Perspective Therapeutics Inc. (NYSE: CATX) could benefit from growing interest in radiopharmaceutical cancer treatments, according to William Blair.

The firm on Friday initiated coverage on Perspective, noting the company is well positioned to leverage lead-212-based radiopharmaceuticals with its peptide platform and established supply chain.

Sector Shifts Drive $35 Billion Market Opportunity

Perspective has designed its platform for increased tolerability and is positioned to be a leader in the radiopharmaceutical industry from a therapeutic perspective. William Blair initiated coverage with an Outperform rating.

Analyst Andy Hsieh wrote on Friday that advances in complex manufacturing and supply-chain logistics, growing acceptance of radiopharmaceuticals, established regulatory precedent, an expanding network of experienced physicians, and more reliable radioisotope production are creating favorable conditions for the sector's growth.

The analyst estimates that radiopharmaceuticals could address oncology markets worth up to $35 billion in the U.S. alone, presenting a significant growth opportunity for investors.

“We believe that an investment in Perspective will allow investors to capture this rapidly evolving trend and benefit from the market’s rapid expansion,” Hsieh wrote.

William Blair estimated a probability-adjusted fair value of about $1.3 billion, or $11.45 per share. That compares with Perspective’s Sept. 16 closing price of $2.70. The firm used a 13% discount rate and 3% terminal growth rate in its analysis.

Wall Street Underestimating Platform Potential

The Street is underestimating the clinical and commercial potential of the company’s radiopharmaceutical platform.

Driven by a growing influx of investment from both large pharmaceutical companies and the investment community, William Blair has observed robust growth in the number of early-stage pure plays. Notable deals include:

In 2023, Eli Lilly and Co. (NYSE: LLY) acquired POINT Biopharma Global Inc. at $12.50 per share in cash, an aggregate of approximately $1.4 billion.

Bristol Myers Squibb & Co. (NYSE: BMY) acquired RayzeBio Inc. in 2024 for $62.50 per share in cash, for a total equity value of approximately $4.1 billion, or $3.6 billion net of estimated cash acquired.

In 2024, AstraZeneca Plc (NYSE: AZN) acquired Fusion Pharmaceuticals Inc. for approximately $2 billion.

“We believe that Perspective provides an attractive opportunity to invest in the rapidly evolving radiopharmaceutical field,” William Blair wrote.

While acknowledging the high attrition rate and binary nature of investing in the biotechnology sector, analyst Hsieh wrote that Perspective’s approach of incorporating lead-212 and both validated and more novel targets with a validated mechanism offers a particularly compelling and de-risked opportunity.

CATX Price Action: Perspective Therapeutics shares were down 0.52% to $2.86 at the time of publication on Friday, according to market data.