Lantheus Holdings, Inc. Q3 FY2024 earnings call

• Lantheus is a leading radiopharmaceutical focused company with market leading commercial products. PYLARIFY delivered solid performance and remains on track to reach blockbuster status in 2024. DEFINITY grew double-digits year-over-year. - CMS's landmark decision to pay separately for specialized diagnostic radiopharmaceuticals beginning January 1, 2025 is a significant win for patient access. - Pipeline progress: MK-6240 and NAV-4694, next generation late stage tau and beta-amyloid radio diagnostics, expected to be differentiated. - PNT2002's SPLASH study interim analysis results were reviewed, continuing to work with Eli Lilly. - Added additional late-stage and early-stage assets to the pipeline to address high unmet medical needs.

Consolidated net revenue for the third quarter was $378.7 million, an increase of 18.4%. Radiopharmaceutical oncology contributed $259.8 million of sales attributable to PYLARIFY, which was up 20.6%. Precision diagnostic revenue was $103.7 million, 7.7% higher, with DEFINITY delivering third quarter net sales of $77 million, increasing 14% year-over-year. Strategic partnerships and other revenue was $15.3 million, up 108.3%. Investigational usage of MK-6240 and NAV-4694 contributed $10 million and $2.3 million, respectively.

• Narrowed revenue guidance to $1.51 billion to $1.52 billion from the prior range of $1.5 billion to $1.52 billion. - Adjusted fully diluted earnings per share guidance to $6.65 to $6.70 from the prior range of $6.60 to $6.70, reflecting timing differences in operating expenses and organizational changes with a $0.02 benefit in Q4 reversing in 2025.

• Actual results may differ materially from forward-looking statements due to various risks and uncertainties detailed in SEC filings. - Market competition and pricing pressures could impact financial performance. - Regulatory changes may affect product approvals and reimbursement.

Q: Talk about the factors behind PYLARIFY's 3Q revenues, including seasonality and strategic partnerships.

A: Sequential decline was due to traditional third quarter seasonality, net price impact of recent strategic partnerships, and intentional trade-offs; expect growth in Q4 and to sustain a $1 billion franchise for PYLARIFY.

Q: Comments on the final rates for 2025 and the 4Q guide.

A: CMS final rates for PYLARIFY in 2025 are largely in line with current rates, and the 4Q guide step down is due to increased R&D expenses from Q3 to Q4.

Q: Reconcile the use of 'sustain' vs 'grow' for PYLARIFY and confidence in CMS pricing.

A: Confident in sustaining a $1 billion franchise for PYLARIFY, expecting volume growth, and engaged with CMS for positive pricing outcomes in 2025.

Q: Details on final addendum pricing and strategic contracting.

A: Reading Addendum B correctly, not commenting on specific partnership details due to competitive intelligence.

Q: Information on the Alzheimer's diagnostic pipeline and differentiation.

A: MK-6240 and NAV-4694 are best-in-class with high sensitivity and low off-target binding, complementary to serologic markers for Alzheimer's disease.

Q: Explanation of CMS reimbursement rate calculation and impact on 2026.

A: CMS 2025 calendar year rate is considered, continuing to report ASP, with potential for 2026 rates based on ASP trends.

Q: PNT2002 trial status and subset analyses.

A: Continuing to review data and perform subset analyses with Eli Lilly, ESMO presentation showed positive potential of PNT2002.

Q: Discussion on the Alzheimer's market TAM and scans per patient.

A: Alzheimer's radio diagnostics market potential to reach $1.5 billion by end of decade and $2.5 billion by mid-2030s, with benefits for payers and patient care.

Q: Royalties from PYLARIFY and Flyrcado business.

A: Royalties from PYLARIFY are minimal near-term, Flyrcado commercialized by GE with optimistic potential despite supply implications.