Lantheus Holdings(LNTH) - 2024 Q1 - Quarterly Results

First Quarter 2024 Financial Results Overview Lantheus achieved strong Q1 2024 financial results, driven by commercial excellence and strategic investments, leveraging its market-leading portfolio and robust financial position for sustained growth and M&A opportunities Executive Summary Lantheus achieved strong Q1 2024 financial results, driven by commercial excellence and strategic investments, leveraging its market-leading portfolio and robust financial position for sustained growth and M&A opportunities - The company demonstrated strong performance in Q1 2024, highlighting commercial excellence and innovation, while continuing strategic investments to advance and expand its product pipeline[4] - The company's market-leading commercial portfolio, fully integrated capabilities, and strong financial position, including significant cash flow and capital access, provide a foundation for sustained growth[4] - Leveraging its radiopharmaceutical expertise and financial resources, the company will invest in existing businesses for value maximization and evaluate business development and M&A opportunities in diagnostics and therapeutics to enhance its pipeline and capabilities[4] Summary Financial Performance Lantheus achieved significant financial growth in Q1 2024, with global revenue up 23.0%, a shift from GAAP net loss to profit, and healthy growth in adjusted net income and EPS Q1 2024 Key Financial Data (Unaudited) | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | Change % | | :-------------------------------- | :--------------------- | :--------------------- | :------- | | Global Revenue | $370.0 | $300.8 | 23.0 % | | GAAP Net Income (Loss) | $131.1 | $(2.8) | (4769.3)% | | GAAP Fully Diluted Net Income (Loss) Per Share | $1.87 | $(0.04) | (4616.4)% | | Adjusted Net Income (Non-GAAP) | $118.3 | $102.2 | 15.8 % | | Adjusted Fully Diluted Net Income (Non-GAAP) Per Share | $1.69 | $1.47 | 15.2 % | Key Financial Highlights Revenue growth was primarily driven by strong PYLARIFY and DEFINITY sales, with significant improvement in operating income and robust net cash flow from operations and free cash flow - Global revenue increased by 23.0% to $370 million, primarily driven by net product sales of PYLARIFY and DEFINITY[8] Q1 2024 Key Product Sales (Unaudited) | Product | Q1 2024 Sales (Millions USD) | Q1 2023 Sales (Millions USD) | Change % | | :---------------------- | :--------------------------- | :--------------------------- | :------- | | PYLARIFY | $258.9 | $195.5 | 32.4 % | | DEFINITY | $76.6 | $68.8 | 11.2 % | - Operating income increased to $106.6 million, compared to a loss of $9.3 million in the prior year period; adjusted operating income (non-GAAP) grew 9.4% to $155.3 million[8] Q1 2024 Cash Flow (Unaudited) | Metric | Q1 2024 (Millions USD) | Q1 2023 (Millions USD) | | :-------------------------------- | :--------------------- | :--------------------- | | Net Cash Provided by Operating Activities | $127.2 | $108.5 | | Free Cash Flow | $119.0 | $99.3 | Recent Business Developments Lantheus reported significant progress in its radiopharmaceutical oncology pipeline and other strategic initiatives, including key clinical trial milestones, new partnerships, and leadership appointments Radiopharmaceutical Oncology Pipeline Progress Lantheus reported PNT2002 met its primary endpoint in the Phase III SPLASH trial for advanced prostate cancer, with overall survival data expected in Q3 2024, and FDA accepted its 177Lu-PNT2003 ANDA for a targeted 2026 launch - The Phase III SPLASH trial for PNT2002 met its primary endpoint, demonstrating a 29% reduction in the risk of radiographic progression or death in patients with metastatic castration-resistant prostate cancer (mCRPC)[14] - The company anticipates PNT2002 overall survival (OS) data to be available in Q3 2024, upon reaching 75% of the trial protocol-specified OS target events[14] - The FDA accepted Lantheus' Abbreviated New Drug Application (ANDA) for Lutetium Lu 177 Dotatate (177Lu-PNT2003), with a targeted launch in 2026 following approval and resolution of Hatch-Waxman litigation[14] Other Key Updates Lantheus expanded its pipeline through a strategic agreement with Perspective Therapeutics for VMT-alpha-NET and Pb212-based alpha therapies, appointed Brian Markison as CEO, and received FDA approval for DEFINITY in pediatric patients - As of March 31, 2024, cash and cash equivalents increased to $718.3 million from $713.7 million on December 31, 2023, after accounting for a $98.3 million net investment in the Perspective collaboration during Q1 2024[14] - The company entered into multiple strategic agreements with Perspective Therapeutics, securing an exclusive license option for VMT-alpha-NET and an option to co-develop a Pb212-based alpha prostate cancer therapeutic[14] - Brian Markison was appointed Chief Executive Officer, effective March 1, 2024, and MaryAnne Heino was named Chair of the Board of Directors[14] - The FDA approved a supplemental New Drug Application (sNDA) for DEFINITY® (Perflutren Lipid Microsphere) as an ultrasound enhancing agent for use in pediatric patients with suboptimal echocardiograms[14] Financial Guidance Lantheus has updated its financial outlook, providing revised guidance for the second quarter and full year 2024, reflecting management's expectations for future performance Q2 and Full Year 2024 Financial Guidance Lantheus raised its full-year 2024 net revenue and earnings guidance and provided specific Q2 2024 guidance, reflecting confidence in continued growth - The company raised its full-year 2024 net revenue and earnings guidance and provided Q2 2024 guidance[7] Q2 and Full Year 2024 Financial Guidance | Metric | Q2 2024 Guidance (Issued May 2, 2024) | Full Year 2024 Guidance (Issued May 2, 2024) | Full Year 2024 Guidance (Issued Feb 22, 2024) | | :-------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $380M - $390M | $1.50B - $1.52B | $1.41B - $1.445B | | Adjusted Fully Diluted EPS | $1.81 - $1.86 | $7.00 - $7.20 | $6.50 - $6.70 | - The company does not provide GAAP earnings per common share guidance or a reconciliation to adjusted fully diluted EPS due to the inability to reasonably determine business development and acquisition-related expenses, purchase accounting fair value adjustments, and one-time, non-recurring charges[13] Company Information and Disclosures This section outlines how Lantheus disseminates information to investors, details its conference call and webcast, provides an overview of the company, explains its use of non-GAAP financial measures, and includes a safe harbor statement for forward-looking information Internet Posting of Information Lantheus regularly posts investor-important information on the "Investors" section of its website and encourages regular review by investors - The company regularly posts information that may be important to investors on the "Investors" section of its website, www.lantheus.com, and encourages investors and potential investors to review it regularly[14][15] Conference Call and Webcast The company held a conference call and webcast on May 2, 2024, to discuss financial results, with an online replay available, and discussed non-GAAP financial measures with reconciliations on its website - The company held a conference call and webcast on May 2, 2024, to discuss its financial results[18] - The conference call discussed non-GAAP financial measures, with reconciliations available in the investor relations section of the company's website[19] About Lantheus Holdings, Inc. Lantheus Holdings, Inc. is a leading radiopharmaceutical company based in Massachusetts, with over 65 years of experience dedicated to improving patient outcomes by "finding, fighting, and following" disease - Lantheus is a leading radiopharmaceutical company dedicated to delivering life-changing science, enabling clinicians to find, fight, and follow disease for better patient outcomes[21] - Headquartered in Massachusetts, with offices in Canada and Sweden, the company has provided radiopharmaceutical solutions for over 65 years[21] Non-GAAP Financial Measures The company utilizes non-GAAP financial measures like adjusted net income and free cash flow to provide investors with useful operational assessment information, acknowledging potential exclusion of variable or unpredictable items, and uses these internally for performance evaluation and resource allocation - The company uses non-GAAP financial measures including adjusted net income and its components, adjusted fully diluted net income per share, adjusted operating income, and free cash flow[22] - Management believes the presentation of these measures provides useful information to investors for assessing the company's operations[22] - Investors should consider these non-GAAP measures as a supplement to, not a substitute for or superior to, GAAP financial performance measures[22] Safe Harbor for Forward-Looking and Cautionary Statements This section provides a safe harbor statement for forward-looking statements, cautioning readers about inherent risks and uncertainties that could cause actual results to differ materially from projections, with no obligation for the company to update these statements - This press release contains forward-looking statements subject to risks and uncertainties, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[23] - Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this release, and the company undertakes no obligation to publicly update any forward-looking statements, except as required by law[23] - Risks and uncertainties include market expansion and penetration of PYLARIFY and DEFINITY, manufacturing capabilities, raw material supply, regulatory approvals, ability to execute collaboration agreements, and ability to identify and acquire new diagnostic and therapeutic product opportunities[23][24] Consolidated Financial Statements This section presents the company's unaudited consolidated financial statements, including statements of operations, revenue analysis, reconciliations of GAAP to non-GAAP measures, free cash flow, and condensed balance sheets Consolidated Statements of Operations The Q1 2024 consolidated statements of operations show significant revenue growth and a shift from operating loss to substantial operating income, driven by improved gross profit and gain on asset sales Consolidated Statements of Operations (Unaudited, in Thousands USD) | Metric | Q1 2024 | Q1 2023 | | :-------------------- | :------ | :------ | | Revenue | $369,975 | $300,784 | | Cost of Sales | $128,129 | $223,708 | | Gross Profit | $241,846 | $77,076 | | Total Operating Expenses | $141,465 | $86,420 | | Gain on Sale of Assets | $6,254 | — | | Operating Income (Loss) | $106,635 | $(9,344) | | Net Income (Loss) | $131,066 | $(2,807) | | Diluted Earnings Per Share | $1.87 | $(0.04) | Consolidated Revenues Analysis Revenue analysis indicates PYLARIFY sales grew 32.4% and DEFINITY sales grew 11.2%, collectively driving a 23.0% increase in total revenue, with significant growth in radiopharmaceutical oncology revenue and a decrease in strategic collaboration and other revenue Consolidated Revenues Analysis (Unaudited, in Thousands USD) | Revenue Category | Q1 2024 | Q1 2023 | Change % | | :------------------------------ | :------ | :------ | :------- | | PYLARIFY | $258,870 | $195,470 | 32.4 % | | Other Radiopharmaceutical Oncology | $384 | $717 | (46.4)% | | Total Radiopharmaceutical Oncology | $259,254 | $196,187 | 32.1 % | | DEFINITY | $76,564 | $68,824 | 11.2 % | | TechneLite | $21,714 | $20,986 | 3.5 % | | Other Precision Diagnostics | $5,932 | $5,807 | 2.2 % | | Total Precision Diagnostics | $104,210 | $95,617 | 9.0 % | | Strategic Collaborations and Other Revenue | $6,511 | $8,980 | (27.5)% | | Total Revenues | $369,975 | $300,784 | 23.0 % | Reconciliation of GAAP to Non-GAAP Financial Measures This section details the reconciliation from GAAP net income (loss) and EPS to adjusted non-GAAP figures, highlighting adjustments for stock-based compensation, intangible asset amortization, strategic collaboration costs, and unrealized gains on equity investments Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited, in Thousands USD) | Metric | Q1 2024 | Q1 2023 | | :-------------------------------- | :------ | :------ | | Net Income (Loss) (GAAP) | $131,066 | $(2,807) | | Stock and Incentive Plan Compensation | $15,384 | $9,667 | | Amortization of Acquired Intangible Assets | $9,932 | $11,099 | | Strategic Collaboration and Licensing Costs | $28,000 | — | | Unrealized Gain on Equity Investment | $(60,704) | — | | Long-Lived Asset Impairment | — | $132,052 | | Adjusted Net Income (Non-GAAP) | $118,319 | $102,163 | | Adjusted Diluted Net Income Per Share (Non-GAAP) | $1.69 | $1.47 | - Adjusted operating income increased to $155.3 million in Q1 2024, a 9.4% increase from $142.0 million in Q1 2023[30] Reconciliation of Free Cash Flow Lantheus generated strong free cash flow of $119.0 million in Q1 2024, up from $99.3 million in Q1 2023, primarily due to increased net cash provided by operating activities Reconciliation of Free Cash Flow (Unaudited, in Thousands USD) | Metric | Q1 2024 | Q1 2023 | | :-------------------------------- | :------ | :------ | | Net Cash Provided by Operating Activities | $127,238 | $108,500 | | Capital Expenditures | $(8,273) | $(9,168) | | Free Cash Flow | $118,965 | $99,332 | Condensed Consolidated Balance Sheets As of March 31, 2024, Lantheus' total assets increased to $1.831 billion from $1.651 billion on December 31, 2023, driven by growth in cash, receivables, and equity investments, alongside a significant increase in total stockholders' equity Condensed Consolidated Balance Sheets (Unaudited, in Thousands USD) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and Cash Equivalents | $718,279 | $713,656 | | Accounts Receivable, Net | $337,389 | $284,292 | | Equity Investment | $138,960 | — | | Total Current Assets | $1,148,800 | $1,085,819 | | Total Assets | $1,831,334 | $1,651,149 | | Total Current Liabilities | $237,198 | $187,350 | | Long-Term Debt, Net and Other Borrowings | $562,466 | $561,670 | | Total Liabilities | $885,794 | $835,257 | | Total Stockholders' Equity | $945,540 | $815,892 | Company Contacts This section provides essential contact information for investor relations and external communications, facilitating direct engagement with company representatives Contacts This section provides contact information for investor relations and external communications - Investor Relations Contact: Mark Kinarney, Vice President, Investor Relations, Phone: 978-671-8842, Email: ir@lantheus.com[35] - External Communications Contact: Melissa Downs, Senior Director, External Communications, Phone: 646-975-2533, Email: media@lantheus.com[35]