Q2 2023 Lantheus Holdings Inc Earnings Call
Yes.
[music].
Good morning, welcome to the <unk> second quarter, 'twenty, two or three free natural results conference call.
As your operator for todays call.
Please note that all lines have been pleasing mute to prevent any background noise.
This call is being recorded for replay purposes.
Replay of the webcast will be available in the investors section of the company's website.
You may all be two hours after the completion of the call and will be archived firstly 30 days.
I'll now turn the call over to your host for today, Mark King Arnie, Vice President of Investor Relations Mark.
Thank you good morning, and welcome to today's call.
With me are Mary Anne Heino, our CEO , Paul Blanchfield, our President and Bob Marshall, Our Chief Financial Officer.
Maryann will begin the call with introductory remarks, and then turn the call over to Paul to provide a strategic and operational update.
Bob will cover our financial results and provide updated guidance Maryann will provide closing remarks, and then we will open the call for Q&A.
This morning, we issued a press release, which was furnished to the Securities and Exchange Commission under form 8-K reporting our second quarter 2023 results.
The release and today's slide presentation or in the investors section of our website atlantica stockpile.
I would like to remind you that any comments made during our call. Today could include forward looking statements actual results may differ materially from these statements due to a variety of risks and uncertainties. Please.
Please note that we assume no obligation to update or commentary or any forward looking statements, except as required by applicable law, even if actual results or future expectations change materially.
Please refer to our SEC filings for a detailed discussion of these risks and uncertainties.
Discussions during this call will also include certain non-GAAP financial measures.
Reconciliation of these measures to the most directly comparable GAAP financial measures is also included on the Investor section of our website.
It is my question I'll now turn the call over to our CEO Mary Anne.
Thank you Mark and good morning to everyone I am so pleased to share the Atlantis delivered yet another solid quarter with reported revenue of $321 $7 million up 44% year over year.
We continue to focus on our commitment to innovation and operational excellence and ultimately to making a meaningful difference in patients' lives in fact in the first half of 2023, we impacted the lives of more than 3 million patients.
Outside the U S. We are pleased to note that our P. S may pet imaging agent will soon be available to prostate cancer patients in Europe Kurian, our European partner announced last week that they have received marketing authorization for clarity from the European Commission.
Lindsay is has been a recognized leader in nuclear medicine for more than 65 years, and we believe our differentiated capabilities uniquely support our position as the leading radiopharmaceutical focused company.
Our expertise and commitment to bringing unique product a differentiated clinical value or why we are the clear market leader with both PSA pet would clarify and with our ultrasound enhancing agent definitive.
It's an inspiring time for our industry as the Renaissance underway in Radiopharmaceuticals was clearly evident at the recent society of nuclear medicine, and molecular imaging or <unk> annual meeting the breath of attendees from across medical specialties, and the increased focus on radiopharmaceuticals, including diagnostics biomarker.
And therapeutics speaks to the increased adoption and importance of these innovative products to the healthcare community.
Our deep expertise in Radiopharmaceuticals and our proven ability to successfully commercialized products have made us the partner of choice in this space and enabled us to expand our pipeline with late stage radio therapeutic candidates.
This includes PMT <unk> for prostate cancer, and Pnp Tuesday, with you with three for neuroendocrine tumors.
We also have earlier stage assets such as NK 60 to 40 are F 18 labeled pet diagnostic imaging agent targeting Tau tangles for Alzheimer's disease, and our novel fiberglass activation protein alpha or pet imaging agent, which recently entered the clinic.
It's an exciting time to be in Radiopharmaceuticals and is the leading radiopharmaceutical focused company. We are committed to advancing our portfolio of leading products in late stage product candidates could deliver better patient outcomes for those we serve.
Before I turn the call over to Paul I would like to take a minute to note recent development in the P. S may pet imaging class, including the recent approval of an additional F 18 based agent.
We believe the healthcare community is well served to have a broad set of choices available. We're also confident that he has made that would clarify offers clear clinical and commercial differentiation.
Clinically clarify offers the best combination of both isotope in F 18, and our unique and very PSA targeting ligand. It's important to note that each of the approved F. 18, PMA agents are new chemical entities with unique pharmacokinetics as well as corresponding Pharmacodynamic profiles, we believe the clinical.
Value of clarify was well demonstrated in our pivotal trials. These trials for Polaris Sai Condor and Osprey, both demonstrated high predictive value positive predictive value, which by definition correlates to a low rate of false positives.
Additionally, it is worth noting that the newly approved F 18 P. SMA agent in the U S includes an explicit warning and precautions and its label that recommend because of the associated risks of false positive interpretation that healthcare professionals should consider multi disciplinary consultation and his dual pathological confirmation or biopsy.
When clinical decision, making hinges on uptake only in the prostate <unk> prostate bed region or only on uptake interpreted as border line in patients with suspected recurrence.
We believe the advantages of PSA pet with clarify a clear robust and well documented in scientific literature, and our packaging Sir.
That I will now turn the call over to Paul to provide a strategic and operational update.
Thank you maryanne and good morning, everyone.
Leading the way for lamp as Polaris, Sai, which delivered sales of $210 5 million representing.
Representing 61, 7% year over year growth and approximately 8% sequential growth from the first quarter of 2023 with.
But the vast majority of our sequential growth driven by our existing accounts.
We believe PMA wet clarify offers sustainable competitive advantages that will enable it to remain the number one PMA pet imaging agent, even with the approval of additional competing agents.
Polaris <unk> clinical differentiation includes being the only she estimate pet imaging agent to have measured change an intended patient management for 99% of enrolled patients in a registrational biochemical recurrence or PCR study with results having been published in a peer reviewed.
<unk> scientific journal.
Our pivotal phase III Condor study demonstrated that nearly two thirds of PCR patients with negative or equivocal conventional imaging results at inclusion had a change in intended management after being scanned with Polaris Sai.
Clarify also demonstrated high to very high inter and intra reader agreement, which we believe provides confidence and the consistent interpretation of P. SMA patent with Polaris <unk> scans.
Scientific literature broadly supports F eighteens image clarity advantages versus other isotopes used in PMA pet imaging.
Our pivotal studies scientific research Kols feedback and guidelines all demonstrates the differentiated clinical value of <unk> patent with clarify.
Clarify also has the largest dedicated commercial team and significant adoption as demonstrated by the more than 200000 clarify scans performed since launch.
Broad payer access, including transitional pass through status.
A geographically diverse multi partner Pms supply network, including both commercial and academic partners and sustained supply reliability.
Finally clarify has a nearly two hour half life versus 68 minutes for gallium 68 products, which we believe offers more flexible dose administration advantages for imaging centers and the patients they serve.
There have been promising developments in the reimbursement landscape as the centers for Medicaid and Medicare services or CMS recently requested public comments on proposed hospital outpatient prospective payment system.
CMS put forth several proposals, including for radio Pharmaceuticals for the first time since 2008 separate payment for radiopharmaceutical diagnostics following exploration of transitional pass through status.
We are working with our industry partners and other stakeholders to strongly advocate that CMS adopt this important proposal.
While simultaneously working with Congress to pass defined act to ensure that patients maintain access to innovative diagnostic radiopharmaceuticals, including Polaris Sai.
We are positive about the future and the impact we continue to have on men living with prostate cancer.
And our Microbubble business definitive maintained its strong momentum with second quarter sales of $70 5 million up 13, 2% year over year and remain the clear market leader in the U S ultrasound enhancing agent market.
Contributing to year over year growth with an increase in overall health system procedure volume as patient visits continued to rebound in this post pandemic environment.
We expect these trends combined with our continued focus on educational programs and promotional efforts to help sustain our momentum in the second half of the year.
As Maryann mentioned, we've continued to expand our portfolio and pipeline, including <unk> targeted radio therapeutics.
To realize this potential we continue to work closely with our partner <unk> Biopharma to progress PMT to 002 across R&D supply chain manufacturing and commercial readiness.
We received fast track designation from the FDA in April and expect to read out top line data from splash the phase III Registrational trial later this year.
<unk> is designed to evaluate the efficacy and safety of PMT to 002 in patients with metastatic castrate resistant prostate cancer, who have progressed following treatment with an androgen receptor pathway inhibitor or RPI.
The study has three phases dosimetry randomized treatment and long term follow up.
Needless to say, we look forward to progressing P. N T 2002 for men with prostate cancer and to sharing top line data and the second half of this year.
I'm pleased to note that this quarter, we completed our integration of servo technologies and its asset M. K 62, 40, a clinical stage pet imaging agent for all Timer's disease, which is already being used as a biomarker and more than 60 clinical trials.
Tao imaging has the potential to play an important role in patient staging and patient selection for future treatments.
We are particularly encouraged by the proposed guidelines from the old Timers Association and the National Institute on aging for diagnosis and staging of Alzheimer's disease that incorporates how pet as well as the approval and regulatory submission of new therapies, such as <unk> and Donana map.
We look forward to sharing more progress on M. K 62, 40, and its potential in the future.
We have also progressed or novel FAP Alpha targeted copper 64 labeled pet imaging agent.
In collaboration with ratio Therapeutics, we initiated a phase one study evaluating the pharmacokinetics biodistribution and radiation dosimetry, an adult healthy volunteers.
FAP is over expressed and the tumor micro environment, specifically in cancer associated fibroblasts, which are believed to modulate tumor progression and immune response.
The ubiquitous expression of fat across nearly all epithelium derived cancers.
Paired with the low expression in normal tissues makes it a unique target to focus on for tumor imaging for a wide variety of cancers, including breast pancreatic lung and stomach cancer.
Following the completion of the healthy volunteer study, we plan to progress to a phase one study and cancer patients.
I will now turn the call over to Bob for our financial update.
Thank you Paul and good morning, I will provide highlights of the second quarter financials, focusing on adjusted results unless otherwise noted.
Net revenue for the second quarter was $321 $70 million, an increase of $98 million or 43.8% over the prior year period earnings per share for the second quarter or one dollar and 54 cents, an increase of 66 cents or 73.8% over the prior year <unk>.
Turning now to the details beginning with radiopharmaceutical oncology the category contributed revenue of $211.3 million of sales up 61, 1% over the prior year with clarify delivering $210.5 million a sales up 61.7% over the year over year <unk>.
<unk> diagnostics recorded $97.6 million up 12% from the prior year quarter sales, a definitive where $70.5 million $13 two per cent higher as compared to the prior year quarter technology revenue was $21.6 million up 11.1% from the prior year due to mainly to the realisation opportunistic sales and.
Quarter, Lastly, strategic partnerships and other revenue was $12.8 million driven primarily by M. K 62, 40, and the Relistor royalty.
As was noted in this morning's Relistor press release, we sold our right to the Relistor quarterly net sales royalty stream, though we have retained the rights of any future potential milestone payments I will provide some additional details just ahead of our updated guidance discussion.
Gross profit margin for the second quarter was 69.6% an increase of 359 basis points over the second quarter 2022 result on a similar basis.
As has been the case in recent quarters. The increase is due mainly to favorable volume and product mix with bipolar high and affinity, but also lower logistics expenses, partially offset by generally higher overhead costs <unk>.
Operating expenses for 345 basis points favorable over the prior year at 22.9% of revenue, which was in line with our previously guided expense levels.
It was noted last quarter, we continued to invest in sales and marketing efforts with an expansion of our clarify salesforce intended to support and expand adoption, which demonstrates our confidence in the underlying psm's pet imaging market.
Within G&A and R&D, while the ERP implementation and advancement of our pipeline continue we are also investing in infrastructure to support clarifies growth. In addition to activities associated with the point and M. K 62 40 programs.
Operating profit for the quarter was $151 million, an increase of $69, 4% over the same period prior year.
Total adjustments in the quarter totaled $25.9 million before taxes of this amount at 12.7 and $12.4 million of expense are associated with non-cash stock and incentive plans and acquired intangible amortization, respectively. Also during the quarter, we reduce our net contingent liability accrual by $7.6 million and.
Recorded a fixed asset impairment of $6 million, the remainder is related to acquisition and other nonrecurring expenses.
Are effective tax rate was $26 seven per cent in the quarter, the resulting reported net income from the second quarter was $94.1 million.
Net income of $109.6 million on and adjusted basis, an increase of 74.3% over the prior year quarter gap fully diluted earnings per share with one dollar and 33 cents.
And $1.54 on adjusted basis, an increase of 73.8% over the prior year quarter now.
Turning to cash flow.
Second quarter operating cash flow with the use of $32.3 million as compared to cash provided a $72.6 million in Q2 2022 cat.
Capital expenditures totaled $10.7 million in line with expectations free cash flow, which we defined as operating cash flow less capital expenditures was of use of $43 million a decrease of $111 $2 million from the prior year period during the quarter the company satisfied its obligation under the contingent value rights issue.
And the <unk> acquisition by paying $99.6 million broken down between operating cash flows of $95 $9 million and the balance within financing cash flows. Additionally, the company remitted, both Q1 and Q2 tax payments in April and June respectively, totalling $44.5 million <unk>.
Cash and cash equivalents net restricted cash stood at $414 $1 million a quarter and we continue to have access to a 350 million dollar Undrawn bank revolver and are comfortable with our very strong liquidity position.
Before turning to guidance I would like to provide some additional details regarding the sale of the Ronan Relistor royalty stream.
<unk> retains the right to any future mileson milestone payments and received an initial cash payment of approximately $98 million before tax and.
In exchange for the royalties. This action will result in the reduction of approximately $13 million in revenue in approximately 14 cents of earnings per share both split equally between the third and fourth quarters of this year strategically.
Strategically we believe this unlock significant value today as we focus on our core businesses to find quite followed disease to deliver better patient outcomes.
Turning now to our guidance for the third quarter and updated guidance for the full year, which incorporates the financial impact of the rose store divestiture.
We forecast revenue to be in a range of $310 million to $315 million for the third quarter of 2023, an increase of approximately 30 and 32% over the third quarter of 2022, we are updating our full year you to take into consideration second quarter performance as well as the sale of Relistor royalty stream.
Therefore, we now forecasts full year revenue to be in a range of 12452 $127 billion from the prior range of 1232 $127 billion implied clarify full year range is now $835 million to $860 million up from the prior range of 820 to 860 million.
We expect to finish to continue its momentum and also expect M. K 62, 42, now contribute $15 million a full year revenues rather than the prior guide of $10 million.
Turning now to earnings adjusted EPS should be in the range of one dollar and 30 cents to one dollar and 35 cents for the third quarter as we continue to invest in additional sales and marketing efforts as well as infrastructure to support company growth.
We know we just we now expect adjusted full year EPS, you mean, a range of $5 60 to $5.70.
Per share versus the prior range of $5.45 to $5.70 with that let me turn the call back over to Marianne. Thank you Bob.
Closing the second quarter was yet another solid quarter anchored by our market, leading products <unk> and DEFINITY our commitment to execution an excellent are the cornerstone on which we operate Atlanta's we are driven by our purpose to find fight and file a disease to deliver better patient outcome. We believe.
That radiopharmaceuticals presents significant potential both diagnostically and therapeutically in what has become a modernized approached the personalized medicine.
You see if a patient is added for the target you treat the disease at the target and then you monitor patient respond via imaging.
By investing in innovative diagnostics and therapeutics, we are positioning lanthier to remain the leading radiopharmaceutical focused company.
Products with sustainable advantages such as <unk> affinity had been the key to our longstanding success and we are proud to be able to equip healthcare professionals with the tools they need to make a significant difference in the lives of patients.
With that Bob <unk> now ready to take your questions. Operator. Please go ahead.
Thank you as a reminder to ask a question. Please press the star one one on your telephone and wait for a name to be announced so which are your question. Please press star one one again <unk>.
Also please limit yourself to one question per person.
Please stand by while we compile the Q&A roster.
Mmm.
Sure first question. It comes from the line up for Awhile <unk> from Leering partners to your line is open.
Hey morning, everyone. So.
Good morning, and so I wanted to ask about your guidance for his first off Uhm what are the main drivers behind that and could you talk a bit about your level of confidence in reaching possibly the high end of that range.
So I'll start and then people can contribute so you mean, yes, you've noted the fact that yes by removing the relistor royalty stream out of the back half of the year that that.
Keeping our top end from the prior guide that is effectively.
The race that note that we're trying to point you to.
Where it's coming from obviously as an outperformance and Q2.
Really pleased that it was broad based across all three of the categories.
And as we look to the future we have a lot of confidence and that was one of the reasons that we did raised the bottom end of the clarify range up more than double the b.
Over the beat of what we had provided guidance in the prior quarter. So from there. Those those are that I think the main drivers of of the revenue guidance performance and if you look at the EPS part of it it's similar I mean the performance.
<unk> EPS is also.
Accumulation of our outperformance in queue to which then allows us to continue to invest in the business, which I think continues to demonstrate our confidence in driving growth.
Maybe I'll just add Bob very much agree with that I think we're pleased with the continued adoption specifically a clarify including its position as the number one fears may pet imaging agent. We believe it is clinically and commercially differentiated obviously, we are cognizant that we have new competition over the last couple of weeks that's been expected and.
And indeed, we believe that physicians and prostate cancer patients are well served to have a broad set of choices available. The additional voice and awareness will help promote the overall benefit may pet for prostate cancer patients and has to clear market leader. We believe that we can benefit from that we do believe our product is clinically and commercially.
Differentiated it is obviously a dynamic market, but we remain confident about the potential for clarify and the overall <unk> pet imaging category.
I'll just add one.
Instead of two comments here that that I'd like everyone to hearing and the first it is our confidence in as Bob said effectively by having to remove relistor revenue and the associated EPS and back half of the year that is in effect a raise to what are prying guidance was and you also see our bottom guidance coming up in this I think related to my second point.
First we are incredibly confident in what we are accomplishing in the market and we're very also pleased to see the market's rebound, especially the return of significant patient volume to the definitive market, but the second thing that we are really attending to as a team is trying to be tighter in the guidance that we offer you. So that you have <unk> you have better line of sight to what we.
Anticipating for the visit and you can build your models of that so I would say that the other concerted effort that you see with the guidance that we offer here.
Alright, Thank you and for your next question. It comes from the line a few NZ from the O'reilly.
Good morning, Thank you for taking my questions and so my first phone is with solids, a commercial loan <unk> success, I Might've had a image agent <unk> Loma asthma M. M. I a conference and thank you for hosting me at your training on sanctions arrange a conference in Western Pennsylvania, asking us about it too.
<unk> between clarify on this newer while plus luma for this to Molly killers can you. Please comment on the clinical data presented so far between these two is there any clinically meaningful difference understands they are not compared in the same trial. So I have a quick follow up thank you.
No. Thank you for the question I guess I'll I'll take the first first first let me say I know there's been a lot of chatter from the market about the F 18 product being a like an.
Interesting at this time in N I'll comment, but I really wish the.
The chatter was about what we're doing for patients and what <unk> imaging represented in innovation to the prostate cancer treatment community.
It is interesting about this feedback because it it seems that the the generation of it is from one of the galleon TSA agent offers into the marketplace and that makes it fairly ironic and I'll I'll explain why the two commercially available galleon PSM agents in the U S. Both employed a 5052 regulatory approach to seek approval.
<unk> they reference the safety and efficacy data generated by UCLA and D. C. S. F and then supplement and completed a bridging PK study to demonstrate their equivalency to those academic products.
Indirect contrast, the two F 18, PSA agents employed 505 P. One red tap or an NDA application and which essentially you must demonstrate that you were <unk> weekly different from any other approved agent.
At 18 approved agents do share a common isotope at 18 and I think as we noted in our comments, it's well supported with an abundance of scientific literature that at 18 generated images are clearer than those generated by gallium.
The 218 agents are uniquely different in the Psm's targeting ligand that is attached to the F 18 isotopes and that conveys into important PK and pique differences, which we feel are well documented in the reported results are are two pivotal trials in both those trials, we reported very high positive predictive value, which again as I noted earlier.
Leads to low low false positive rates in the trial. So again I think somewhat I ran it radically it'd be much more credible to say that the galleon P. As an agent in the U S are alike, and the selling agent in the U S are uniquely different.
We can go into more scientific discussion of the actual results of trials, but I think those are all well published the pivotal trials are well published in peer review journals and so they are they are available for direct comparison.
<unk>. Thanks for the clarification. There. So we also heard of Commons from <unk>.
<unk> earnings cause onto their adjustments or changes in practice guidelines that do not favor.
<unk> agents related to false positive <unk>, particularly in bone lesions can you clarify if you have seen such changes and we would appreciate any actual Tyler.
Again. This is one of them almost going to label is desperately seeking science because in looking at those comments what we've come to appreciate is that the guidelines that are being reference or the European guidelines.
Clarify was just approved in your in the European Commission, but has not yet.
It concluded and guidelines those guidelines reference the only PSA may 17 P. S may pay agent that is approved in in Europe , which is an agent that is non approved in the U S nor under development in the U S. So why those guidelines would be reference when you have such outstanding exemplary guidelines in the U S with the N T C N S M I.
In a way is is somewhat bewildering to us and I will I can confirm you fully that those guidelines. The USPS guidelines from those Zeppelin, great agencies have not changed their stance on clarify and its value in being used in P. S maintain imaging and in patient selection 40th may be therapeutic.
Thank you and for your next question.
It comes from the line of Anthony patrolling from Missoula America's Anthonys. Your line is open. Please ask you a question.
Good morning, Anthony.
Anthony.
Once again entering your patrolling from Missoula America's Your line is open. Please ask your question.
Mmm why don't we move forward and we can come back to Anthony.
Yeah sure Nevers.
One moment for your next question.
Okay and your next question comes from the line of Richard Dean Witter from Teresa Securities. Your line is open.
Hi, Thanks for taking my questions. So I wanted to maybe just start off on <unk> any color that you can give on how sales and performance tracked throughout the quarter and maybe even into the early part of a <unk>.
<unk>.
Okay did you see any any changes or or did you see the new competitor <unk> competitor.
Show up at all.
Later in the two Q.
Alright, thanks for the question.
I think we were confident in the trajectory that we saw over the course of the second quarter, which was in line with our overall expectations as Bob and noted in the last quarter, we DC impacts from the holidays. So in the second quarter would be memorial day, we see natural impacts and we would expect over July 4th in in in the future Labor day Thanksgiving and Chris.
Smith.
Overall.
We're very comfortable with the trends we solved we're not going to comment on what we've seen in the third quarter to date other than Bob reiterating the guidance and raising.
What we saw and expect for the second half of the year. So overall remain confident as I said earlier in my prepared remarks, we expected an additional competitor to come on board.
We are very comfortable with our market leading position is the number one psm's pet imaging agent.
Are very pleased with the overall growth of the market is now annualized thing in our estimates approximately 1.2.
Billion dollars and that's versus a Tam that we shared back in January of noted there could be upside of $1.6 billion. So we still are very pleased with the uptake of Polaris five the uptake of the overall market.
And where we're going to go going forward.
Enriches is Mary and I'm, just going to add what I say each time on these calls I would like everyone to appreciate something that we're thrilled that we're still in a lunch here. This is a brand new market a brand new category and we continue to be incredibly confident in what we see is the potential growth as Paul mentioned were already dollarizing.
<unk> at 1.2 billion, we see Minerally Tam of $1.6 billion in we see upside on that based on again evolving physician intent to use these products in their management their diagnosis and management prostate cancer.
Alright, thank you.
One mailed to your next question.
And for your next question comes from the line of Math Taylor from Jeffries match. Your line is now open.
Okay.
Hi, Thank you for taking my question good morning.
Good morning that.
Good morning, So I wanted to see if you could comment a little bit further on some of the reimbursement development that you talked about with CMS asking for.
Public commentary and defined back to kind of running in parallel.
Maybe you could discuss some of the potential outcomes that you see there could you help us understand the timing of when some of these things have happened and maybe which of those would you is most likely.
Thanks for the question that so I think we were obviously pleased as we mentioned in our prepared remarks that CMS.
Released their proposed O P. P. S rules for the calendar year 2024 in the middle of July .
In those proposed rules for the first time since 2815 years.
They included proposed rules five of them that it would adjust the reimbursement for.
Innovative radiopharmaceutical diagnostics and two of which would dramatically change the current transitional pass through payment status effectively as they propose potentially beginning next year.
And so we're naturally very pleased that CMS has heard the need for continued patient access to these innovative radiopharmaceutical diagnostics and.
And we are working with stakeholders as well as members across the industry to submit comments and to help CMS understand the importance of specifically a number of their proposed rules, which could go into effect in calendar year 2004 G.
<unk> early speaking CMS finalize it it's rules for the upcoming year in the early December late November timeframe, after which before which they receive comments and so we're obviously working with them and our industry partners to ensure that they understand the importance and are optimistic that those could go into effect and neck.
What year that said, we've always said we have a multipronged approach and so we are also.
Supporting the find out.
Both in the house and in the Senate to find Doc was reintroduced in the house on February 27th It is 34 co sponsors, including bipartisan support as the co sponsors. It was also referenced in a recent house energy and Commerce Committee meeting on July 18th where there are several members made comments about the importance of supporting.
The <unk> and.
And then it was introduced in the Senate on May 9th and also has a bipartisan sponsorship and so we're naturally hopeful that the find out will be included in a legislative hearing this fall and being passed in due course, but as we said we have a multi <unk>.
<unk> strategy, Apple through CMS and through the find up as well as other commercial strategies to minimize the potential impact on pass through and most importantly ensure that prostate cancer patients continue to have access to innovative radiopharmaceuticals diagnostics, including clarify the market leading edge.
Thank you answer your next question. It comes from the line of Anthony patrolling from Missoula America's Anthony to your line is now open.
Alright, Thanks, and good morning, everyone. Congrats on on the short corner here.
Just high level on looking at the P. SMA prostate cancer testing landscape and just in terms of share as.
As we go forward here, we do have the third competitor in the U S market.
You know maybe just thoughts on.
How how shares gonna trend now with three options in the marketplace.
And then one quick follow up will be on Europe , just just a recap on how.
How we should be thinking about the rollout of clarifying in Europe .
Fewer pet facilities, but yet there's a higher incidence of prostate cancer. So how should we be thinking about the rollout in Europe .
One quick follow up thanks.
Anthony I'm going to start with I I I'll speak to what our expectations are going to share perspective sure as a fixed pool. It's a 100 per cent. So the only thing I know for sure is that any participants have to share that number what we're really confident about is that we will remain the commanding leader in this marketplace ma'am market share perspective for this quarter we reported.
In approximately 70% as our estimated Sharon again, I need to be clear about that because there is no. Unlike the the pharmaceutical industry. There is no third party here that explicitly and very carefully follows in track market share. So we do have to estimate it but our estimate is again, 70% of the market and we continue to.
Be the market leader and we will continue to be the market leader, which is really great place to be for your Europe question. If it's not one that we will answer specifically the time, although I really appreciate your comments about the infrastructure of pms's being less but yet the incidence and prevalence four gentlemen, prostate cancer being hired what I will stage where.
Company with our partner Curiam is the leading bleeding.
The leading pms provider they have the largest network of Pms throughout Europe , and so that's as you know from our lunch. That's an important important access point that really once you have the infrastructure. Then you can drive the demand, but it will be our partner doing that so it would be really early and probably I would say inappropriate this time for us to offer any <unk>.
Projections there.
Thank you.
One moment for next question.
And for your next question is comes from the line of Justin Walsh from Jones trading just in your line is now open.
Hi, Thanks for taking the question Uhm LMT Ages 13, 63, SF still early but I was wondering if you can comment on the potential advantages and disadvantages of copper 64, pet compared with flooring 18, pet imaging and sort of relate to that why use copper for targeting fat and flooring for P SMA and and.
Is there some concern that the future entrance of copper based P. SMA agents could pressure clarified down the road.
I'm going to come in to your question generally and then if we can we can absolutely jumped deeper into science you out, but I think what you're seeing here for the larger marketplace is he intend to deploy a variety of isotopes and then exploit what are the individual differences.
Between between the different isotopes five or 64 is it really good I still for pet. It has a short positron range, which is just a little bit longer than F 18, and a longer half life. So we remember with the positron range that way you get clarity of image. So it has it's a it's a little bit longer than if 18, but not noticeably. So you get that nice clear image, but with a long.
Half life.
Really distinct commercial advantages about how to distribute your product and so I will say copper production has a long way to go in terms of scale up here.
<unk> is the only company that we're aware of with a commercial copper 64 product in the U S, which is called the tech net and that's an orphan indications of the overall value moving.
That's available that is probably lower but again I would point you to what we're seeing in the larger marketplace and this goes to some of the alphas as well as some of the other isotopes the intent within radiopharmaceuticals to employ and deeply these isotopes across a variety of imaging and therapeutic products that really make for it.
As I said earlier really personalized medicine.
And so that that's kind of our sense I won't I won't do a direct comparison between the cop or other than when I just talk to you about the positron range and then and then half life, but really you always have to think about the the full product what is the isotope what is the <unk> or other <unk> conjugated and look at the total value being offered.
<unk> that product.
Alright, thank you.
The next question is.
It comes from the line of flower solo from CGS. Larry. Your line is open. Please ask you a question.
Greg Good morning.
Just a clarification personal questions about your gardens essentials going 45 75.
574 584 right.
Yeah apples for apples include a real store.
Alright.
Yeah.
It was 14 14 cent impact in the back half a year. So it was a 565 hundred 70, so yeah that would be the equivalent would be five major medical.
That would be it would have been the equivalent yes, but.
Deborah <unk>.
Absolutely. Okay. Just a question on <unk> just to follow up on just on.
Adoption from.
As you go forward.
Recently or are you.
More expansion of existing doctors are you getting new doctors are scams.
Uhm averages are they continuing to go upwards.
Also in terms of where you seem more penetration and and.
For initial staging of high risk patients or or suspected by where you calling to the different failure penetration. Thanks.
Larry that was about 25 questions in one.
[laughter]. Thank you [laughter].
Larry Good morning, and thanks for the question.
Awesome.
I think.
There we see.
Ah clarify and really the added penetration I think this is really followed a trend that we had expected. If we go back to what we talked about last year, we were really about adding additional accounts and those were metrics that we shared as we were having more imaging centers, whether they be government facilities hospitals are free standing imaging centers adopt pollero.
<unk> and be able to offer it to their referring physicians I think what we've seen over the last couple of months and certainly in the second quarter was the there's only so many accounts were going to be adding and so our real focus has been driving adoption and raising awareness amongst referring physicians that does include new physicians that have not yet.
<unk> P S may pet imaging, including with <unk>, but I would say, it's increasingly ensuring those physicians understand the breadth of patients with which they can prescribe and the benefits of peace may pet with clarified uhm naturally the current setting where we had a previous condensed.
<unk> imaging pet imaging agent approved in that setting.
Was an early adopter I think we've seen increased adoption in the initial staging and going down from high very high risk to high risk to intermediate unfavourable as we would expect in a launch and then naturally with <unk> being approved last year. We've also seen all by minor some scam.
To support that patient selection. So I think things are generally following the trend that we would expect where that existing account growth or the activation of referring physicians has really been a key focus of ours and as Bob mentioned, we've made investments in our sales and marketing demand generated activities, which we think is appropriate given where.
[noise], we are but also demonstrates the confidence in the growth potential to not only continue to grow. This 1.2 billion dollar category, but also expand what the potential is as guidelines and medical practice continues 12 lost.
And that was that 23 25.
[laughter].
Alright, Thank you and for your next question. It comes from the line of David strictly from the JMP Securities Davis. Your line is open.
Hi, good morning.
Just looking at the slides seven in the deck and you've talked a lot about the commercial and clinical differentiation.
Clarify but.
We look at the warnings and precautions and the commentary there I'd really just like to get your thoughts on.
Too dark.
You assume that they're going to look at that and changed or practice or.
Do you have any precedent to look at where there.
There was something like that clinically or.
A different label that actually impact the practice or do you feel like the dogs are going to.
He these warnings or is it something that you know.
Any thoughts that you have on sort of what impact that might have would be great. I think it's a really fair question and I'll answer. It. This way we are absolutely committed as we always have been as a company to operating within our field to play within the United States right market is your package insert your label that is the basis for Ya right for <unk>.
Emotion the basis for your rate for sure, especially from a commercial perspective from sharing clinical data about your products and we are incredibly committed to that I think your your comment about will doctors really change their mind based on a single part of a label.
Don't think so I think that's much more relevant here is the clinical experience of physicians already have with clarify we've been in the market is now over two years and I think by by any means measurable and he would call. This a blockbuster lunch and I say that I'm proud to say that but I'm much more proud about why that happened that have.
Because the level of innovation that was represented by P. SMA imaging was correlated and matched by our commercial execution, the excellence with which we brought this product to physicians and to the market. So I think that is really going to be much more of the basis of how physicians choose going forward what product to use when scanning.
Their patients when when it is relevant to a necessary. They do refer back to your package insert to make sure that their own practices kind of in line with that we brought particular attention to it today only because we've been offered significant feedback about the attempt to make a claim about <unk> agents in general.
<unk> being a like and we wanted to clarify where the products are different as and as I said, most most distinctively they're different and that they're both they're unique new chemical entities that both followed different paths to approval based on the the construct of the isotope in the in the log in that attached to it.
And I would just add I do think this matters in the marketplace I think clinical and commercial differentiation is important we saw that with our early commercial competitor, where they were approved about six months after us and if you look at the relative share positions those clinical and commercial Differentiators do play out.
We welcome as we expected additional competition with another essay teen agent, but as a forced to market agent.
Where clarify has a significant market leadership wherever 200000 patients have been scanned for this has been used in over a thousand imaging centers that we've shared we think we have a market leading position with sustainable clinical and commercial advantages that will enable us to remain the market leader for many years to come.
Thank you and we have a follow up question from Richard Gere later from tourists Securities Recharge. Your line is open.
Hi, Thanks for taking the follow up I I S or two quick ones here Marianne you had mentioned something about a slight change to your guidance I think either philosophy.
With with with this updated guide can you just refresh us on what what that meant with a narrower band and then the second question.
Is on the Splash trial, you're gonna you're gonna have novartis appear somebody for trial, probably read out before or around the same time.
Investors are naturally going to ask.
<unk> tried to compare between the trial, so Paul or anything you can say about differences between the trials that you'd highlight as people try to compare them is that fair and what what what what do you think would be a reasonable way to compare the PSS primary endpoint. Thanks.
You're welcome so I'll I'll take on your first question, which was kind of what I was trying to convey I think we we have been again, we have been in.
Throw a pandemic and then through a launch we have not had our guidance more reflect a wider range just because of the uncertainty of what was going on in the market when it points. During the month you. Just you know you <unk> you just don't know exactly where it's going we feel now and this is what you are seeing in our guidance is somewhat of a tightening of the range.
Our confidence in having better line of sight.
<unk>, it's about Infinity, we're now confident that patient volume is coming back into that markets at the market now represent again the opportunity that it had before the pandemic until we are better line of sight in forecasting there, but we also build as a as a company based on what has been a longstanding pattern.
Needing and raising on guidance that it was also fear to our analysts community to try to give the hydro view as to where we think we're heading to start I think probably at here I'm rich and I don't want you to take the impression that this is new I actually made those kinds of comments that we were <unk>.
Taking that kind of a a shift and in the view just as Marianne just outlined over the last couple of quarters. So we're kind of continuing the trend here of what we had kind.
Kind of came into the 2023 fiscal year.
With that kind of a view as we had continued to gain knowledge with a couple of years of experience under our belt, we can see things like holiday schedules and so forth that started.
Outline a clearer pattern for us to be able to give we think intelligent and guidance ranges.
To your second question, Rick about Slash you are so right that people will be incredibly eager to compare that not only the trial designs, but the trial results. When you turn that he has an eight four and then flash and you're also correct or Morgan intelligence would also suggest that the PSM eight four data will read out at <unk>, which will proceed what we believe.
Leave what is what will be the release and the availability of the of the slash data.
I won't use this time here to try to compare actual trial designs. What I will say that is important is that both PSM 848 slash are in the same patient population, which is the pre chemo population and the any comparison to date has been between the slash dosimetry data as a lead in data and division trial data, which really are different.
Patient population. So we'll wait to see I think the important outcomes that will be looked at will of course be radiographic three progression.
And then O S. O S data will also trail a little bit by definition you have to let the data that you read it but I can assure you there'll be lots of discussion about these data and there'll be many players in the marketplace, who will who will want to understand how the data are depending on what they say I will say in general.
No and this is something you've heard us say before that from radiopharmaceutical perspective, one of the things that we see as an absolute confidence in this market is the willingness to embrace additional products just because of the of the supply chains associated with these projects and products and like there is there is more so than <unk> other non radiopharmaceutical categories.
A willingness for physicians and.
Desire for musicians have access to more than one type of product and we think that will be very positive for P. A T 2002 N N T N T 2003.
Thank you one moment your next question.
We have a follow up question from Rosanna Ruiz Leerink Parker's Ramayana Your line is open.
Great. Thanks for taking the follow up so I wanted to check in about your contracts with the large pms networks for a second like how long do some of these last thing can you remind us are you planning to add new ones in the near term or revamped some contracts and could they help guarantee some exclusivity in terms of holding majority.
Preferred morning time manufacturing positions for <unk> and things like that.
Thanks for Anna I. Appreciate the question. So as we shared in the past we have a multi channel pms strategy across the U S were currently working with 47 pm apps.
Almost 75% year over year and are able to offer clarify so a little over 95% of the U S population just based on drive times, and where we do those a number of Rpm's contracts. We shared publicly go out a number of years, including to 2000 to 2007 and beyond.
We are not exclusive to any individual pm F chain, although some of our partners are exclusive to US we had been working for this for a number of years to ensure that clarified.
Is remaining accessible including in those pre determined manufacturing time slots that we've continued to.
Work through and optimize as medical practice has become more clear and so we feel very comfortable in RPM F. A position to be able to continue to provide the market leading products at the times and days in which our customers.
Require it up we do naturally continue to work with RPM at partners to expand redundancy to create more supply and we really think that's a unique value proposition that is not replicated by any other P. S may imaging agents, including recently approved as a teen competitors.
Alright, so ladies and gentlemen is there are no further questions. At this time. Thank you for participating in today's conference distinctions. The program you may now disconnect and have a wonderful day.
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