Lantheus Holdings, Inc. Q2 FY2024 earnings call

Company Overview

• Lantheus is a leading radiopharmaceutical-focused company with a purpose to improve patient outcomes. Delivered a strong quarter led by commercial products PYLARIFY, DEFINITY, and TechneLite, with over 3.4 million patients impacted since the start of 2024.

Pipeline Developments

• Expanded pipeline through acquisitions: NAV-4694 (Alzheimer's diagnostic), RM2 clinical-stage radiodiagnostic and radiotherapeutic pair, and licensed two product candidates from Radiopharm Theranostics.

PYLARIFY Performance

• Net sales over $273 million, up nearly 30% year-over-year. Addressable market expected to grow from over $2 billion in 2024 to north of $3 billion by 2029.

DEFINITY Performance

• Second quarter net sales approximately $78 million, up almost 11% year-over-year.

Financials

• Q2 2024 operating profit was $171 million, an increase of 14%. Operating cash flow totaled $84.7 million. Capital expenditures were $11.2 million.

Consolidated net revenue for the second quarter of 2024 was $394.1 million, an increase of 22.5%. Radiopharmaceutical Oncology contributed $273.3 million of sales, up 29.3%. Precision diagnostic revenue was $112.1 million, 14.9% higher, with DEFINITY at $78.1 million (10.7% higher) and TechneLite at $28.2 million (30.5% higher). Strategic partnerships and other revenue was $8.7 million, down 31.7% due to prior year RELISTOR royalties not repeated, offset by a strong MK-6240 contribution.

Full Year 2024

• Estimated consolidated revenue in range of $1.5 billion to $1.52 billion, PYLARIFY expected to grow mid-20%.

Adjusted EPS

• Revised to $6.60 to $6.70 due to R&D investments and transactions, accounting for share count and pipeline expenses.

Guidance Structure

• No quarterly guidance provided, focus on long-term growth; will offer full-year guidance in future with sufficient color.

• Regulatory Uncertainties: Impact of CMS final rule on PYLARIFY pricing and patient access.
• Competition: Potential impact of new entrants in radiopharmaceuticals on market share.
• Clinical Trial Risks: Uncertainties in clinical trial outcomes and timelines for pipeline candidates like MK-6240 and NAV-4694.

Q: Thoughts on CMS proposal for PYLARIFY unbundling and revised earnings guidance?

A: CMS proposal is positive but pricing uncertainty remains. Revised EPS is due to R&D investments for pipeline assets like MK-6240 and transactions affecting share count.

Q: Size of Alzheimer's opportunity and PYLARIFY market share?

A: Alzheimer's total addressable market is over $1 billion. PYLARIFY is the market leader with over 400,000 scans since launch and a mid-60% market share.

Q: PYLARIFY revenue growth in 2025 and R&D step-up?

A: Positive on PYLARIFY's growth potential, with R&D investments in pipeline assets like NAV-4694 and RM2 being key drivers for future growth.