By John Vandermosten, CFA

NASDAQ:LNTH

READ THE FULL LNTH RESEARCH REPORT

Lantheus Holdings, Inc. (NASDAQ:LNTH) reported 2024 financial and operational results on February 26^th, producing sales of over $1 billion for Pylarify during the calendar year. Other products also made a material contribution including Definity, which rose almost 14% in part due to opportunistic sales. The company generated almost $500 million in free cash flow for 2024 which has allowed Lantheus to make meaningful acquisitions. The company began 2025 with a pair of potentially transformational acquisitions that can accelerate the commercialization of pipeline assets, provide new revenue generating business lines, give access to additional manufacturing capacity and augment early-stage development.

We believe that Lantheus seeks to become one of the preeminent radiopharmaceutical companies in the industry with a portfolio of imaging and therapeutic assets in new modalities to identify and treat disease. Lantheus has recognized the immense opportunity in Alzheimer’s disease following the approval of Leqembi and Kisunla and the development of many other β-amyloid and Tau tangle therapies. Patients who may be appropriate for the new treatments require confirmation of the disease, which may be more precisely achieved with Lantheus’ neurology assets. The company is advancing legacy uses for radiopharmaceuticals in oncology and refining its TechneLite generator business line as well as the numerous partnerships forged in the Definity product line.

Along with its 2024 report, the company provided guidance for 2025. It calls for revenue growth in the low single digit range and earnings growth of a few percentage points higher. This does not include any impact from the acquisitions announced year to date. We anticipate that Lantheus will provide additional information on the impact of acquiring these businesses when they close later this year.

2024 Financial and Operational Results

Lantheus announced 2024 results in a February 26^th press release in conjunction with a conference call before the market open that day. A slide deck was provided to guide the earnings call. The company subsequently filed Form 10-K with the SEC. Annual revenues totaled $1.53 billion producing GAAP earnings of $4.37 per share and adjusted earnings per share (EPS) of $6.78.

Lantheus’ revenues of $1.53 billion represent an 18% increase over prior year amounts with a 24% rise in Pylarify sales dominating the increase. Since the beginning of 2024 and to date, the company has announced eight strategic transactions oriented towards the future of radiopharmaceuticals. The deals provide exposure to theranostics with the acquisition of multiple Life Molecular assets, Meilleur Technologies’ beta amyloid imaging agent, two preclinical assets from Radiopharm Theranostics and an alpha therapy with Perspective Therapeutics. In 2025, the company announced two additional acquisitions for Life Molecular Imaging and Evergreen Theragnostics.

For the year ending December 31^st, 2024 relative to the same prior year period:

• Net sales were $1.53 billion up 18% from $1.30 billion. The increase was driven by a 24% increase in Pylarify sales, a 14% increase in Definity sales, a 9% rise in TechneLite sales and a 5% increase in Other Precision Diagnostics offset by a 26% decline in Strategic Partnerships. Important drivers for 2024 revenues include increased volumes of Pylarify, continued supply constraints for Definity’s competitors and increased usage of the AD imaging candidates in clinical trials driving Strategic Partnership growth. Demand for TechneLite moderated as competitor manufacturing units came back online and opportunistic sales in the prior year quarter did not repeat. Strategic Partnerships faced a difficult comparison as revenues in the prior year included amounts from the sale of rights for Relistor;
• Cost of goods sold fell 7% to $546 million as higher Pylarify and Definity related costs were more than offset by the absence of expenses related to the Azedra termination. Product gross profit margin rose to 63.5% from 52.8%^[1];
• Sales and marketing expenses were $178 million, up 25% from $142 million on increased sales and marketing efforts related to an expansion of the Pylarify sales force, functional support, and brand strategy spending in support of existing and future products;
• General and administrative expenses were $194 million vs. $125 million, increasing 54%. The change was attributable to spending on technology, specifically a new enterprise resource planning (ERP) system, higher stock compensation, increased headcount and employee related costs and higher professional fees, primarily related to business development activity;
• Research and development expenses were $168 million, up 116% from $77.7 million. The substantial increase was driven by employee-related costs resulting from an increase in headcount as well as an increase in project costs, including research and development expenses related to the multiple acquisitions that took place in 2024. This was partially offset by the absence of a non-cash impairment charge that took place in the prior year and did not recur and lower clinical expenses;
• Interest expense was $20 million, even with prior year levels and related to the $575 million in the 2.625% convertible senior notes due in 2027 and cost of maintaining access to the 2022 revolving facility;
• Gain on sale of assets of $8.4 million was related to the sale of the Somerset Facility to Perspective in March and the sale of a portion of the North Billerica campus;
• Investment in equity securities was a net unrealized loss of $43 million related to the carrying value of Perspective and Radiopharm’s common stock. No equity gain or loss was recognized in the prior year;
• Other income was ($37) million vs. ($66) million;
• Income tax of $119 million represents a 27.5% tax rate with deferred and state income taxes explaining the difference between it and the US statutory rate;
• GAAP net income was $312 million or $4.37 per diluted share. Adjusted net income as presented by Lantheus was $485 million or $6.76 per diluted share. The difference between the two is explained in part by removal of stock and incentive plan compensation, strategic collaboration and license costs, amortization of acquired intangible assets and unrealized loss in investment securities offset by the income tax effect of non-GAAP adjustments. Other minor line items also contributed to the difference between GAAP and adjusted results.

On December 31st, 2024, Lantheus held $913 million in cash compared to $714 million at the end of 2023. Free cash flow for 2024 was $493 million vs. $311 million in the prior year period. Company guidance for 2025 calls for revenues of $1.545 to $1.610 billion and EPS of $7.00 to $7.10 in 2024. Free cash flow is expected to fall in the range of $550 to $600 million.

Summary

Lantheus reported full year 2024 results with fourth quarter results ahead of our estimates. 2024 was a year of strong growth from Pylarify and execution on a number of potentially transformative acquisitions in a trend which has continued into 2025. Management provided revenue, earnings and cash flow guidance for 2025, indicating a deceleration in topline growth. We have updated our estimates to reflect this; however, we anticipate that LMI and Evergreen as well as other assets in the development portfolio will drive a sharp acceleration in 2026. Lantheus has positioned itself to play a more dominant role in many promising areas in the radiopharmaceutical space. With respect to the LMI acquisition, Lantheus’ combination will provide a head start in AD commercialization activities where it has two next-generation imaging assets that provide improved precision over older agents. After folding in the global sales team already focused on AD, Lantheus can immediately launch its product and gain faster access to formularies and physicians. Evergreen offers research, development and manufacturing assets as well as a diagnostic agent in NETs that is a complement to PNT2003. The research assets may help Lantheus more quickly and efficiently develop new radiopharmaceuticals, increasing the long-term value of the company. We maintain our valuation of $134 per share.

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^{[1] We calculate gross margin as 1-COGS/(revenues from Pylarify, Definity, Technelite and Other Precision Diagnostics) as reported in company filings. We exclude revenues from Strategic Partnerships and Other from the calculation.}