Lantheus Holdings, Inc. (LNTH) Q1 2025 Earnings Summary
Executive Summary
- Q1 2025 revenue was $372.8M and adjusted diluted EPS was $1.53; both missed Wall Street consensus, driven by PYLARIFY pricing/reimbursement transition and competitive dynamics among smaller, non‑contracted sites, while DEFINITY grew 3.5% year over year . Results vs estimates: revenue $372.8M vs $379.1M* and adjusted EPS $1.53 vs $1.65*; EBITDA $120.4M* vs $172.9M* — a broad miss across key lines .*
- Management tightened FY25 guidance: revenue to $1.55–$1.585B (from $1.545–$1.610B) and lowered adjusted EPS to $6.60–$6.70 (from $7.00–$7.20), reflecting updated PYLARIFY trajectory (flat to low single-digit growth) and increased R&D investment (~7.5% of revenue) .
- Strategic repositioning accelerates: closed Evergreen (OCTEVY, theranostic pairs) in April, expects Life Molecular Imaging (Neuraceq) soon, and announced SPECT divestiture to SHINE to focus on PET diagnostics/microbubbles; MK‑6240 met pivotal sensitivity/specificity endpoints with NDA planned in Q3 2025 — key multi‑year growth catalysts .
- Operating cadence: gross margin was 67% with 180 bps YoY compression from strategic partnership contracting, dose mix, and a brief moly supply issue; free cash flow was $98.8M and cash reached $938.5M, underscoring ample liquidity amid portfolio realignment .
What Went Well and What Went Wrong
What Went Well
- PYLARIFY volumes grew YoY; Lantheus maintained a pricing premium and secured the majority of revenue through strategic partnerships, positioning for broader portfolio launches (e.g., NEURACEQ, OCTEVY, MK‑6240) .
- DEFINITY achieved ~$79M in Q1 sales, remaining the #1 ultrasound-enhancing agent despite competitive supply returning to the U.S. market .
- MK‑6240 met co‑primary endpoints in two pivotal studies; NDA filing planned for Q3 2025, building an Alzheimer’s imaging franchise with NAV‑4694 and anticipated LMI assets .
Selected quotes:
- “We are laying the foundation for the next chapter… acquisitions… add growth drivers… diversify our revenues” — CEO Brian Markison .
- “We plan to maintain our market leadership… broaden contracting… expand product availability… maintain pricing premium” — CCO Amanda Morgan on PYLARIFY .
- “MK‑6240… met its primary endpoints… [we] plan to submit a New Drug Application… in the third quarter” — CEO Brian Markison .
What Went Wrong
- Pricing/reimbursement transition (mean unit cost for Medicare FFS hospital outpatient) and competitive disruption among small, later‑adopter sites pressured PYLARIFY net price; management shifted FY25 PYLARIFY growth view to flat to low single-digit from low‑to‑mid single-digit .
- Gross margin compressed ~180 bps YoY on contracting impacts, dose volume mix, higher freight, and brief moly supply shortage affecting TechneLite .
- EBITDA and adjusted EPS missed consensus, reflecting broader profitability pressure amidst strategic investments and non‑cash equity losses in radiotheranostics holdings .*
Financial Results
Values with * retrieved from S&P Global.
Estimates vs Actuals (Q1 2025):
Values with * retrieved from S&P Global.
Segment Breakdown (Q1 2025 vs Q1 2024):
KPIs and Operating Metrics:
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- “Collectively, these transactions… add immediate revenue growth drivers… exciting programs… key capabilities… and streamline and help focus our organization” — CEO Brian Markison on Evergreen, LMI, SPECT sale .
- “We will… broaden contracting… maintain pricing premium… expand product availability… [and] educate on PYLARIFY’s clinical and commercial differentiation” — CCO Amanda Morgan on commercial strategy .
- “We are updating the implicit [PYLARIFY] range… to flat to low single‑digit… Evergreen adds ~$10M revenue… reduces adjusted EPS by ~$0.25… adjusted EPS now $6.60–$6.70” — CFO Robert Marshall on guidance .
- “MK‑6240… met its primary endpoints… we plan to file an NDA in the third quarter” — CEO Brian Markison on AD imaging catalyst .
Q&A Highlights
- PYLARIFY dynamics: Competitive switching at smaller, later‑adopter accounts post MUC; strategy is to expand contracting and product availability while preserving premium pricing; large strategic accounts remained stable .
- SPECT divestiture rationale: Non‑core, stable revenue with below‑average margins; sale accelerates consolidated margin expansion and focus on PET/microbubbles; expected close by year‑end .
- Guidance cadence: Q2 expected sequential growth in dose volumes; back half could reach mid‑single‑digit for PYLARIFY; overall FY pivot to lower band of prior ranges .
- CMS/ASP: Active discussions; potential ASP emergence; current team continuity despite administration changes; near‑term MUC impacts ~20% of patients (Medicare FFS, hospital outpatient) .
- Long‑term growth: With OCTEVY, PNT2003, MK‑6240, NEURACEQ annualization, and base PYLARIFY/DEFINITY, management reiterated potential for double‑digit revenue growth in 2026 .
Estimates Context
- Q1 2025 results vs consensus: Revenue $372.8M vs $379.1M*, adjusted EPS $1.53 vs $1.65*, EBITDA $120.4M* vs $172.9M* — broad‑based misses reflecting pricing/mix headwinds and elevated opex/R&D .*
- Consensus inputs included 13 EPS estimates and 12 revenue estimates for the quarter [GetEstimates Q1 2025].*
- Implications: Street likely to lower FY25 EPS forecasts toward $6.60–$6.70 and tighten revenue range; estimate dispersion may narrow given updated PYLARIFY growth view and added Evergreen dilution .*
Values with * retrieved from S&P Global.
Key Takeaways for Investors
- Near‑term: Expect continued pricing/mix headwinds in PYLARIFY with sequential dose volume growth; focus on contracting expansion to recapture later‑adopter sites — monitor Q2 trajectory and ASP developments with CMS .
- Portfolio catalysts: MK‑6240 NDA in Q3 2025 and LMI close (Neuraceq) create an Alzheimer’s imaging franchise; Evergreen adds OCTEVY and theranostic capabilities — a multi‑year growth setup .
- Margin mix: SPECT divestiture (expected close year‑end) should support future gross margin expansion; watch integration execution and timing .
- FY25 reset: Guidance lowered/tightened; R&D step‑up (~7.5% of revenue) underscores investment phase — supports 2026 double‑digit growth potential if launches/approvals track .
- Liquidity: $938.5M cash and $750M undrawn revolver provide flexibility for integration and pipeline investments, mitigating execution risk .
- Trading setup: Stock likely sensitive to reimbursement signals (ASP), PYLARIFY contracting progress, and MK‑6240 regulatory milestones; consider positioning around Q3 NDA filing and LMI close updates .
- Medium‑term thesis: Diversification beyond PYLARIFY toward AD imaging and theranostics, coupled with margin accretion post SPECT exit, supports a higher‑quality revenue mix by 2026–2027 .