Several leading companies in the nuclear medicine targeted imaging space have seen their stock valuations decline in recent quarter, despite continued clinical progress. Stock prices of companies like Lantheus Holdings, Telix Pharmaceuticals, and Clarity Pharmaceuticals have taken a hit, but beneath the surface, pipeline progress remains strong. For investors with a long-term horizon, this valuation dip may be an opportunity to buy companies with promising candidates.
Blue Earth Diagnostics is another player in the space and is privately held. From investor perspective, Blue Earth’s private status means its stocks are not publicly traded, but its acquisition history, $466M M&A deal in 2019, and a commercialized PSMA based hybrid PET tracer currently under “pass-through” Medicare status, is a viable competitor.
Novartis, a big cap pharma, is the major player with the approved radiotherapeutic products for prostate and neuroendocrine cancers. With the focus on radiotherapeutics, it remains relatively insulated from the market volatility for imaging agents-its 2024 annual report doesn’t list sales of imaging agents.
Sector Snapshot
The radiotracer marketing companies mentioned above have leading programs in molecular imaging and therapeutics, utilizing PSMA and SSTR biomarkers alongside F-18, Ga-68, and Cu-64 radioisotopes to enable targeted cancer diagnosis and treatment.
The pipelines of these companies span:
- PET imaging agents for prostate, neuroendocrine, breast cancers and brain imaging for Alzheimer’s
- Theranostic platforms combining diagnostic imaging scans coupled with targeted radiotherapy
- AI-assisted applications for image interpretation to guide clinical decisions
- Partnerships with CDMOs and shippers for manufacturing, scale-ups, and distribution of imaging tracers
Why Are Valuations Down?
As the radiodiagnostics field matures, stakeholders are evaluating risk, timelines, and competitive positioning. Understanding the drivers behind the valuation downturn is essential for the current market sentiment which to help investment decisions.
1. Rising Competition
New entrants and overlapping radiotracers in PSMA and SSTR imaging has intensified competition. With the availability of multiple agents of comparable quality vying for similar indications, annual revenue and earnings forecasts are under pressure. Lantheus’ Q2 2025 press release reported ~ 8% year-over-year decline in PYLARIFY® revenue and lowering of the previous EPS guidance by ~ 15%. Pylarify represented 66% of total revenue . The stock has declined ~ 50% YTD.
2. Reimbursement
For newly approved tracers with pass-through status, CMS provides separate payment for the tracer, and other procedural costs are bundled. Tracers with expired pass-through status often compete with these tracers. Per new rule, CMS now allows separate reimbursement for diagnostic radiopharmaceuticals that exceed the $630 cost threshold. Reimbursement for this category of tracers is calculated using claims-derived Mean Unit Cost (MUC) data, which is typically lower than reimbursement for active pass-through status candidates for the same radioisotopes with similar application; the lower reimbursement affects revenue and earnings.
Among individuals not eligible for Medicare—such as those covered by commercial, employer-sponsored insurance—reimbursement policies differ significantly across payers. These variations may result in varying negotiated rates and higher out-of-pocket expenses, which can deter patients from proceeding with recommended scans.
3. Product-specific regulatory inquiry & dilution
Telix reported ~ 25% increase in revenue for Q2 2025 for Ga-68 PET PSMA (Illuccix®), however shares are currently down ~ 24% after the FDA requested additional manufacturing/supply-chain information on its kidney-cancer diagnostic agent TLX250-CDx (Zircaix, 89Zr-girentuximab), which would delay the US launch.
Clarity is a clinical stage radiopharmaceutical company. Its equity increase of ~ $203M this year to accelerate development and commercialization of key programs resulted in share dilution, a common occurrence for companies needing capital for growth, and stock is down ~ 28% YTD.
4. Growth deceleration fears
PSMA PET adoption produced high growth in the initial stages (Pylarify was approved by FDA in May 2021, ~ 4 years ago). Now as the utilization matures and multiple agents are competing in the space, investors believe scan volumes may be plateauing, and market saturation concerns are likely lowering the stock prices.
Long-Term Outlook is promising
Despite the pullback, growth prospects are promising based the following:
- Other products are in pipeline to expand indications beyond prostate cancer – e.g., cardiac, kidney cancer, neuro oncology
- Clinical candidates to expand into radiotherapeutics
- Investigation of radiotracers with longer half-life and lower manufacturing costs
Bottom Line
The recent pullback in nuclear medicine imaging stocks largely reflect short-term headwinds—pricing pressure, competitive dynamics, regulatory delays, rather than structural weakness. Long-term fundamentals remain compelling as precision oncology continues to expand, with PSMA PET imaging firmly established in prostate cancer care and new indications and theranostic pipelines on the horizon. For investors with a medium- to long-term view, these may represent a buying opportunity- after proper due diligence —with room to navigate near-term volatility.
Disclaimer: This blog is for informational purposes only and is not an investment advice; the opinions expressed are author’s alone. Readers are encouraged to conduct their own due diligence and consult with financial professionals before making any investment decisions.
