As large pharmaceutical companies focus on acquiring and integrating late-stage assets, middle-market investors are uniquely positioned to deploy capital into building the critical infrastructure that supports the theranostics supply chain and acquiring or licensing earlier-stage theranostic programs poised for growth.
This article is the first of a three-part series examining middle-market investment opportunities across the rapidly evolving theranostics ecosystem. Part I frames the sector’s secular growth drivers and competitive dynamics and focuses on two foundational segments in which investors can build scaled, defensible platforms: radiopharmacy networks and contract development and manufacturing organization (CDMO)/contract manufacturing organization (CMO) services. These last‑mile and manufacturing infrastructures form the operational spine of theranostics, presenting compelling opportunities for platform development, consolidation and long-duration value creation.
Part II will examine the upstream isotope and generator ecosystem alongside clinic enablement and software, and Part III will analyze ancillary logistics and services and the radiotracer market — completing the end‑to‑end view of theranostics.
Recent Market Signals
Several recent transactions underscore the growing momentum in theranostics. Trilantic North America’s growth investment in SOFIE Biosciences, a PET radiopharmacy and CDMO, illustrates how investors can partner with founder-led companies to expand footprint, capacity and drug development sponsor-facing services. Similarly, Telix Pharmaceuticals’ acquisition of RLS (USA) — a 31-site U.S. radiopharmacy network — demonstrates the strategic importance of scaled radiopharmacy operations with reliable last-mile manufacturing and distribution.
At the larger end of the spectrum, Curium’s continuation vehicle process illustrates how private equity sponsors are positioning radiopharmaceutical leaders for long-duration growth. These funds allow sustained long-term growth in part through an expanded geographical presence, as demonstrated by Curium’s acquisition of Monrol, which increased Curium’s PET footprint from 34 sites in Western Europe and Asia to 46, including sites in Eastern Europe and the Middle East. Meanwhile, isotope supply has become an active battleground. Partnerships such as BWXT Medical’s agreement with NorthStar Medical Radioisotopes to supply actinium-225 show how upstream supply security is a strategic necessity.
Theranostics Investment Segments
The theranostics industry encompasses a diverse ecosystem of interconnected segments — from isotope production and radiopharmaceutical manufacturing to radiopharmacy networks, logistics and clinical delivery infrastructure. For middle-market investors, this fragmentation presents a range of entry points across the value chain in which specialized expertise, operational scale and disciplined capital deployment can create outsized value. Segments that are particularly attractive for investment and platform development include radiopharmacy networks and CDMO/CMO services.
Radiopharmacy Networks
The radiopharmacy network segment represents the front line of the theranostics supply chain — where complex radiolabeled materials are converted into patient-ready, single-dose preparations and dispatched for same-day administration. These facilities perform compounding, labeling, quality control and delivery of diagnostic and therapeutic radiopharmaceuticals under intense time, safety and regulatory constraints. In practical terms, radiopharmacies are the sector’s last-mile manufacturing plants, ensuring that isotopes with half-lives measured in hours reach patients precisely on time and under compliant conditions.
From an investment perspective, high-performing radiopharmacies exhibit a compelling blend of recurring revenue, operational leverage and regulatory defensibility. Radiopharmacies operate under radioactive materials licenses, sterile compounding permits and state pharmacy board oversight, creating substantial regulatory friction that deters new entrants. The economics hinge on route density — how many deliveries can be made within a narrow time window from each pharmacy hub. Once a radiopharmacy establishes sufficient local volume and route density, each additional dose contributes disproportionately to margin, generating strong operating leverage and attractive cash flow characteristics.
As of 2025, the U.S. radiopharmacy market remains fragmented and increasingly capacity-constrained. UPPI, the largest independent alliance, encompasses more than 80 institutional and stand-alone sites — underscoring the significant share still held by operators outside the major national networks. Although large players are investing aggressively to expand their footprints, their ability to meet growing demand — particularly in therapeutic compounding — is constrained by high capital costs, complex regulatory requirements and a limited pool of qualified personnel. With the Food and Drug Administration (FDA) accelerating approvals of new theranostic agents, each requiring distinct radionuclide handling, labeling and distribution protocols, the market is likely to enter a new period of fragmentation. The short half-lives and logistical demands of these products favor localized production near treatment centers, even as scale-up at the national level remains challenging. For middle-market investors, these conditions present a compelling opportunity to back or integrate emerging, therapy-focused radiopharmacy platforms that combine regional agility with institutional-quality compliance, positioning them as foundational assets for future industry consolidation.
The growth drivers are structural and secular:
- Therapeutic Expansion: Radioligand therapies such as Lu-177-based products and multiple Ac-225 programs are moving from tertiary to community settings, dramatically expanding the addressable market.
- Isotope Diversification: The growing variety of isotopes and ligands increases the need for specialized compounding and quality control expertise across the network.
- Operational Outsourcing: Many hospitals and cancer centers outsource hot-lab operations due to cost, safety and compliance complexity.
- Regulatory Scrutiny: Tighter enforcement of USP General Chapter <825> (Radiopharmaceuticals — Preparation, Compounding, Dispensing, and Repackaging) and Nuclear Regulatory Commission (NRC) requirements drives demand toward larger, compliant networks with validated systems and experienced authorized users.
From a private equity perspective, this segment aligns closely with other successful healthcare service roll-ups: recurring demand, high compliance barriers, fragmented ownership and predictable growth tied to demographic and technological trends. A sponsor could create value through:
- Consolidation: Acquiring regional radiopharmacies to build geographic coverage, standardize operations and capture route efficiencies.
- Infrastructure Modernization: Investing in automation, cold-chain tracking and digital order management to expand throughput and reduce labor intensity.
- Therapeutic Capability Expansion: Upgrading facilities from diagnostic-only to dual diagnostic-therapeutic licensure, unlocking higher revenue per dose.
- Partnership Alignment: Forming supply or distribution partnerships with isotope producers, CDMOs and oncology networks to secure demand and ensure upstream access.
Exit pathways are strong and diverse. Strategic acquirers include healthcare distributors, isotope suppliers, and large oncology or radiopharmacy networks seeking regional scale. Alternatively, integration with CDMO or isotope platforms can create vertically aligned theranostics infrastructure companies — entities controlling everything from isotope production to bedside delivery, a model that could command infrastructure-level valuations.
Ultimately, radiopharmacy networks are the operational fulcrum of the theranostics value chain — the only infrastructure capable of translating upstream isotope supply into usable patient treatments at scale. Investors positioned in this space are not merely capturing transactional pharmacy margins; they are building the enabling platform upon which the entire next generation of precision radiotherapeutics depends.
Legal diligence in radiopharmacy transactions focuses heavily on licensing, compliance and operational risk under overlapping federal and state regimes. Each facility must hold active radioactive materials licenses (under NRC or Agreement State authority), nuclear pharmacy permits and, when compounding occurs, evidence of USP <825> and <797> compliance. Diligence should confirm that licenses are properly scoped for diagnostic and therapeutic compounding, that authorized users and radiation safety officers are current, and that no material deficiencies exist in inspection histories or radiation safety documentation.
Diligence should closely evaluate the radiopharmacy’s aseptic processing controls and environmental monitoring trends and occurrences, as deviations in these areas can reveal systemic weaknesses in sterile technique, facility maintenance or quality oversight that directly affect product integrity and regulatory compliance. From a transactional standpoint, investors must verify license assignability, antikickback compliance in referral relationships and Drug Enforcement Agency registration when radioactive drugs contain controlled substances. Real estate and transport logistics raise additional risk — environmental audits and hazmat transport authority must be confirmed, as violations can trigger civil penalties or license suspension.
CDMO and CMO Services
The CDMO and CMO segment forms the core manufacturing infrastructure of the radiopharmaceutical and theranostics ecosystem. As drug sponsors advance a growing pipeline of diagnostic and therapeutic radioligands, few possess the specialized facilities, personnel and regulatory framework necessary to safely produce radioactive materials under Current Good Manufacturing Practice (cGMP) conditions. This structural capacity gap fueled explosive demand for outsourcing — positioning radiopharma CDMOs as critical enablers of sector growth and highly investable assets with strong recurring revenue profiles and meaningful barriers to entry.
Unlike traditional biologics or small-molecule CDMOs, radiopharmaceutical manufacturing requires integrated capabilities across three complex domains: (1) radiochemistry and isotope handling, (2) aseptic fill-finish of short-lived materials, and (3) rigorous regulatory documentation spanning FDA drug cGMP and NRC (or Agreement State) radiation safety requirements. Each facility must operate under a unique combination of FDA registration, radioactive materials licenses and radiation protection protocols. The result is a naturally limited competitive field.
From an investment standpoint, demand growth exceeds available supply, giving well-run CDMOs the ability to command premium pricing, negotiate long-term capacity reservations and secure cost-plus contracts indexed to isotope inputs. For investors, this combination of long-term visibility and high technical barrier provides a uniquely attractive risk-adjusted return profile.
The growth drivers are multi-layered:
- Pipeline Expansion: The number of therapeutic radiopharmaceutical candidates in development more than tripled over the past five years, creating multi-year manufacturing backlogs.
- Complex Chemistry: Each new ligand-isotope pairing requires customized radiolabeling chemistry, analytical validation and release testing that sponsors are ill-equipped to perform in-house.
- Regulatory Pressure: FDA, NRC and state regulator expectations for sterility assurance, radiation safety and stability testing are intensifying, increasing the cost and risk of internal manufacturing.
- Speed-to-Clinic Imperative: Outsourcing allows smaller sponsors to accelerate first-in-human studies and maintain capital-light business models attractive to venture and private equity investors.
The strategic rationale for investment centers on building or backing multisite, multicapability CDMO platforms that can flexibly serve diagnostic and therapeutic programs. By aggregating complementary facilities (e.g., one focused on Lu-177, another on Ac-225), investors can offer end-to-end services — from precursor synthesis and radiolabeling to fill-finish and quality control — under a single brand and compliance system. Such integration provides scale economies, diversified isotope exposure and cross-selling potential across clients.
Value-creation levers for private equity investors include:
- Capacity Expansion: Funding facility upgrades or additional hot cells to capture unmet demand; incremental capacity can often be pre-sold through multiyear master service agreements.
- Regulatory and Quality Excellence: Building robust quality systems that meet FDA and NRC standards creates differentiation and premium pricing leverage.
- Operational Optimization: Centralizing procurement, scheduling and validation services improves throughput and margins.
- Partnership Alignment: Strategic alliances with isotope producers or radiopharmacy networks can secure upstream supply and downstream distribution, strengthening the platform’s value proposition.
Financially, CDMOs exhibit the attractive traits of hybrid manufacturing-services businesses — high utilization sensitivity but low client churn, with recurring development and production fees. As the industry consolidates, valuation multiples should mirror those of biologics and cell-therapy CDMOs.
From an exit standpoint, the strategic buyer universe is deep. Large global CDMOs that lack meaningful nuclear capabilities may seek bolt-on acquisitions to enter this space. Potential acquirers also include isotope producers, radiopharmacy consolidators and major pharmaceutical companies developing radioligand portfolios. A well-run platform with validated facilities, multi-isotope expertise and long-term client contracts represents an immediately accretive target for these players.
For investors, this segment could be viewed as a gateway infrastructure play in a rapidly expanding therapeutic category. As theranostics matures into a mainstream oncology modality, CDMOs will control the pace and reliability of drug commercialization, making them foundational to both supply security and innovation velocity.
CDMO diligence requires a deep dive into cGMP compliance, radiological licensing and contractual allocation of regulatory responsibility. Buyers must review FDA inspection histories (Form 483s, Warning Letters) and verify that the facility maintains valid drug establishment registrations and quality agreements that clearly delineate sponsor and manufacturer obligations under 21 C.F.R. Part 212 or 211. Radiation safety licensing — which consists of separate NRC or Agreement State authorizations — must match the isotopes handled, and waste-management practices must comply with Environmental Protection Agency and Department of Transportation standards.
Diligence should also assess aseptic processing practices and environmental monitoring data across production suites, as recurring excursions or uncontrolled trends may indicate deficiencies in cleanroom management, operator technique, or quality system maturity that pose material compliance and release risks. Contract review should focus on ownership of formulations, liability for batch failures, and indemnities covering isotope exposure or contamination events. Consideration should also be given to contractual limitations that may impact development and expansion strategies. Change-of-ownership clauses in long-term manufacturing agreements and customer consent rights can materially affect deal timing and valuation.