Lantheus Holdings, Inc. (LNTH) Q2 2024 Earnings Summary

Executive Summary

Revenue and adjusted EPS grew solidly: Q2 revenue $394.1M (+22.5% Y/Y) and adjusted EPS $1.80 (+16.4% Y/Y); GAAP EPS was $0.88 due to non-GAAP items including transactional costs and an unrealized equity loss .
PYLARIFY led results with $273.3M (+29.8% Y/Y); DEFINITY delivered $78.1M (+10.7% Y/Y); TechneLite rose to $28.2M (+30.5%) aided by opportunistic sales .
FY24 revenue guidance maintained at $1.50–$1.52B, but adjusted EPS cut to $6.60–$6.70 (from $7.00–$7.20) driven by stepped-up R&D/business development investment and higher diluted share count assumptions (H2 ~74.5M; FY ~72.5M) .
Regulatory backdrop improved: CMS’s CY25 OPPS proposed rule would maintain separate payment for certain diagnostic radiopharmaceuticals (including PYLARIFY) for Medicare FFS hospital outpatients; management views this as significant progress. Only ~20% of PYLARIFY revenue is exposed to TPT dynamics in hospital outpatient Medicare FFS .
Near-term stock catalyst setup: guidance reset versus strong operational execution; watch for CMS final rule in November and more mature PNT2002 SPLASH OS data expected in Q3 2024 .

What Went Well and What Went Wrong

What Went Well
- PYLARIFY sustained leadership and growth: $273M+ Q2 net sales, nearly +30% Y/Y; “#1 utilized PSMA PET imaging agent” with broad availability and expanding distributor network .
- DEFINITY momentum: ~$78M Q2 sales (+10.7% Y/Y); management reiterated 80+% market share in echo contrast, supporting a durable cardiology franchise .
- Policy tailwind: CMS proposed CY25 OPPS rule maintains separate payment post-TPT for higher-cost diagnostic radiopharmaceuticals, supporting sustained access for Medicare FFS in hospital outpatient settings .
What Went Wrong
- Margin pressure: Q2 gross margin 68.4%, down 121 bps Y/Y, impacted by prior RELISTOR royalty sale (~80 bps headwind), higher-than-forecast TechneLite volumes, and higher contracted material/overhead costs .
- Opex step-up: Operating expenses were 25% of revenue, +202 bps Y/Y and “ahead of expected spending levels,” reflecting accelerated pipeline and lifecycle investments .
- Guidance reset: FY24 adjusted EPS reduced to $6.60–$6.70 (from $7.00–$7.20) to reflect increased R&D/BD spend (≈$0.25 EPS headwind) and higher diluted shares from convert dynamics .

Financial Results

Quarterly trend (oldest → newest):

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($M)	$354.0	$370.0	$394.1
GAAP EPS (diluted)	$1.47	$1.87	$0.88
Adjusted EPS (diluted)	$1.75	$1.69	$1.80
Gross Margin %	~64.9% (229.9/354.0)	68.8%	68.4%
Adjusted Operating Income ($M)	N/A	$155.3	$171.1
Operating Cash Flow ($M)	$112.3	$127.2	$84.7
Free Cash Flow ($M)	$100.2	$119.0	$73.5
Cash & Equivalents ($M, period-end)	$713.7	$718.3	$757.0

Year-over-year view (Q2):

Metric	Q2 2023	Q2 2024	Y/Y Change
Revenue ($M)	$321.7	$394.1	+22.5%
GAAP EPS (diluted)	$1.33	$0.88	(33.7%)
Adjusted EPS (diluted)	$1.54	$1.80	+16.4%
Gross Margin %	N/A	68.4%	(121 bps)

Segment breakdown (Q1 vs Q2 2024):

Segment ($M)	Q1 2024	Q2 2024
PYLARIFY	$258.9	$273.3
DEFINITY	$76.6	$78.1
TechneLite	$21.7	$28.2
Other Precision Diagnostics	$5.9	$5.8
Radiopharmaceutical Oncology Total	$259.3	$273.3
Precision Diagnostics Total	$104.2	$112.1
Strategic Partnerships & Other	$6.5	$8.7
Total Revenue	$370.0	$394.1

Selected KPIs and drivers:

PYLARIFY scans: administered across all 48 contiguous states, D.C., Puerto Rico; European distribution via partner; leadership reinforced by F-18 network .
PYLARIFY market share: “mid-60% range,” with >400,000 scans since launch; market annualizing just north of $1.5B with 2024 current TAM >$2B and potential to >$3B by 2029 .
PMF network: ~58 PET manufacturing facilities active in the U.S. (capacity/redundancy expansion) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2024	$1.50B–$1.52B (May 2, 2024)	$1.50B–$1.52B (Jul 31, 2024)	Maintained
Adjusted EPS (diluted)	FY 2024	$7.00–$7.20 (May 2, 2024)	$6.60–$6.70 (Jul 31, 2024)	Lowered
PYLARIFY growth	FY 2024	Mid-20% growth	Mid-20% growth reiterated	Maintained
Diluted Shares (assumption)	H2 2024 / FY 2024	N/A	~74.5M (H2) / ~72.5M (FY)	New color

Drivers of EPS change: ~$0.25 EPS headwind from increased R&D (e.g., MK‑6240, NAV‑4694, RM2) and share count dynamics tied to convertible notes; no incremental PNT2002 investment assumed .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’23 and Q1’24)	Current Period (Q2’24)	Trend
PYLARIFY performance/market	Q4: Continued scale; FY23 revenue $851.3M; market leadership . Q1: $259M sales (+32% Y/Y); expanded field force; strategic partnerships; TAM larger than expected; 58 PMFs .	$273M sales (+29.8% Y/Y); volumes rising; leadership sustained; Q3 seasonality, Q4 stronger; market annualizing just >$1.5B .	Positive momentum with seasonal dip in Q3.
CMS policy / reimbursement	Q1: TPT expiry mitigation plans; only ~20% revenue exposed (hospital outpatient Medicare FFS) .	CY25 OPPS proposal maintains separate payment post‑TPT for PYLARIFY; company supportive; continues legislative advocacy .	Improving policy tailwind.
Margins / costs	Q4: GM implied ~65% . Q1: GM 68.8%; mix benefits; some cost headwinds .	GM 68.4% (-121 bps Y/Y) on RELISTOR royalty sale headwind, higher TechneLite volume, higher contracted costs .	Slight pressure near term.
Pipeline – Alzheimer’s	Q1: MK‑6240 highlighted; regulatory path update expected later in 2024 .	Acquired NAV‑4694 (β‑amyloid PET) and held MK‑6240 pre‑NDA; plan to file MK‑6240 NDA in 2025 .	Accelerating investment/visibility.
Pipeline – Prostate oncology	Q4/Q1: PNT2002 SPLASH met rPFS; OS readout expected when ~75% events; PNT2003 ANDA accepted .	SPLASH OS readout expected Q3; confidence reiterated; PNT2003 could launch 2026 pending litigation .	Near-term catalyst approaching.
AI / Technology	Q1: Not emphasized on call. Q2 period: aPROMISE integrated into Siemens syngo.via (press release) .	AI-enabled quant tools supporting PSMA PET workflows (press release) .	Building digital augmentation.
Manufacturing / supply chain	Q1: PMF network expansion to 58 sites to extend capacity/redundancy .	Continued F‑18 distributor network strength; reliable supply cited .	Strengthening infrastructure.

Management Commentary

“We delivered another strong quarter led by our commercial products PYLARIFY, DEFINITY and TechneLite.” — CEO .
“CMS…proposes separate payment for diagnostic radiopharmaceuticals…This represents significant progress…most importantly, sustained patient access.” — President .
“Gross profit margin…68.4%, a decrease of 121 basis points…due largely to an approximate 80 basis point headwind due to the…RELISTOR royalty sale…offset by higher-than-forecasted TechneLite volumes…higher contracted…costs.” — CFO .
“We are adjusting our view of earnings…fully diluted adjusted EPS…$6.60 to $6.70…approximately $0.25 [of] anticipated investment for 2024 is within the R&D line…model…~74.5 million [H2] shares and about 72.5 million for the full year.” — CFO .
“With PYLARIFY on track to surpass $1 billion in sales and be the first radiopharmaceutical diagnostic blockbuster…we are fully committed to advancing and expanding our pipeline.” — CEO .

Q&A Highlights

CMS OPPS proposal and contracting: Management avoided detailed speculation during the comment period, but reaffirmed support and continued strategic partnerships to sustain leadership; confirmed separate payment would apply to ~20% of PYLARIFY revenue in Medicare FFS hospital outpatient .
FY24 EPS bridge and R&D intensity: Majority of guide-down reflects increased R&D (NAV‑4694, RM2) and higher diluted shares; underlying operations intact; more color to come as MK‑6240 approaches 2025 NDA .
PYLARIFY cadence: Volumes to continue growing; Q3 expected to be seasonally lower than Q4 on dollars; strategic partnerships may weigh on net price as year progresses .
Alzheimer’s diagnostics thesis: NAV‑4694 and MK‑6240 positioned as next‑generation agents; MK‑6240 in >90 trials; potential for earlier detection and monitoring; plan to file MK‑6240 NDA in 2025 .
PNT2002 SPLASH OS: More mature OS data expected in Q3; management “comfortable” and intends to move ahead subject to data .

Estimates Context

S&P Global consensus data for Q2 2024 revenue and EPS was unavailable at the time of analysis due to an access limit; as a result, numeric beat/miss versus consensus cannot be provided. We note management characterized radiopharmaceutical oncology performance as “generally in line with expectations and seasonal trends.” Values retrieved from S&P Global could not be displayed due to access limits .
Street models are likely to reflect: FY24 revenue unchanged at $1.50–$1.52B and adjusted EPS lowered to $6.60–$6.70, consistent with company guidance .

Key Takeaways for Investors

Core engine healthy: PYLARIFY growth and market leadership continue, supported by broad F‑18 network and strategic partnerships; DEFINITY steady double‑digit growth supports base business .
Guidance reset is investment‑driven: EPS guide reduction reflects proactive pipeline acceleration (NAV‑4694, RM2, MK‑6240 pre‑NDA) and share count, not operational deterioration; monitor R&D ramp and returns .
Policy tailwinds possible in November: CMS finalization of CY25 OPPS separate payment could provide medium‑term visibility for hospital outpatient Medicare FFS access (20% exposure) .
Near-term catalysts: SPLASH OS update in Q3; MK‑6240 regulatory path clarified (NDA in 2025); continued Alzheimer’s diagnostics development with NAV‑4694 .
Watch Q3 seasonality and pricing mix: Expect Q3 to be the softer half vs Q4, with volume growth partly offset by strategic partnership terms; focus on volume trajectory and mix .
Balance sheet optionality: $757M cash, undrawn $350M revolver provides capacity for BD and internal development .
Execution focus: Track margin levers (mix, cost inflation, TechneLite variability), life‑cycle management of PYLARIFY, and contracting discipline as competitive landscape evolves .

Additional Relevant Press Releases (Q2 2024 period)

CMS Proposed CY25 OPPS rule welcomed; would maintain separate payment for PYLARIFY post‑TPT (final rule due early Nov) .
NAV‑4694 (β‑amyloid PET) acquisition broadens Alzheimer’s portfolio alongside MK‑6240 (tau); both positioned as next‑gen diagnostics .
RM2 (GRPR‑targeted) radiotheranostic pair global rights acquired; Phase 1/2a prostate cancer study planned 2025 .
aPROMISE AI‑enabled quant software now available on Siemens syngo.via, supporting PSMA PET workflows .

Citations:
Financials and guidance: .
Operations, policy, and pipeline: .