Earnings Labs

Lantheus Holdings, Inc. (LNTH)

Q2 2025 Earnings Call· Wed, Aug 6, 2025

$83.27

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Transcript

Operator

Operator

Good morning. Welcome to Lantheus' Second Quarter 2025 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, Vice President of Investor Relations. Mark?

Mark Richard Kinarney

Analyst

Thank you. Good morning. With me today are Brian Markison, our CEO; Paul Blanchfield, our President; and Bob Marshall, our CFO. We will begin with prepared remarks and then take your questions. This morning, we issued a press release, which was furnished to the SEC under Form 8-K reporting our second quarter 2025 results. The release and today's slide presentation are available in the Investors section of our website. Any comments 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.

Brian A. Markison

Analyst

Thank you, Mark, and thank you for joining us today. This morning, we announced second quarter results that were below expectations and also lowered our financial outlook for the remainder of 2025. Before I go into the broader steps that we are taking to diversify our business and establish a new growth trajectory for the company, I want to drill down on PYLARIFY and the current dynamics in the PSMA PET market. In the back half of the quarter, the confluence of MUC-based reimbursement and aggressive discounting by what had been a somewhat dormant F-18 competitor, led some economically sensitive customers to reassess their choice of PSMA agents. This led to the renegotiation of some existing strategic partnerships as well as a conscious decision to walk away from those volumes at certain accounts that requested pricing terms that were not in the long-term interest of our PSMA PET franchise. PYLARIFY also continues to be concentrated in large institutions that due to constraints continued to grow at a slower rate than the overall market. However, our strategic partnership agreements have proven and will continue to prove effective at retaining the vast majority of our customers, who recognize PYLARIFY's clinical differentiation. This is reflected in our U.S. quarterly volume growth, 2% year-over-year and over 4% sequentially. Paul will provide greater detail, but I want to be clear, we understand the dynamics that we faced during the quarter, how we expect these dynamics to evolve in the second half of the year, and how these changes impact our business. We have implemented actions to ensure we maintain our market leadership and maximize the long-term value of the franchise. These actions include conducting a continuous and comprehensive review of our customer base. Expanding our strategic partnerships to the smaller, high-growth accounts, enhancing our availability…

Paul M. Blanchfield

Analyst

Thank you, Brian. Sales of PYLARIFY are $251 million during the quarter, down 8.3% versus last year. U.S. volumes for PYLARIFY were up 2% year-over-year and more than 4% sequentially, both lower than our expectations. As Brian mentioned, in the back half of the quarter, PSMA PET competitive pricing pressures intensified, particularly from an F-18 competitor, and we experienced an increase in account losses, which significantly impacted volume in the latter half of May and June. The majority of the impact occurred in accounts that had greater exposure to MUC-based reimbursement and a greater focus on economics. We made the intentional decision to remain disciplined with our pricing strategy, even at the cost of losing select accounts rather than chase volume and harm the long-term value of our PSMA PET franchise. Additionally, those competitive price offerings, combined with our MUC-based reimbursement led to an increase in renegotiations of some existing partnerships, resulting in further net price compression during the quarter. These dynamics overshadowed the progress we made in expanding strategic partnerships with smaller later adopters where our volume growth outpaced that of our larger accounts. Importantly, our strategic partnerships, which cover the vast majority of our business have been effective on multiple fronts. First, they have enabled us to maintain and grow volumes with a significantly higher market share in contracted than non-contracted accounts, though we are increasingly coexisting with Gallium even within contracted accounts. Second, they have largely leveled the playing field related to MUC-based reimbursement. And finally, they frequently offer us a last look when competitive price offers arise, which led us decide to renegotiate when doing so is in the long-term interest of the franchise or in some cases, walk away from dose volume. As we look ahead to the remainder of the year, we expect volume…

Robert J. Marshall

Analyst

Thank you, Paul. I will provide details of the second quarter 2025 financials, focusing on adjusted results with comparisons to the prior year quarter unless otherwise noted. Consolidated net revenue for the second quarter was $378 million, a decrease of 4.1%. Radiopharmaceutical oncology currently PYLARIFY contributed $250.6 million of sales, down 8.3%, lower than previously expected. Our U.S. volumes were up over 4% sequentially, as described by Paul, competitive dynamics have driven the net price environment lower than expected. Precision Diagnostics revenue of $115.8 million was up 3.3%. Highlights include sales of DEFINITY at $83.9 million, 7.5% higher along with TechneLite revenue of $25 million, down 11.4% due to a prior year comp that included a greater opportunistic sales to [indiscernible]. Lastly, strategic partnerships and other revenue was $11.6 million, up 32.8% due to the continued contribution from our investigational product candidate, MK-6240 at $6.5 million as well as $3.4 million from the newly acquired Evergreen CDMO business. Gross profit margin for the second quarter was 67.6%, a decrease of 80 basis points. The decrease is mainly attributable to unfavorable pricing impact to margin. The inclusion of the Evergreen manufacturing infrastructure, offset in part by favorable year-over-year volume from both DEFINITY and PYLARIFY. Operating expenses at 27.2% of net revenue were 227 basis points higher than the prior year rate but generally in line with previously guided underlying spending levels. As noted on our last earnings call, increases in operating expenses reflect investments made to support several growth and efficiency initiatives. Notably, research and development increased 271 basis points to 7.7% of net revenue in support of a number of late and early stage development programs, including but not limited to the recent NDA filing for the new PSMA PET product candidate. Operating profit for the quarter was $152.6 million…

Brian A. Markison

Analyst

Thank you, Bob. Before we turn to Q&A, I want to reiterate our steadfast focus on driving commercial execution for PYLARIFY as we continue to position ourselves for growth and sustained radiopharmaceutical leadership. While we are pleased with our progress in strengthening our capabilities, expanding the portfolio, and enhancing our long-term potential, we fully understand that driving commercial execution is critical to supporting our efforts and remains our top priority. We have been taking and we'll continue to take decisive actions across our commercial business, innovation efforts and use of capital in both the near and long term that we believe are in the best interest of the business, patients and shareholders. With that, I'll turn it over to Q&A. Operator?

Operator

Operator

[Operator Instructions] Our first question comes from the line of Matt Taylor from Jefferies.

Matthew Charles Taylor

Analyst

So I wanted to ask about your prior comments on 2026, you talked about the acquisitions out of your mid-single-digit CAGR to an underlying growth. We're getting you to consistent double-digit growth. Do you think with the changes that are happening in the market now, you could still achieve that, or could you offer any thoughts on how to think about 2026 at a high level?

Brian A. Markison

Analyst

Yes. I think it's certainly achievable. But again, I'll let Bob give you the answer in full, but it is a combination of organic and inorganic growth, as we've described before. So Bob?

Robert J. Marshall

Analyst

Yes, I'll build on that. I mean it is largely predicated on a number of factors that really haven't changed. Putting 20 to 26 for PYLARIFY, there are a lot of moving parts there. But this is a math problem. And what I have often talked about is the fact that the keys are having DEFINITY kind of get back to its normal run rate, which is going to be in a high single-digit kind of trajectory. And you're seeing that sort of playing out even in this quarter, which was pretty positive. But the real keys here are going to be, as Brian noted, from an inorganic perspective, the sale of the spec business, which removes about $120 million from the base year. And then the real key is what has been -- what we've done and accomplished here with LMI transaction is the annualization of Neuraceq and withstand the growth trajectory that, that product has, which has been very positive. But supporting that, but to a lesser degree, continues to be the launches of MK-6240, PNT2003, OCTEVY, so while those are more minor in contribution in 2026, just given the time of the year that they would potentially launch, they would still be contributors. But again, mathematically, it is still something that's on the table.

Operator

Operator

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

Anthony Charles Petrone

Analyst

And I'll stick with a guidance question, Bob. Maybe just the -- what is actually baked in top and bottom line for LMI? And as we sit here into early August, I think I'm coming up with, if we add $30 million top line, implied range is minus 4% to minus 6%, PYLARIFY in 2Q was down 8%. So certainly still pressured, but maybe if you can give us a sense of the share losses? Do you -- is that done at this point? And maybe just a little bit on actually where the underlying market growth rate is at the moment.

Brian A. Markison

Analyst

Yes. So thanks for the question. Well, I'll let Bob lead off the answer to the beginning of your question, and then Paul will pick up the back half of the question. But if they do want to reinforce, we are beginning to see signs of stabilization in the PSMA PET marketplace, which is encouraging. But Bob, go ahead.

Robert J. Marshall

Analyst

Thanks, Anthony. You're right. I mean the additions of both Evergreen and LMI in terms of Neuraceq are sort of fitting into our goal of continuing to diversify our revenue streams. So specifically, we're forecasting from an August to December contribution in revenue of $40 million to $45 million of net revenue with $0.04 of EPS accretion. So when you [ NET ], I mean, I had previously talked about the fact that I thought the combination of Evergreen and LMI would be low single-digit dilution. And that is actually what we're seeing. We do have two different sort of contribution periods in terms of evergreen being sort of nine months, and we've got five months of LMI. I normalize that, we certainly get down into that low single- digit solution perspective. So right on -- we're right on pace for that part of the contribution. But for the PYLARIFY question, I'll turn it to Paul.

Paul M. Blanchfield

Analyst

Thanks, Bob. Thanks, Anthony. So our assumptions for the second half for PYLARIFY are that we continue to grow volumes year- over-year in the low single-digit range, which was largely consistent with what we saw in the first half of the year. The broader market will continue to grow in the mid- to high teens in the second half of the year, year-over-year. So that does factor in some continued share loss driven by our over-indexing to larger institutions and recognizing some of the competitive dynamics in the marketplace. Notably, we expect net price to continue to decline sequentially in both the third and the fourth quarter for PYLARIFY. This is due to the pricing actions in both renegotiations that took place in the second quarter in the back half that will then fully quarterize, if you will, for the third quarter as well as in the fourth quarter. And then we also expect to see some impact on best price or 340B. That's a 2-quarter lag from a government pricing perspective. And so volumes for PYLARIFY will continue to grow as they have in the first half of this year, but we will see that less in the market, and we will see further price degradation given some of the competitive dynamics and those are the underlying assumptions baked within our guidance.

Operator

Operator

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

Richard Samuel Newitter

Analyst

Maybe just on the new formulary for PYLARIFY, I guess, what's the earliest that you could potentially be commercial with a product like this from a timing standpoint with, I guess, the March 6 PDUFA. So is it possible you could have this like midyear TPT in place, or is it more likely in the October time frame of next year? And then just on that, the NextGen PYLARIFY product, I'm just curious if you could talk a little bit about what -- why couldn't this have been put out earlier? I guess it feels a little reactionary, but I'm just curious on kind of how the strategy there took form and when that began?

Brian A. Markison

Analyst

Yes, Richard, I appreciate the questions. And I'll take the why now part of it, flip it over to Paul for a little more detail. But I think the way you've discussed the PDUFA date and potential approval and HCPCS codes, I think you're pretty much spot on, but I'll let Paul review it one more time. As far as the why now is concerned, research and development is never on a stopwatch the way you'd like it to be. And while we have said repeatedly that we have a lot of work in development, we wanted to make sure that we really got it right and had a new formulation that would actually work in the marketplace and actually be worth our time and energy and have rewards and pay out for the customers. And I think the improvement in batch yield improvement in our ability to, if you will, load the formulation for greater out-the-door time, greater convenience, all makes it work extremely well. And also there's a gross margin benefit that we will accrue here as well, which is pretty meaningful. So our research and development in large part has some serendipity involved, so I'd like it to be available sooner, but it's available, I think, at the right time for us. So Paul, a little bit on timing.

Paul M. Blanchfield

Analyst

Yes. Thanks, Brian. Thanks, Rich. So as was mentioned, we're going to work expeditiously to activate our supply chain to secure coding coverage and payment, including HCPCS and TPT. We're going to share more exact timing as we get closer to launch. But effectively, with the March 2026 PDUFA date, we would expect to be able to potentially meet the June 1 submission for TPT which would then go live in the fall, October 1. At the latest, we would imagine January 1, but there is some sequencing in order to get our PMF chains activated and approved to be able to go forward with this new formulation, which, as Brian mentioned, we think will provide a number of benefits, including batch size, including production efficiency and most importantly, leveling the playing field with regard to TPT reimbursement and then ultimately ensuring that clinical differentiation is recognized and is appreciated by customers and wins today and overcome some of the transitory reimbursement-related and equities in the market.

Operator

Operator

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

Yuan Zhi

Analyst

Maybe, Brian or Paul, how should we think about this new formulation, whether it will have an impact on your long-term contracts already in place? Will it be an add-on to the contract, or will it trigger another negotiation of those contracts?

Brian A. Markison

Analyst

Well, it's very simple. It will be a complete add-on it's already contemplated in our contract language and could potentially offer the opportunity for a 340B price reset, which would be very helpful and meaningful to the franchise and to the marketplace. So the contracts already contemplate this. Appreciate the question, and we're ready to roll.

Operator

Operator

Our next question comes from the line of Mazi Alimohamed from Leerink.

Mazahir Lukman Alimohamed

Analyst

This is Mazi on for Roanna. So can you provide more details on the commercial opportunity for tau imaging, and how this fits with the broader Alzheimer's strategy alongside Neuraceq?

Brian A. Markison

Analyst

Yes, I think it's a terrific question. Coming out of the meeting, the AAIC in Toronto a few weeks ago, there are a number of important agents in late-stage development that, quite frankly, already used MK-6240 for patient selection and longitudinal follow-up. So while today, there's not a huge demand for tau tracers going forward, the value that a tau tracer brings to the marketplace is really going to be quite unmistakable. The ability to pinpoint more precisely the cause of sequelae of Alzheimer's dementia, longitudinal follow-up and also the potential for improvement with therapy is an unmistakable benefit of a tau tracer. So we're excited about it. It's a building market. It doesn't really blow up and become enormous tomorrow, but it certainly has what we believe is potential across our neuro portfolio to be similar in size as PYLARIFY.

Paul M. Blanchfield

Analyst

And maybe I'll just add -- agree with everything Brian mentioned. I think as we start to work more closely with our newly welcomed LMI colleagues. I think we're incredibly pleased with the capabilities and the talent of our LMI neuro team, which serves as an existing commercial franchise that we'll be able to further highlight the clinical differentiation that we believe MK and indeed Neuraceq and our late-stage pipeline. And so we're excited to build on that scale and those talent and capabilities that have recently joined our organization to be a preeminent leader in the neuro PET diagnostic market like we have that in PSMA.

Operator

Operator

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

Lawrence Scott Solow

Analyst

Can you just give us an idea of how much of your business on PYLARIFY is contracted versus non-contracted? Maybe I'm just kind of paid into that. I imagine, obviously, it's been continuing to rise. But -- and then the second part of that question is, on these contracts, themselves, you mentioned some renegotiation. So did you lose some share? Like of the strategic agreements from strategic agreements. So I'm just trying to get a little more hold of grasp on how firm are these agreements? It sounds like you've walked away from, maybe, in some cases, some contracted business as well, if I'm not -- if I'm hearing that correctly?

Brian A. Markison

Analyst

Yes. And again, I appreciate the question. We have not given specific counts, if you will, or percentages, but the vast majority of our business is under contract. And I think one of the things that has evolved with the change to MUC reimbursement is some of our accounts had much greater exposure, if you will, to the MUC reimbursement dynamic than the classic 20% that would normally be across the board exposed to this through traditional Medicare. And with those accounts, if they're especially price sensitive, the negotiation gives us basically a last look, and we have decided it's not in our best interest. It's really -- we don't think it's in their best interest for their patients, but we have decided to walk away from a discounting dynamic that was more than we're willing to tolerate. So Paul, I think you want to build on that.

Paul M. Blanchfield

Analyst

Yes. Thanks, Brian, and thanks for the question there, Larry. The strategic partnerships have been successful on a number of fronts as we've shared. They enabled us to maintain and grow volumes in our core business to have significantly higher market share in those accounts than we do in those small number of accounts that are not contracted, but we are increasingly coexisting with Gallium. They were designed and largely leveled the playing field related to the MUC-based reimbursement dynamics at hospitals. What we particularly saw in the quarter is that one of our competitors, an F-18 based competitor significantly increased aggressive pricing. That was greater and broader than was anticipated. And so when we look at our strategic partnerships, when we have the MUC-based reimbursement dynamics that they were largely designed to level the playing field when we add the pricing dynamics and offers that puts some customers in a position to have to come back to us to relook at the terms of those contracts. In some cases, it made sense economically for the long-term health of the franchise to renegotiate those contracts to maintain the business and those core customers. In others, given some of the best price dynamics, it did not make sense. And so we made the difficult decision in some cases, to walk away from volumes to not honor to not increase our pricing terms such that we could inadvertently materially impact the long-term health of the business, and those are some of the dynamics. We have conducted a bottoms-up review of all of our contracts, Brian, myself and our commercial team. We have proactively reached out to customers we do believe there is stabilization emerging in the marketplace and that those will prove continue value-added for the long-term health of the business.

Operator

Operator

Our next question comes from the line of Justin Walsh, PhD from JonesTrading.

Justin Howard Walsh

Analyst

You mentioned the TPT reset you're hoping to see with the new formulation. Can you comment on the most recent updates for the TPT time lines for key competitors? If you expect these competitors to maybe make similar moves and how confident you are that the new formulation will be awarded TPT?

Brian A. Markison

Analyst

All right. I'll start the answer, I'll then put it to Paul. We're very confident given the fact that this is a NDA application. We've had an extensive review with our internal and external experts and feel highly confident that this formulation should be approved, will be eligible for new HCPCS codes and reimbursement. So Paul?

Paul M. Blanchfield

Analyst

Yes, Justin, maybe just get into some of the specifics I agree with Brian and our overall confidence on our new formulation being eligible for HCPCS code and for TPT. If we look at the broader marketplace, our primary Gallium competitor, lost TPT on their product on July 1 of this year. Now they do have another agent in development that they have been discussing and they presumably plan for TPT later this year, but I'll leave that up to them to comment. Our #1 team-based competitor would lose TPT as of October 1, 2026. And so those are the latest time lines. And as I shared earlier, I believe, that my response to Rich, we would expect potential TPT for our new formulation in the same time frame as our SAP competitor were to lose it. As for their internal development plans, I will leave that up to them to answer.

Operator

Operator

Our next question comes from the line of Tara Bancroft from TD Securities.

Unidentified Analyst

Analyst

This is Francis on for Tara Bancroft. So for the new PSMA imaging agent, how are you seeking to position versus PYLARIFY? And what are your assumptions with several new -- pricing assumptions with several new entrants. Do you expect to offer a substantial discounts for this versus PYLARIFY to gain traction?

Paul M. Blanchfield

Analyst

I think we are very excited about the new formulation. We are expeditiously working to prepare our launch plans, to continue to engage with the agency and to meet our March 6, 2026, PDUFA date. I think overall, we believe this will allow us to improve the pricing dynamics in the marketplace, driven by a number of fronts. One, the reset of 340B best price in the marketplace, given the kind of 2-quarter 6-month lag from a government price reporting dynamic. I think secondly, when we look at our new formulation being on a 3-year TPT dynamic, we think some of the strategic partnerships while remaining critical also pose an opportunity, recognizing there would be more of a reimbursement level playing field in the marketplace than the current disadvantage that PYLARIFY has. And so we feel incredibly optimistic and positive that, first, it will level the playing field. And secondly, it will enable us to focus on the continued clinical differentiation of the agent, which is still very much understood and is increasingly emerging in the marketplace as competitors experience other F-18 agents and see some of the downside in those agents. But unfortunately, given some of the MUC-based reimbursement dynamics, are providing a temporal challenge that we believe our new formulation will help address.

Operator

Operator

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

Brian Kemp Dolliver

Analyst

So looking further out into 2027, given that we will not have ASP in 2026, we get ASP in 2027. How are you thinking about the impact of that on your strategy, given you're going to have two products essentially two versions of PYLARIFY in the marketplace and presumably with different reimbursement dynamics?

Brian A. Markison

Analyst

Yes, I appreciate the question. We moved to ASP, let's presume it's the beginning of 2027. It's perfectly in line with our strategy. The new formulation will replace the older will have an improvement in gross margin and again, the potential for a 340B price reset. And our current contracts or partnerships already contemplate the ability to add portfolio products to their agreements.

Operator

Operator

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

John D. Vandermosten

Analyst

Another question on the new formulation of PYLARIFY. How much expansion on market size do you think the new formulation is PYLARIFY will get? And then will the new formulation completely replace the existing PYLARIFY? I think you may have said that, Brian, but I just want to clarify how you expect that to change over time, that mix between the new and the old?

Brian A. Markison

Analyst

We expect that the new formulation to completely replace PYLARIFY as it currently exists in the marketplace. And as far as expanding the market, I think, with the level playing field and what we believe is the best PSMA agent, we think we'll be able to return to growth. And certainly, the customers that I'm talking to right now that are seeing poor performance with the other F-18 agent, I anticipate that they're going to come back to us. We will also have expanded out-the-door time, set the ability to deliver across a wider radius with a newer formulation. So I'm very much looking forward to the launch of that product, and it's a key part of our future strategy.

Operator

Operator

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

Tsan-Yu Hsieh

Analyst

Just kind of going back to the AAIC conference. I guess one of the themes that came out using blood-based biomarkers as a rule out test typically for the symptomatic patients? I believe you highlighted Alzheimer's sensitivity across different product portfolios, I'm just curious about your strategy in boosting the utility and the quadruple patient population, so you can expand beyond the screen for the high-risk patients in that setting.

Brian A. Markison

Analyst

Yes, it's a great question, and I appreciate it. I think really looking at the blood-based biomarkers as a market expansion opportunity and a way for primary care to basically almost view it like it's a PSMA test for prostate cancer and get patients to the neurologist and then let the neurologist make the decision upon a full workup for an amyloid or tau scan or both. And I think the game going forward is all about identifying these patients much earlier in their treatment paradigm for the disease course. And I think if you look at our tracers, particularly MK and NAV and further in the pipeline 2620 they are definitely more sensitive and a better spatial resolution than the current first-generation traces available. So we're very much looking forward to future therapeutics that seem to be on the near-term horizon and could be a step-up over what's currently available.

Operator

Operator

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

Yuan Zhi

Analyst

Maybe one follow-up question to Bob or Paul on Neuraceq. What's the underlying assumption of year-over-year growth in both volume and price for your $40 million revenue guidance in 2025 for the last five months?

Robert J. Marshall

Analyst

So we're not going to be able to disclose sort of the year-to-date Neuraceq performance as that -- it is still within another public company, albeit a South African listed company. So from that perspective, I think what I can tell you is that the growth trajectory, what represents these last four months represents a very healthy sort of double-digit growth rate, if you will, overall for Neuraceq. Right now, we're just busy integrating and getting plans. Paul, if you want to expand on sort of the efforts from a U.S. sales trajectory.

Paul M. Blanchfield

Analyst

Yes, absolutely. I mean I think we're -- thanks for the question, Yuan. We're very excited about Neuraceq. We think the growth will continue to be driven by a growing overall PET diagnostic market for Alzheimer's, led by increased patient and customer awareness and the continued adoption of therapeutic agents, both those that are on the market and the excitement in the long term about the late- stage pipeline. We are incredibly pleased with the team that's joining us from LMI, and we believe that our combined organizations will enable greater supply and geographic expansion from a PMS network, levering the expertise we built with PYLARIFY, deeper customer relationships driven by our broader portfolio and then improve systems and processes. And we believe, as I mentioned earlier, that the Alzheimer's commercial franchise that the LMI team has so built with incredible talent and capabilities is going to serve as a great launching pad as we think about MK-6240 and our own combined late-stage Alzheimer's portfolio.

Operator

Operator

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

David Louis Turkaly

Analyst

One for Bob quickly here. So I just wanted to check some math. So given the guidance for PYLARIFY implied in the back half of the year, if we kind of look at that as a base point for 2026, we assume a little volume growth of kind of how you exit this year. Would it be fair to look at PYLARIFY revenues in '26 and said it could be flattish to possibly even down a little bit versus $25 million given sort of what we're seeing today.

Robert J. Marshall

Analyst

I don't think that's an unfair assumption. Obviously, we're not here to provide guidance on 2026. Your math and your thinking around somewhat of the trajectory in terms of annualizing through the pricing dynamics that we've-- would've seen here and what we're expecting in the second half of the year, I do think that we will annualize through those as we go through the first half of next year. So what we've seen obviously does sort of expand out that annualization process. So again, your assumptions are not wrong in totality.

Paul M. Blanchfield

Analyst

David, I would just add to Bob, I agree with everything he said. We want to be really clear. Our top priority is to stabilize, clarify to maintain market leadership in 2025 and ensure that we set up our PSMA PET franchise for long-term growth, leadership and success. And so we'll certainly come '26 when it's appropriate, but that remains our clear focus as an organization.

Operator

Operator

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

Richard Samuel Newitter

Analyst

Just on that last answer to David's question. I guess, when you said that double-digit growth combined inorganic and organic in 2026 is still the goal or on the table? It sounds like you're assuming the possibility that that's achievable with negative PYLARIFY growth, as you just said, is that correct?

Brian A. Markison

Analyst

Yes.

Operator

Operator

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.