Q1 2025 Lantheus Holdings Inc Earnings Call
So, thanks guys. Thanks, Brian.
Speaker Change: Good morning. Welcome to Lantheus First Quarter, 2025 Conference Call. All lines have been placed on mute. This call is being recorded and a replay will be available in the investor's section of the company's website approximately two hours after the completion of the call and will be archived for at least 30 days.
Speaker Change: I'll now turn the call over to Mark Kinarney, Vice President of Investor Relations, Mark.
Mark Kinarney: Thank you, good morning. With me today at Brian Markison, our CEO , Paul Blanchfield, our President, Bob Marshall, our CFO , and Amanda Morgan, our Chief Commercial Officer.
Speaker Change: We will begin with prepare remarks and then take your questions.
Speaker Change: This morning we should press release which was furnished to the SEC under Forma K, reporting our first quarter 2025 results.
Speaker Change: The release and today's slide presentation are available in the Investor section of our website.
Speaker Change: Any comments made could include forward-looking statements. Actual results may differ materially from these statements due to a risk, due to a variety of risks and uncertainties, which are detailed in our SEC filings.
Speaker Change: Discussions will also include certain non-GAAP financial measures. Reconciliation of these measures to the most directly comparable GAAP financial measures is included in the investor section of our website. I will now turn the call over to our CEO , Brian .
Thank you, Mark, and good morning, everyone. Thank you, everyone.
Brian: Before I dive into my prepared remarks, I'd like to note our press release from last evening where we announced our plans to divest our respect business to shine technologies.
Brian: I would like to extend my heartfelt thanks to the incredible team that has been with the company from the very beginning and has played a vital role in shaping Lantheus into what it is today.
Brian: In 2025, we've been laying the foundation for the next chapter of our business.
Brian: We announced two acquisitions in the first quarter, Evergreen Theronostics and Life Molecular Imaging. Both are designed to fuel our radiopharmaceutical leadership and sustain long-term growth. We closed on Evergreen in early April and expected close the LMI acquisition in the coming weeks. [inaudible]
Brian: And as I mentioned, we also announced an agreement to vest our spec business. Collectively, these transactions accomplish a number of objectives.
Brian: First, they are immediate revenue growth drivers that complement our business and diversify our revenue.
Brian: Second, they had exciting programs in late and early stage development.
Brian: Third, they add key capabilities, both people and infrastructure that will enable the company to deliver novel programs from bench to clinic and ultimately patients. And finally, they streamline and help focus our organization.
Brian: With a strong cash position and discipline capital allocation strategy, we are well positioned to continue investing in our capabilities, advancing and selectively expanding our pipeline and returning value to shareholders.
Paul: With that, I'll turn the call over to Paul to give an operation and strategic update.
Paul: Thank you, Brian . I'm pleased to share more about our recent developments
Paul: We believe the acquisitions of Evergreen and LMI will strengthen our radio diagnostic and therapeutic capabilities while expanding our commercial portfolio and pipeline, ultimately enhancing our long-term growth potential.
Paul: Evergreen enhances our capabilities across the entire value chain with scalable, radiotherapeutic, manufacturing, infrastructure, and early stage discovery engine and an expanded pipeline, including Octavi, a Registration stage pet imaging agent targeting neuroendocrant tumors.
Paul: Evergreen's Springfield New Jersey site and dedicated team will enable us to manufacture our own clinical stage radio therapeutics, improve development timelines and accelerate our pipeline .
Paul: We also expect to make further investments in this facility and team to enhance our radio diagnostic expertise and process development capabilities.
Paul: LMI will provide Lantheus with a commercial radio diagnostic Alzheimer's franchise, a talented teen and neurose, a globally approved F18 pet imaging agent used to detect beta amyloid plaques in patients at risk of Alzheimer's disease.
Paul: We believe that LMI and Lantheus' combined capabilities will support neuroseaks continued growth in the beta amyloid, radio diagnostic market, and create a scalable and differentiated platform from which to launch all of our Alzheimer's disease pet imaging agents.
Paul: Alzheimer's disease affects over 50 million people globally and remains an area of significant unmet need for patients, caregivers, providers, and broader society.
Paul: We believe the Alzheimer's Radio Diagnostic Market is poised for significant growth driven by currently approved therapeutics and over 100 candidates in clinical development targeting beta amyloid or tau.
Paul: When approved, these therapeutics are expected to increase the need for accurate and timely diagnosis, staging, patient selection, and monitoring of disease. Areas we believe pet imaging is uniquely positioned to address.
Paul: and we are positioning ourselves to lead in this market with the potential for multiple differentiated pet agents targeting beta-ameloid for town.
Paul: Finally, yesterday we announced an agreement to divest our spec business to shine technologies The spec business has been a foundational part of Lantheus's leadership in nuclear medicine dating back to our days as New England nuclear
Paul: We believe now is the right time to de-fest the spec business as we continue to focus on pet radio diagnostics, micro bubbles, and radiotherapeutic agents.
Paul: Shine's isotope production capabilities make them a natural owner of this business and they are committed to investing in and growing the business.
Paul: We are grateful to the generations of colleagues who have brought our spec products to patients and are confident that the business and these colleagues will be in good hands with shine. We expect the transaction to close by the end of this here.
Paul: With that, I'll turn the call over to Amanda, provide a commercial update.
Amanda: Thank you, Paul. I'm pleased to share the progress on our commercial portfolio. Polarify sales for the first quarter were $258 million with year-over-year volume growth offset by low single-digit decline in that price.
Amanda: We have successfully executed our strategy to secure the vast majority of Polarify revenue through strategic partnerships with key hospitals and freestanding imaging centers
Amanda: However, with the expiry of Polarified Pastor's status and the implementation of mean unit cost payment for Medicare, FFS, and the hospital outpatient studying, we did experience what we believe will be temporal competitive disruption among smaller, non contracted sites.
Amanda: We plan to maintain our market leadership and will continue to work through these competitive pressures and grow volume and revenue in 2025.
Amanda: We will achieve this by broadening our contracting efforts while maintaining our pricing premium, expanding product availability in both earlier and later calibration time.
Amanda: educating on polarified clinical and commercial differentiation and continuing to provide superior customer service.
Amanda: By 2030, we anticipate the PSMA pet addressable market will exceed $3.5 billion.
Amanda: The key drivers for this growth include the rising incidence and prevalence of the disease, continued conversion of conventional imaging, broader adoption among lower risk patients, and the expansion of the PSMA targeted radio ligand therapy
Amanda: We are pleased with the FDA's recent approval of Pledicto in the Pre-Kemo Therapy MCRPC setting as supported by the PSMA 4 trial results and expect this indication to further increase demand for PSMA pet imaging agents such as Polarify.
Amanda: Notably, Plovika Label now references the use of any FDA-approved PSMA pet products for patient selection.
Amanda: We believe there is a market expansion opportunity with our phase 4 mirror study in patients with favorable intermediate risk disease.
Amanda: With this data, our goal is to support future updates to NCCN and SNMI guidelines to include the use of PSMA pet with Polarify in this patient population, which could in turn expand the addressable market
Amanda: Definity remains the number one utilized ultrasound enhancing agent with more than 20 years in the market and more than 20 million echocardiograms performed
Amanda: In the first quarter of 2025, Diffinity achieved approximately $79 million in sales, even with a return of competitive supply to the US market.
Amanda: With our two number one imaging agents in Polarify and Definity, we are pleased to continue to serve as the partner of choice for our customers and look forward to the expansion of these relationships with the potential to add neuropheak in 2025.
Amanda: PNT2003, Octavi, and MK6240 in 2026, as well as NAV4694 in 2027.
Amanda: I will now turn it back to Brian to discuss our development pipeline .
Brian: Thank you, Amanda. We continue to advance our diverse catalyst-rich pipeline with a focus on assets that are first or best in class in oncology, neurology, and cardiology.
Brian: We believe our neurology pipeline of MK6242 and NAV combined with Elimized Neuroseak and P.I.2620
Brian: positions us well to support the diagnosis, staging, patient selection of therapy, and monitoring of patients with Alzheimer's disease.
Brian: Our portfolios are highly complementary and we believe Elimites established commercial franchise provides a platform that will enable us to quickly realize the value of these assets.
Brian: We recently announced that MK-6240, our next generation Tao Imaging Agent, met its primary endpoints in two pivotal studies assessing its sensitivity and specificity
Brian: We plan to submit a new drug application to the FDA in the third quarter of this year, and if approved, look forward to bringing MK6242 to the market in 2026.
Brian: Additionally, we remain on track to submit an NDA for NAV in 2026 as well.
Brian: We have strengthened our oncology portfolio with the acquisition of Evergreen's Octavi . .
Brian: which has the potential to create a thermonostic pair with PNT2003, our Registration Stage Radio equivalent therapeutic candidate for SSDR, Positive, Gastrointropancreatic Nurendra Contumers, or Jeff Ness.
Brian: PNT-2003, which has the potential to be the first FDA-approved radio equivalent to Luda Thura, is planned to launch in 2026, pending FDA approval and positive resolution to patent litigation, which is ongoing.
Brian: Turning to some of our earlier oncology assets, Ellen TH-2503, which was acquired with Evergreen, is a potentially best in first-in-class thermonostic pair targeting the CCK-2R receptor.
Brian: We currently have the diagnostic agent paired with gallium 68 and phase two development, and we are excited to report the phase one therapeutic trial with lutecium 177 is now recruiting patients in Europe .
Brian: Arthur Nostek-Pair for LNTH-2401 and 2402 includes a gallium-68 imaging agent with a Potassium Therapeutic Agent targeting GRPR.
Brian: which is a receptor highly expressed in several tumor types, particularly in prostate cancer.
Brian: We believe there is a potential for this asset to serve independently and in combination with PSMA, since DRPR and PSMA expression are frequently negative correlated.
Brian: It is important to note that an early disease, GRPR expression, is quite similar to PSMA.
Brian: The diagnostic agent 2401 is already in phase two development and we remain on track to submit an I&D for 2402, the therapeutic candidate
Brian: LNTH-2403 is a preclinical therapeutic agent targeting LLRC-15, which is strongly expressed on multiple malignancies, including head and neck, breast, lung, and pancreatic cancers.
Brian: We are initially focusing on osteosarcoma, for which the FDA has granted both orphan drug and rare pediatric disease designations.
Brian: osteosarcoma is a malignant bone tumor that primarily develops in children and teenagers and is the most common childhood bone cancer with around 1000 new cases diagnosed annually in the US.
Brian: Finally, for PNT-202, the Phase 3 splash study recently reached 100% of pre-specified overall survival events.
Brian: The results were comparable to the previously purported 46% and 75% readouts and remain confounded by patient crossover within the study.
Brian: While we continue to work closely with a partner Eli Lilly to review the full data set, we do not plan to pursue an NDA or further invest in this asset at this time.
Brian: I will now turn the call over to Bob. Thank you, Brian . Good morning, everyone. I will provide highlights to the first quarter of 2025 financials, focusing on adjusted results with comparisons to the prior year quarter, unless otherwise noted.
Bob: Turning to the details, consolidated net revenue for the first quarter was $372.8 million and increased to 0.8%.
Bob: Radio Pharmaceutical Oncology, currently glorified, contributed $257.7 million of sales flat with the prior year.
Bob: Precision Diagnostic Revenue of 104.4 million less flat year over year. I like to include affinity at 79.2 million, 3.5% higher, along with techno-like revenue of 19.7 million, down 9.2% do a brief Molly supply issue in March now resolved.
Bob: Lastly, Strategic Partnerships and other revenue was 10.7 million up 65.1% due to the continued contribution from use of our investigational asset MK620.
Bob: in third-party clinical trials, up 10.4% as well as from the recognition of the first sale milestone from workado of two million dollars.
Bob: Gross profit margin for the first quarter was 67%, a decrease of 180 basis points.
Bob: The decrease is attributable to impacts at margins, stemming from our strategic partnership contracting initiatives. The annualization of 2024 PMF network and related supply additions
Unbearable PMF
Bob: Edward Doce Volumix, as well as Under Absorption of Overhead Due to the Molly Supply Shortage, late in the quarter, partially offset by favorable volumes for polarifying and
Bob: Operating expenses at 28.3% of net revenue were 147 base points higher than the prior year rate, and slightly higher than the previously guided spending levels.
Bob: As noted earlier this year, increases in operating expenses reflect investments made to support several growth and efficiency initiatives
Bob: Notably, research and development increased 251 basis points to 7.3% of net revenue in support of a number of late and early-stage development programs.
Bob: It is worth noting that the company expends nearly 3 million of business development expenses, largely legal and other third party, in support of yesterday's announced a vassager of our spec business to shine
Bob: We do not adjust our management P&L for transaction-related expenses when the deal itself is not signed within the same quarter as incurred. They're by inflating current period offerings.
Bob: Properting profit for the quarter was 144.3 million, it decreases 7.1%.
Bob: Other income and expense at 4.6 million of income is rid of interest income offset in part by interest expense on our existing debt.
Bob: Total adjustments in the quarter were 52.3 million of expense before taxes. Of this amount, 21.2 and 8 million of expense is associated with non-cash stocking incentive plans and acquired intangible amortization respectively.
Bob: 14.9 million as result of unrealized losses tied to our equity investments in perspective and radioformed their anostics. 5.4 million is related to RM2 milestones and the remainder relating to acquisition integration and other non-recurring expenses.
Bob: Our effective tax rate was 26.5%, resolving gap net income for the first quarter was 72.9 million and 109.5 million on an adjusted basis.
A decrease of 7.5% A decrease of 7.5%
Bob: Gap fully diluted earnings per share for the first quarter of $1.2 in $1.53 on an adjusted basis.
Bob: A Decrease of 9.5%. Now, during the cashflow, first quarter operating cashflow totaled 107.6 million.
Bob: Down 19.7 million from Q1 last year, as working capital, particularly DPO metrics, have normalized from the post-SAP implementation and requirement.
Bob: Capital expenditures totaled $8.7 million, $400,000 slower. Free cash flow, which we defined as operating cashless capital expenditures, was $98.8 million.
1 million lower for the previously described reasons. [inaudible]
Bob: During the quarter, the company investing additional $5 million in rad equity and deposited $50 million related to the evergreen acquisition which closed on April 1st.
Bob: Taken together, cash and cash equivalents, net-ever-stricted cash, were $938.5 million at the end of Q1.
Bob: We have access to our $750 million undrawn bank revolver and are comfortable with our very strong liquidity position.
Bob: We are actively monitoring the recent terror activity and are working closely with our partners and industry groups to assess any potential impact and advocate for the continued exceptions granted to pharmaceuticals and radium isotopes. This is an evolving situation, but this juncture direct impact to our business remains to minimise [inaudible]
Bob: Turning now to our updated interim corporate guidance for the full year 2025. An anticipation of closing the LMI transaction in the next weeks, we're providing an interim view to the business, but we'll update a consolidated view of 2025 after we have closed that transaction.
That said, our view of clarified performance.
Bob: For the balance of the year has come into sharper focus. We are updating the implicit plerify range embedded in the previously guided standalone Lantheus, full year view of revenue.
Bob: That said, we are shifting our implicit point horrified year over year range to flat to low single digit percent growth for the full year versus our prior view of low single digit to mid single digit growth.
Commentary on all other Lantheus products remains the same. [inaudible]
Bob: Evergreen adds approximately 10 million of revenue for the balance of the year and reduces adjusted DPS by approximately 25 cents in line with prior dilution guidance.
Bob: Taken together, revenue is now expected to be 1.551.585 billion ahead of adding in the potential LMI revenue contribution demonstrating the power of our strategic intent to diversify revenue
Bob: For adjusted EPS modeling purposes, we continue to expect low single-digit dilution from the combined addition of Evergreen and LMI, Assuming it consists in share count.
Bob: The divestiture of the spec business should not have any impact on 2025 revenue or earnings, as it is expected to close toward the end of the year, but this strategic move should unlock consolidated revenue growth and gross margin expansion in the future.
Bob: Additionally, the company advanced several R&D projects with positive ROI metrics not previously considered in the prior guide. Therefore, R&D should be approximately 7.5% of revenue of approximately a hundred basis points for the full year.
Bob: For now, by only incorporating our fly-up date, R&D investments, and including Evergreen, we now see adjusted EPS in the range of $6.60 to $6.70 versus the prior guide of $7.00 and $7.20.
Speaker Change: We do expect LMI contributions to the company to be a creative to revenue and earnings immediately. We look forward to providing more specifics after the LMI closing. With that, I'll turn the call back over to Brian . Thank you, Bob.
Speaker Change: We are diversifying our revenues and setting up the business for continued long-term growth.
Speaker Change: We are driving both commercial and clinical success through our leading diagnostic agents and our diversified pipeline.
Speaker Change: We are committed to advancing our position as the leading radio pharmaceutical focus company.
with both new clinical developments and inorganic growth acquisitions.
Speaker Change: Remaining the partner of choice for nuclear medicine departments and freestanding imaging centers, delivering sustainable growth
Speaker Change: creating long-term value for our shareholders and bringing innovative products to patients who need them.
Speaker Change: With that, we are ready to take your questions, operator, please proceed.
Speaker Change: As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question, please press star 1-1 again. We ask that you please limit yourself to one question.
Please stand by while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Anthony Petrone from Mizzouho Financial Group [inaudible]
Speaker Change: Thanks, and good morning everyone. Hope everyone's well. Maybe start with Polarified friends.
Speaker Change: in the quarter, obviously good detail in the prepared remarks, but maybe just a little bit more on the competitive dynamics you're seeing out there, certainly by our math, you're looking at a fair amount of share shift.
Speaker Change: here through the March ending quarter. So a little bit on the Polarify competitive dynamics and I'll have one quick follow-up on Gross Margin.
Speaker Change: Okay, Anthony, thanks. We got the questions. I think Paul will lead it off on the reply.
Speaker Change: Paul? Yeah, thanks Anthony. Good morning. So I think in the first quarter, I'll add to what we and Amanda provided in the prepared remarks. We first, we were successful in securing the vast majority of our revenues through the Strategic Partnerships.
Speaker Change: Those, as we've stated before, have largely been with our long-standing and established hospitals and free-standing imaging centers, many of them who have been with us since launch.
Speaker Change: Those partnerships were key to stabilizing the business, especially amidst the transition to mean-unit cost from a Medicare fee per service reimbursement perspective. They're also going to serve us incredibly well as we launch a broader portfolio.
Speaker Change: In the quarter, we did experience short-term competitive disruption, specifically among the smaller non-contracted sites due to MUC-related reimbursement, price as well as product availability.
Speaker Change: These smaller sites have been more recent adopters of PSMA pet imaging and as a result they have been outpacing the broader PSMA pet market growth We continue to work through competitive pressures and some of these market dynamics
Speaker Change: But we do plan to maintain our market leadership to grow volumes and revenues and to expand our contracting efforts with some of these higher growth later adopter accounts, as well as expanding product availability to ensure that we can continue to meet the growth.
Speaker Change: and, in short, our growth grows closer to that of the broader market.
That's helpful. Go ahead. Go ahead, your follow-up question.
Speaker Change: The rationale to exit spec now, and again, on the positive end here, I know you had the MK6244 headline in line, Rhine Out, which was positive, one can we expect to see that data? Thanks.
Speaker Change: Yes, Eddie, thank you. Well, on the on the MK question on the readout of the data right now, we're
Speaker Change: like all hands on deck to file the new drag application. And then in the not too distant future we're going to be happy to showcase the data because it is quite positive, which gives us a lot of a lot of confidence going into the submission. Thank you very much.
Speaker Change: On the sale of the spec business, I think it's important to note that if you look at where we're going, our recent acquisitions, our pipeline, molecular imaging, thermonostic pairs, radio ligand therapies
The spec business has been a big anchor for us [inaudible]
Speaker Change: But not a core to our future growth. So what we're doing is we're looking to streamline unlock value, partner that business with a party like shine technologies that is willing to invest further in it. And we will also remain very close to shine.
Speaker Change: You know, it total is about 115 to 120 million of revenue. It's been a very stable contributor.
Speaker Change: So that's what I mean when you know as a growth factor when that comes out of the business it sort of helps to accelerate the best balance of our portfolio which we do think can continue to grow and expand
Speaker Change: The gross margin implications to a couple of hundred basis points of benefit as we look forward.
Speaker Change: because the business has a gross margin profile that is much below the company's current average. So again, as Brian noted, this does help to unlock additional value while that business has potential to grow in Cheyentans.
Thank you. One moment for our next question.
Speaker Change: Our next question comes in the line of Roanna Ruiz from Learing Partners Roanna Ruiz, David Turkaly, David Turkaly,
Roanna Reese: Hey, morning everyone, so I was curious, I noticed you tightened your fiscal 25 guidance that could you talk a bit more about what drivers could put you on either the low end or the high end of that guidance by your end?
Speaker Change: and just tagging on a click-spec divestiture question. I assume it probably frees up certain resources and was curious. Where would you pivot those in terms of contributing to the rest of the commercial or development pipeline? Thank you very much.
Speaker Change: Yeah, Roanna, could you do me a favor and repeat the second half of that question? I'm not sure I completely got it.
Speaker Change: Oh sure, with the specs of business, divestiture, I was assuming that you were going to free up certain resources or capital things like that. Where would you want to use those in terms of either the pipeline or commercial efforts?
Speaker Change: I appreciate the clarification. Bob, you want to start off and then Paul will pick it up? Yeah, I'll take it from a guidance perspective.
Speaker Change: So run, appreciate the question. We've narrowed the range but we're now coalescing around the bottom half of the prior range.
Speaker Change: It's just that, you know, Q1 was extremely informative on how the competitive environment would
Speaker Change: Managed Polarify as we came off pass-through. Our original view actually was a pretty wide range that contemplated a range of outcomes with the first half being flatish and then with low single to mid single digit to mid single to high single digit type of an outcome. So all we've done is here's narrow this range.
Speaker Change: to sort of to to be at the bottom we're taking the bottom half of that original range.
Speaker Change: The key thing here, though, is we do still expect healthy dose volumes to route the balances of the year.
Speaker Change: and, you know, that is, you know, why we, you know, we landed where we did.
Thank you.
Speaker Change: And we're on maybe on your, you know, spectre question. I think we would characterize it really as a couple things, right? And I'll expand on kind of what Brian and Bob said earlier, but one, this is really about organizational focus.
Speaker Change: We are ruthlessly prioritizing key growth areas like pet radio diagnostics and radio therapeutics as well as our affinity micro bubbles as future growth drivers. So I think it just enables the broader organization to really focus its efforts there. There has naturally been limited investment in the development programs of
That business is many decades mature [inaudible]
Speaker Change: and similarly from a commercial perspective it's got relatively little complexity working with just a few key partners.
Speaker Change: We're incredibly excited for the shine team to take on those capabilities and to further invest in that business and so this is really around who's the best owner and what our organizational focus needs to be to drive continued growth and value creation. And then lastly, there's the financial benefits that Bob mentioned of just.
Speaker Change: You know, it's been a relatively stable business with margins below the company average and so this really allows us to unlock the full potential of our financial
Speaker Change: Capabilities, and then focus the organization wholeheartedly on our future in pet diagnostics, radiotherapeutics, and microbubble.
Speaker Change: Yeah, and Roanna, you know, I think it's important to note that a number of our colleagues
We'll be going with the spec business, the shine. [inaudible]
Speaker Change: So if you think about the bigger pictures strategically, we're onboarding a team from Evergreen, from Wife Molecular Imaging with Phenomenal Capability and Molecular Imaging of Radio Diagnostics and Therapeutics.
Speaker Change: and quite frankly a legacy business that we're not. Bye.
Speaker Change: We're not really nurturing and paying that much attention to as we grow the rest of the business.
Speaker Change: is essentially coming out. So moving parts, some leaving, unfortunately, and some coming in, fortunately, and it's really a natural transition of this business all in line with our strategic intent.
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of Richard Newitter, from Truace Securities [inaudible]
Richard Neuwirter: Thanks for taking the question. I wanted to maybe just ask on the the acquisitions
Richard Neuwirter: You know, just looking, looking at 2026 because that's going to be the first
Richard Neuwirter: Full year where these acquisitions will be will be will be in there. I think your prior guidance to the soon or your prior comments with low single digit percent delusions in the combination of LMI and evergreen.
Speaker Change: Is that still the right way to think about it? You know, it sounds like you think LMI is going to be accreted right out of a gate. I'm just wondering if...
Speaker Change: giving us some update on that. And then also I think last call you had said you expect 2026 with acquisitions to be a double-digit revenue growth potential year, is that still in the cards as well? Thank you
Speaker Change: Yes, before Rich thanks for the question, that is definitely in the cards and I appreciate you asking and then Bob you want to take the rest of the answer.
Bob: Yeah, so exactly the guide for the dilution was low single digit, but combination of both Evergreen and LMI. That guide also comes with it sort of mid-year.
Bob: sort of closing on the deals, we closed early and expect on Evergreen and expect to you know, to close on LMI in the next weeks. That all being said...
Bob: Yes, but, you know, the 25 cents that they've given to the midpoint of what we had said previously, which at 7-10, is missing a digit. That does include about 50 basis points of additional interest income lost.
Bob: But at the same time, I do fully expect that we would get to most single-digit delusion off that 710 number once we've closed on LMI as well and then we and then update our guidance after we've closed to take that into consideration both revenue and earnings [inaudible]
Thank you. One moment for our next question.
Matt Taylor: Our next question comes from the line of Matt Taylor from Jeffries
Matt Taylor: Hi, thank you for taking the question. So I wanted to follow up on commentary from from last quarter. You had talked about in 2026 with the combination of your base business and the acquisition. Thank you very much.
Matt Taylor: Edward Green, and now I'm like being able to sustainably grow in the double digits, and I guess I just wondered if there's any change to that thinking positive or negative, and maybe you could give us any color around the quantum within the double digits you could grow beyond this year.
Thank you. Thank you.
Speaker Change: Yeah, thanks, Matt. I appreciate the question on the quantum. I think it's a little early on that front, but on double digits yet. So let me tell you what we're looking at, right?
It's the potential launch of Octavi.
Speaker Change: with combined the potential launch of 2003, the potential launch of MK6240, the full annualization of neuroseak and our plants to grow it, but more importantly perhaps is the anchored growth with polarifying affinity, which we plan to continue. Thank you.
Speaker Change: Guys, did I leave anything out? No, so that's what we're looking at, that's what we're excited about, and that's anchor in our double digit growth for 2026.
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of Paul Choi from Goldman Sachs [inaudible]
Good morning. This is Daniel on for
for Paul. We have two questions.
Speaker Change: But first is like, are you still thinking that there's a chance that part of this, a butterfly revenue would switch to ASP pricing this year? And what about the trend for 2026 and beyond?
Speaker Change: The second question is that after the LMI deal close, what's the current trend of the path scan market growth in the Alzheimer's scan market? Thank you.
Speaker Change: Okay, so on which one do you want to take first, the Alzheimer's or the glorify?
Speaker Change: Why don't I touch on the Polarif? Why don't I touch on the Pet Scan?
Speaker Change: Hall timers, and then Amanda can maybe touch on the 2025 and future, the long-term growth of the PSMA paper. And before you do that, we are in constant discussions with CMS.
and we are...
working with them, and could ASP emerge rather soon, yes?
Speaker Change: But, you know, look, it's a little murky down there, so I can't really predict the future.
Speaker Change: Amanda, the team are really working hard on it. Amanda, you want to comment on that briefly and then we'll switch it over to Paul? Yeah, we're, we're encouraged by our conversations. It is a fluid conversation. You know what I will share? That the team that we've been communicating with remains the same team at CMS? Yeah, that's right.
Great, all right, Bob? All right.
Speaker Change: continues to come into greater focus and affirmation with the Plovicto data as an example and their approval with PSMA-4.
Speaker Change: And so, I think we're very excited about the long-term potential of PSMA PET.
Speaker Change: from a pricing perspective near-term right strategic partnerships are going to anniversary largely in the first half of this year, which will set us up for more support in the long-term growth.
Speaker Change: and so I think we remain optimistic about the overall PSMA pet market and the long-term potential for Polarify, especially as we brought on the portfolio to be the go-to partner for hospitals and free standing imaging centers. We have the potential to have the largest and broadest innovative portfolio to work with those sites to expand our strategic partnerships and continue to support that continued growth, and that includes all timers.
Speaker Change: Clearly, life molecular remains a separate organization under life health care today but just, you know, monitoring the trends of overall claims data as a result of Alzheimer's scans specifically for beta amyloid but increasingly for tau .
We see very robust growth.
Speaker Change: in that marketplace. And when we think combining the terrific team and capabilities of LMI with that of Lantheus and our deep at 18 expertise experience with customers, we're very optimistic about the opportunity and Alzheimer's with neuro-seek as well as MK6242, now 4694 and PI2620 to have a broad, deep portfolio on Alzheimer's that can be a very meaningful franchise for us.
Thank you. One moment for our next question.
Larry Solo: Our next question comes from the line of Larry Solow from C.J.S. Securities Inc [inaudible]
Larry Solo: Good morning, thanks for taking a question. First question, I'm just on the gross margin and the little bit of higher cost. You mentioned the issue with technology, but was gross margin impacted at all just by the, I guess, the overall price discounting on Polarify and is plarify pricing kind of in line with
How are you expected to be so far?
Larry Solo: Yeah, I mean, particularly when I gave the sort of the explanation for the for the quarter in on a year over year basis
Larry Solo: That particularly was, you know, that does have an impact from the, the impacts from margin from the strategic partnerships and so forth. But, you know, there were a handful of other things that I mentioned in terms of cost, but when you think about maybe relative to what we had expected, that the real drivers from a...
with our original expectations sort of, you know... [inaudible]
Larry Solo: 67 and a half that's 68. Why was it, you know, not there? It really kind of came down to just a couple of the different factors. Really one break costs were higher.
but also the dose volume mix in our PMF network.
Larry Solo: And what that does is like, you know, depending on the mix of clarify where in which of the different networks they're not all the same. So that makes it
Larry Solo: But again, going back to the pricing aspect, we still remain an apprised premium to our competitors and so from an expectation perspective that was sort of what we had expected.
Thank you. One moment for our next question.
Larry Solo: Our next question comes from the line of you on you from B-Riley [inaudible]
Speaker Change: Good morning. Thank you for taking our questions. Maybe to ask a new question a bit differently.
Speaker Change: Can you please comment more on the effects of this long-term contract you find? For clients in that package, do they grow in volume of clarified faster than others?
Speaker Change: Then if we compare the growth rate across academic centers and the community centers, is there a difference in terms of growth and market penetration? Thank you
Speaker Change: You on, thank you for the question. I think it's various too. There is certainly a different in the growth and utilization across the marketplace.
Speaker Change: The Utilization of Polarify and quite honestly other PETCT agents those have been early adopters and so their utilization rates are far higher than say other parts of the market and in some cases that has led to patient wait times [inaudible]
and whereas some of the smaller, non-contracted accounts. [inaudible]
Speaker Change: are growing higher than the overall market because they've been later adopters and are earlier in their adoption curve.
Speaker Change: and so I do think we see a difference in overall utilization. Our focus had been...
Speaker Change: to secure the vast majority of polarify revenues through strategic partnerships. We believe we've been very successful with that, and our current evolution is to now increasingly focus on those smaller non-contracted sites.
Speaker Change: that present more near-term growth opportunities. And so, to some extent, this really comes down to mix.
Speaker Change: and our steadfast focus on securing the vast majority of the business.
and now...
Speaker Change: Evolving to focus on expanding our contracts with smaller accounts, to expanding our out-the-door times to meet growth where it is for those accounts, and that's what we're busy doing on a regular basis now.
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of Justin Walsh from Jones Trading
Justin Walsh: Hi, thanks for taking the question. Can you discuss how you view the long-term opportunity for the GRPR targeting imaging and therapy in prostate cancer?
Justin Walsh: Specifically, I'm wondering if there's expected clinical value for imaging GRPR outside of enabling the therapeutic or that the key feature there, and if you'd expect therapeutic use ultimately be in the post-DSNA setting.
Justin Walsh: Great question. Let me start sort of at the beginning. In early prostate, carcemmoma
Justin Walsh: GRPR expression is quite avid and quite similar to PSMA expression.
Justin Walsh: and what we find fascinating about the agent or the target is where one overexpresses the other could be underexpressing. So, in other words, if you get into later lines of therapy, if PSMA expression is down or depressed,
Justin Walsh: GRPR expression could be quite high and there could be a fair amount of divinity there for a radio ligand therapy.
Justin Walsh: The Gallium Diagnostic Agent is in phase two right now and we're exploring separate fast track opportunities to see if we can bring that to the market earlier.
Justin Walsh: I think there will be an interesting role for the imaging agent in and apart from the therapeutic.
Justin Walsh: and I think with the therapeutic, we're focused right now on getting the IND filed and also getting into the clinic as soon as practical in phase one. And we think there's going to be a very interesting role because ultimately. Thank you very much.
Justin Walsh: These radio ligand therapies are not going to be used to single agents, they will be used.
Justin Walsh: Incommunation, like any other therapeutic modality in oncology, and we think they'll be additive. So there could be a very interesting role, both in very early, mid and late term prostate cancer disease for the therapy and also for the diagnostic. Thank you very much.
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of Kemp Dolliver from Brookline Capital Markets
Thank you. On the...
Smaller account in the market for clarify.
Speaker Change: Are these accounts that are operating essentially on a spot basis, or are they contracted with others? I'm trying to reconcile.
Speaker Change: You know, your position is a premium priced product with what looks like a customer base that might be commodity, have a commodity mindset. So can you reconcile that for me?
Speaker Change: Yeah, I think we're looking at it a little bit differently, I think.
as we have...
Speaker Change: Grown our business and match that with our growing PMF network.
We have 63 PMF's up and running in the country. Jeffrey,
and R Strategic Contracts.
were designed to partner us for the long term.
with our highest volume early adopters. [inaudible]
Speaker Change: I think what we're seeing is the smaller accounts that now have some capacity, we're not initially are early focus as we were dealing with the major institutions.
Speaker Change: So Amanda, do you want to expand on that a little bit? [inaudible]
Yeah, no, thanks, Brian .
Speaker Change: That's exactly right. As we continue to evolve, as Paul shared in his prepared remarks, as we continue to evolve in the market, we are continuing to grow and expand our product availability. And that'll be through our earlier and later calibration times. That will enable us to not only partner as Brian said with our largest...
Speaker Change: Strategic Accounts, but also a partner with the smaller accounts of those later adopters that are continuing other uptake of P.S. and Mate Pets.
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of Francis Duveau from TD Securities [inaudible]
Speaker Change: Remains impacting about 20% of patients. That is the overlap or intersection, I should say, between Medicare care fee for service relative to...
Speaker Change: Medical Advantage, or Commercial Payers, and then in the hospital outpatient setting.
and kind of patience overall when you look at that. I would say, you know, I think when we look at the quarter and some of the dynamics, we looked at MUC pricing, we looked at...
Competitive pricing as well as product availability in some cases.
I'll all intersect on the impact of customers.
Speaker Change: as well as the adoption or growth curves in there. And so I think they all had a bit of an issue. I would say, M-U-C
Speaker Change: is likely more of a transitory impact as customers understand based on the payment timing of claims from Medicare. It does take them a little bit of time to understand what that looks like. The MUC ASP.
Dynamics coming from CMS. We're quite...
volatile.
Speaker Change: in the month leading up to January 1st with a number of adjustments to the addendums coming out there, and so I didn't think it took some time.
Speaker Change: for sites to understand that. We think sites have a pretty good understanding of their book of business and that should stabilize over time. And they continue differentiation and availability of Polarified. Plus our broadening portfolio will support our continued growth.
Thank you. One moment for our next question.
Shea Andy: Our next question comes from the line of Shay Andy from William Blair .
Speaker Change: Okay, thanks for giving us questions. So we're curious about your long-term view on the outside of our diagnostic market, specifically pertaining to the encroachment of share-based biomarkers for diagnostic purposes. So biogen on the first quote-of-call he mentioned.
Speaker Change: for the potential for blood-based markers to potentially supplant the need for PET scans. So I'm just curious if you can comment on that.
and potentially provide your view there.
Speaker Change: and a quick follow-up for your 2030 Polarified Revenue Guidance. I understand the PSM edition, opportunity is included, and that's reading out later this year, but...
Speaker Change: Could you help us understand the growth potential for PSMA-DC and some of the activities of five assets that's moving earlier minds and recently moved to space three trials. Thank you.
Speaker Change: Alright, so I'll kick it off with the old timers, answer and turn it over to Paul . . . . .
Speaker Change: First on serology, blood-based biomarkers. I think they're very important. I think if you look at the prostate market...
Speaker Change: You have PSA as a legitimate marker for detection, follow up, etc. for disease, and I would think in AD or Alzheimer's disease, you'd see a similar pattern hopefully where people will get screened with serology and then become candidates. Thanks.
I think when you compare them, there is no comparison. [inaudible]
Speaker Change: Right, molecular imaging gives you quantification, it gives you geography, it gives you correlation to treatment, an outcome, an effect
Speaker Change: So, none of the serology markers can actually do that. They're not that sensitive. Nor are they specific.
Speaker Change: So, if you're looking at specific regions of the brain, for example, with MK620 to 40, and looking at longitudinal follow-up, if you're looking at what parts of the brain are mostly affected by the NFTs, serology can never do that.
at least in my current lifetime, I think. So,
Speaker Change: While I appreciate comments from others, I think maybe they're not totally informed that they're informed.
Speaker Change: But there's no comparison with molecular imaging and serology. I think serology is a great tool. It's caught close to effective.
Speaker Change: It should be used as a screening mechanism, but if you want to know what's happening inside the brain with Alzheimer's, dementia, angiography, follow-up, effects of treatment, you really need a molecular imaging scan with beta amyloid and TALEN.
Speaker Change: Over multiple years, it's not hard to imagine that as a payer and a physician looks at saying putting on some on therapy that make cost $100,000 over three years, the desire to not just do a blood test but to do a couple thousand dollar pet scan
Speaker Change: That's quite smart money to really understand the location and extent to disease and to effectively monitor that. And so we think there's a symbiotic relationship between serological markers and imaging the same way we see with PSA from a serological test in PSMA [inaudible]
Speaker Change: I think on your earlier question on the PSMA Therapeutic Market, I think we may ring invariant courage, not only Novartis' results with PSMA 4, but PSMA Edition, which we're optimistic about as well as you said, there are dozens of candidates targeting PSMA from a radio ligand therapy, and that really underscores our addressable market view where the scans associated with RLP could go from roughly 30,000 I believe to almost 200.
1000 by the end of the decade.
Speaker Change: for PSMA Pet Use. We think that can expand not only with RLP but also with antibody drug conjugates and other.
Speaker Change: therapeutics targeting PSMA and so we think there's continued benefit in the molecular imaging and the ability to find and follow disease not only with Polarified but with old-timers as Brian mentioned.
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of David Turkaly from Citizens' JMP
Hey, good morning.
Speaker Change: There was lots of debate heading in about the changes that might happen with the reimbursement and then debates about clients, customers switching.
Speaker Change: and it sounds like you're saying these smaller centers maybe never use the clarify and now you're going to focus on them but
Speaker Change: despite discussions of whether these images, scans might be apples to apples or not, we're just curious if you've seen any evidence of switching either at the large accounts or the small accounts are even on a patient basis so far.
Speaker Change: Yeah, I think great question and I appreciate it. I think if you look at our later adopters, smaller accounts
Speaker Change: that we have not focused on. There has been a bit of what I would call stroke-of-the-pen risk with them switching over to other agents, Paul Seluma, whatever gallium, and we really focused again, as we've said repeatedly on our major accounts.
Speaker Change: Those that have the majority of the volume and also providing the most cutting-edge treatment, I think in the smaller accounts again and we know where every dose is going because our PMF partners are doing a great job delivering those doses
Speaker Change: You know, if they're doing one or two scans a week, we're not going to drop everything and go visit them. So naturally they're open to a dialogue about price. If that's all that matters to them.
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of John Vandermosten from Zach's
Speaker Change: Thank you, and a good morning. It's two for me. First, I know what conditions does it make sense to launch into their competitors, to a brand-of-brain pharmaceutical? And then second, what are some of the leading cow candidates in development? [inaudible]
that was meant a bit from...
MKC40 and PI-2620.
Thank you.
Speaker Change: John , I apologize, but you were breaking up on the line, and I hate to do this, but could you please repeat the questions?
Speaker Change: Apologies. Under what conditions does it make sense to launch an air competitor to a brand-of-radiopharmaceutical and follow-up was looking at the leaking cow candidates that are on the right now, which one might benefit from 60 to 40 and 20 to 20?
and the therapeutic side of what you're looking at.
David. [inaudible]
Speaker Change: Well, I think on the TAO agents and also our NAV data amyloid.
Speaker Change: Because of their greater sensitivity and specificity, any therapeutic candidate that's in the clinic right now in trials will certainly benefit from better patient selection and follow up.
Speaker Change: For example, both MK and NAV have the potential to detect very early centaloid count and they're actually quite frankly more sensitive than blood biomarkers.
Speaker Change: MK6240 right now is in 103, approximately academic trials around the world.
Speaker Change: and over 15 sponsored trials with major farmer partners, and we're working very closely with Jansson, Roche, and others, Merck obviously to name a few, to explore and help them
Speaker Change: Clarified, Detect, and put patients into clinical trials for their therapeutics. On the generic radio equivalent question, Paul would love to take that question.
Paul: Thanks for the question. So, you know, I'm launching our radio equivalent for O3, you know, first and foremost, you know, we always looked at our appropriate return metrics to ensure that we're going to generate a return north of our weighted average cost of capital. So we don't just look for growth at any sort. We're looking to ensure we have a positive financial return from those investments.
and products in that space. [inaudible]
Paul: And in addition, it further expands our relationships with nuclear medicine departments and hospitals that are already using, say, polarify on their pet CTs that may already be using neuroseak And so we think this is a good opportunity and we're focused on bringing this to the market. But suffice it to say we look very closely at the conditions at demand studies at market research to ensure that there is a positive return to the investments we're making. And we remain optimistic about that ability to bring up heavy and PNTO through
and Jeffrey, as a Theronastic-like pair next year. [inaudible]
Thank you. One moment for our next question.
Speaker Change: Our next question comes from the line of Richard Newitter from Truest Securities Please, please.
Richard Neuwirter: Hi, thanks for the follow-up. Just wanted to go back to the Polarify Gardens, sorry if you said this when I missed it. So, flat to low single digits for the full year. You had previously said
Richard Neuwirter: Flat, first half, 25, year over year, for Polarifi. Is that still intact? And we just basically maybe a little less recovery in the back half to true it up? Or how should we think of any changes to cadence? Thank you.
Thank you. Thank you.
Richard Neuwirter: No, Richard, that's actually fairly astute. I mean, the range does provide, you know, obviously we delivered a flat call in first quarter.
Richard Neuwirter: The math in and of itself, and you're right, the flat to low single digits is for the full year.
Richard Neuwirter: But from a Q2 perspective, I would anticipate sequential growth over Q1.
Richard Neuwirter: But I don't want to get into the pricing aspect of it, but what you're saying is that the back half would still have [inaudible]
Richard Neuwirter: potential to be mid single digit in the back half. So the language and the overall sentiment remains largely the same as we get in here with the exception of maybe Q2 where you know we get into sort of the full effective of a year's worth of contracting. Thank you very much.
Speaker Change: Thank you. Ladies and gentlemen, there are no further questions at this time. Thank you for participating in today's conference. This concludes the program. You may disconnect and have a wonderful day