Q2 2020 Lantheus Holdings Inc Earnings Call
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You play audio webcast will be available death protection. The company's website approximately two hours. After the completion of the call I will be archived for CTP I'll now turn the call over a few whos could be Mr. multi line you senior director Investor Relations Mike.
Thank you and good morning, welcome to the Lantheus Holdings second quarter 2020 earnings Conference call.
Joining me today is our president and CEO, Marianne Hey, you know and our CFO Bob Marshall.
This morning, we issued a press release, which was furnished to the Securities and Exchange Commission under form 8-K reporting our second quarter 2020 results you can find or at least in the investor section of our web site at Lantheus Dot com.
Before we get started I'd like to remind you that our comments. During this call will include forward looking statements actual results may differ materially from those indicated by forward looking statements due to a variety of risks and uncertainties. In particular, there are significant uncertainty about the duration and contemplated impact of the koeppen 19 pandemic. This.
Instead results could change at any time and the contemplated impact of covert 19 on the company's business results and outlook is the best estimate based on information available as of today's date. Please note that we assume no obligation to update these forward looking statements, except as required by applicable law, even if actual results or future expectation.
Change materially please refer to our SEC filings for a detailed discussion of these risks and uncertainties.
[noise] also discussions during this call will include certain non-GAAP financial measures reconciliation of these measures to the most directly comparable GAAP financial measures is also included intersection of our website with that I'll now turn over the call to Marianne Marianne. Thank you Mark and good morning, everyone I Hope this thing Egypt.
And your family as well as you listen to this call.
We continue to navigate through the Koby Macy's intended to help me safety of our employees patients and other partners in healthcare community, we need a top priority, we fix safety protocols in place across our site and have been vigilant in monitoring these protocols as well as emerging information around virus transmissions convention.
At the start of pandemic, we've managed our business operations effectively are essential workers have remained on campus as we continuously manufactured and ship products to our customers are other employees continue to work remotely and we have a return to office plan in place that enjoys the state and thoughtfully turnover employees to our different campuses.
We're pleased to begin on next chapter Atlanta with the closing of the Cogen acquisition.
At the beginning of this process, we didn't imagine or integration would be virtual but I haven't so impressed with the dedication to this effort by team members from both land and per again.
Since the outset my commitment has been to ensure the new lantheus represents the complementary strengths of both companies with the intent to be a best in class organization in the markets we serve.
That goal has not changed and we believe our milestones and strategic plan will deliver that vision.
In the near term milestones include the acceleration of product awareness and patient demand for adeptra and to build out of additional manufacturing to ensure we can meet demand the p., while India submission and opportunities in our micro bubble franchise.
We believe our capabilities and portfolios complement each other and will ensure we serve our target markets of precision diagnostic oncology radiopharmaceuticals and specialty offerings in artificial intelligence for AI analytics and pharmacy services.
Now that we have movie on deal closed integration, we're excited to capitalize on opportunities for value creation.
The lifetime sector continues to evolve with the use of isotope in both.
The diagnostic applications and we intend to be a leading companies in this emerging field.
More importantly, with the completion of this acquisition. We believe we are well positioned to serve the healthcare community with a more important goal the marriage of diagnosis and treatment.
Our goal is to lead in this developing landscape a therapeutic radio isotope a companion diagnostics as well as radio isotope related AI analytics and pharmacy services.
We believe that their announcing principal represented by companion diagnostic paired with therapeutics improves patient management and outcome and will be a value offerings to physicians patients and payers.
Now I will discuss business trends in our commercialized portfolio before discussing our pipeline.
Early April we announced that as a result of the impact of the Cobiz 19 pandemic, we recognize declining demand for products starting in the latter half of March at hospitals restricted access to limit discredit infection and focused on the treatment at Cobiz 90 infected patients instead of elective procedures that are typically formed for.
Outpatient.
At the time, we correctly anticipated the second quarter impact of the Cobot 19 pandemic on our business would be more significant than that seen in the latter part of the first quarter. Accordingly, we suspended our guidance and announce a number of cost saving measures intended to mitigate the economic impact to our business.
As the second quarter progressed, we agreed steady recovery of our business. This recovery has been most shaped by regional disease trends.
Which impacted the restoration of access to hospitals and willingness of patients to enter hospital outpatient services.
Noteworthy however has been the trend of increased use of ultrasound, including the use of DEFINITY any inpatient setting during this time.
Anecdotal feedback suggests that the ultra sound diagnostic modality may have been chosen for clinical diagnostic procedures because of the convenience and safety of having the diagnostic procedures performed at the pieces bed side, rather than we need to transport potentially infectious and very ill patients within hospitals to areas where stationary diagnostic.
Clinton is located.
While our sales team has been working remotely during this period, we have regularly engage our customers and provided additional information and training through virtual programs.
The relative strength of DEFINITY sales in this period, we believe was driven by the increased use of ultrasound and where appropriate the use of an ultrasound enhancing agent such as DEFINITY.
Our commercialized products demonstrated healthy trends in twentytwenty prior to the onset of pandemic.
DEFINITY delivered a strong start to the year for Michael Global franchise.
Because the so what products directly to hospitals, we have access to individual customer sales data. Therefore throughout the pandemic. We've had direct line of sight to the use of DEFINITY at the hospital level.
These data give us greater insight about the return of DEFINITY related diagnostic procedures done then does the broader metric of elective procedures, commonly cited in market analyses during the pandemic.
Having insight has been a great benefit for our business planning normally and even more so in the current environment I.
I think it is also noteworthy to share that we did not suffer low any of our DEFINITY or nuclear field based employees at any point during the pandemic to ensure they were available to assist our customers and understand safe use of our product in the hospital and other settings.
As such we had been in regular contact with our customers and have been able to continuously assess their needs.
This information has also guided our preparation as hospitals returns offering additional in an outpatient services that had been pause during the most most acute period of the Pandemics for particular regions.
While prior to the completion of our merger with Progenics via debt. Your field basically had been furloughed, we reinstated those employees and your customer related activities as soon as the merger was completed.
We are committed to sporting patients physicians positions and our other healthcare stakeholders with their needs as we collectively site the pandemic facing us.
With respect to other developments in our business on our first quarter earnings call I shared that we filed in import drug license application in China with the National Medical product administration or NPPA for the DEFINITY echocardiography indication.
I am pleased to report that our application was accepted by the end PA and is now being reviewed we believe this is an important milestone in our efforts to commercialize DEFINITY in China.
Regarding the status of potential generic file in the U.S market to DEFINITY to date, we have not received notice of an end to application as I've noted before we remain confident in our plan to defend the DEFINITY intellectual property estate and believe we have continued growth prospects for micro local franchise.
Our Technelite business also performed relatively well during the quarter.
We were able to receive Molly supply for more suppliers. Despite complications with airline logistics that were pandemic related most notably early in the second quarter.
These challenges required flexibility in our manufacturing schedules one of our core competencies Atlantis.
Our manufacturing and logistics team did a fantastic job to ensure that customers were minimally impacted.
Relating to his Vedra I would note that has been ARINC and since we first announced the Progenics acquisition to undertake an assessment of the field based stakeholder facing structure for opportunities to optimize demand generation inpatient pull through.
While fuel basin and creating efforts like again, we're pause as I previously noted we reinstated those employees on day, one of the newly merged company.
As he feels the sales and medical teams Reengaged with these customers, we will be implementing certain strategies to address our commercial and medical footprint over the next several quarters.
We believe market opportunity exists for the only FDA approved therapy for field promo site, Toma, and Paraganglioma, where ppgs and we're committed to ensuring patients and other patient really stakeholders are aware of and have access to this important treatment.
Moving onto our pipeline with our Progenics merger completed we have added two new product candidate PEO and 10 95, our prostate cancer diagnostic and therapeutic agents as our nearest term opportunities in our own internal pipeline today, I will discuss P. Wales, and our progress towards M&A submission.
Pete ill is a PSN they targeted pet imaging agent that enables clinicians to visualize both bone and soft tissue in the past disease in patients with locally advanced recurrent endorsement of static prostate cancer.
The positive results more pivotal registrational phase III onto a trial in men with biochemical recurrence prostate cancer were recently presented at two important meetings, the American society of clinical oncology or ACO as well as a society of nuclear medicine, and molecular imaging or Essent and alive.
The primary endpoint of the conduit trial measured the diagnostic performance a few weibo in men with biochemical recurrence of prostate cancer and uninformative baseline imaging based on conventional modalities.
Importantly in addition presented for the primary endpoint in the Condor trials data was also presents presented for a key secondary endpoint the physician intent to change the disease management plan for patients.
In the conduit trial positions indicated they would modify the disease management plan, it's 63.9% of the patients based on Pos imaging results.
These data were presented at both ASCO and and then I highlight the potential of bio to detect prostate cancer non invasively end reliably and make better informed decisions during treatment planning with the ultimate goal of improving disease management in order the most prevalent and growing forms of cancer in the us in men.
Our p. while team has been working diligently on NVH with the FDA. We were informed early in July of a potential equipment related issue, which could impact the production of the p., while drug product at our channel partner pet manufacturing facilities or Pms.
This issue is related to the pumps in the manufacturing equipment and not related to any of the data in the clinical trial.
We have assessed and the already addressing the potential issue and believe this remediation moved our ending a filing target date to no later than the middle of the fourth quarter.
The NDA filing remains a top priority and we are continually assessing our timeline for efficiencies that can accelerate the time to filing.
Simultaneously, we are building out the team that will support P. whales launch.
Turning now to superiors EFI team our novel cardiac imaging agents, our development and commercialization partner GE healthcare has informed us that the second phase three trial continues however, new patient enrollment has been delayed due to the impact of dependent.
GE healthcare intends to zoo enrollment in this quarter and expect to complete enrollment by mid 2021, and assuming regulatory approvals begin commercialization in early 2023.
With that I will conclude my update on key commercial and strategic programs and turn the call over to Bob Bob.
Thank you Mary Anne and good morning, everyone I will provide highlights for the second quarter financials, focusing on adjusted results or most otherwise noted.
Revenue for the second quarter was $66 million, a decrease of 23% from the prior year quarter.
Revenue during the quarter demonstrated a clear progression of recovery as states and localities moved through the initial phases of economic reopening variation across geographies in April the company's revenues decreased by 44.3%.
Versus prior year. However by June they were down only 2.8% on a similar basis, which does not include the contribution from Progenics second quarter revenues include 11 days the contribution from the Progenics portfolio, adding 1.2% of sales growth to our quarterly.
Consolidated results year over year.
Sales of DEFINITY in the second quarter for 40.4 million were 26.1% lower as compared to the prior year quarter, notably DEFINITY grew by 5.4% in June as compared to the prior year month.
In contrast to the 55.6% decrease experience in April on a similar basis.
Secondly, revenue was $18.9 million down 6% from the prior year quarter.
Similar to the sequential improvement throughout the quarter Technelite grew 2.7% in June versus the same month prior year other nuclear combined with contribution for Progenics assets decreased 32.6% to 10.3 million due mainly to the ongoing impacted cobot 19 related issues on xenon rebates and allows.
Just totaled 3.5 million.
Gross profit margin for the second quarter was 41.7% a decrease of 1140 basis points from the second quarter 2019 on a similar basis. The decrease is due to several factors related to covert 19, including a change in product mix with takeaways increased contribution to total sales relative to prior period.
We also experienced higher supply chain expenses during the quarter due to excess Molly volume purchases to meet customer demand and higher logistics.
Costs lastly, we incurred higher labor costs as a percentage of revenue in the quarter do a conscious decision not to for lower employees in support of longer term continuity in what is complex manufacturing environment.
We do however, expect that gross margin levels or return when related product revenues returned to historic run rate among other factors.
Operating expenses were 160 basis points favorable to prior year at 29.7% of net revenue driven primarily by delivering on our quarterly spend reduction goals in the quarter offset in part by the inclusion of the Progenics operating expense.
Post close for the last 11 days the quarter as a reminder, we reduced salaries in hours as appropriate for all team members implemented a hiring freeze on planned additions and realize.
Every dickson a reduction in promotional expenditure travel and entertainment expenses among other initiatives.
Operating profit for the quarter was $7.9 million or a decrease of 57.4% from the same period prior year.
Adjustments in the quarter totaled 13.5 million before taxes of this amount $3.4 million associated with noncash stock incentive plans along with half a million tied to our recent credit facility Amendment also in the quarter, we recorded $8.7 million of expenses, which were contingent on the closing of our acquisition with Progenics along with.
Lantheus pre integration efforts prior to the close.
The balance when rates do acquired intangible amortization, our effective tax rate was 33.1% in the quarter.
The resulting reported net income for the second quarter was a loss of 7 million in a profit of $4.5 million on an adjusted basis, a decrease of 58.3%.
GAAP basic and fully diluted earnings per share were a loss of 16 cents in a profit of 10 cents on an adjusted basis, a decrease from the prior year of 61.3%.
Now turning to cash flow second quarter operating cash flow was a use of $2.2 million as compared to cash inflow 21.1 million in Q2, 2019 capital expenditures totaled $2.3 million down from the prior year quarter free cash flow, which we defined as operating cash flow less capital expenditures was a user.
$4.4 million, a decrease of 22 million from the prior year period.
Our quarterly cash flow contains several onetime expenses associated with the closing of the progenics transactions as well as modest inventory build during the quarter cash and cash equivalents now stands at $90.3 million.
Also to maintain liquidity, we elected to lead the existing Roas store related non recourse loan outstanding during the second half of 2020.
That said, we are comfortable with our strong liquidity position and as well as having continued access to a 200 million dollar revolver.
As you know, we redo our revenue and adjusted earnings per share full year guidance for 2020 earlier. This year. This action was persist precipitated by the meaningful impact on our business due to direct.
Directly patient in hospital actions associated with the state home orders in advisors, not United States in response to the covert 19 pandemic, we continue to monitor customer orders in order trends closely looking to both regional and national data point to inform our internal forward booking sensitivity analyses.
And while recent revenue trend has been encouraging the remains sufficient uncertainty in the marketplace to warrant continued pause on providing formal guidance.
That said as expected and.
Detailed in our previous we in our public filings the acquisition of Progenics will have a meaningful to pricing impact on our existing financials over the next 12 months as we integrate invest and capture synergies to drive and create value for stockholders.
These investments will serve to create our building blocks.
For improved and sustainable sales growth product diversity and margin improvements.
For the second half of 2020, I can't offer several integration and expense related milestone.
The company has completed more than 900 tasks to date as part of our integration planning and day one execution plan.
Additionally, we have map 90 tactical and strategic integration goals to be completed during the balance of 2020.
We took advantage of the time between agreement and the close to expedite integration objectives. For instance, we have already integrated the salesforce into many of our processes and systems, such as Salesforce dot com as well as a unified customer contracting process. Additionally, we migrated the progenics business onto the Lantheus TV platform as well as our.
ERP system, which support manufacturing supply chain order to cash procure to pay and financial reporting going live on July Onest.
From a financial perspective, we are targeting the capture 4.6 million of synergies in the second half 2020.
These expense savings will largely be in gionee cost centers as we work towards the full $20 million of savings originally targeted.
Further for modeling purposes, we expect to re purpose expenses and invest in the relaunch of the Zadra as noted by Marianne as well would begin the preparation for the P., while commercial launch R&D will also require additional investment in support of the PEO Anda filings, including one time submission views as well as needed expenditures to ensure RPM.
Manufacturing partnerships are prepared approved and ready to achieve our fuel revenue forecast.
Therefore, as you model the second half of operating expenses attributable to the Progenics portfolio net of synergies.
DNA in R&D together will be approximately equivalent to progenics first quarter expense run rate extrapolated in the first quarter Progenics expenses for these two categories totaled approximately $21 million.
Put another way we are effectively replicating the progenics operating expense run rate, but through synergies in repurchasing of expense.
We are able to investor greater amount near term to drive longer term value.
Two last modeling points gross margin in the second half of year.
Should improve versus our Q2 results what to do so incrementally and not reached more than historic levels. As I briefly noted on who we see impacts Kobin 19 subside.
Secondly, when calculating EPS share count will be very throughout the year during each quarter in the second half the weighted average diluted.
Outstanding shares will approximate 67 million shares and just over 54 million on a full year basis also fully diluted.
Our goal remains to accelerate revenue growth and deliver on our accretion target accelerating revenue and improving longer term margins and cash flow requires near term investments run rate synergies will manifest more clearly once we get through the initial 12 month period as a combined company.
There, we expect to see rapid improvement in our financial performance as we realize the benefits of the merger.
With that let me turn the call back ordinary.
Thank you Bob in closing I would like to recognize all lantheus employees incumbent any new for their commitment to patients and our customers. We have been in continuous operation of delivery of needed diagnostic and therapeutic products to the healthcare community and have done so with the commitment to quality and service, which defines our company. This is Joe.
Both of those essential workers reporting to our manufacturing and distribution sites daily as well as those diligently working from home as we do our part to serve patients and site. This virus.
Unfortunately, my position to have such a dedicated employee group and I would like to recognize that collectively you continue to in body. The very best of our company values.
Before turning to questions I would also like to discuss the changes to our board of directors that were meet with the completion of the transaction, hence we sell and Dr. Gary Shaffer has stepped down from your Lantheus Board seats, and we have added Dr. Gerard bear and Heinz notably members of the former Progenics Board to our reconstituted board of directors I am.
We are grateful to Ken and dairy for their contribution to the Lantheus Board and your support of my role I Welcome Heinz and Gerard to the board and Im So excited by the future we will create with this newly merged company.
With that Bob and I are now ready to take your questions. Operator. Please go ahead.
Thank you as a reminder, asked a question you will need to press Star then the number one and a telephone keypad again that will be star one on the telephone keypad Catholic question. Please stand by will be compiled achieving roster.
First question comes from the line of French deny from Jefferies. Your line is now open you may ask your question.
Hi, good morning.
We believe Doug just maybe because sort of little bit would be the data you're or the detail you provided on the monthly run rate of revenue and so nice rebound as you move into June.
The deferred for DEFINITY and Technelite, I know, you're not giving guidance for the back but I'm curious whether you think those those positive growth rate you saw in the month of June should be considered sustainable as you move into the back half of the year.
Roger of course.
The comments, we make our assumption of of not being a large resurgence of virus or a need for returns to the the kind of locked down conditions that most of the communities were in in the first half of year, but having said that we do expect to see continued rebounding recovery of our product usage with one exception and I'll I'll note that now.
As Bob referenced on in other revenue the most significant negative contributing factor was the loss of revenue with xenon and that is related to how the xenon modality diagnostic procedures actually conducted these studies are generally two parts of ventilation skin ventilation and then a perfusion scans.
Have a patients lungs, many times looking to see if they are in July in alone. There is strong hesitancy for any ventilation type procedures in today's market just because of the risk of contamination to other either healthcare workers in the room or two patients who might then enter the rooms afterwards, so across the board any type of ventilation related.
Procedures have been suppressed at this time until we figure out how to have them safely and reliably used in patients regardless of what there is kind of infectious status might be so we do not expect in the short term to see recovery of xenon revenues, but across our other products we do.
Helpful.
Maybe one for Bob I know you gave some detail on the spending and your ability to realize synergies from progenics.
Yes, you do you mentioned $21 million of expenses that they had in the first quarter operating expenses. We should just assume that that continues given that you're going to reinvest any savings and I. Suppose. The question is when we might start to see some of that.
That that spending actually start to trend downward.
When you might start to actually show those synergies on the PNM as opposed to reinvest in them.
We'll Roger music that will obviously with as before about the commercial infrastructure around few while on of course of ramping. So the is vedra relaunch. If you will together with those two things one those are in places where you would start to see leverage returns PML.
But it goes beyond just the synergy savings those we have very clear path forward on terms of what those synergy targets look like in how and when we're going to be able to capture them.
I think it's worth noting is that if you look at the operating expense.
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From from the Lantheus side of things. It wasn't just this isn't just about finding synergies within the combined company, but the run rate savings that we put into the PML you see.
No that on an absolute dollar basis, I said 168 basis points favorability for that translates into $7.3 million of reduction.
Actual dollar savings that were put through the PML in the second quarter and Thats inclusive of the bringing on the Progenics operating expenses in for those 11 days so.
When you start to think through manifesting that savings on a go forward basis I noted that it would be 12 months before we really started to see it's partly because we have some of the near term investment.
But also timing of how we will.
Capture additional synergies and then when we give our 2021 guidance.
Presuming that things are sit back more to normal I think you'll be able to see it but at that juncture.
That's helpful. And then maybe just one last one Marianne on key while you noted the slight delay given just the issue with manufacturing anything more on that is.
You mentioned it had been remediated, but is there any risk with the timelines are pure whales with any further based upon us.
We're confident that they won't Rajan I'd like to stress again. It is an equipment related issue in data art, our channel partners, which are the pet manufacturing facilities Rpms, who have been incredibly responses, we kind of identified it and very quickly.
Part of a proof that used in the process of synthesis and we were able to replace the pumps and we already have some encouraging data from those new even placed pumps that we do not expect a delay any more than what I already cited.
Great. Thank you.
I guess I reminded to ask a question you will need to Pratt's part of the number one on the telephone keypad that will be side than the number one on the telephone keypad.
Next question comes from the lineup Larry Solow from CJS Securities. Your line is now open you may ask your question.
Hi, good morning, guys.
Right. So it's going to couple of.
Joined the good morning joined a couple of minutes late.
I apologize if a few covered this sounds like the two while you just sort of discussed with a modest delay there and you got to draw it sounds like it's going to start to ramp could you just discuss the rest of a progenics product line obviously.
Relic store not talk about too much but.
The greatest revenue generating our product currently for Progenics, how what's the sort of outlook for that product and then.
In terms of there on the pipeline I guess the other product.
Pubic solid MPS or may side.
If those trials are still delays.
So yes, let me kind of breakdown that question because it had several parts.
I will talk to you foresee the other product you are right on a on an absolute basis, a standalone progenics. The relistor revenue stream that is the royalty stream paid by about healthcare is the largest revenue creating item currently on the Progenics PNM. So we don't speak to it because we're not controlling the commercialization of it but inc.
As a new product has remained steady in the marketplace the patients who unfortunately.
Need that product are not in any way pandemic related then they would continue to need the product going to on him with the chronic basis.
For the other products in the in the that we inherited with the Progenics acquisition. The next nearest term one is 10 95, which as you noted is a therapeutic and it will be for the treatment of prostate cancer that trial has been paused only four new patients entering any patients were already in the trial will continue to receive try.
Ill doses, but just on safety basis, and very consistent with what is happening across clinical trials in the us.
We are not yet lean we rolled a new patient I will say from his edrick perspective, the eating and specifically about that but I'll note. What we know for the first quarter. There were 11 therapeutic doses administered in Q2 nine of them were first doses for patients to were second doses for patients with usually come about.
Three months later and headroom to date in Twentytwenty, we have a total of 21 total doses already delivered which is a significant ramp up from what they had experienced in 2019 as you heard both Bob and I mentioned, our intent has been and remains to carefully look at what the field based structure is because we are confident.
That weaken increased demand generation and patient pull through which both will contribute positively to sales for that product.
Okay, great and I really.
Not providing any updated guidance.
Obviously understood why in this environment just purchased from up from a global perspective on on attribute touched on being the call, but I know when you first acquired or announced the acquisition of Progenics you sort of hot.
Timelines for or for accretion.
X covert or if we assume quoted.
Hopefully range over the next couple of years do you still sort of.
And Ken your general.
Expectations for.
The accretion as we look out 24 36 months.
I'll say, yes, and let Bob give some more detail.
Yes, yes in fact that was appointed tried to make on that and towards into my commentary, which is that we remain committed to our financial goals and targets.
As everybody knows that there are public filings out there that assumed.
On January one starts. So if you were to think in terms of dialing things forward in terms of mid 2020 start.
We're now underway, we are starting to execute our integration management office has done a fantastic job of preparing.
The company in each of the leaders within their own functions to want to be poised to capture both synergies as well as productivity gains.
To be able to execute in over the near term and an over the next month in years.
Keep us on track along those timelines that we had previously discussed.
But just sort of not adult no don't focus on the year, but focus on the months of ownership.
And and worse bird, we're still committed to those timelines.
Got it and Mary I know you mentioned.
Lack of I guess access to some echocardiograms.
The new was being used a little more on the ultrasound.
Modality is that something that as you look out over the long term Creek eventually.
Benefit for definitive differ from what I know, obviously trying to get into different modalities. So we got.
Is that sort of fit that potentially.
Hi, I think it may Larry because I think the learning has been that in any situation. It may be safer and more convenient if you can bring diagnostic modalities to the patient rather than having to transportation to those areas were stationary equipment door and we've seen and I may have talked about this before but we see.
In an increasing profitability with ultrasound before this where the ultrasound equipment is actually getting smaller easier to use in a portable setting and that in fact is part of the reason that we drove forward with our DEFINITY room temperature program. It was our commitment to make sure that if ultrasound with going reportable that DEFINITY could be more affordable is.
Well and so having a room temperature formulation rather than one that requires refrigeration, we feel kind of add to that that dynamic that we're seeing in the marketplace.
Gotcha and then just just last question I think on them.
Q1, you had mentioned.
Technelite, obviously procedures down.
Too early April may and slowly coming back.
But I think you have mentioned carry some inefficiencies are they.
We are pharmacy is actually how to use more mall.
On more technelite in their procedures.
There are less strategic plan, it sort of somewhat offset.
Became current you meet getting a quarter that we'll just see that sort of through the quarter.
We did any Bob and I. Both noted this these are really regional variations in it it really aligned very very closely with the reopening of regions and so with fruit reopening and kind of return of normal Honda within hospitals for in an outpatient procedures, we would expect to see their channel partners.
So with Radiopharmacies revert back at some point to their practice of having multiple deliveries to hospitals during the day instead of the onetime delivery that they adopted during the acute phase of the pandemic, but again, it's such a region.
On an aspect that I can't make a general statement about it Larry but I'll just add to that to death and when we look at Technelite. It Didnt drop that was what I was indicating about gross margin.
To the extent that I noted for DEFINITY.
Right.
As for the reasons that Marion engine yourself, it actually does articulated but that same ramp even though you might have seen a changing the way the delivery enters us into the system was occurring throughout the period.
It was still a ramp of recovery I mean, bill lending at 18.9 million, which was a pretty good results given the circumstances right.
Order.
But it's still good follow that same sort of trajectory, but as the definitive recovery was it was a very.
Deeper recovery, but if you, but definitely still a good experience.
Upper trajectory throughout the quarter.
Okay, great. Okay, great. Thank you I appreciate all the color.
Welcome.
Again I wanted to ask a question you will need to press tied them. The number one on the telephone keypad that will be star one on the telephone keypad.
Showing no further questions at this time, ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may disconnect have a wonderful thing.
Thank you everyone stay safe.
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Good morning, ladies and gentlemen, welcome to don't say its holdings second quarter 2020 earnings Conference call. This is your operator for today's call. Please note that always publicly and then any back on like this call is being recorded for replay purposes.
Oh do you have cats will be available and investors section the company's website approximately two hours after the completion of the call.
Be archives plus 30. These I'll now turn the call over to you hope to be Mr., Mike <unk> Senior Director Investor Relations Mike.
Thank you and good morning, Welcome go Lantheus Holdings second quarter 2020 earnings conference call joining.
Joining me today is our president and CEO, Marianne hanging out and our CFO Bob Marshall.
This morning, we issued a press release, which was furnished to the Securities and Exchange Commission under form 8-K reporting our second quarter 2020 results you can find or at least in the investor section of our web site at Lantheus Dot com.
Before we get started I like to remind you that our comments. During this call will include forward looking statements actual results may differ materially from those indicated by forward looking statements due to a variety of risks and uncertainties.
In particular, there are significant uncertainty about the duration and contemplated impacted the cobot 19 pans out.
This means that results could change at any time and the contemplated impacted covert 19 on the company's business results and outlook is the best estimate based on information available as of today's date. Please note that we assume no obligation to update these forward looking statements, except as required by applicable law, even if actual results or future actually.
Patients change materially please refer to our 50 filings for a detailed discussion of these risks and uncertainties.
Also discussions during this call will include certain non-GAAP financial measures reconciliation of these measures to the most directly comparable GAAP financial measures is also included.
Mr Section of our website with that I'll now turn over the call to Marianne Marianne.
Mark and good morning, everyone I hope, it's like each of you. It did your family safe well as you listen to this call.
As we continue to navigate through the cold would make you can't Delek <unk> safety of our employees Peaches and other partners in health care community, we need our top priority, we have strict safety protocols in place across our site and have been vigilant monitoring these protocols as well as emerging information around virus transmission convention.
[laughter] thought as pandemic, we've noticed our business operations effectively.
Our social workers have remained on campus as we continuously manufactured and ship products to our customers or other employees continue to work remotely and be however, we turned off his plan in place that enjoys the state and thoughtfully turned up our employees do you want different campuses.
We're pleased to begin our next chapter Atlanta, Yes, with the closing of the Progenics acquisition.
At the beginning of this process, we didn't imagine our integration would be virtual but I haven't so impressed with the dedication to this effort by team members from both men and again.
Since the outset my commitment has been to ensure the new lantheus represents the complementary strengths of both companies will be intends to be a best in class organization in the markets. We said that gold has not changed and we believe our milestones and strategic plan will deliver that agent.
In the near term milestones include.
Acceleration aquatic awareness and patient demand for Debra and to build out of additional manufacturing to ensure we can meet them in the <unk>, India submission and opportunities in our micro double franchise.
We believe our capabilities and portfolio complement each other and will ensure we serve our target markets of precision diagnostic oncology radiopharmaceuticals and specialty offerings in artificial intelligence or AI analytics and forms services.
Now that we haven't won't be on deal closed integration, we're excited to capitalize on opportunities for value creation.
The lifetime sector continues to evolve with the use of isotope in both.
No I think applications and we intend to be a leading company in this emerging field.
More importantly, with the completion of this acquisition. We believe we are well positioned to serve the healthcare community with the more important though the marriage of diagnosis and treatment.
Our goal is to lead in this developing landscape a therapeutic radio isotope a companion diagnostic as well as radio isotope related AI analytics and pharmacy services.
We believe the three gnostic principal represented by companion diagnostic paired with therapeutic improves patient management and outcome and will be a valued offerings to physicians patients and payers.
Now I will discuss business trends in our commercialized portfolio before discussing our pipeline.
In early April we announced that as a result of the impact of the Cobiz 19 pandemic, we recognize declining demand for products starting in the latter half of March at hospitals restricted access to limit discarded infection and focused on the treatment of cold 19 infected patients instead of elective procedures that are typically performed well.
Outpatient.
At the time, we correctly anticipated the second quarter impact of the Cobot 19 pandemic on our business would be more significant than that seen in the latter part of the first quarter Accordingly.
And in our guidance and announced a number of cost saving measures intended to mitigate the economic impact to our business.
As the second quarter progressed, we agreed steady recovery of our business. This recovery has been most shaped by regional disease trends, which impacted the restoration of access to hospital and willing to the patients to enter hospital outpatient services.
Noteworthy however has been the trend of increased use of ultrasound, including the use of DEFINITY any inpatient setting during this time.
Anecdotal feedback suggest that the ultrasound diagnostic modality may have been chosen for a possible diagnostic procedures because of the convenient and safety of having to diagnostic procedures performed at the pieces bedside, rather than me to transport potentially affected and very ill patients within hospital to areas where stationary diagnostic.
Equipment is located.
While our sales team has been working remotely during this period, we have regularly engage our customers and provided additional information and training virtual programs.
The relative strength of depending sales in this period. We believe was driven by this increased use of ultrasound and where appropriate use of an ultrasound enhancing agents such as this entity.
Our commercialized products demonstrated healthy trends in twentytwenty prior to the onset pandemic.
The baby delivered a strong start to the year for unlikable franchise.
Because we sell what products directly to hospitals, we have access to individual customer sales data. Therefore throughout the pandemic, we'd have direct line of sight to the use of DEFINITY at the hospital level.
These data give us greater insight about the return of DEFINITY related diagnostic procedures done then does the border metric of elective procedures, commonly cited in market analyses during the pandemic.
Having insight has been great benefit for our business, playing mentally and even more so in the current environment I.
I think it is also noteworthy to share that we did not furlough any volatility or nuclear field based employees at any 0.3 independent Dennis to ensure they weren't available to assist our customers and understand they use about product in the hospital and other settings.
As such we had been in regular contact with our customers and have been able to continuously assess their needs.
Information has also guided our preparation as hospitals returns offering additional in an outpatient services that had been pause during the most acute period of the pandemic for particular region.
Well prior to the completion of our merger with Progenics. He is that your field based employees had been furloughed, we reinstated those employees and their customer related activities as soon as a merger was completed.
We're committed to 40 patients efficient positions and or other healthcare stakeholders with their needs as we collectively site pandemic facing us.
With respect to other developments in our business on our first quarter earnings call I still get we filed an import drug license application in China with a national medical product administration or M. P. Eight for the DEFINITY echocardiography indication.
I am pleased to report that are application was accepted by the end P. Eight and is now being reviewed we believe this is an important milestone in our efforts to commercialize DEFINITY in China.
Regarding the status of potential generic fire in the U.S market to the entity to date, we have not received notice of an end application.
As I've noted before we remain confident in our plan to defend the DEFINITY intellectual property estate and believe we have continued growth prospects for Michael bubble franchise.
Our Technelite business also performed relatively well during the quarter, we were able to receive Molly supply or more suppliers. Despite complications with airline logistics that will pandemic related most notably early in the second quarter.
These challenges required flexibility in our manufacturing schedule, one of our core competencies Atlanta.
Our manufacturing and logistics team did a fantastic job to ensure that customers wouldn't minimally impacted.
Relating to his Vedra I would note that has been our intent since we first pronounced Virginia acquisition to undertake an assessment of the field based stakeholder facing structure for opportunities to optimize demand generation NPC pull through.
While fuel basin and creating effort bikes again, we're pause as I previously noted we reinstated those employees on day, one of the newly merged company.
As we feel the sales and medical team Reengage with these customers, we will be implementing certain strategies to address our commercial and medical footprint over the next several quarters.
We believe market opportunity exists, but only at FDA approved therapy for field promos, I, Toma and paraganglioma or PPG out and we're committed to ensuring patients and other related stakeholders are aware of and have access to this important treatment.
Moving onto our pipeline we are Progenics merger completed we have added two new product candidate B Y O and 10 95, our prostate cancer diagnostic and therapeutic agent as our nearest term opportunities in our own internal pipeline today I will discuss p., while in our progress towards NVH submission.
Pete Y O is a P.S. and they targeted pet imaging agent that enables clinicians to visualize both bone and soft tissue metastasis in patients with locally advanced recurrent indoor metastatic prostate cancer.
The positive results more pivotal Registrational phase three candour trial in men with biochemical recurrence prostate cancer were recently presented at two important meeting the American society of clinical oncology or Africa, as well as a society of nuclear medicine, and molecular imaging and am I.
The primary endpoint of upon or trial measured the diagnostic performance a p. Y O Y in men with biochemical recurrence of prostate cancer and uninformative baseline imaging based on conventional modality.
Importantly in addition presented for the primary endpoint in the Condor trial data was also present presented for the key secondary endpoint the physician intent to change the disease management plan for patients.
In the conduit trial positioned indicated they would monetize the disease management plan, it's 63.9% of the patients based on P. why you imaging results.
These data were presented at both at the end and thereby highlight the potential of P. Y O y to detect prostate cancer non invasively end reliably and make better informed positions during treatment planning with the ultimate goal of improving disease management in one of the most prevalent and growing forms of cancer in the us in men.
Our p. while team has been working diligently on M.D.A. with the FDA. We were informed early in July of a potential equipment related issue, which could impact the production of the P. wild drug product at our channel partner manufacturing facilities or Pms.
She was related to the pump in the manufacturing equipment and not related to any of the data in the clinical trial.
We have assessed and already addressing the potential issue and believe this journey the agent moves our anda filing target date to no later than the middle of the fourth quarter.
The NDA filing you need a top priority and we are continually assessing our timeline for efficiencies that can accelerate the time filing.
Simultaneously, we are building out the team that will support P. whales launch.
Turning now to period as EFI team, our novel pits cardiac imaging agents, our development and commercialization partner GE healthcare has informed us that second phase three trials continue however, new patient enrollment has been delayed due to the impact of the pandemic.
GE healthcare intends to zoom enrollment in this quarter and expects to complete enrollment by mid 2021, and assuming regulatory approval begin commercialization in early 2023.
That I will conclude my update on T. commercially strategic programs and turn the call over to Bob Bob.
Thank you Mary Anne and good morning, everyone I will provide highlights of the second quarter financials, focusing on adjusted results unless otherwise noted.
Revenue for the second quarter was $66 million, a decrease of 23% from the prior year quarter revenue during the quarter demonstrated a clear progression the recovery escape from localities moved through the initial phases of economic reopening variation across geographies in April the company's revenues decreased by 44.3%.
Versus prior year.
However by June they were down only 2.8% on a similar basis, which does not include the contribution from Progenics.
Second quarter revenues include 11 days the contribution from the Progenics portfolio.
Adding 1.2% of sales growth to our quarterly.
Solid data results year over year.
Sales of DEFINITY in the second quarter were 40.4 million or 26.1% lower as compared to the prior year quarter, notably DEFINITY grew by 5.4% in June as compared to prior year month.
Contract to the 55.6% decrease experience in April on a similar basis.
Secondly, revenue was 18.9 million down 6% from the prior year quarter.
Similar to DEFINITY sequential improvement throughout the quarter Technelite grew 2.7% in June versus the same month prior year other nuclear combined with contribution for Progenics assets decreased 32.6% to 10.3 million due mainly to the ongoing impacted cobot 19 related issues on xenon rebates and allow.
With his totaled 3.5 million.
Gross profit margin for the second quarter was 41.7% a decrease of 1140 basis points from the second quarter 2019 on a similar basis. The decrease is due to several factors related to covert 19, including a change in product mix with takeaways increased contribution to total sales relative to prior period.
We also experienced higher supply chain expenses during the quarter due to excess Molly volume purchases to meet customer demand and higher logistics.
Cost well actually we incurred higher labor costs as a percentage of revenue in the quarter due to a conscious decision not to furlough employees in support of longer term continuity in what is complex manufacturing environment.
We do however, expect that gross margin levels or return when related product revenues returns of historic run rate among other factors.
Operating expenses were 160 basis points favorable to prior year at 29.7% of net revenue driven primarily by delivering on our quarterly spend reduction goals in the quarter offset in part by the inclusion of the projected operating expense.
Post close for the last 11 days for the quarter as a reminder, we reduced salaries in hours as appropriate for all team members implemented a hiring freeze on planned additions.
And realized.
Prediction reduction in promotional expenditure travel and entertainment expenses among other initiatives.
Operating profit for the quarter was $7.9 million or a decrease of 57.4%.
Same period prior year.
Adjustments in the quarter totaled 13.5 million before taxes, how this amount $3.4 million associated with noncash stock incentive plans, along with a half a million tied to our recent credit facility Amendment also in the quarter. We recorded 8.7 million of expenses, which were contingent on the closing of our acquisition of Progenics along with.
Lantheus pre integration efforts.
Sure just close.
The balance when rates do acquired intangible amortization.
Our effective tax rate was 33.1% in the quarter.
The resulting reported net income for the second quarter was a loss of 7 million in a profit of $4.5 million on an adjusted basis.
Crisa, 50.3%.
GAAP basic and fully diluted earnings per share where lots of 16 cents in a profit attend trends on an adjusted basis decreased from the prior year of 61.3%.
Now turning to cash flow second quarter operating cash flow, where the use of $2.2 million as compared to cash inflow 21.1 million in Q2, 2019 capital expenditures totaled 2.3 million down from the prior year quarter free cash flow, which we defined as operating cash flow less capital expenditures was the use of.
$4.4 million, a decrease of 22 million from the prior year period.
Our quarterly cash flow contains several onetime expenses associated with the closing of the Progenics transaction as well as modest inventory build during the quarter cash and cash equivalents now stand at $90.3 million also to maintain liquidity, we elected to leave the existing relic store related non recourse loan outstanding during the same.
Second half of 2020.
That said, we are comfortable with our strong liquidity position and as well as having continued access to our $200 million revolver.
As you know redo our revenue and adjusted earnings per share full year guidance for 2020 earlier. This year. This action was Brazil precipitated by the meaningful impact on our business due to direct.
Directly patient in hospital actions associated with the stayed home orders and advisory firm that United States in response to the covert 19 pandemic, we're continuing to monitor customer orders in order trends closely looking to both regional and national data points to inform our internal forward looking sensitivity analyses.
And while recent revenue trends have been encouraging the remain sufficient uncertainty in the marketplace to warrant continued pause on providing formal guidance.
That said as expected and.
Detailed in our previous we in our public filings the acquisition of Progenics will have a meaningful pricing impact on our existing financials over the next 12 months as we integrate investing capture synergies to drive and create value for stockholders.
These investments will serve to create our building blocks.
For improved and sustainable sales growth product diversity and margin improvement.
For the second half of 2020, I can't offer several integration and expense related milestones.
The company has completed more than 900 tasks to date as part of our integration planning and day one execution plan.
Additionally, we have not 90 tactical and strategic integration goals can be completed during the balance of 2020.
We took advantage of the time between agreement and the close to expedite integration objectives. For instance, we have already integrated the salesforce into many of our processes and systems, such as Salesforce dot com as well as a unified customer contracting process. Additionally, we migrated the progenics business onto the Lantheus TV platform as well as our.
ERP system, which support manufacturing supply chain ordered a cash procure to pay and financial reporting going live on July onest.
From a financial perspective, we are targeting the capture 4.6 million of synergies in the second half 2020.
<unk> expense savings will largely be in DNA cost vendors as we work towards the full $20 million of savings originally targeted.
Further for modeling purposes, we expect to re purpose expenses and invest in the relaunch of the Zohydro as noted by Marianne as well and begin the preparation for the P., while commercial launch R&D will also require additional investment in support of the P., while anda filings, including one time submission fees as well as needed expenditures to ensure RPM.
Jeff manufacturing partnership our prepared approved and ready to achieve RP, while revenue forecast.
Therefore, as you model the second half of operating expenses attributable to the Progenics portfolio net of synergies.
DNA in R&D together will be approximately equivalent to progenics first quarter expense run rate extrapolated.
In the first quarter Progenics expenses for these two categories totaled approximately $21 million.
Put another way we are effectively replicating the progenics operating expense run rate, but through synergies and repurchasing of expense.
We are able to investor greater amount near term to drive longer term value.
Two last modeling points gross margin in the second half of year.
Should improve versus our Q2 results what to do so incrementally and not reached more than historic levels. As I briefly noted until we see the impacts of Tobin 19 subside.
Secondly, when calculating EPS share count will be very throughout the year during each quarter in the second half the weighted average diluted.
Outstanding shares will approximate 67 million shares and just over 54 million on a full year basis also fully diluted.
Our goal remains to accelerate revenue growth and deliver on our accretion targets.
Accelerating revenue and improving longer term margins and cash flow requires near term investment run rate synergies will manifest more clearly once we get through the initial 12 month period as a combined company from there we expect to see rapid improvement in our financial performance as we realize the benefits of the merger.
With that let me turn the call back ordinary.
Thank you Bob in closing I would like to recognize all lantheus employees incumbent anything for their commitment to patients and our customers.
We have been continuous operation of delivery of needed diagnostic and therapeutic products to the healthcare community and have done so with the commitment to quality and service, which defines our company.
This is to both of those essential workers reporting to our manufacturing and distribution sites daily as well as those diligently working from home as we do our part to serve pages and spices virus.
Unfortunately, my position has such a dedicated employee group and I would like to recognize that collectively you continue to in body. The very best of our company values.
Before turning to questions I would also like to discuss the changes to our board of directors that will need with the completion of the transaction, hence we sell and Dr. dairy Shaffer has stepped down from your Lantheus 40, and we have added Dr. Gerard bear and Heinz medically members of the former president export to our reconstituted board of directors I impaired.
We are grateful to Ken and Gary for their contributions to the lab support and your support of my role I Welcome Heinz and you're right to the board and Im So excited by the future we will create with this newly merged company.
With that Bob and I are now ready to take your questions. Operator. Please go ahead.
Thank you as a reminder, asked a question you will need to press Star then the number one and a telephone keypad again that will be star one on the telephone keypad in order to ask a question. Please stand by will be compiled documenting roster.
First question comes from the line of pledged in life of Jefferies. Your line is now open you may ask your question.
Hi, good morning.
When you guys, just maybe you could sort a little bit would be the data you're or the detail you provided on the monthly run rate revenue and so nice rebound as you move into June.
The deferred for DEFINITY Technelite, I know, you're not giving guidance for the back but I'm curious whether you think those those positive growth rate you saw in the month of June should be considered sustainable as you move into the back half of the year.
Roger of course.
Any comments, we make our assumption of of not being a large resurgence of virus or a need for return to the the kind of locked down conditions that most of the case where in in the first half the year, but having said that we do expect to see continued rebounding recovery of our product usage with one exception and I'll I'll note that now.
As Bob referenced in other revenue the most significant negative contributing factor was the loss of revenue would xenon and that it related to how the xenon modality diagnostic procedures actually conducted these studies are generally two parts of ventilation scan ventilation and then perfusion scans.
Of the patients lungs, many times looking to see if theyre and volume alone. There is strong hesitancy for any ventilation type procedures in today's market just because of the risk of contamination to other either healthcare workers in the room or two patients who might then enter the rooms afterwards, so across the board any type of ventilation related.
Procedures have been suppressed at this time until we figure out how to have them safely and reliably used in patients regardless of what they're kind of infection status might be so we do not expect in the short term to see recovery of the non revenue, but across our other products we do.
Helpful.
Maybe one for Bob I know you gave some detail on the spending and your ability to realize synergies from progenics.
Yes, you mentioned $21 million of expenses that they had in the first quarter operating expenses. We should just assume that that continues given that you're going to reinvest any savings and I suppose the question as you know when we might start to see some of that.
That that spending actually start to trend downward.
When you might start to actually show those synergies on the PNM as opposed to reinvest in them.
Ross you May think that we'll have to do with as we feel about the commercial infrastructure around few while on of course of ramping so the vedra relaunch. If you will together with those two things one those are in places where you would start to see leverage return to PPL.
But it goes beyond just the synergy savings those we have very clear path forward on terms of what those synergy targets look like in how and when we're going to be able to capture them.
I think it's worth noting is that if you look at the operating expense.
[music].
From from the Lantheus side of things. It Wasnt just this isn't just about finding synergies within the combined company, but the run rate savings that we put into the PML you see.
No that on an absolute dollar basis, I said 168 basis points favorability, but that translates into $7.3 million of reduction.
Actual dollar savings that were put through the PML.
The second quarter and Thats inclusive of the bringing on the Progenics operating expenses in for those 11 days. So you start to think through manifesting that savings on a go forward basis I noted that it would be 12 months before we really started to see it's partly because we have some of the near term investment.
But also timing of how we will.
Capture additional synergies and then when we give our 2021 guidance.
Presuming that things are a bit back more to normal I think you'll be able to see it but at that juncture.
That's helpful. And then maybe just one last one Mariano few while you noted the slight delay given just the issue with manufacturing anything more on that is.
I did mention it had been remediate, but is there any risk at the timelines are few whale slip any further based upon this.
We're confident that they won't Rajan I'd like to stress again. It is an equipment related issue in data are our channel partners, which are the pet manufacturing facilities Rpms, who have been incredibly responses. We identified in very quickly with part of a pump that used in the process of synthesis and we were able to replace the pumps and we already have.
Some encouraging data from those newly be placed pumps that we do not expect a delay any more than what I already cited.
Great. Thank you.
I guess I reminded to ask a question you will need to Pratt fires on the number one on the telephone keypad that will be higher than the number one on the telephone keypad.
Next question comes from the line up Larry Solow CJS Securities. Your line is now open you may ask your question.
Hi, good morning, guys.
Sure Brian a couple of.
Joining the good morning joined a couple of minutes late.
I apologize if you covered this sounds like the two while you just sort of discussed with a modest delay there.
And you got to draw it sounds like it's going to start to re ramp could you just discussed with the rest of a progenics product line obviously.
Reliv store not talked about too much but.
Your greatest revenue generating product currently for Progenics, how what's the sort of outlook for that product and then.
In terms of there on the pipeline I guess the other product.
Pubic sodomy pits are made side.
Yes, those trials are still delayed.
So yes, let me kind of breakdown that question because it had several parts.
I will talk to you.
The other product you're right on a on an absolute basis in Standalone Progenics the list or revenue stream that is the royalty stream paid by bouche healthcare is the largest revenue creating item currently on the Progenics TNL, we don't speak to it because we're not controlling the commercialization of it but as a new product.
Has remained steady in the marketplace the patient to unfortunately need that product are not in any way pandemic relating to meet with continued to meet the product on him with the chronic basis.
For the other products in the in the that we inherited with the Progenics acquisition. The next nearest term one is 10 95, which as you noted is a therapeutic and it will be for the treatment of prostate cancer that trial has been paused only four new patients entering any patients were already in the trial will continue to receive.
Ill doses, but just on safety basis, and very consistent with what is happening across clinical trials in the us.
We are not yet meaning that we are rolling new patient I will say.
And as Dedrick perspective, the eating at specifically about that but I'll note. What we know for the first quarter. There were 11 therapeutic doses administered in Q2 nine of them were first doses for patients to were second doses for patients with usually come about three months later and headroom to date in 2020, we have a total of 21 total doses.
Already delivered which is a significant ramp up from what they had experienced in 2019 as you heard both Bob and I mentioned, our intent has been and remains to carefully look at what the field based structure is because we are confident that we can increase demand generation and patient pull through which both will contribute positively.
Two sales for that product.
Okay, great and I really not providing any updated guidance and.
Obviously understood why in this environment, just but just from a from a global perspective and I'm not sure. If you touched on the call, but I know when you first acquired or announced the acquisition of Progenics you sort of hot.
Timelines for or for accretion.
X cold good or.
Jim Corbett.
Hopefully range over the next couple of years do you still sort of.
Maintain your general.
Expectations for Burger accretion as we look out 24 36 months.
I'll say, yes, and let Bob give some more.
Yes, yes in fact that was pointing to try to make on that and towards the end of my commentary, which is that we remain committed to our financial goals and targets.
As everybody knows that there are public filings out there that assumed.
On January one starts. So if you were to think in terms of dialing things forward in terms of mid 2020 start.
We're now underway and we are starting to execute our integration management office has done a fantastic job of preparing.
The company in each of the leaders within their own functions to want to be poised to capture both synergies as well as productivity gains.
The able to execute in over the near term and then over the next month in years.
Keep us on track along those timelines that we had previously discussed.
But just sort of not but don't don't focus on the year, but focus on the months of ownership.
And and worth Berg, we're still committed to those timelines.
Got it and Mariano you mentioned.
Lack of I guess access.
Cardio grams.
Then it was being used a little more on the ultrasound.
Modality is that something that you know as you look out over the long term Creek eventually there will be a benefit for definitive different Medina, obviously trying to get into different modalities. So we've got.
That sort of fit that potentially.
I think it may Larry because I think the learning has been that in any situation. It maybe safer and more convenient if you can bring diagnostic modalities to the patient rather than having to transportation to those areas were stationary equipment door and we've seen and I may have talked about this before but we see.
In an increasing profitability with ultrasound before this where the ultrasound equipment is actually getting smaller easier to use an affordable setting and that is actually part of the reason that we drove forward with our DEFINITY room temperature program and we are committed to make sure that if ultrasound with going more affordable that DEFINITY could be more affordable is.
Well and so having a room temperature formulation rather than one that requires refrigeration, we feel kind of add to that that dynamic that we're seeing in the marketplace.
Gotcha and then just just last question I think on them.
Q1, you had mentioned.
Technelite, obviously procedures down.
Clearly April may and slowly coming back.
But I think you have mentioned Theres some inefficiencies are they.
Later pharmacies actually how to use more mall.
Or more technelite in their procedures.
If you can only relapsed procedures.
Somewhat offset.
During the current maybe getting a quarter that did you see that sort of through the quarter.
We did as Bob and I. Both noted this these are really regional.
Asians and it's really aligned very very closely with the reopening of regions and so with flu reopening and kind of return of normal Honda within hospitals were in an outpatient procedure. We would expect to see their channel partners, who are the radiopharmacies revert back at some point to their practice of having.
Multiple deliveries to hospitals during the day instead of the onetime delivery that they adopted during the acute phase of the pandemic, but again, it's such a region.
Kind of aspect that I can't make a general statement about it Larry but I'll just add to that to.
When we look at Technelite. It Didnt drop that was what I was indicating about gross margin.
To the extent that I noted for DEFINITY.
Right I touched on it but it's for the reasons that Marianne engine yourselves actually goes articulated but that same ramp even though you might have seen a change in the way the delivery enters us into the system was occurring throughout the period.
It was still a rail of recovery I mean, bill landing at 18.9 million, which was a pretty good results given the circumstances right quarter.
But it still good follow that same sort of trajectory, but as the definitive recovery was it was a very.
Deeper recovery, but it definitely still a good experience an upper trajectory throughout the quarter.
Okay, great. Okay, great. Thank you I appreciate all the color.
Welcome.
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