Lantheus Holdings, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• 2024 Achievements: 2024 was groundbreaking with Pylarify becoming first radio diagnostic blockbuster ($1B+ sales), DEFINITY growing double digits. Announced strategic transactions with Light Molecular Imaging and Evergreen Theragnostics to enhance capabilities, expand pipeline, and enter new markets.
• 2025 Focus: Focus on leading radiopharmaceutical renaissance, growing flagship diagnostics (Pylarify, DEFINITY), advancing pipeline, and closing acquisitions. CMS payment rule enhancement supports radiopharmaceutical innovation.
• Pylarify Update: Q4 sales $266 million, up 15.7%; full year $1.058 billion, up 24.3%. Plan to grow volume/net sales in 2025, maintain market leadership.
• DEFINITY Update: Q4 net sales $86.2 million, up 17.9%; full year $317.8 million, up 13.6%. Driven by clinical/commercial value, competitor supply chain issues.
• Pipeline Progress: Advancing Alzheimer's diagnostics (MK-6240, NAV-4694); expect NDA submissions in 2025/2026. Pending acquisitions to add OCTEVY, Neuraceq, and theragnostic pairs.

Segment Performance

• Radiopharmaceutical Oncology: Fourth quarter sales $266 million, up 15.3% (Pylarify sales $266 million, up 15.7% for the quarter; full year sales $1.058 billion, up 24.3%).
• Precision Diagnostics: Fourth quarter revenue $117.5 million, up 16.8% (DEFINITY $86.2 million, up 17.9%; TechneLite $25.1 million, up 16.7%). Full year DEFINITY revenue $317.8 million, up 13.6%; TechneLite $95.5 million, up 9.3%.
• Strategic Partnerships and Other: Fourth quarter $7.7 million, down 66.2% (due to RELISTOR royalty milestone in prior year); full year $38.2 million (led by MK-6240 investigational use sales).

Guidance

• 2025 Revenue: Estimated $1.545B to $1.61B, 1%-5% growth from 2024.
• Pylarify Growth: Low to mid-single digit net growth.
• DEFINITY Growth: Low to mid-single digit growth, facing 2024 opportunistic sales headwinds but high single-digit two-year stack growth.
• Gross Profit Margin: Materially similar to 2024 at ~68%.
• Adjusted EPS: $7-$7.20, 3.5%-6.5% growth from 2024.
• Free Cash Flow: Anticipated $550M to $600M.

Risks

• Regulatory Uncertainty: CMS payment policy changes and reimbursement shifts could impact revenue.
• Competitive Pressures: New entrants in radiopharmaceuticals may affect Pylarify's market share/pricing.
• Acquisition Risks: Delays/issues in closing strategic transactions with Light Molecular Imaging and Evergreen Theragnostics could hinder pipeline expansion/growth plans.

Question and Answer

• Q: Status update on mirror study for Pylarify? A: Mirror study continues enrolling, expects last patient in Q4 2025, aims to update guidelines and expand addressable market.
• Q: Competitive dynamics with new reimbursement and new PSMA PET agents? A: New entrant gallium images not as good as Pylarify; CMS reimbursement shift is a benefit, focusing on clinical and commercial differentiation.
• Q: Potential for CMS to switch to ASP methodology? A: Difficult to predict, but migration to ASP would be upside; CMS expected to release draft rules in July, final rules in November 2025, effective Jan 1, 2026.
• Q: Ex US commercial plans for pipeline assets? A: Focus is US for now, but acquisition of Light Molecular Imaging will expand international footprint, with opportunity-based expansion into EU.
• Q: Prospects for PNT2002? A: Uncertain due to suboptimal overall survival hazard ratio in trial; waiting for study readout to determine FDA approval prospects.