Good morning. Welcome to the Lantheus Fourth Quarter and Full Year 2024 Conference Call. [Operator Instructions]. This call is being recorded and a replay will be available in the Investors section of the company's website approximately two hours after the completion of the call and will be archived for at least 30 days. I'll now turn the call over to Mark Kinarney, VP of Investor Relations.

Thank you. Good morning. With me today are Brian Markison, our CEO, Paul Blanchfield, our President, Bob Marshall, our CFO, and Amanda Morgan, our Chief Commercial Officer. We will begin with prepared remarks and then open the call for q&a. This morning, we issued a press release, which was furnished to the SEC under Form 8K, reporting our fourth quarter 2024 results. The release and today's slide presentation are in the Investors section of our website. Any comments made could include forward-looking statements. Actual results may differ materially from these statements due to a variety of risks and uncertainties, which are detailed in our SEC filings. 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 Investors section of our website. I will now turn the call over to our CEO, Brian.

Thank you, Mark, and good morning, everyone. 2024 was a groundbreaking year for Lantheus as we achieved a number of important milestones and enhanced our capabilities as the leading radiopharmaceutical focused company. I am immensely proud of our team and the meaningful difference we have made in the lives of over 7 million patients in 2024. Our strong performance in the fourth quarter and throughout all of 2024 was driven by our commitment to operational excellence. We remain focused on further expanding our radiopharmaceutical excellence through a leading commercial portfolio, innovative pipeline and differentiated capabilities. Last month, we announced two strategic transactions that have the potential to first, enhance our capabilities across the radiopharmaceutical value chain, including in Alzheimer's diagnostics and oncology therapeutics. Second, allow us to enter new markets with significant growth potential that diversify our business. Third, expand our pipeline with potentially best or first in class radiopharmaceutical, theragnostic pairs that make use of our existing expertise. And fourth, help to drive sustained double digit revenue growth beginning in 2026. Light Molecular Imaging will support our future growth with the addition of Neuraceq, an approved radio diagnostic for Alzheimer's disease, expand our capabilities with an Alzheimer's commercial franchise, as well as an enhanced R&D and clinical development capabilities and grow our pipeline. Evergreen Theragnostics has the potential to add OCTEVY, a registrational stage PET radio diagnostics that complements our therapeutic registrational stage candidate PNT2003, strengthen our clinical and commercial manufacturing capabilities, add multiple clinical and preclinical assets to the pipeline and enhance our early-stage R&D capabilities quite significantly. Both acquisitions are subject to customary closing conditions and are expected to close in the second half of this year. Throughout 2024, we also executed a series of asset in-licensing deals to expand our pipeline. We are excited about these potentially best of first in class agents for Alzheimer's disease and oncology and plan to advance them during the year. Operationally, we grew Pylarify to over $1 billion in sales, making it the first ever radio diagnostic blockbuster and the clear number one utilized PSMA PET imaging agent. We also grew our market leading ultrasound enhancing agent DEFINITY double digits in its 24th year on the market. In November, CMS issued its calendar year 2025 rule, which enhanced payment from specialized diagnostic radiopharmaceuticals for covered products. This was a significant step that will support long-term radiopharmaceutical diagnostic innovation. We entered 2025 focused on leading the renaissance in radiopharmaceuticals, growing both our flagship diagnostic agents, advancing our pipeline, closing our two recently announced transactions and delivering value to our patients, customers, employees and shareholders. With that, I'll turn the call over to Paul to provide an update on our operational performance. Paul?

Thank you, Brian. I'm incredibly proud of our team's performance in 2024 and excited about the opportunities in front of us in 2025. With over $1 billion in sales, Pylarify remains the clear number one utilized PSMA PET imaging agent. We plan to build on this success by growing both volume and net sales in 2025 and are confident that we will maintain our market leadership and relative price premium, even amidst competitive pressures. Pylarify sales for the quarter were $266 million, up 15.7% year-over-year. Growth was driven by volume as net price was up approximately 1% year-over-year, even after taking a mid-single digit price increase at the beginning of 2024. Quarter-over-quarter, we grew volumes just shy of 2% with net price essentially flat. Fueling this growth is the continued expansion of the PSMA PET current addressable market, which we estimate to be $2.5 billion plus in 2025, up from $2 billion plus in 2024, while the total addressable market could exceed $3.5 billion by the end of the decade. Year-over-year market growth is expected to be driven by the continued conversion of bone scans in the initial staging and BCR patient segments, and we expect our customer base to grow their PSMA PET volumes accordingly, as the vast majority of our hospital and freestanding imaging business are now under long-term strategic partnership agreements. We took an almost 6% WAC price increase earlier in 2025 and expect Pylarify’s clinical and commercial differentiation to continue to support its clear market leadership and premium pricing. As Brian mentioned, we are pleased with CMS' new payment policy, which recognizes the value of and ensures access to innovative radio diagnostics. The rule provides separate payment for innovative radiopharmaceutical diagnostics like Pylarify following expiry of transitional pass-through payment status for the approximately 20% of patients…

Thank you, Paul, and good morning, everyone. I will provide highlights of the fourth quarter and full year financials, focusing on adjusted results with comparisons to the prior year period, unless otherwise noted. Revenue for the fourth quarter was $391.1 million an increase of 10.5% and revenue for the full year was $1,534,000,000 an increase of 18.3%. Now turning to the details, beginning with radiopharmaceutical oncology, which contributed $266 million of sales in the quarter, up 15.3% due primarily to the continued strength of Pylarify with sales of $266 million an increase of 15.7%. The difference in growth rates is due to a novel amount of Azedra sales in the prior year results. Pylarify posted full year sales of $1.058 billion an increase of 24.3%. Precision Diagnostics fourth quarter revenue of $117.5 million was 16.8% higher, driven by DEFINITY at $86.2 million or 17.9% higher, and TechneLite at $25.1 million was up 16.7%. For the full year, DEFINITY revenue was $317.8 million up 13.6% and TechneLite revenue was $95.5 million up 9.3%. Lastly, strategic partnerships and other revenue was $7.7 million down 66.2% for the fourth quarter due to the inclusion of a RELISTOR royalty milestone receipt in the prior year. Full year revenue was $38.2 million led by sales of MK-6240 for investigational use in third party clinical trials. Gross profit margin for the fourth quarter was 68% and in line with the full year result of 68.3%, but down 130 basis points year-over-year due mainly to the RELISTOR royalty milestone embedded in the prior year quarter, offset in part by favorable product mix with strong volume contributions from across the commercial portfolio. Operating expenses at 29.1% of net revenue in the quarter were 670 basis points unfavorable from the prior year, but within previously guided spending levels. Increases…

Thank you, Bob. We are pleased with our strong performance in 2024 and excited about our momentum in 2025 and beyond. We are well positioned to grow Pylarify and DEFINITY, advance our existing pipeline and close out two recently announced strategic transactions to become a fully integrated radiopharmaceutical company. These pending transactions will enable us to concentrate on enhancing our capabilities across the radiopharmaceutical value chain, including in Alzheimer's diagnostics and oncology therapeutics, entering new markets with significant growth potential that diversify our business and expanding our pipeline with potentially best of first in class radiopharmaceutical theragnostic pairs, including the potential for multiple commercially approved products in 2026. In closing, we are confident that our strategy will enhance our radiopharmaceutical leadership, drive growth, build long-term shareholder value and bring innovative products to patients. With that, we're ready to take your questions. Operator, please go ahead.

Our first question comes from the line of Roanna Ruiz from Leerink Partners.

Hi, good morning everyone. Was curious, could you give us a status update on the mirror study that you mentioned briefly and talk a bit about more its implications on Pylarify, and I was curious if the timing is still on track or a little bit delayed versus what you thought before?

Thanks for the question. So, the mirror study is our study to assess the use of PSMA PET with Pylarify in the intermediate favorable setting. As a reminder, this is not necessarily, if you will, a registrational study, because Pylarify has a very broad label in the staging where it identifies the risk of metastases, but it doesn't distinguish the level of risk. And so, the NCCN and the FMMI and other guidelines agencies has effectively recommended use of PSMA PET with Pylarify in their intermediate unfavorable and the high and very high-risk patient population. We began studying PSMA PET with Pylarify in intermediate favorable patients last year, that continues to enroll. We would expect to have the last patient in sometime in the fourth quarter of 2025, then to be able to follow those patients, do the right clinical trial analysis, as well as publishing with the hopes of having guidelines from NCCN and SNMMI updated in the coming years, which then could influence payer policies and overall expand the addressable market for the staging population. And I think you'll note that in our total addressable market, we would expect that staging population to increase from approximately 145,000 scans annually potential today to approximately 175,000 by the end of the decade.

Our next question comes from the line of Anthony Petrone from Mizuho Financial Group.

Thanks, and congrats on just a strong year overall getting Pylarify to $1.0 billion in the recent transactions. Maybe just to stick on the USPS and PET dynamics. So maybe one, just a little bit on the competitive dynamics with the new reimbursement change that's effective. January 1, know you mentioned most of your customers are now contracted, just anything you're seeing competitively of market shifts as this new reimbursement code has come in? And then secondly, the competitors out there looking at basically a reengineered, reformulated version, if you will, of their PSMA PET agent. Just expectations on that on whether or not that's baked into the guide and what you think that does for the competitive landscape? Thanks again and congrats on a strong year all around.

Yeah. Thanks, Anthony. I'll start with the back end of your question and then turn it over to Paul and Amanda for the second half for the first question, part of the question anyway. With regard to a new product entrant, I think it's gallium. The images are not as good as Pylarify images. There's been a little bit of noise about it. I don't really see a big sort of influx to anything that's happening with Pylarify. So, they're doing what they're doing, good for them. And we're going to keep on executing our game plan. So, Paul?

Yeah, no, Anthony, thanks for the questions. Maybe I'll just tackle some of the MUC kind of CMS piece and then I'll turn it over to Amanda to talk about some of the competitive dynamics that we're seeing in the marketplace. So, I think as we said, I think we're incredibly excited about the CMS shift to MUC versus where we were previously expected to be from the expiry of transitional payment status. And this is clearly a benefit for Pylarify. But I think more broadly as a clear leader in radiopharmaceutical diagnostics with Pylarify, an incredibly strong pipeline with MK-6240 of NAV-4694 of our fab agent earlier in development, as well as some of the pending acquisitions with the addition of OCTEVY, of Neuraceq and earlier stage Theragnostic pairs. I think we're incredibly pleased for the long-term growth potential, sustainability and payment dynamics related to MUC. And so, I think we think this is a big win. We're naturally going to continue to work with the agency to shift to ASP over time. But I think we're really pleased overall with the market and what this does to the growth and sustainability of the radiopharmaceutical diagnostic space. Maybe, I'll turn it over to Amanda to talk a little bit more about the competitive dynamics.

Yes. Thanks, Paul. So, as we shared on our commentary during the call that we've secured the vast majority of hospital and freestanding imaging centers with multi-year contracts. This will enable us to continue to leverage our strategic partnerships. What I'll say is that I'm very pleased with the evolution of this strategy and the partnership. We expect to continue to capitalize on Pylarify’s clinical and commercial differentiation to support its clear market leadership and pricing premium even with the current competitive market dynamics. So just kind of talking a little bit more about our commercial differentiation and our clinical differentiation. From a commercial differentiation perspective, we have the largest dedicated commercial team. Additionally, we have broad payer access with more than 90% of lives having access to Pylarify. We have a longer half-life, which is a distribution advantage and that enables us to optimize on our multi partner manufacturing facility network. This makes Pylarify widely available through a diverse supply chain, ensuring convenient and reliable supply in over 48 states. And then from a clinical differentiation perspective, there's really three things. There's clarity from a diagnostic perspective, meaning accurate detection rate without the high false positive rate. We have clarity in intended patient management, is based on robust pivotal clinical data and clarity from consistency and reader interpretation or high inter reader agreement. So, by driving differentiation through clinical and commercial differentiation, our long-term strategic partnership and an optimal customer experience, we plan to continue to grow Pylarify both in volume and net sales in 2025.

Our next question comes from the line of Richard Newitter from Truist Securities.

Hi, thanks for taking the questions. Just maybe on Pylarify, any color you can provide on the cadence and pacing of the Pylarify growth within that low single digit to mid-single digit? And specifically, in the first half of the year, should we expect Pylarify to grow in all quarters including the first quarter?

So, I think that our guidance actually kind of has captured sort of a range of different scenarios. Toward the low end, I think you would expect sort of a flattish first half with modest growth in the second half. That's how you get to that sort of the low end of the range. That takes consideration sort of the anniversarying as we go through the strategic partnerships as more of those contracts actually come into full sort of value, if you will. But if you think towards the higher end of the range, really what that does imply, yes, is growth in the first half of the year actually increasing to sort of the mid-single, high single digit kind of growth in the back half of the year. The scenario is going to capture like a very nice growth profile no matter where we are in the whole thing. And it sort of is very reflective of the hard work that the commercial team has done to get these strategic partnerships put in place.

Our next question comes from the line of Paul Choi from Goldman Sachs.

My question is on Flaccarto [ph] and just as you're thinking about your partnership there, can you maybe just update us on what are the inputs that are involved in the decision process of potentially going forward with the co-promote here and just kind of what has been the sort of rate limiting step from the Lantheus perspective?

At this time, we're not anticipating entering into the co-promote option with GE. They're more than capable of achieving their ambition, and we're here to support them if they need it.

Our next question comes from the line of Matt Taylor from Jefferies.

Good morning. Thank you for taking the question. I wanted to go back to I think it was Paul before was talking about the potential for CMS to go to an ASP based methodology and all the folks now reporting that. Can you talk about the potential for that to happen this year versus next year? And if that does happen for Pylarify, how do you think that changes your growth potential for Pylarify in ‘26 or '27 if it changes?

So, it is a little hard to predict what's going to be happening down within the beltway, as you know. So hopefully, doors will stay open. But look, if they migrate to ASP, we look at that as upside to the business. It's that simple.

I think that's spot on. I think the CMS will continue to establish draft rules this summer in July. Then they come out and collect comments throughout the fall. They come out with final rules, proposed rules in the November timeframe to take effect in '26. So Matt, just to be specific, I think the earliest we could potentially see this is Jan 1, ’26, but we would see those draft rules in July. I think CMS remained open to adjusting for ASP. Clearly, requires the industry to report ASP for the vast majority of products that would be subject to the separate payment status. Our base case is for MUC in ’25 and beyond. And if we received ASP, that would just further support the payment dynamics of the overall PSMA PET diagnostics. So, guidance and our expectations are based on MUC for the full year of 2020.

Our next question comes from the line of Yuan Zhi from B. Riley.

Although Pylarify will be paid in separate payments after this pass through expires in January, the reimbursement price is lower than competitors. I heard some customers are racing from Pylarify to Elucid [ph] or Altiuma [ph] in 4Q before the CMS policy update. I'm curious to hear how the situation dynamics have played out recently. Thank you.

So, I'll tag team that with Amanda. But as you heard us repeatedly, our strategic contracts are in place with the vast majority of our customers and that strategy was set in motion over a year ago. And so, we're very comfortable and it anticipated essentially no change to any of the rules. So, the fact that we have an MUC and have a separate payment is really upside to what we were originally thinking and planning, and we never changed our strategy and tactics all the way through. So, while it's true that the competition is trying to nibble at the borders, we've kept the wall up. So, Amanda, anything you want to add to that?

Yes. What I'll add is, listen, it's a complex market, right? There's different factors in play here from the commercial differentiation that I talked about, the clinical differentiation. There's also an availability piece, right? And so that does have an important kind of piece of how this market plays. There are select markets where there is limited access to Pylarify in early mornings or late afternoons. And we'll continue to build that through our PMS network and expanding our manufacturing time slots. But really, I would just go back to kind of what we hear from accounts and that is they prefer F-18 when it's available. And we've done a fantastic job of getting patients access to Pylarify, getting accounts access to Pylarify. And then just as Brian shared, really through our strategic partnerships, we really have been able to, as we shared, really secure a vast majority of our hospitals and freestanding imaging centers.

Yes. And the other thing to note is our service statistics and customer support, along with our PMF partnerships is just outstanding. So, appreciate the question. We're locked and loaded.

Our next question comes from the line of Larry Solow from CJS Securities.

I guess I just wanted to just follow-up on Richard's question on the cadence of the year. I guess you can infer that the impact of price obviously is waning in the back half. So, my question is kind of what does that mean as we look out to '26? Should we actually expect I know you're not giving guidance for '26, but longer term this should sound like it's a one year reset. Should we expect kind of price to at least not be a headwind as we look out into 2026? And second part of that question is just, I don't know if you can give us a little more concrete numbers here, but it felt like the price impact in the back half of this year or in Q4 was pretty muted. So, I assume there will be some impact, right, going forward, at least in the front half of the year? Thanks.

Yeah, Larry, thanks for that question. I think your assessment is right that this year 2025 is going to be more reflective of the price dynamics as we anniversary through the strategic contracting with our partners. And so, the normal seasonality, if you will, isn't necessarily going to be reflective within the Pylarify franchise. We will see seasonality that we normally see with the DEFINITY, for instance. But as we look into 2026, as we anniversary through, yes, we do have a sense of bringing those sort of foundational products in Pylarify and DEFINITY back to more of a seasonally cadence sort of flow, if you will, of revenue stream.

Maybe just to add, Larry, on the specific kind of pricing dynamics. In the second half of 2024, we did see sequential declines. If you look at the first half of 2024 pricing and you look at the second half of 2024 pricing from an actual realized, we did see a decline. Now that's with the overall raising prices and others that helps offset some of those. But that will normalize, as Bob has mentioned, as we get to the second half of 2025, because those year-over-year comps are now included in that. We did take a mid-single digit price increase at the beginning of 2024. We highlighted that we did the same slightly earlier in 2025 this year.

Our next question comes from the line of Justin Walsh from Jones Trading.

You noted Neuraseq is expected to expand your international footprint. Do you have broader ex US commercial plans for your pipeline assets? And to what degree do you anticipate remaining US focused in the long-term?

I think our focus really is US based right now. Neuraceq, and once we close on Life Molecular Imaging, it will give us a much stronger international footprint. We certainly want to stop relying on out licensing our assets. So, I think we're going to look very carefully at expanding into the other markets, particularly the EU. However, we're not going to do a greenfield exercise where we're going to pour a lot of money into something and I hope we can fill it up. So, it's going to be opportunity based. And I think the stronger portfolio gives us a real reason to be there. But as we look at the company today, we're US Focused.

Our next question comes from the line of Andy Hsieh from William Blair.

I'm curious if you can comment on your strategy in building a dataset that highlights the competitive differentiation for MK-6240 and NAV-4694, as you get ready for the regulatory submissions of these two assets?

Yes, it's a great question. And I think there was the annual Amyloid Conference in Puerto Rico in January, which seems like ages ago. And the quality and amount of information on MK-6240 was really quite substantial. And data coming out of the head study in Pittsburgh, which is a federally funded trial where basically they're comparing all the Tau agents and all the tracers in AD demonstrated a significant advantage for MK-6240 over any of the other Tau tracers, whether they're in development or on the market today. So, we feel that MK-6240 is already recognized as an extraordinary asset for its ability to detect early tau tangles. And the evidence of that is very clear as well because it's in over 100 clinical trials right now, most of vast majority academic, but we have some real interesting partnerships already in place and developing with major pharma like J&J, like Merck and others and Roche to really be the diagnostic agent for their assets in development. And we're very excited about that. NAV is a little bit further behind, but again, NAV as a beta amyloid is seeming to shape up quite similarly to MK in its ability to detect very early or low centaloid counts. And I might add both of these agents, while not as convenient as a blood test, may turn out to be more sensitive than a blood test. We're certainly seeing that pan out right now with MK-6240. That doesn't mean it would ever replace it, because a blood test is inexpensive and so cheap. However, looking at some data versus pTau and MK-6240, the tracers have a distinct advantage right now, our tracers anyway. Thanks.

Our next question comes from the line of John Vandermosten from Zacks.

Great. Thank you and good morning. As you mentioned before, you acquired two assets from Radiopharm Theranostics and that was the 2403 and 2404. First question is are those completely under your control right now? And then the second part is, you have a significant investment in them as well. And they have a pretty large portfolio and a presence in Australia. Does anything else look attractive at that company for you?

Yes. Number one, the answer to 100% control of the assets is yes. And number two, the whole company does look interesting. They've got a very nice portfolio in development. But our significant investment is really not that big in reality. It's kind of a foot in the door to stay close to them and support them. And we're going to stay close to them. We like the management team. We like what they're trying to do, and we want them to be successful. And if more reasons evolve to partner, we'll continue to do so. But we are leveraging their capabilities right now as we march along with LRRC15 and get it into the clinic.

Our next question comes from the line of Kemp Dolliver from Brookline Capital Markets.

I want to ask about PNT2002 in the context of the PSMA for final hazard ratio coming out at 0.91. I know we're still waiting for your final HR data, but it strikes me that with that as the competitive bar that 2002’s prospects may look pretty appealing now.

Yeah, thanks for the question. I think when you look at the population pre chemo for 2002 as well as Pluvicto, we were under dosed in our trial. The cycles were a little further apart, and we had a suboptimal overall survival hazard ratio, which may not improve. So, while the safety, the efficacy of the product is there, from our ability to get it approved by the FDA, we're not that confident. So, we're going to just wait for the study to read out, see where we go and then determine if we have a play. So, we're just going to learn as we go and see how it goes. But right now, we are not expecting an FDA approval for 2002 in the near future.

Our next question comes from the line of Richard Newitter from Truist Securities.

Hi, thank you for taking the follow-up. I just wanted to ask -- the low single digit to mid-single digit Pylarify growth guide. Can you just talk to what your underlying market growth assumption is? Or what the trend will look like in 2025 to get there?

So, I think, Rich, we continue to see growth potential in the PSMA PET market, certainly double-digit growth when we see that. We are very focused on maintaining our leadership and our share position. I think what you're seeing is the natural seasonality across quarters that Bob has alluded to many times before. And then the gross to net compression given the roll in of our strategic partnerships. And so, the overall market remains strong. We are focused on maintaining our revenue share going forward and maintaining Pylarify as the clear market leader. So, growth will not be sequentially the same every year or even every quarter as additional data comes out. And so, we believe in the long-term potential. And we believe that Pylarify will maintain its leadership and its revenue share position.

Yeah, the only thing I would add to that, Paul, obviously that the guide is -- we're trying to do it on a net basis because that's what ultimately gets recorded. And we're really pleased that we're we are growing the franchise. It's a billion-dollar franchise with a very nice margin profile. It's going to help us to generate that $550 million to $600 million of free cash flow, which is now -- I had been telling people that it was about $125 million on average. That number goes up to about $140 million on average.

You say that again?

$550 million to $600 million of free cash flow.

This year?

This year. So, that's ultimately the benefit because that's going to help us to drive our long-term growth profile as a company.

Our next question comes from the line of David Turkaly from Citizens JMP.

Hey, good morning. I apologize I've been bouncing around a little, but I thought I heard a comment early on that sustained double digit growth could begin again in 2026. And I'm just wondering, is that based on sort of the current core of like Pylarify and DEFINITY? Or are there some assets in the pipeline there that you're comfortable with that will be contributing by then? And if so, could you maybe point to which ones would deliver that kind of a profile?

Right. Yes. No, great question. And I'm glad you asked it. So, we certainly anticipate Pylarify to lead the way and DEFINITY. There's no question in our mind there at this time. Also, we have 20O3 in the pipeline and pending closing of LMI and Evergreen, Life Molecular Imaging. We will look to add Neuraceq, which we're very excited about, and OCTEVY, the theragnostic pair to 20-O3, which is in our pipeline. So, we're looking at potentially three brand new launches next year that will lead to our growth profile, the addition of Neuraceq, and that will pop us into double digit growth, but I want to underscore led by Pylarify.

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.