Lantheus Holdings, Inc. (LNTH) Q4 2024 Earnings Summary

Executive Summary

• Q4 revenue was $391.1M (+10.5% YoY); GAAP diluted EPS was a loss of $(0.17) driven primarily by a $119.1M unrealized loss on equity securities; adjusted diluted EPS was $1.59 (−9% YoY) .
• Product highlights: PYLARIFY net sales were $266.0M (+15.7% YoY) and DEFINITY was $86.2M (+17.9% YoY); TechneLite grew 16.7% YoY to $25.1M .
• FY25 guidance: revenue $1.545B–$1.610B and adjusted diluted EPS $7.00–$7.20; company sees gross margin ~68%, FCF $550M–$600M, and R&D +100–150 bps as % of revenue; revolver increased to $750M .
• Strategic catalysts: definitive deals to acquire Life Molecular Imaging (Neuraceq AD franchise) and Evergreen Theragnostics (OCTEVY NET imaging and manufacturing), both expected to close 2H25, and CMS final OPPS rule enabling separate payment for innovative radiodiagnostics starting Jan 1, 2025 .
• Management reiterated PYLARIFY leadership and multi‑year strategic contracting; near-term growth cadence tempered by gross-to-net dynamics, with sustained double-digit revenue growth targeted starting in 2026 on core portfolio plus new launches (Neuraceq, OCTEVY, PNT2003, subject to approvals) .

What Went Well and What Went Wrong

What Went Well

• PYLARIFY achieved “first-ever blockbuster radiodiagnostic” status, surpassing $1B in full-year net sales, with Q4 sales at $266.0M (+15.7% YoY) and continued market leadership; “we will maintain our market leadership and relative price premium” (CEO/President) .
• DEFINITY posted strong growth: Q4 $86.2M (+17.9% YoY), aided by competitor supply challenges; management emphasized #1 utilization and established clinical value (CCO) .
• Balance sheet and liquidity strengthened: cash and cash equivalents rose to $912.8M; revolver increased to $750M, supporting BD priorities and buybacks (approx. $100M repurchased in Q4 at ~$89.59/share) .

What Went Wrong

• GAAP EPS turned negative: $(0.17) in Q4 vs $1.47 prior-year, largely due to a $119.1M unrealized loss on equity investments; adjusted EPS fell to $1.59 (−9% YoY) .
• Adjusted operating margin compressed to 38.8% from 43.6% in Q3, reflecting higher R&D and G&A tied to business development activities and integration costs .
• Strategic partnerships/gross-to-net effects moderated near-term PYLARIFY net pricing and sequential growth cadence; management guided low-to-mid single digit PYLARIFY net growth for FY25 and noted flattish 1H scenarios at the low end of the range .

Financial Results

Segment/Product Revenue (in $USD thousands)

Key Performance Indicators

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “2024 was a groundbreaking year… PYLARIFY reached blockbuster status… In 2025, we will grow our commercial portfolio… and provide innovative radiopharmaceutical solutions… to create long-term sustainable growth and shareholder value.” (CEO) .
• “PYLARIFY remains the clear #1 utilized PSMA PET imaging agent… we plan to build on this success by growing both volume and net sales in 2025… maintain market leadership and relative price premium.” (President) .
• “Operating expenses… were within previously guided levels… G&A notably higher tied to potential acquisitions of Life Molecular and Evergreen… effective tax rate 26.1% in the quarter.” (CFO) .
• “If [CMS] migrate to ASP, we look at that as upside… earliest [implementation] Jan 1 ’26.” (CEO/President) .
• “We expect sustained double-digit revenue growth beginning in 2026… potentially 3 brand-new launches next year… led by PYLARIFY.” (CEO) .

Q&A Highlights

• MIRROR study (PYLARIFY in intermediate favorable): enrollment continues; last patient-in expected Q4 2025; goal to influence guidelines and expand staging TAM (145k to ~175k scans by decade end) .
• Competitive dynamics: Gallium entrant noted; management sees inferior imaging vs PYLARIFY; strategic multi‑year contracts in place; F18 supply chain advantages and clinical/commercial differentiation underpin leadership (CEO/CCO) .
• PYLARIFY growth cadence: Low end guide assumes flattish 1H and modest 2H growth; high end implies growth in 1H and mid‑single to high‑single digit in back half (CFO) .
• ASP transition: CMS draft rules in July; final in Nov for Jan 1 ’26 effective date; ASP adoption viewed as positive (CEO/President) .
• PNT2002: Not expecting near-term FDA approval given dosing/intervals and suboptimal OS HR; safety/efficacy present but regulatory path uncertain (CEO) .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 EPS/Revenue was unavailable at time of request due to data access limits; as a result, we cannot quantify beats/misses vs consensus for this quarter [Values retrieved from S&P Global]*.

Where estimates may need to adjust:

• Adjusted EPS trajectory and margin mix: higher R&D mix (+100–150 bps) and lower adjusted operating margin in Q4 (38.8%) could drive modest EPS upward revisions constrained by opex mix; FCF outlook ($550–$600M) supports valuation and BD optionality .
• Product-level contributions: DEFINITY’s outsized Q4 growth from competitor supply issues may normalize in FY25; PYLARIFY net growth guided low-to-mid single digit, with ASP potential in 2026 viewed as upside .

Key Takeaways for Investors

• Core franchise resilience: PYLARIFY and DEFINITY delivered double-digit YoY growth; strategic contracts and F18 network reinforce durable leadership despite competitive noise .
• Margin/GAAP optics: Q4 GAAP loss driven by $119.1M unrealized equity loss; adjusted EPS/margins reflect ramped BD/R&D ahead of portfolio expansion—focus on adjusted metrics for operating performance .
• 2025 setup: Modest top-line growth (1%–5%) and adjusted EPS growth (3.5%–6.5%), with gross margin ~68% and R&D mix higher; strong FCF ($550M–$600M) supports M&A and buybacks .
• Policy tailwind: CMS separate payment now effective; ASP methodology could arrive in 2026 and is viewed as upside to radiodiagnostic reimbursement .
• Pipeline/catalysts: LMI/Neuraceq and Evergreen/OCTEVY add near- and mid-term revenue optionality; MK-6240 NDA (2025) and NAV-4694 NDA (2026) broaden AD diagnostics; watch transaction closings (2H25) .
• 2026 inflection: Management targets return to sustained double-digit revenue growth on new launches plus core products—monitor regulatory/timing for Neuraceq, OCTEVY, and PNT2003 .
• Trading lens: Near-term narrative hinges on reimbursement clarity (ASP path), PYLARIFY cadence vs guide, and BD execution; any updates on CMS ASP draft rule in July and deal closings are potential stock catalysts .