.
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“The information request from the SEC does not mean that Telix or anyone else has violated United States federal securities laws or that the SEC has a negative opinion of any person, entity or security,” TLX wrote.
TLX last traded at $22.08/sh through Wednesday’s lunchtime trade.
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