Lantheus Holdings(LNTH) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents unaudited condensed consolidated financial statements and management's discussion for Q2 2025 Item 1. Financial Statements Presents unaudited condensed consolidated financial statements and notes for periods ended June 30, 2025 Condensed Consolidated Balance Sheets Details the Company's financial position (assets, liabilities, equity) as of June 30, 2025 Balance Sheet Summary | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Assets | | | | Total current assets | $1,201,816 | $1,326,633 | | Total assets | $2,116,077 | $1,980,340 | | Liabilities & Equity | | | | Total current liabilities | $280,132 | $240,526 | | Total liabilities | $949,294 | $892,329 | | Total stockholders' equity | $1,166,783 | $1,088,011 | - Total assets increased by $135.7 million from December 31, 2024, to June 30, 2025, primarily driven by increases in intangibles and goodwill, partially offset by a decrease in cash and cash equivalents[8] - Cash and cash equivalents decreased from $912.8 million at December 31, 2024, to $695.6 million at June 30, 2025[8] Condensed Consolidated Statements of Operations Reports revenues, expenses, and net income for Q2 and H1 2025 and 2024 Statements of Operations Summary | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $378,045 | $394,091 | $750,809 | $764,066 | | Gross profit | $241,011 | $255,774 | $478,711 | $497,620 | | Operating income | $87,966 | $102,729 | $190,033 | $209,364 | | Net income | $78,755 | $62,073 | $151,700 | $193,139 | | Basic EPS | $1.15 | $0.89 | $2.21 | $2.80 | | Diluted EPS | $1.12 | $0.88 | $2.14 | $2.74 | - Revenues decreased by 4.1% for the three months ended June 30, 2025, and by 1.7% for the six months ended June 30, 2025, compared to the same periods in 2024[10] - Net income increased by 26.9% for the three months ended June 30, 2025, but decreased by 21.5% for the six months ended June 30, 2025, compared to the same periods in 2024[10] Condensed Consolidated Statements of Comprehensive Income Presents net income and other comprehensive income for Q2 and H1 2025 and 2024 Comprehensive Income Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $78,755 | $62,073 | $151,700 | $193,139 | | Foreign currency translation | $276 | $(32) | $133 | $(173) | | Comprehensive income | $79,031 | $62,041 | $151,833 | $192,966 | - Comprehensive income increased by $16.99 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher net income and a positive foreign currency translation[13] Condensed Consolidated Statements of Changes in Stockholders' Equity Outlines changes in common stock, treasury stock, retained earnings, and total equity for H1 2025 Stockholders' Equity Changes | Metric (in thousands) | January 1, 2025 Balance | June 30, 2025 Balance | | :-------------------- | :---------------------- | :-------------------- | | Common Stock Amount | $709 | $717 | | Treasury Stock Amount | $(175,000) | $(275,000) | | Additional Paid-In Capital | $817,972 | $844,903 | | Retained Earnings | $445,945 | $597,645 | | Accumulated Other Comprehensive Loss | $(1,615) | $(1,482) | | Total Stockholders' Equity | $1,088,011 | $1,166,783 | - Total stockholders' equity increased by $78.77 million from January 1, 2025, to June 30, 2025, driven by net income and stock-based compensation, partially offset by common stock repurchases[16] - The Company repurchased $100.0 million of common stock during the six months ended June 30, 2025[16] Condensed Consolidated Statements of Cash Flows Summarizes cash flows from operating, investing, and financing activities for H1 2025 and 2024 Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $194,669 | $211,958 | | Net cash used in investing activities | $(296,190) | $(151,615) | | Net cash used in financing activities | $(116,632) | $(16,746) | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(217,224) | $43,384 | - Net cash provided by operating activities decreased by $17.29 million for the six months ended June 30, 2025, compared to the same period in 2024[19] - Net cash used in investing activities significantly increased by $144.58 million, primarily due to the acquisition of Evergreen for $269.1 million in 2025[19] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures for the condensed consolidated financial statements Note Regarding Company References and Trademarks Clarifies the usage of company references and trademarks within the financial report - The note clarifies company references (e.g., 'Company,' 'Lantheus' for Lantheus Holdings, Inc. and its subsidiaries) and trademark usage within the Form 10-Q[24][25] 1. Basis of Presentation Explains the accounting principles and standards used for preparing the interim financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions, including normal and recurring adjustments[26] - These statements should be read in conjunction with the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2024[27] 2. Summary of Significant Accounting Policies Details the key accounting policies, including asset classification and new accounting standards - Assets are classified as held for sale when management commits to a plan to sell, the sale is probable within one year, and the asset is available for immediate sale[28] - Equity investments with readily determinable fair values are measured at fair value, with changes recorded in investment in equity securities – unrealized loss (gain)[29] - The Company is evaluating the impact of new accounting standards: ASU 2024-04 (Debt with Conversion and Other Options), ASU 2024-03/2025-01 (Expense Disaggregation Disclosures), and ASU 2023-09 (Income Tax Disclosures), which become effective in 2025, 2026, and 2024, respectively[32][33][34] 3. Revenue from Contracts with Customers Analyzes revenue recognition from various product categories and license agreements Revenue by Source | Revenue Source (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenue, net | $374,547 | $392,756 | $741,465 | $762,069 | | License and royalty revenues | $3,498 | $1,335 | $9,344 | $1,997 | | Total revenues | $378,045 | $394,091 | $750,809 | $764,066 | Revenue by Product Category | Product Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | PYLARIFY | $250,642 | $273,255 | $508,296 | $532,125 | | DEFINITY | $83,939 | $78,100 | $163,150 | $154,664 | | TechneLite | $24,982 | $28,186 | $44,693 | $49,900 | | Strategic partnerships and other revenue | $11,590 | $8,725 | $22,337 | $15,236 | | Total revenues | $378,045 | $394,091 | $750,809 | $764,066 | - PYLARIFY revenue decreased by 8.3% for the three months and 4.5% for the six months ended June 30, 2025, compared to 2024[38] - DEFINITY revenue increased by 7.5% for the three months and 5.5% for the six months ended June 30, 2025, compared to 2024[38] - Strategic partnerships and other revenue increased significantly by 32.8% for the three months and 46.6% for the six months ended June 30, 2025, compared to 2024[38] 4. Fair Value of Financial Instruments Categorizes and measures financial instruments based on fair value hierarchy levels - The Company categorizes financial instruments into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[41] Fair Value Measurement | Fair Value (in thousands) | June 30, 2025 Total Fair Value | Level 1 | Level 2 | Level 3 | | :------------------------ | :----------------------------- | :------ | :------ | :------ | | Assets: | | | | | | Money market funds | $533,320 | $533,320 | $— | $— | | Investment securities | $44,235 | $44,235 | $— | $— | | Liabilities: | | | | | | Deferred compensation plan liabilities | $777 | $777 | $— | $— | | Contingent consideration liabilities | $43,042 | $— | $— | $43,042 | - Contingent consideration liabilities, primarily from the Evergreen acquisition, are classified as Level 3 instruments and valued at $43.0 million at June 30, 2025[51][52][53] - The Company held 11,677,339 shares of Perspective common stock (fair value $40.2 million) and 282,958,513 shares of Radiopharm common stock (fair value $4.1 million) at June 30, 2025, both classified as Level 1[45][46] 5. Income Taxes Reports income tax expense and effective tax rates for the current and prior periods Income Tax Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $25,762 | $22,301 | $49,346 | $62,503 | | Effective tax rate | 24.6% | 26.4% | 24.5% | 24.4% | - The effective tax rate decreased for the three months ended June 30, 2025, primarily due to changes in the valuation allowance related to equity securities, partially offset by increased non-deductible stock compensation[55] 6. Inventory Details inventory composition and changes, including reclassifications to assets held for sale Inventory Composition | Inventory (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials | $26,446 | $29,080 | | Work in process | $13,663 | $15,870 | | Finished goods | $22,048 | $23,075 | | Total inventory, net | $62,157 | $68,025 | - Total inventory, net, decreased by $5.87 million from December 31, 2024, to June 30, 2025[56] - $10.4 million of inventory was reclassified to assets held for sale as a result of the pending sale of the SPECT business[56] 7. Property, Plant and Equipment, Net Presents the net value of property, plant, and equipment, including reclassifications Property, Plant and Equipment Summary | PP&E (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Total gross PP&E | $223,182 | $285,560 | | Accumulated depreciation and amortization | $(65,456) | $(108,762) | | Total PP&E, net | $157,726 | $176,798 | - Net property, plant and equipment decreased by $19.07 million from December 31, 2024, to June 30, 2025[60] - $96.7 million of gross PP&E and $53.2 million of accumulated depreciation were reclassified to assets held for sale due to the pending SPECT business sale[60] 8. Assets and Liabilities Held for Sale Outlines assets and liabilities classified as held for sale due to SPECT business divestiture - On May 1, 2025, the Company entered into an agreement to sell its SPECT business to SHINE Technologies, LLC, including diagnostic agents and manufacturing facilities[63] Assets and Liabilities Held for Sale Summary | Held-for-Sale (in thousands) | June 30, 2025 | | :--------------------------- | :------------ | | Assets: | | | Accounts receivable, net | $16,386 | | Inventory | $10,368 | | Property, plant and equipment, net | $43,451 | | Total assets held-for-sale | $73,415 | | Liabilities: | | | Accounts payable | $7,448 | | Accrued expenses and other liabilities | $3,670 | | Asset retirement obligation | $18,727 | | Total liabilities held-for-sale | $29,845 | - The assets and liabilities of the SPECT business were classified as held for sale as of June 30, 2025, with no impairment recognized[64] 9. Accrued Expenses, Other Liabilities and Other Long-Term Liabilities Details the composition and changes in accrued expenses and various long-term liabilities Accrued Expenses and Liabilities Summary | Liability (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Total accrued expenses and other liabilities | $208,600 | $204,992 | | Operating lease liabilities | $47,851 | $53,185 | | Long-term contingent consideration liabilities | $43,042 | $— | | Total other long-term liabilities | $102,179 | $63,180 | - Long-term contingent consideration liabilities increased to $43.0 million at June 30, 2025, primarily due to the Evergreen acquisition[67] 10. Asset Retirement Obligations Describes the asset retirement obligations and changes in estimated decommissioning costs - The Asset Retirement Obligation (ARO) is approximately $20.4 million at June 30, 2025, related to the decommissioning of radioactive-related operations[68] Asset Retirement Obligation Changes | ARO Changes (in thousands) | Amount | | :------------------------- | :----- | | Balance at January 1, 2025 | $23,344 | | Revision of estimated decommissioning costs | $(4,727) | | Reclassification to liabilities held-for-sale | $(18,727) | | Accretion expense | $246 | | Balance at June 30, 2025 | $136 | - A $4.7 million reduction in estimated decommissioning costs was recorded in the first quarter of 2025 due to changes in remediation technology and processes[70] 11. Goodwill and Intangibles, Net Reports the carrying value and changes in goodwill and intangible assets, including IPR&D Goodwill Changes | Goodwill (in thousands) | Amount | | :---------------------- | :----- | | Balance at January 1, 2025 | $61,189 | | Acquisition of Evergreen | $116,221 | | Reclassification to assets held for sale | $(541) | | Balance at June 30, 2025 | $176,869 | - Goodwill increased by $115.68 million, primarily due to the $116.2 million recognized from the Evergreen acquisition[72] Intangible Assets, Net | Intangibles (in thousands) | June 30, 2025 Net | December 31, 2024 Net | | :------------------------- | :---------------- | :-------------------- | | Amortizable intangibles | $144,946 | $161,761 | | Non-amortizable (IPR&D) | $215,000 | $— | | Total intangibles, net | $359,946 | $161,761 | - Total intangibles, net, increased significantly to $359.9 million at June 30, 2025, largely due to $215.0 million in in-process research and development (IPR&D) from the Evergreen acquisition[72] 12. Long-Term Debt, and Other Borrowings, Net of Current Portion Details the Company's long-term debt, including convertible notes and revolving credit facility Long-Term Debt Summary | Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | 2.625% Convertible Senior Notes due 2027 | $574,996 | $575,000 | | Unamortized debt issuance costs | $(8,611) | $(10,392) | | Finance lease liabilities | $1,258 | $1,645 | | Total long-term debt and other borrowings, net of current portion | $566,847 | $565,279 | - The 2022 Revolving Facility was amended in December 2024, increasing its capacity from $350.0 million to $750.0 million and extending the maturity to December 19, 2029[79] - As of June 30, 2025, there were no outstanding borrowings under the 2022 Revolving Facility, and the Company was in compliance with all covenants[84][241] - The 2.625% Convertible Senior Notes due 2027 have a carrying value of $575.0 million and a fair value of $731.0 million as of June 30, 2025[97] 13. Accumulated Other Comprehensive Loss Summarizes changes in accumulated other comprehensive loss, primarily from foreign currency Accumulated Other Comprehensive Loss Changes | Component (in thousands) | Balance at January 1, 2025 | Other comprehensive loss before reclassifications | Balance at June 30, 2025 | | :----------------------- | :------------------------- | :---------------------------------------------- | :----------------------- | | Foreign Currency Translation | $(1,615) | $133 | $(1,482) | | Total Accumulated Other Comprehensive Loss | $(1,615) | $133 | $(1,482) | - Accumulated other comprehensive loss improved from $(1,615) thousand at January 1, 2025, to $(1,482) thousand at June 30, 2025, primarily due to positive foreign currency translation adjustments[98] 14. Stockholders' Equity and Stock-Based Compensation Discusses changes in stockholders' equity and the impact of stock-based compensation expenses - The Board authorized a $250 million share repurchase program in November 2024. As of June 30, 2025, the Company repurchased approximately 2.4 million shares for $200.0 million under this program[102] Stock-Based Compensation Expense | Stock-Based Compensation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total stock-based compensation expense | $22,321 | $18,479 | $43,519 | $33,863 | - Stock-based compensation expense increased by $3.84 million (20.8%) for the three months and $9.66 million (28.5%) for the six months ended June 30, 2025, compared to the same periods in 2024[103] 15. Net Income Per Common Share Calculates basic and diluted net income per common share for the reporting periods Net Income Per Share Summary | EPS (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $78,755 | $62,073 | $151,700 | $193,139 | | Basic weighted-average common shares outstanding | 68,516 | 69,356 | 68,591 | 69,056 | | Diluted weighted-average common shares outstanding | 70,312 | 70,601 | 70,896 | 70,364 | | Basic EPS | $1.15 | $0.89 | $2.21 | $2.80 | | Diluted EPS | $1.12 | $0.88 | $2.14 | $2.74 | - Diluted EPS increased by $0.24 (27.3%) for the three months ended June 30, 2025, but decreased by $0.60 (21.9%) for the six months ended June 30, 2025, compared to the same periods in 2024[104] - The convertible notes had a dilutive impact on EPS for the three and six months ended June 30, 2025, as the average stock price exceeded the conversion price[105] 16. Other Income Reports components of other income, net, including foreign currency and interest income Other Income Summary | Other Income (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Foreign currency loss | $342 | $455 | $420 | $238 | | Interest income | $(7,213) | $(8,924) | $(16,695) | $(17,472) | | Revision of estimated decommissioning costs | $— | $— | $(4,727) | $— | | Total other income, net | $(6,895) | $(9,044) | $(21,023) | $(17,832) | - Other income, net, decreased by $2.15 million for the three months ended June 30, 2025, primarily due to lower interest income on reduced cash balances after the Evergreen acquisition[107][228] - For the six months ended June 30, 2025, other income, net, increased by $3.19 million, mainly due to a $4.7 million adjustment reducing estimated decommissioning costs[107][228] 17. Commitments and Contingencies Discloses legal proceedings, regulatory milestones, and potential sales milestones - The Company is involved in legal proceedings, including a patent infringement lawsuit by Novartis entities regarding PNT2003 and a patent infringement lawsuit filed by the Company against a software developer[110][111] - For the Cerveau acquisition (MK-6240), the Company could pay up to $51.0 million in regulatory milestones and up to $1.2 billion in sales milestones, plus double-digit royalties, but no liability was recorded as of June 30, 2025, due to timing uncertainty[112] 18. Benefit Plans Describes the Company's nonqualified deferred compensation plan and related assets - The Company adopted the Nonqualified Deferred Compensation Plan (LDCP) in October 2024, allowing key employees and non-employee directors to defer portions of their compensation[114] - As of June 30, 2025, LDCP assets and liabilities were $0.8 million each, held in a Rabbi Trust and invested in corporate-owned life insurance (COLI)[115] 19. Acquisitions Details recent acquisitions, including Evergreen Theragnostics and other strategic agreements - On April 1, 2025, the Company acquired Evergreen Theragnostics, Inc. for an upfront cash payment of $276.4 million, with potential additional milestone payments of up to $727.5 million[116][117][118] Evergreen Acquisition Details | Evergreen Acquisition (in thousands) | Estimated Fair Value | | :----------------------------------- | :------------------- | | Cash and cash equivalents | $8,065 | | Intangibles (IPR&D) | $215,000 | | Total identifiable assets acquired | $262,529 | | Total liabilities assumed | $(59,284) | | Net assets acquired | $203,245 | | Purchase consideration | $319,466 | | Goodwill | $116,221 | - In January 2024, the Company entered into strategic agreements with Perspective Therapeutics, Inc., acquiring 11.39% of outstanding shares for $20.8 million and an exclusive option for Pb212-VMT-α-NET for $28.0 million[130][131][132] - In June 2024, the Company acquired global exclusive rights to two preclinical assets (LNTH-2403 and LNTH-2404) from Radiopharm Theranostics Limited for an upfront payment of $2.0 million, with potential additional milestone and royalty payments[135][138] - In June 2024, the Company acquired Meilleur Technologies Inc., including its asset NAV-4694, for an upfront payment of $32.9 million, with additional payments made in August 2024 and May 2025 to reduce future royalty obligations[140][141] - In July 2024, the Company acquired global rights to RM2 from Life Molecular Imaging, Inc. for an upfront payment of $35.0 million, plus a $1.0 million prior payment and a $5.4 million milestone payment in March 2025[143] 21. Subsequent Events Reports significant events after the reporting period, including new acquisitions and share repurchases - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, providing significant U.S. tax law changes, which the Company is currently evaluating for impact[149] - On July 21, 2025, the Company acquired Life Molecular Imaging, Inc. for an upfront payment of $350.0 million in cash and up to an additional $400.0 million in potential earn-out and milestone payments, including Neuraceq, an approved Alzheimer's disease radiodiagnostic[150] - On July 31, 2025, the Board authorized a new share repurchase program (2025 Program) to repurchase up to $400.0 million of common stock through December 31, 2027, replacing the previous 2024 Program[151] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes financial condition, operating results, liquidity, and strategic developments Cautionary Note Regarding Forward-Looking Statements Warns that the report contains forward-looking statements subject to inherent risks - The report contains forward-looking statements subject to risks and uncertainties, including those related to product market expansion, manufacturing capabilities, regulatory approvals, acquisitions, and pipeline development[152] - Actual results may differ materially from expectations due to inherent uncertainties, risks, and changes in circumstances[153] Available Information Indicates where company reports and SEC filings can be accessed free of charge - Company reports (10-K, 10-Q, 8-K) are available free of charge on its investor relations website (investor.lantheus.com) and the SEC's website (www.sec.gov)[155](index=155&type=chunk)[156] Overview Introduces Lantheus as a radiopharmaceutical company focused on oncology and diagnostics - Lantheus is a leading radiopharmaceutical-focused company, classifying revenues into Radiopharmaceutical Oncology, Precision Diagnostics, and Strategic Partnerships and Other Revenue[158] - The Company's products are used by various healthcare professionals in cardiology, nuclear medicine, oncology, and radiology, aiming to improve patient outcomes and reduce costs[159] Recent Developments Highlights key strategic actions, including share repurchases, acquisitions, and regulatory updates - The Board authorized a new $400.0 million share repurchase program (2025 Program) through December 31, 2027, replacing the previous program[162] - The FDA accepted the NDA for a new formulation of the F-18 PSMA PET imaging agent, with a PDUFA action date goal of March 6, 2026[164] - On July 21, 2025, the Company acquired Life Molecular Imaging for $350.0 million upfront, including Neuraceq, an approved Alzheimer's disease diagnostic[165] - On April 1, 2025, the Company acquired Evergreen Theragnostics for an upfront payment of $276.4 million, expanding its CDMO services and proprietary products[168][169] - On May 1, 2025, the Company agreed to sell its SPECT business to SHINE Technologies, LLC, to focus on PET radiodiagnostics and microbubbles[171][173] - MK-6240 successfully met co-primary endpoints in two pivotal studies, supporting an NDA submission to the FDA expected in Q3 2025[187] Key Factors Affecting Our Results Discusses critical drivers and challenges influencing financial performance, including product growth - PYLARIFY's growth depends on maintaining its position as the most utilized PSMA PET imaging agent amidst increasing competition and the expiration of Transitional Pass-Through (TPT) Status[191][192] - DEFINITY's growth is expected through continued physician education and label expansion, including FDA approval for pediatric use in March 2024[196][199] - Strategic Partnerships and Other Revenue focuses on radiopharmaceutical diagnostic and therapeutic opportunities, including biomarkers, digital solutions (e.g., aPROMISE), and CDMO services from the Evergreen Merger[197][198][200][201][202] - R&D investments are substantial, focusing on PYLARIFY, PNT2002/2003, LNTH-2501, MK-6240, NAV-4694, LNTH-1363S, RM2, LNTH-2403, and LNTH-2404[205][206] - The Company does not plan to pursue an NDA or further invest in PNT2002 due to confounding results in the SPLASH study[209] Results of Operations Compares revenues, expenses, and net income for the current and prior reporting periods Three Months Operating Results | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change $ | Change % | | :-------------------- | :--------------------------- | :--------------------------- | :------- | :------- | | Revenues | $378,045 | $394,091 | $(16,046) | (4.1%) | | Gross profit | $241,011 | $255,774 | $(14,763) | (5.8%) | | Sales and marketing | $41,041 | $45,035 | $(3,994) | (8.9%) | | General and administrative | $66,515 | $47,409 | $19,106 | 40.3% | | Research and development | $45,489 | $60,601 | $(15,112) | (24.9%) | | Operating income | $87,966 | $102,729 | $(14,763) | (14.4%) | | Net income | $78,755 | $62,073 | $16,682 | 26.9% | Six Months Operating Results | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change $ | Change % | | :-------------------- | :--------------------------- | :--------------------------- | :------- | :------- | | Revenues | $750,809 | $764,066 | $(13,257) | (1.7%) | | Gross profit | $478,711 | $497,620 | $(18,909) | (3.8%) | | Sales and marketing | $83,544 | $90,581 | $(7,037) | (7.8%) | | General and administrative | $123,331 | $95,304 | $28,027 | 29.4% | | Research and development | $81,803 | $108,625 | $(26,822) | (24.7%) | | Operating income | $190,033 | $209,364 | $(19,331) | (9.2%) | | Net income | $151,700 | $193,139 | $(41,439) | (21.5%) | - Revenue decreases were primarily due to lower PYLARIFY net sales price and decreased TechneLite sales volume, partially offset by increased DEFINITY sales and Evergreen's contract manufacturing revenue[214] - General and administrative expenses increased significantly due to the Evergreen acquisition, including nonrecurring post-combination expenses and higher employee-related costs[223] - R&D expenses decreased due to upfront option payments in the prior year (Life Molecular, Radiopharm, Perspective), partially offset by payments to AstraZeneca and increased project costs for newly acquired assets[225][226] Liquidity and Capital Resources Analyzes the Company's cash flows, debt, and ability to meet future capital requirements Cash Flow Activities | Cash Flow (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $194,669 | $211,958 | | Net cash used in investing activities | $(296,190) | $(151,615) | | Net cash used in financing activities | $(116,632) | $(16,746) | - Net cash used in investing activities increased significantly in 2025, primarily due to the $269.1 million acquisition of Evergreen[234] - Net cash used in financing activities increased due to $100.0 million in common stock repurchases and $24.5 million in tax withholding payments related to equity awards[236] - The 2022 Revolving Facility was increased to $750.0 million and extended to December 2029, with no outstanding borrowings as of June 30, 2025[238][239] - The Company had $695.6 million in cash and cash equivalents at June 30, 2025, and believes current resources are sufficient for future capital requirements[249][250][251] Critical Accounting Policies and Estimates Confirms no significant changes to critical accounting policies or estimates during the period - There have been no significant changes to the Company's critical accounting policies or underlying assumptions and estimates in the six months ended June 30, 2025[253] Off-Balance Sheet Arrangements Discloses the Company's surety bond and confirms no other off-balance sheet arrangements - The Company has a $30.3 million surety bond to the Massachusetts Department of Public Health as financial assurance for decommissioning its North Billerica production facility[254] - No other off-balance sheet arrangements, such as structured finance or special purpose entities, have been engaged in[254] Item 3. Quantitative and Qualitative Disclosures About Market Risk Addresses market risk exposures, noting no material changes since December 31, 2024 - No material changes to market risk exposures have occurred since December 31, 2024[256] - Equity investment risk exists due to the $44.2 million carrying value of investments in Perspective and Radiopharm, which are recorded at fair value and subject to market price volatility[257] Item 4. Controls and Procedures Confirms effective disclosure controls and procedures with no material changes in internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[258] - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[259] PART II. OTHER INFORMATION Presents additional information not in financial statements, including legal proceedings and risk factors Item 1. Legal Proceedings Refers to Note 17 for details on legal proceedings, including patent infringement lawsuits - Information on legal proceedings is incorporated by reference from Note 17, 'Commitments and Contingencies,' in the condensed consolidated financial statements[261] Item 1A. Risk Factors Updates risk factors, highlighting new and evolving risks in commercial products, reimbursement, and capital - PYLARIFY's growth is at risk due to PMF manufacturing capacity, maintaining adequate coding/coverage/payment, competition from other PSMA PET imaging agents, the expiration of TPT Status, and potential generic market entry in 2026[262][264][266][268] - Reforms to the U.S. healthcare system, including the One Big Beautiful Bill Act (OBBBA), could adversely affect the business through reduced patient coverage, decreased Medicaid reimbursement rates, and Medicare cuts[271][272][274] - Prevailing economic conditions, such as unemployment, inflation, and tariffs, could negatively impact demand for healthcare services, increase operating expenses, and affect customer profitability[276][277] - Recent acquisitions (Life Molecular, Evergreen) and dispositions (SPECT business) pose risks related to integration challenges, unforeseen expenses, and the inability to realize anticipated benefits[280][282][283] - Repurchases of common stock under the new $400.0 million program could affect the value of common stock, and stockholders may prefer alternative capital allocation[286] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details common stock repurchase activities in Q2 2025 under the 2024 Program and dividend policy Common Stock Repurchase Activity | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of the 2024 Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the 2024 Program | | :--------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------- | :-------------------------------------------------------------------------------- | | April 2025 | 4,230 | $102.32 | — | $150.0 million | | May 2025 | 1,262,751 | $79.36 | 1,259,865 | $50.0 million | | June 2025 | 1,686 | $77.86 | — | $50.0 million | | Total | 1,268,667 | | 1,259,865 | $50.0 million | - During the three months ended June 30, 2025, the Company repurchased 1.26 million shares for approximately $100.0 million under the 2024 Program[290] - The Company does not currently intend to pay dividends in the foreseeable future, expecting to retain future earnings for business growth and debt repayment[292] Item 3. Defaults Upon Senior Securities Confirms that there were no defaults upon senior securities - There were no defaults upon senior securities[293] Item 4. Mine Safety Disclosures States that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[294] Item 5. Other Information Reports no Rule 10b5-1 trading arrangement changes by directors or officers in Q2 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during the second quarter of 2025[295] Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including bylaws, equity plan amendments, and certifications - Exhibits include Amended and Restated Bylaws, Ninth Amendment to 2015 Equity Incentive Plan, CEO and CFO certifications, and Inline XBRL documents[296] SIGNATURES Provides the official signatures of the Chief Executive Officer and Chief Financial Officer - The report is signed by Brian Markison, Chief Executive Officer, and Robert J. Marshall, Jr., Chief Financial Officer and Treasurer, on August 6, 2025[301]