Recent radiopharma acquisitions underline the value of EUZ's core capabilities: independent isotope supply and specialist manufacturing. Strategic and financial investors are acquiring comparable isotope businesses at multiples well above EUZ's, yet EUZ's shares trade near their 52-week low. We see this valuation disconnect as a compelling BUYing opportunity.
Another price tag for isotope supply. EUZ trades at less than half the multiples implied by Telix's agreed acquisition of ITM, a medical isotope producer with its own drug pipeline. The $ 1.65bn upfront price implies c. 5.3x annualised sales and c. 16x manufacturing EBITDA (eNuW), compared with EUZ's 2x and 6.9x FY26e, respectively (eNuW). Additional consideration of up to $ 700m depend on approvals and sales targets for its late-stage cancer therapy (ITM-11). BWXT's agreed majority sale of its medical isotope activities to Nordic Capital similarly implied roughly 5-8x FY26e EV/sales (eNuW; also see last update).
EUZ supplies drug developers without competing with them. For a drug developer, buying essential isotopes from a supplier with competing treatments also helps finance a commercial rival. Once ITM becomes part of Telix, Novartis would source Lu-177 for its prostate cancer therapy Pluvicto from a group developing competing treatments. Curium's agreed acquisition of Lantheus would similarly enlarge its therapeutic portfolio. This broader competitive overlap gives developers a stronger reason to qualify an independent supplier (primary or secondary) and makes EUZ a natural partner, in our view. It has no competing drug portfolio and combines high-purity Lu-177 supply with expanding Ac-225 capabilities. May's agreement with Thor Medical also adds Pb-212 supply for research and development. The commercial opportunity should build as customers qualify additional suppliers and award contracts. Meanwhile, the risk for EUZ to lose business due to the market consolidation appears to be limited, to our understanding.
Manufacturing quality protects launch timelines. The FDA withheld approval of ITM's cancer therapy ITM-11 in August and Lantheus' diagnostic imaging kit in June. Both decisions cited problems at external manufacturing sites, without identifying clinical safety or efficacy concerns. These setbacks demonstrate the cost of manufacturing shortfalls for developers when a drug is otherwise ready for approval. GE HealthCare's agreed $ 945m acquisition of radiopharmaceutical contract manufacturer SOFIE further underlines the strategic importance of reliable production. EUZ brings established pharmaceutical-grade manufacturing capacity and is already gaining traction: its contract development and manufacturing business (CDMO) nearly doubled sales in H1, adding € 3.1m yoy. Manufacturing agreements with companies such as Bicycle Therapeutics, Pentixapharm and Archeus demonstrate EUZ's role in turning drug development into reliable clinical supply.
In sum, we see EUZ as a beneficiary of the sector's consolidation: BUY, PT € 21.50, based on DCF.
ISIN: DE0005659700
