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Item 1A. Risk Factors

2021-02-25 compared with 2020-02-25 · 443 added, 322 removed, 412 unchanged (65% of the section changed)

You should carefully consider the following risks.

The risks and uncertainties described below are not the only ones we face.

Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business.

These risks could materially affect our business, results of operations or financial condition, cause the trading price of our outstanding common stock to decline materially or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by us or on our behalf.

See “Cautionary Note Regarding Forward-Looking Statements” and the risks of our businesses described elsewhere in this Annual Report on Form 10‑K.

Risks Related to Our Current Products and Revenues

The growth of our business is substantially dependent on our ability to continue to grow the appropriate use of DEFINITY in suboptimal echocardiograms in the face of increased segment competition from other existing echocardiography agents and potential generic competitors as a result of future patent and regulatory exclusivity expirations .

Risk Factor Summary

Our business is subject to a number of risks, including risks that may adversely affect our business, results of operations, cash flows, and prospects.

These risks are discussed more fully below and include, but are not limited to, risks related to:

Risks Related to Our Portfolio of Commercial Products

• Our ability to continue to grow the appropriate use of DEFINITY in suboptimal echocardiograms in the face of segment competition from other echocardiography ultrasound enhancing agents and potential generic competition as a result of patent and regulatory exclusivity expirations.

• The instability of the global Mo-99 supply, including periodic supply outages and limitations at the NTP Radioisotopes (“NTP”) processing facility in South Africa and the Australian Nuclear Science and Technology Organisation’s (“ANSTO”) processing facility in Australia, in each case resulting in our inability to fill some or all of the demand for our TechneLite generators on certain manufacturing days during the outage or limitation periods.

• Our dependence upon third parties for the manufacture and supply of a substantial portion of our products, raw materials and components, including DEFINITY at JHS and DEFINITY RT at SBL.

• Risks related to RELISTOR, commercialized by Bausch, and that the revenues generated for us thereby may not meet expectations.

• Risks related to the commercialization of AZEDRA, including in connection with market acceptance and reimbursement, that may cause the product not to meet revenue or operating income expectations.

• Risks associated with our DEFINITY RT formulation, approved by the FDA in November 2020, including our ability gain post-approval market acceptance and adequate reimbursement.

Risks Related to Our Portfolio of Clinical Development Candidates

• Risks associated with our lead agent in development, PyL, for which an New Drug Application (“NDA”) was accepted by the FDA and granted priority review with an assigned Prescription Drug User Fee Act (“PDUFA”) action date of May 28, 2021, including:

• Our ability to obtain FDA approval of PyL in 2021;

• Our ability to successfully gain post-approval market acceptance and adequate reimbursement for PyL;

• Our dependence upon third parties for the manufacture and supply of PyL and the timing of that manufacturing capacity becoming available;

• Our ability to compete successfully with other prostate cancer imaging agents, including those that target prostate specific membrane antigen (“PSMA”).

• Risks associated with flurpiridaz F 18, which in 2017 we out-licensed to GE Healthcare, including:

• GE Healthcare’s ability to successfully complete the Phase 3 development program, including delays in enrollment that have resulted from the COVID-19 pandemic;

• GE Healthcare’s ability to obtain FDA approval;

• GE Healthcare’s ability to gain post-approval market acceptance and adequate reimbursement.

• Risks related to the development and commercialization of our AI product offerings, including relating to assessment of disease burden targeting PSMA;

• Risks associated with 1095, including delays in enrollment that have resulted from the COVID-19 pandemic and our ability to successfully complete the Phase 2 study in mCRPC.

Risks related to the Integration of the Progenics Acquisition

• The continued integration of the Progenics Acquisition may involve unexpected costs, liabilities or delays, including the ability of our combined business to continue to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom we or Progenics do business.

• The anticipated benefits of the Progenics Acquisition may not be fully realized or may take longer to realize than we expect.

• The contractual contingent value rights (“CVRs”) we issued as part of the Progenics Acquisition may result in substantial future payments and could divert the attention of our management.

Risks Related to Reimbursement and Regulation

• The dependence of certain of our customers upon third-party healthcare payors and the uncertainty of third-party coverage and reimbursement rates.

• Uncertainties regarding the impact of U.S.

and state healthcare reform measures and proposals on our business, including measures and proposals related to reimbursement for our current and potential future products, controls over drug pricing, drug pricing transparency and generic drug competition.

• Our being subject to extensive government regulation and oversight, our ability to comply with those regulations and the costs of compliance.

Risks Related to our Business Operations and Financial Results

• The impact of the on-going global COVID-19 pandemic on our business, financial condition or prospects, including:

a decline in the volume of procedures and treatments using our products, in particular Xenon because of institutional concerns and professional society guidelines relating to the possible spread of COVID-19 to technicians and other patients given that Xenon is both inhaled and exhaled by the patient;

potential delays and disruptions to global supply chains, manufacturing activities, logistics, operations, clinical development programs, employees and contractors, the business activities of our suppliers, distributors, customers and other business partners;

and the effects on worldwide economies, financial markets, social institutions, labor markets and healthcare systems.

• Our ability to introduce new products and adapt to an evolving technology and medical practice landscape.

• Risks associated with our investment in, and construction of, additional specialized manufacturing capabilities at our North Billerica, Massachusetts facility, including our ability to bring the new capabilities online in 2021.

Risks Related to our Capital Structure

• Risks related to our outstanding indebtedness and our ability to satisfy those obligations.

• Risks related to the ownership of our common stock.

Risks Related to Our Portfolio of Commercial Products

The near-term growth of our business is substantially dependent on our ability to continue to grow the appropriate use of DEFINITY in suboptimal echocardiograms in the face of increased segment competition from other existing echocardiography agents and potential generic competitors.

The growth of our business is substantially dependent on our ability to continue to grow the appropriate use of DEFINITY in suboptimal echocardiograms.

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We estimate that DEFINITY held over 80% of the U.S.

market for contrast agents in echocardiography procedures as of December 31, 2019.

DEFINITY currently competes with Optison, a GE Healthcare produc t, Lumason, a Bracco product (known as SonoVue outside the U.S.), as well as echocardiography without contrast and other non-echocardiography agents.

We launched DEFINITY in 2001, and we continue to actively pursue patents in connection with DEFINITY, both in the U.S.

market for ultrasound enhancing agents in echocardiography procedures as of December 31, 2020.

DEFINITY currently competes with Optison, a GE Healthcare product, Lumason, a Bracco product (known as SonoVue outside the U.S.), as well as echocardiography without ultrasound enhancing agents and other non-echocardiography agents.

We launched DEFINITY in 2001, and we continue to actively pursue additional patents in connection with DEFINITY and DEFINITY RT, both in the U.S.

and internationally.

In the U.S., we have an Orange Book-listed method of use patent expiring in March 2037 and additional manufacturing patents that are not Orange Book-listed expiring in 2021, 2023 and 2037.

Outside of the U.S., while our DEFINITY patent protection and regulatory exclusivity have generally expired, we are currently prosecuting additional patents to try to obtain similar method of use and manufacturing patent protection as granted in the U.S.

We were also recently granted a composition of matter patent on the modified formulation of DEFINITY which runs through December 2035.

If the modified formulation is approved by the FDA, then this patent would be eligible to be listed in the Orange Book.

for DEFINITY we now own a total of four Orange Book-listed method of use patents, one of which expired in 2035 and three of which expire in 2037, as well as additional manufacturing patents that are not Orange Book-listed expiring in 2021, 2023 and 2037.

for DEFINITY RT, we own a total of five Orange Book-listed patents, including a composition of matter patent which expires in 2035.

Outside of the U.S., while our original DEFINITY

patent protection and regulatory exclusivity have generally expired, we are currently prosecuting additional DEFINITY and DEFINITY RT patents to obtain similar patent protection as in the U.S.

The Orange Book-listed patents include a patent on the use of VIALMIX RFID which expires in 2037;

additional VIALMIX RFID patent applications have been submitted in major markets throughout the world.

Because our Orange Book-listed composition of matter patent expired in June 2019, we may face generic DEFINITY challengers in the near to intermediate term.

Under the Hatch-Waxman Act, the FDA can approve ANDAs for generic versions of drugs before the expiration of an Orange Book-listed patent covering the innovator product if the ANDA applicant demonstrates, among other things, that (i) its generic candidate is the same as the innovator product by establishing bioequivalence and providing relevant chemistry, manufacturing and product data, and (ii) the marketing of that generic candidate does not infringe an Orange Book-listed patent or the Orange Book-listed patent is invalid.

With respect to any Orange Book-listed patent covering the innovator product that expires after the ANDA applicant intends to begin commercialization, the ANDA applicant must certify that its generic candidate will not infringe the innovator’s Orange Book-listed patents or that the Orange Book-listed patents are invalid.

The ANDA applicant must also give Notice to the innovator, which would then enable the innovator to challenge the ANDA applicant in court within 45 days of receiving such Notice.

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We can give no assurance that we would have grounds to file a patent infringement suit, that we would obtain the full 30 month stay, that we would be successful on the merits asserting that a generic candidate infringes our Orange Book-listed patent, or that we would be successful defending the validity of our Orange Book-listed patent in court or in a USPTO adversarial proceeding.

As part of our microbubble franchise strategy, (i) we are developing a modified formulation of DEFINITY, (ii) we look for other opportunities to expand our microbubble franchise, including new applications beyond echocardiography and contrast imaging generally such as our strategic arrangements with Cerevast and CarThera, and (iii) we continue to build specialized in-house manufacturing capabilities at our North Billerica facility for DEFINITY and, potentially, other products.

However, we can give no assurance that our microbubble franchise strategy will be successful or that new manufacturing capabilities, a new indication, a modified formulation or new applications will grow our microbubble franchise.

We have on-going development and technology transfer activities for our modified formulation with SBL located in South Korea but can give no assurances as to when or if those development and technology transfer activities will be completed and when we will begin to receive a supply of our modified formulation from SBL.

In addition, potential global disruptions in air transport due to COVID-19 (coronavirus) could adversely affect our ability to receive a supply of our modified formulation from SBL, which, depending upon the magnitude and duration of such disruptions, could delay the commercial launch of our modified formulation.

If we are not able to continue to (i) grow DEFINITY sales, which depend on one or more of the growth of echocardiograms, the growth in the appropriate use of contrast in suboptimal echocardiograms, and our ability to sustain and grow our leading position in the U.S.

echocardiography contrast market, or (ii) be successful with our microbubble franchise strategy, we may not be able to continue to grow the revenue and cash flow of our business, which could have a negative effect on our business, results of operations and financial condition.

As part of our microbubble franchise strategy, (i) we have developed and received FDA approval for DEFINITY RT, a modified formulation of DEFINITY, (ii) we look for other opportunities to expand our microbubble franchise, including new applications beyond echocardiography and ultrasound enhancing agent imaging generally such as our strategic arrangements with Cerevast, CarThera and Insightec, and (iii) we have completed construction of our specialized in-house manufacturing capabilities at our North Billerica facility for DEFINITY and, potentially, other sterile vial products.

However, we can give no assurance that our microbubble franchise strategy will be successful or that a modified formulation, new applications or new manufacturing capabilities will grow our microbubble franchise.

We believe DEFINITY RT will become commercially available later in 2021, although that timing cannot be assured.

If we are not able to continue to (i) grow DEFINITY and DEFINITY RT sales, which depend on one or more of the growth of echocardiograms, the growth in the appropriate use of ultrasound enhancing agents in suboptimal echocardiograms, and our ability to sustain and grow our leading position in the U.S.

echocardiography ultrasound enhancing agent market, or (ii) be successful with our microbubble franchise strategy, we may not be able to continue to grow the revenue and cash flow of our business, which could have a negative effect on our business, results of operations and financial condition.

The global supply of Mo-99 is fragile and not stable.

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When NTP was not producing, we relied on Mo-99 supply from both IRE and ANSTO to limit the impact of the NTP outages.

In the second quarter of 2019, ANSTO experienced facility issues in its existing Mo-99 processing facility which resulted in a decrease in Mo-99 available to us.

In addition, as ANSTO transitioned from its existing Mo-99 processing facility to its new Mo-99 processing facility in the second quarter of 2019, ANSTO experienced start-up and transition challenges, which also resulted in a decrease in Mo-99 available to us.

Further, starting in late June 2019 and through the date of this filing, ANSTO’s new Mo-99 processing facility has experienced unscheduled production outages, and we are now relying on IRE and NTP to limit the impact of those ANSTO outages.

Because of these various supply chain constraints, depending on reactor and processor schedules and operations, we have not been able to fill some or all of the demand for our TechneLite generators on certain manufacturing days, consequently decreasing revenue and cash flow from this product line during the outage periods as compared to prior periods.

ANSTO’s new Mo-99 processing facility, could eventually increase ANSTO’s production capacity from approximately 2,000 curies per week to 3,500 curies per week with additional committed financial and operational resources.

At full ramp-up capacity, ANSTO’s new facility could provide incremental supply to our globally diversified Mo-99 supply chain and therefore mitigate some risk among our Mo-99 suppliers, although we can give no assurances to that effect, and a prolonged disruption of service from one of our three Mo-99 processing sites or one of their main Mo-99-producing reactors could have a substantial negative effect on our business, results of operations, financial condition and cash flows.

We are also pursuing additional sources of Mo-99 from potential new producers around the world to further augment our current supply.

In 2019 and 2020, ANSTO experienced multiple facility issues that resulted in ANSTO outages and volume limitations, during which time we relied on IRE and NTP to limit the impact of those outages and limitations.

Because of the COVID-19 pandemic, we experienced challenges receiving regularly scheduled orders of Mo-99 from our global suppliers, particularly in the second quarter of 2020.

We continue to manage these various supply chain challenges, but depending on reactor and processor schedules and operations, at times we have not been able to fill some or all of the demand for our TechneLite generators on certain manufacturing days.

A prolonged disruption of service from one of our three Mo-99 processing sites or one of their main Mo-99-producing reactors could have a substantial negative effect on our business, results of operations, financial condition and cash flows.

We are also pursuing additional sources of Mo-99 from potential new producers to further augment our current supply.

In November 2014, we entered into a strategic arrangement with SHINE for the future supply of Mo-99.

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Absent a new supplier, a supply disruption relating to uranium targets or fuel could have a substantial negative effect on our business, results of operations, financial condition and cash flows.

In addition, because we source our radioisotopes almost exclusively from international suppliers, potential global disruptions in air transport due to COVID-19 (coronavirus) could adversely affect our international supply chain for radioisotopes which, depending upon the magnitude and duration of such disruptions, could have a substantial negative effect on our business, results of operations, financial condition and cash flows.

The instability of the global supply of Mo-99, including supply shortages, has resulted in increases in the cost of Mo-99, which has negatively affected our margins, and more restrictive agreements with suppliers, which could further increase our costs.

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We rely on JHS as our sole source manufacturer of DEFINITY, NEUROLITE, Cardiolite and evacuation vials.

We currently have additional on-going technology transfer activities for a modified formulation of DEFINITY with SBL.

We currently believe that if approved by the FDA, the modified formulation could become commercially available in early 2021, although that timing cannot be assured.

Currently, our DEFINITY, Neurolite, Cardiolite, evacuation vial and saline product supplies are approved for manufacture by a single manufacturer.

We rely on SBL as our sole source manufacturer of DEFINITY RT.

Based on our current estimates, we believe that we will have sufficient supply of DEFINITY, NEUROLITE, Cardiolite and evacuation vials from JHS, and sufficient supply of saline from our sole manufacturer, to meet expected demand.

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We do not yet receive Xenon resulting from LEU Mo-99 production at IRE and can give no assurances as to the timing of the availability of LEU Xenon.

We believe we will have a sufficient supply of HEU and LEU Xenon to meet our customers’ needs.

We believe we will have a sufficient supply of Xenon to meet our customers’ needs.

However, until IRE converts to LEU Xenon production or we can qualify an additional source of bulk unprocessed Xenon, we will rely on IRE as a sole source provider of HEU Xenon.

1095 is currently manufactured only at the CPDC.

Until December 2019, the CPDC was subject to an Import Alert by the FDA, which restricted the CPDC’s ability to ship products to the U.S.

Although the CPDC has since been cleared by the FDA to ship products to the U.S., there can be no guarantee that the CPDC, or any other third-party manufacturer that we may partner with in the future, will not be subject to similar restrictions in the future.

In addition to the products described above, for reasons of quality assurance or cost-effectiveness, we purchase certain components and raw materials from sole suppliers (including, for example, the lead casing for our TechneLite generators and the lipid blend material used in the processing of DEFINITY).

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In addition to our existing manufacturing relationships, we are also pursuing new manufacturing relationships to establish and secure additional or alternative suppliers for our commercial products.

We currently have additional on-going technology transfer activities for a modified formulation of DEFINITY with SBL.

We are also in the final stages of an extensive, multi-year effort to add specialized manufacturing capabilities at our North Billerica, Massachusetts facility.

This project is part of a larger corporate growth strategy to create a competitive advantage in specialized manufacturing.

We have also completed construction of our specialized in-house manufacturing capabilities at our North Billerica, Massachusetts facility.

This project should not only deliver efficiencies and supply chain redundancy for our current portfolio but also should afford us increased flexibility as we consider external opportunities.

H owever, we cannot assure you that these activities or any of our additional supply activities will be successful or that we will be able to avoid or mitigate interim supply shortages before new sources of product are fully functional and qualified.

However, we cannot assure you that these activities or any of our additional supply activities will be successful or that we will be able to avoid or mitigate interim supply shortages before new sources of product are fully functional and qualified.

In addition, we cannot assure you that our existing manufacturers or suppliers or any new manufacturers or suppliers can adequately maintain either their financial health, technical capabilities or regulatory compliance to allow continued production and supply.

A reduction or interruption in manufacturing, or an inability to secure alternative sources of raw materials or components, could eventually have a material adverse effect on our business, results of operations, financial condition and cash flows.

We rely on Bausch to develop and commercialize RELISTOR, exposing us to significant risks.

We rely on Bausch to pursue and complete further development and obtain regulatory approvals for RELISTOR worldwide and to effectively commercialize the product and manage pricing, sales and marketing practices and inventory levels in the distribution channel.

The revenue derived from royalty and milestone payments from our RELISTOR collaboration with Bausch can fluctuate significantly from period to period, and our past revenue is therefore not necessarily indicative of our future revenue.

We are and will be dependent upon Bausch and any other business partners with which we may collaborate in the future to perform and fund development, including clinical testing of RELISTOR, making related regulatory filings and manufacturing and marketing products, including for new indications and in new formulations, in their respective territories.

Revenue from the sale of RELISTOR depends entirely upon the efforts of Bausch and its sublicensees, which have significant discretion in determining the efforts and resources they apply to sales of RELISTOR.

Bausch may not be effective in obtaining approvals for new indications or formulations, marketing existing or future products or arranging for necessary sublicense or distribution relationships.

Our business relationships with Bausch and other partners may not be scientifically, clinically or commercially successful.

For example, Bausch has a variety of marketed products and its own corporate objectives, which may not be consistent with our best interests, and may change its strategic focus or pursue alternative technologies in a manner that results in reduced or delayed revenue to us.

Bausch may also have commercial and financial interests that are not fully aligned with ours in a given territory or territories, which may make it more difficult for us to fully realize the value of RELISTOR.

We may have future disagreements with Bausch, which has significantly greater financial and managerial resources which it could draw upon in the event of a dispute.

Such disagreements could lead to lengthy and expensive litigation or other dispute-resolution proceedings as well as extensive financial and operational consequences to us and have an adverse effect on our business, results of operations and financial condition.

In addition, independent actions may be taken by Bausch concerning product development, marketing strategies, manufacturing and supply issues, and rights relating to intellectual property.

We are also dependent on Bausch for compliance with regulatory requirements as they apply to RELISTOR.

The RELISTOR commercialization program continues to be subject to risk.

Future developments in the commercialization of RELISTOR may result in Bausch taking independent actions concerning product development, marketing strategies or other matters, including termination of its efforts to develop and commercialize the drug.

Under our license agreement with Bausch, Bausch is responsible for obtaining supplies of RELISTOR, including contracting with contract manufacturing organizations (“CMOs”) for supply of RELISTOR active pharmaceutical ingredient and subcutaneous and oral finished drug product.

These arrangements may not be on terms that are advantageous and will subject us to risks that the counterparties may not perform optimally in terms of quality or reliability.

Bausch’s ability to optimally commercialize either oral or subcutaneous RELISTOR in a given jurisdiction may be impacted by applicable labeling and other regulatory requirements.

If clinical trials indicate, or regulatory bodies are concerned about, actual or

possible serious problems with the safety or efficacy of RELISTOR, Bausch may stop or significantly slow further development or commercialization of RELISTOR.

In such an event, we could be faced with either further developing and commercializing the drug on our own or with one or more substitute collaborators, either of which paths would subject us to the development, commercialization, collaboration and/or financing risks.

There has been growing public concern regarding the use of opioid drugs.

Any efforts by the FDA or other governmental authorities to restrict or limit the use of opioids may negatively impact the market for RELISTOR.

In addition, there is a substantial risk that the revenue targets for receiving additional RELISTOR milestone payments will not be met.

As a result, there is no assurance that we will realize the potential revenue represented by future RELISTOR milestone payments.

Any such significant action adverse to the further development and commercialization of RELISTOR could have an adverse impact on our business.

Our AZEDRA commercialization program is subject to significant risk.

Progenics received FDA approval for AZEDRA in July 2018.

Since then, the AZEDRA commercial program has faced numerous challenges, including, among other things:

• limited success in manufacturing patient-ready doses of AZEDRA;

• a small Orphan Drug patient population;

• reluctance by some potential hospital customers to invest in the necessary facility build-out to accommodate the administration of a highly radioactive therapeutic agent (including, among other things, the construction of lead-lined rooms to accommodate inpatients following AZEDRA’s administration);

• the high cost of the drug and reimbursement.

Because of these issues, we can give no assurance that AZEDRA will become a commercial success.

After increased experience administering AZEDRA, clinicians may conclude that the complexity of administration and/or safety concerns with using a highly radioactive therapeutic agent may not justify AZEDRA’s perceived clinical benefits.

AZEDRA became eligible for new technology add-on payments (NTAP) under the Medicare Hospital Inpatient Prospective Payment System (IPPS) effective October 1, 2019.

As required by statute, NTAP eligibility under the IPPS can continue for a period of at least two years, but not more than three years.

Under the fiscal year 2021 IPPS Final Rule, published in September 2020, CMS finalized continuation of AZEDRA’s NTAP for fiscal year 2021—i.e., from October 1, 2020 through September 30, 2021.

Although there is potential for AZEDRA to receive an additional year of NTAP coverage, CMS may not decide to renew NTAP coverage for the period of October 1, 2021 through September 30, 2022.

If post-pass-through payment levels impact market acceptance for AZEDRA, the drug may not generate enough revenue to make it economically viable.

In addition, the market may react negatively to the high cost of AZEDRA, which could result in negative publicity and potentially reputational harm to us.

Further, to the extent new Federal restrictions relating to drug pricing are implemented and apply to AZEDRA, the additional pricing pressure could further limit AZEDRA’s economic viability.

If AZEDRA is determined to be challenging to administer, not economically viable or we are unable to successfully commercialize it, our business, results of operations, financial condition and cash flows could be adversely affected.

We may not be able to maintain Orphan Drug exclusivity for AZEDRA and, even if we do, that exclusivity may not prevent the FDA, from approving competing products.

Under the Orphan Drug Act, the FDA may designate a product as an Orphan Drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.

AZEDRA currently has the Orphan Drug designation in the United States.

In the United States, Orphan Drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

In addition, if a product that has Orphan Drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to Orphan Drug exclusivity, which means the FDA may not approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity.

We may not be able to maintain Orphan Drug exclusivity for AZEDRA.

In addition, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective or if we are unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Even after an Orphan Drug is approved, the FDA can

subsequently approve the same drug with the same active moiety for the same condition if the FDA concludes that the later drug is safer, more effective or makes a major contribution to patient care.

A loss of the Orphan Drug exclusivity for AZEDRA may have an adverse impact on our ability to adequately commercialize AZEDRA.

Our just-in-time manufacturing of radiopharmaceutical products relies on the timely receipt of radioactive raw materials and the timely shipment of finished goods, and any disruption of our supply or distribution networks could have a negative effect on our business.

Because a number of our radiopharmaceutical products, including our TechneLite generators, rely on radioisotopes with limited half-lives, we must manufacture, finish and distribute these products on a just-in-time basis, because the underlying radioisotope is in a constant state of radio decay.

Because a number of our radiopharmaceutical products, including our TechneLite generators and AZEDRA, rely on radioisotopes with limited half-lives, we must manufacture, finish and distribute these products on a just-in-time basis, because the underlying radioisotope is in a constant state of radio decay.

For example, if we receive Mo-99 in the morning of a manufacturing day for TechneLite generators, then we will generally ship finished generators to customers by the end of that same business day.

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Any delay in us receiving radioisotopes from suppliers or being able to have finished products delivered to customers because of weather or other unforeseen transportation issues could have a negative effect on our business, results of operations, financial condition and cash flows.

Challenges with product quality or product performance, including defects, caused by us or our suppliers could result in a decrease in customers and revenues, unexpected expenses and loss of market share .

The manufacture of our products is highly exacting and complex and must meet stringent quality requirements, due in part to strict regulatory requirements, including the FDA’s cGMPs.

Problems may be identified or arise during manufacturing quality review, packaging or shipment for a variety of reasons including equipment malfunction, failure to follow specific protocols and procedures, defective raw materials and environmental factors.

Additionally, manufacturing flaws, component failures, design defects, off-label uses or inadequate disclosure of product-related information could result in an unsafe condition or the injury or death of a patient.

Those events could lead to a recall of, or issuance of a safety alert relating to, our products.

We also may undertake voluntarily to recall products or temporarily shut down production lines based on internal safety and quality monitoring and testing data.

Quality, regulatory and recall challenges could cause us to incur significant costs, including costs to replace products, lost revenue, damage to customer relationships, time and expense spent investigating the cause and costs of any possible settlements or judgments related thereto and potentially cause similar losses with respect to other products.

These challenges could also divert the attention of our management and employees from operational, commercial or other business efforts.

If we deliver products with defects, or if there is a perception that our products or the processes related to our products contain errors or defects, we could incur additional recall and product liability costs, and our credibility and the market acceptance and sales of our products could be materially adversely affected.

Due to the strong name recognition of our brands, an adverse event involving one of our products could result in reduced market acceptance and demand for all products within that brand, and could harm our reputation and our ability to market our products in the future.

In some circumstances, adverse events arising from or associated with the design, manufacture or marketing of our products could result in the suspension or delay of regulatory reviews of our applications for new product approvals.

These challenges could have a material adverse effect on our business, results of operations, financial condition and cash flows.

In the U.S., we are heavily dependent on a few large customers and group purchasing organization arrangements to generate a majority of our revenues for our nuclear medical imaging products and our other products.

In the U.S., we are heavily dependent on a few large customers to generate a majority of our revenues for our nuclear medical imaging products.

Outside of the U.S., we rely primarily on distributors to generate a substantial portion of our revenue.

In the U.S., we have historically relied on a limited number of radiopharmacy customers, primarily GE Healthcare, Cardinal, UPPI, Jubilant Radiopharma and PharmaLogic, to distribute our current largest volume nuclear imaging products.

In the U.S., we have historically relied on a limited number of radiopharmacy customers, primarily Cardinal, RLS, UPPI, Jubilant Radiopharma and PharmaLogic, to distribute our current largest volume nuclear imaging products.

Among the existing radiopharmacies in the U.S., continued consolidations, divestitures and reorganizations may have a negative effect on our business, results of operations, financial condition and cash flows.

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For all of our medical imaging products, we continue to experience significant pricing pressures from our competitors, large customers and group purchasing organizations, and any significant, additional pricing pressures could lead to a reduction in revenue which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Outside of the U.S., Canada and Puerto Rico, we have no sales force and, consequently, rely on third-party distributors, either on a country-by-country basis or on a multi-country, regional basis, to market, sell and distribute our products.

Outside of the U.S.

and Canada, we have no sales force and, consequently, rely on third-party distributors, either on a country-by-country basis or on a multi-country, regional basis, to market, sell and distribute our products.

In Canada, we maintain our own direct sales force to sell DEFINITY.

We formerly owned or operated radiopharmacies and we now sell radiopharmaceutical products under the Isologic Supply Agreement.

In Australia, we also formerly owned or operated radiopharmacies, and we now sell DEFINITY and radiopharmaceutical products under the GMS Supply Agreement.

In certain circumstances, distributors may also sell competing products to our own or products for competing diagnostic modalities and may have incentives to shift sales towards those competing products.

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We face significant competition in our business and may not be able to compete effectively.

The market for diagnostic medical imaging agents is highly competitive and continually evolving.

Our principal competitors in existing diagnostic modalities include large, global companies with substantial financial, manufacturing, sales and marketing and logistics resources that are more diversified than ours, such as GE Healthcare, Bracco, Curium and Jubilant Life Sciences, as well as other competitors, including NorthStar Medical Radioisotopes.

We cannot anticipate their actions in the same or competing diagnostic modalities, such as significant price reductions on products that are comparable to our own, development or introduction of new products that are more cost-effective or have superior performance than our current products, the introduction of generic versions when our proprietary products lose their patent protection or the new entry into a generic market in which we are already a participant.

In addition, distributors of our products could attempt to shift end-users to competing diagnostic modalities and products.

The markets for our products are highly competitive and continually evolving.

Our principal competitors for our current commercial products and leading clinical development candidates include large, global companies that are more diversified than we are and that have substantial financial, manufacturing, sales and marketing, distribution and other resources:

• For DEFINITY, our competitors currently include GE Healthcare and Bracco.

• For a number of our radiopharmaceutical commercial products, our competitors currently include Curium, GE Healthcare, Bracco and Jubilant Life Sciences, an affiliate of JHS and Jubilant Radiopharma, as well as other competitors, including NorthStar Medical Radioisotopes.

• For PyL, if and when approved by the FDA, we will compete with Bracco’s Axumin (fluciclovine F 18).

We also may face competition from Telix Pharmaceuticals Limited, which also has a PSMA-targeted prostate cancer PET diagnostic imaging agent currently under review with the FDA.

• For RELISTOR, our principal competitors include Nektar Therapeutics, in collaboration with AstraZeneca PLC;

Cubist Pharmaceuticals, a subsidiary of Merck & Co., Inc.;

Mallinckrodt plc, in collaboration with Takeda Pharmaceutical Company Limited;

and BioDelivery Sciences International, Inc.;

together with other prescription, as well as over-the-counter, laxatives used as first line therapy for OIC.

• For AZEDRA, there are currently no approved anticancer treatments in the U.S.

for malignant, recurrent, and/or unresectable pheochromocytoma and paraganglioma.

• For 1095, our principal competitors in the field of radiopharmaceutical therapeutics for mCRPC may include Novartis AG;

Point Biopharma;

Telix Pharmaceuticals Limited;

and Bayer HealthCare Pharmaceuticals Inc., each of which have product candidates in development.

We cannot anticipate the actions of our current or future competitors in the same or competing diagnostic modalities, such as significant price reductions on products that are comparable to our own, development of new products that are more cost-effective or have superior performance than our current products or the introduction of generic versions after our proprietary products lose their patent protection.

In addition, distributors of our products could attempt to shift end-users to competing diagnostic modalities and products, or bundle the sale of a portfolio of products, in either case to the detriment of our specific products.

Our current or future products could be rendered obsolete or uneconomical as a result of these activities.

Our failure to compete effectively could cause us to lose market share to our competitors and have a material adverse effect on our business, results of operations, financial condition and cash flows.

Further, the radiopharmaceutical industry continues to evolve strategically, with several market participants either recently sold or for sale.

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We cannot predict what impact new owners and new operators may have on the strategic decision-making of our competitors, customers and suppliers, and such decision-making could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Ultrasound enhancing agents may cause side effects which could limit our ability to sell DEFINITY.

DEFINITY is an ultrasound enhancing agent based on perflutren lipid microspheres.

In 2007, the FDA received reports of deaths and serious cardiopulmonary reactions following the administration of ultrasound micro-bubble enhancing agents used in echocardiography.

Four of the 11 reported deaths were caused by cardiac arrest occurring either during or within 30 minutes following the administration of the ultrasound enhancing agent;

most of the serious but non-fatal reactions also occurred in this time frame.

As a result, in October 2007, the FDA requested that we and GE Healthcare, which distributes Optison, a competitor to DEFINITY, add a boxed warning to these products emphasizing the risk for serious cardiopulmonary reactions and that the use of these products was contraindicated in certain patients.

In a strong reaction by the cardiology community to the FDA’s new position, a letter was sent to the FDA, signed by 161 doctors, stating that the benefit of these ultrasound enhancing agents outweighed the risks and urging that the boxed warning be removed.

In May 2008, the FDA substantially modified the boxed warning.

On May 2, 2011, the FDA held an advisory committee meeting to consider the status of ultrasound micro-bubble contrast agents and the boxed warning.

In October 2011, we received FDA approval of further modifications to the DEFINITY label, including:

further relaxing the boxed warning;

eliminating the sentence in the Indication and Use section “The safety and efficacy of DEFINITY with exercise stress or pharmacologic stress testing have not been established” (previously added in October 2007 in connection with the imposition of the box warning);

and including summary data from the post-approval CaRES (Contrast echocardiography Registry for Safety Surveillance) safety registry and the post-approval pulmonary hypertension study.

Further, in January 2017, the FDA approved an additional modification to the DEFINITY label, removing the contraindication statement related to use in patients with a known or suspected cardiac shunt.

Bracco’s ultrasound enhancing agent, Lumason, has substantially similar safety labeling as DEFINITY and Optison.

If additional safety issues arise (not only with DEFINITY but also potentially with Optison and Lumason), this may result in unfavorable changes in labeling or result in restrictions on the approval of our product, including removal of the product from the market.

Lingering safety concerns about DEFINITY among some healthcare providers or future unanticipated side effects or safety concerns associated with DEFINITY could limit expanded use of DEFINITY and have a material adverse effect on the unit sales of this product and our financial condition and results of operations.

Risks Related to our Portfolio of Clinical Development Candidates

The process of developing new drugs and obtaining regulatory approval is complex, time-consuming and costly, and the outcome is not certain.

We currently have two active clinical development programs in the U.S.

– PyL and 1095.

We also have a number of strategic partnerships relating to obtaining additional indications for existing commercial products or regulatory approval for clinical development candidates.

To obtain regulatory approval for these agents in the indications being pursued, we must conduct extensive human tests, which are referred to as clinical trials, as well as meet other rigorous regulatory requirements, as further described in Part I, Item 1.

“Business—Regulatory Matters.” Satisfaction of all regulatory requirements typically takes many years and requires the expenditure of substantial resources.

A number of other factors may cause significant delays in the completion of our clinical trials, including unexpected delays in the initiation of clinical sites, slower than projected enrollment, competition with ongoing clinical trials and scheduling conflicts with participating clinicians, regulatory requirements, limits on manufacturing capacity and failure of an agent to meet required standards for administration to humans.

In addition, it may take longer than we project to achieve study endpoints and complete data analysis for a clinical trial or we may decide to slow down the enrollment in a trial in order to conserve financial resources.

Our agents in development are also subject to the risks of failure inherent in drug development and testing.

The results of preliminary studies do not necessarily predict clinical success, and larger and later stage clinical trials may not produce the same results as earlier stage trials.

Sometimes, agents that have shown promising results in early clinical trials have subsequently suffered significant setbacks in later clinical trials.

Agents in later stage clinical trials may fail to show desired safety and efficacy traits, despite having progressed through initial clinical testing.

In addition, the data collected from clinical trials of our agents in development may not be sufficient to support regulatory approval, or regulators could interpret the data differently and less favorably than we do.

Further, the design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced.

Clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts.

Regulatory authorities may require us or our partners to conduct additional clinical testing, in which case we would have to expend additional time and resources.

The approval process may also be delayed by changes in government regulation, future legislation or administrative action or changes in regulatory policy that occur prior to or during regulatory review.

The failure to provide clinical and preclinical data that are adequate to demonstrate to the satisfaction of the regulatory authorities that our agents in development are safe and effective for their proposed use will delay or preclude approval and will prevent us from marketing those products.

We are not permitted to market our agents in development in the U.S.

or other countries until we have received requisite regulatory approvals.

For example, securing FDA approval for a new drug requires the submission of an NDA to the FDA for our agents in development.

The NDA must include extensive nonclinical and clinical data and supporting information to establish the agent’s safety and effectiveness for each indication.

The NDA must also include significant information regarding the chemistry, manufacturing and controls for the product.

The FDA review process can take many years to complete, and approval is never guaranteed.

If a product is approved, the FDA may limit the indications for which the product may be marketed, require extensive warnings on the product labeling, impose restricted distribution programs, require expedited reporting of certain adverse events, or require costly ongoing requirements for post-marketing clinical studies and surveillance or other risk management measures to monitor the safety or efficacy of the agent.

Markets outside of the U.S.

also have requirements for approval of agents with which we must comply prior to marketing.

Obtaining regulatory approval for marketing of an agent in one country does not ensure we will be able to obtain regulatory approval in other countries, but a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in other countries.

Also, any regulatory approval of any of our products or agents in development, once obtained, may be withdrawn.

Approvals might not be granted on a timely basis, if at all.

Our lead agent in development, PyL, faces risks relating to regulatory approval.

Our lead agent in development is PyL TM (18F-DCFPyL), our PSMA-targeted PET imaging agent for prostate cancer.

We filed an NDA for PyL in September 2020.

The NDA was accepted by the FDA in December 2020, granted priority review, and assigned a PDUFA action date of May 28, 2021.

The PyL NDA is supported by data from two pivotal studies (OSPREY and CONDOR), designed to establish the safety and diagnostic performance of PyL imaging across the disease continuum of prostate cancer.

Results from OSPREY Cohort A demonstrated improvement in specificity and positive predictive value of PyL PET imaging over conventional imaging in men with high risk prostate cancer but did not meet one of the study’s primary endpoints for sensitivity.

OSPREY Cohort B and CONDOR studied men with prostate cancer in various disease states, including biochemical recurrent prostate cancer, hormone sensitive prostate cancer, non-metastatic castrate resistant prostate cancer, and metastatic castrate resistant prostate cancer.

OSPREY Cohort B demonstrated sensitivity in detecting metastatic lesions, while CONDOR, in patients with biochemical recurrent prostate cancer and non-informative baseline findings, demonstrated a high correct localization rate and high detection rate, including patients with low PSA values.

In the CONDOR study, 63.9% of patients had a change in intended disease management plans due to the PyL imaging results.

While we believe the results from these two studies, taken as a whole, demonstrate the ability of PyL to reliably detect and localize disease and could enable more appropriate patient management, if the FDA determines that these study results are not sufficient or convincing, we may not be able to obtain FDA approval to commercialize PyL in the U.S.

in 2021 and may have to perform additional clinical studies with PyL.

If that were to result, our business, results of operations, financial condition and cash flows could be adversely affected.

We can give no assurance that GE Healthcare will be successful with the further clinical development of flurpiridaz F 18.

In May 2015, we announced complete results from the first of two planned Phase 3 clinical trials for flurpiridaz F 18.

Although the development candidate appeared to be well-tolerated from a safety perspective and outperformed SPECT in a highly statistically significant manner in the co-primary endpoint of sensitivity and in the secondary endpoints of image quality and diagnostic certainty, flurpiridaz F 18 did not meet its other co-primary endpoint of non-inferiority for identifying subjects without disease.

In April 2017, we entered into the License Agreement with GE Healthcare for the continued Phase 3 development and worldwide commercialization of flurpiridaz F 18.

Under the License Agreement, GE Healthcare will, among other things, complete the worldwide development of flurpiridaz F 18 by conducting a second Phase 3 trial and pursue worldwide regulatory approvals.

We cannot assure any particular outcome from GE Healthcare’s continued Phase 3 development of the agent or from regulatory review of either our or their Phase 3 study of the agent, that any of the data generated in either our or their sponsored Phase 3 study will be sufficient to support an NDA approval, that GE Healthcare will only have to conduct the one additional Phase 3 clinical study prior to filing an NDA, or that flurpiridaz F 18 will ever be approved as a PET MPI imaging agent by the FDA.

Any failure or significant delay in completing clinical

trials for our product candidates or in receiving regulatory approval for the sale of our product candidates may harm our business and delay or prevent us from being able to generate additional future revenue from product sales.

Even if clinical development candidates receive regulatory approval, we can give no assurance that they can be successfully commercialized.

Even if our clinical development candidates proceed through their clinical trials and ultimately receive regulatory approval, there is no guarantee that an approved product can be manufactured in commercial quantities at a reasonable cost or that such a product will be successfully marketed or distributed.

The manufacturing, marketing and distribution of radiopharmaceuticals is complex.

Rather than being manufactured at our own facilities, both PyL and flurpiridaz F 18 will require the creation of a field-based network of specialized PET manufacturing facilities, or PMFs, with radioisotope-producing cyclotrons.

The radioisotope used in both PyL and flurpiridaz F 18 is fluorine-18, or F 18, which has a 110 minute half-life, requiring that these products be manufactured and distributed rapidly to end-users.

After being made on a cyclotron at a PMF, the F 18 is then combined with certain chemical ingredients in specially designed chemistry synthesis boxes to manufacture either PyL or flurpiridaz F 18.

PyL or flurpiridaz F 18 is next transferred to a radiopharmacist who prepares and dispenses patient-specific doses from the final product.

Because each of the PMFs manufacturing these products will be deemed by the FDA to be a separate manufacturing site, each will have to be approved by the FDA, and we can give no assurance that the FDA will do this in accordance with the planned roll-out schedule for the products.

In our PyL NDA, we included a limited number of PMFs for approval, and we intend to add in a sequenced manner, using FDA site approval processes, additional PMFs to our manufacturing network in the months following FDA product approval with the goal of having broad availability for the U.S.

population within six months of product approval.

If we are delayed in our PyL commercial launch by FDA approval of our manufacturing sites or other challenges, our business, results of operations, financial condition and cash flows could be adversely affected.

In addition, in the case of both PyL and flurpiridaz F 18, obtaining adequate reimbursement will be critical, including not only coverage from Medicare, Medicaid, other government payors as well as private payors but also appropriate payment levels which adequately cover the substantially higher manufacturing and distribution costs associated with an F 18-based agent in comparison to a Tc-99m-based agent.

We can give no assurance, even if PyL and flurpiridaz F 18 obtain regulatory approval, that adequate reimbursement can be secured to allow the approved agents to become successfully commercialized.

We have been and expect to continue to be dependent on partners for the development of certain product candidates, which expose us to the risk of reliance on these partners.

In connection with our on-going development activities, we currently depend, and expect to continue to depend, on numerous collaborators.

For example, in addition to our collaboration with GE Healthcare on flurpiridaz F 18, we have collaborations with Bayer to develop and commercialize products using our PSMA antibody technology, with Curium for the development and commercialization of PyL in Europe, and with ROTOP for the development and commercialization of 1404 in Europe.

In addition, certain clinical trials for our product candidates may be conducted by government-sponsored agencies, and consequently will be dependent on governmental participation and funding.

These arrangements expose us to the same considerations we face when contracting with third parties for our own trials.

If any of our collaborators breach or terminate its agreement with us or otherwise fail to conduct successfully and in a timely manner the collaborative activities for which they are responsible, the preclinical or clinical development or commercialization of the affected product candidate or research program could be delayed or terminated.

We generally do not control the amount and timing of resources that our collaborators devote to our programs or product candidates.

We also do not know whether current or future collaboration partners, if any, might pursue alternative technologies or develop alternative products either on their own or in collaboration with others, including our competitors, as a means for developing treatments for the diseases or conditions targeted by our collaborative arrangements.

Our collaborators are also subject to similar development, regulatory, manufacturing, cyber-security and competitive risks as us, which may further impede their ability to successfully perform the collaborative activities for which they are responsible.

Setbacks of these types to our collaborators could have a material adverse effect on our business, results of operations and financial condition.

We depend on licenses from third parties for our rights to develop and commercialize certain product candidates.

If we fail to achieve milestone requirements or to satisfy other conditions, we may lose those rights under those license agreements, and our business, results of operations and financial condition could be adversely affected.

Many of our products or product candidates incorporate rights licensed by third parties -- for example, we license patent rights on RELISTOR from Wyeth LLC and on PyL from JHU.

We could lose the rights to develop or commercialize these products and product candidates if the related license agreement is terminated due to a breach by us or otherwise.

In addition, we are required to make substantial cash payments, achieve milestones and satisfy other conditions, including filing for and obtaining marketing approvals and introducing products, to maintain rights under our license agreements.

Due to the nature of these agreements and the uncertainties of development, we may not be able to achieve milestones or satisfy conditions to which we have contractually

committed, and as a result may be unable to maintain our rights under these licenses.

If we do not comply with our license agreements, the licensors may terminate them, which could result in our losing our rights to, and therefore being unable to commercialize, related products.

Risks Related to the Integration of the Progenics Acquisition

We may not be able to successfully integrate the Progenics business into our business and realize the anticipated benefits of the Progenics Acquisition.

The ultimate success of the Progenics Acquisition will depend on our ability to successfully combine the business of Progenics with our own and realize the anticipated benefits, including synergies, cost savings, innovation and operational efficiencies and revenue growth from the combination.

If we are unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, and the value of our common stock may suffer.

The Progenics Acquisition involves the continued integration of Progenics’ business into our existing business, which has been a complex, costly and time-consuming process.

The on-going integration may result in material challenges, including, without limitation:

• The diversion of management’s attention from ongoing business concerns and performance shortfalls at one or both of the companies;

• Managing a larger combined company;

• Maintaining employee morale and attracting, motivating and retaining management personnel and other key employees;

• Unanticipated risks to our integration plan including in connection with timing, talent, and the potential need for additional resources;

• New or previously unidentified manufacturing, regulatory, or research and development issues in the Progenics business;

• Retaining existing business and operational relationships and attracting new business and operational relationships;

• Unanticipated changes in federal or state laws or regulations;

• Unforeseen expenses or delays associated with the Progenics Acquisition.

Many of these factors are outside of our control and any one of them could result in delays, increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which could materially affect our financial position, results of operations and cash flows.

Our future results may be adversely impacted if we do not effectively manage our expanded operations following the completion of the Progenics Acquisition.

Our combined business is now significantly larger and more complex than our business was immediately prior to the consummation of the Progenics Acquisition.

Our ability to successfully manage this combined business will depend upon our ability to continue to integrate the two separate businesses and manage the combined business with its increased scale and scope, and increased costs and complexity.

We may not be successful or may not realize the expected operating efficiencies, cost savings and other benefits previously disclosed.

The CVRs we issued as part of the Progenics Acquisition may result in substantial future payments and could divert the attention of our management.

As part of the consideration for the Progenics Acquisition, we issued CVRs to the stockholders of Progenics and holders of in-the-money Progenics equity awards entitling them to future cash payments of 40% of PyL net sales over $100.0 million in 2022 and over $150.0 million in 2023.

These payments could be substantial and could adversely impact our liquidity.

In addition, we are obligated to exercise a level of effort, expertise and resources consistent with those normally used in a medical diagnostics business similar to our size and resources with respect to developing, seeking regulatory approval for and commercializing a product of similar market potential at a similar stage in its development or product life to PyL.

We are also required to produce net sales statements for PyL that may be reviewed and challenged by CVR holders, with any disagreement to be resolved by an independent accountant.

These requirements could divert management time and resources and result in additional costs.

The financial analyses and forecasts considered by us and Progenics and their respective financial advisors in connection with the Progenics Acquisition may not be realized, which may adversely affect the market price of our common stock in the future.

In performing their financial analyses and rendering their opinions related to the Progenics Acquisition, each of the respective financial advisors to us and Progenics relied on, among other things, internal stand-alone financial analyses and forecasts as separately provided by us and Progenics.

These analyses and forecasts were prepared by, or as directed by, our management or the management of Progenics, as applicable.

None of these analyses or forecasts were prepared with a view towards public disclosure or compliance with the published guidelines of the SEC or U.S.

Generally Accepted Accounting Principles.

These projections are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them.

These projections are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond our control and the control of Progenics.

We can give no assurance that our current or future financial condition or results of operations will be consistent with what was set forth in such analyses and forecasts, which could have an adverse impact on the market price of our common stock or our current or future financial position.

We expect to continue to incur substantial expenses related to the integration of the Progenics business with our business.

We have incurred, and expect to continue to incur, substantial expenses in connection with the integration of the Progenics business with our own.

There are a large number of processes, policies, procedures, operations, technologies and systems that have been, or must be, integrated, including purchasing, accounting and finance, sales, payroll, pricing, revenue management, marketing and benefits.

The substantial majority of these costs have been, and will continue to be, non-recurring expenses related to the Progenics Acquisition, facilities and systems consolidation costs.

We may also incur additional costs to maintain employee morale and to attract, motivate or retain management personnel or key employees.

Risks Related to Reimbursement and Regulation

Certain of our customers are highly dependent on payments from third party payors, including government sponsored programs, particularly Medicare, in the U.S.

Many of our customers are highly dependent on payments from third party payors, including government sponsored programs, particularly Medicare, in the U.S.

and other countries in which we operate, and reductions in third party coverage and reimbursement rates for our products (or services provided with our products) could adversely affect our business and results of operations.

A substantial portion of our revenue depends, in part, on the extent to which the costs of our products purchased by our customers (or services provided with our products) are reimbursed by third party payors, including Medicare, Medicaid, other U.S.

A substantial portion of our revenue depends on the extent to which the costs of our products purchased by our customers (or services provided with our products) are reimbursed by third party payors, including Medicare, Medicaid, other U.S.

government sponsored programs, non-U.S.

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The NCD permits the coverage of such radiopharmaceuticals only when certain criteria are met.

Our PET pipeline product flurpiridaz F 18, if approved, may become subject to this NCD, and may not be covered at all.

Our partnered PET pipeline product flurpiridaz F 18, if approved, may become subject to this NCD, and may not be covered at all.

If Medicare and other third party payors do not provide adequate reimbursement for the costs of our products (or services provided using our products), deny the coverage of the products (or those services), or reduce current levels of reimbursement, healthcare professionals may not prescribe our products and providers and suppliers may not purchase our products.

In addition, demand for new products may be limited unless we obtain favorable reimbursement policies (including coverage, coding and payment) from governmental and private third party payors at the time of the product’s introduction, which will depend, in part, on our ability to demonstrate that a new agent has a positive impact on clinical outcomes.

In addition, demand for new products may be limited unless we obtain favorable reimbursement (including coverage, coding and payment) from governmental and private third party payors at the time of the product’s introduction, which will depend, in part, on our ability to demonstrate that a new agent has a positive impact on clinical outcomes.

Third party payors continually review their coverage policies for existing and new products and procedures and can deny coverage for procedures that include the use of our products or revise payment policies such that payments do not adequately cover the cost of our products.

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• Reducing payments for certain imaging procedures when performed together with other imaging procedures in the same family of procedures on the same patient on the same day in the physician office and free-standing imaging facility setting;

Making significant revisions to the methodology for determining the practice expense component of the Medicare payment applicable to the physician office and free-standing imaging facility setting which results in a reduction in payment;

Revising payment policies and reducing payment amounts for imaging procedures performed in the hospital outpatient setting;

• Making significant revisions to the methodology for determining the practice expense component of the Medicare payment applicable to the physician office and free-standing imaging facility settings which results in a reduction in payment;

• Revising payment policies and reducing payment amounts for imaging procedures performed in the hospital outpatient settings;

• Reducing prospective payment levels for applicable diagnosis-related groups in the hospital inpatient setting.

In the physician office and free-standing imaging facility setting, services provided using our products are reimbursed under the Medicare physician fee schedule.

Since 2015, payments under the Medicare physician fee schedule have been subject to specific annual updates:

a 0.5% update through 2018;

a 0.25% update in 2019;

no updates from 2020 to 2025;

and, beginning in 2026, differential updates based on whether the physician participates in advanced alternative payment models (with 0.75% updates for qualifying participants and 0.25% updates for non-qualifying participants) (which may be subject to budget neutrality adjustments).

Since 2019, fee schedule payments have been adjusted for certain physicians based on their performance under a consolidated measurement system (that measures performance with respect to quality, resource utilization, meaningful use of certified electronic health records technology, and clinical practice improvement activities).

Payment rates under the Medicare physician fee schedule are regularly subject to updates to effectuate various policy goals.

For example, since 2019, fee schedule payments have been adjusted for certain physicians based on their performance under a consolidated measurement system (that measures performance with respect to quality, resource utilization, meaningful use of certified electronic health records technology, and clinical practice improvement activities).

From 2019 through payment year 2024, physicians may be eligible for a bonus based on the use of certain alternative payment models designated as “advanced” by CMS.

The ongoing and future impact of these changes cannot be determined at this time.

Medicare physician schedule payment rates may also be impacted by other Congressional policy priorities (e.g., annual updates ranging from 0% to 0.75% under the Medicare Access and CHIP Reauthorization Act of 2015, and a 3.75% increase in CY 2021 (intended to offset a portion of the widespread reductions in the Relative Value Units (RVUs) underlying rate calculations)

We believe that Medicare changes to payment policies for imaging procedures applicable to non-hospital settings will continue to result in certain physician practices ceasing to provide these services and a further shifting of where certain medical imaging procedures are performed, from the physician office and free-standing imaging facility settings to the hospital outpatient setting.

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We also expect increased regulation and oversight of advanced diagnostic testing in which our products are used.

Beginning January 1, 2020, a professional who is ordering advanced diagnostic imaging services (which include MRI, CT, nuclear medicine (including PET) and other advanced diagnostic imaging services that the Secretary of HHS may specify) must consult a qualified clinical decision support mechanism, as identified by HHS, to determine whether the ordered service adheres to specified appropriate use criteria (“AUC”).

Beginning January 1, 2020, a professional who is ordering advanced diagnostic imaging services (which include MRI, CT, nuclear medicine (including PET) and other advanced diagnostic imaging services that the Secretary of HHS may specify, but not currently including echocardiography) must consult a qualified clinical decision support mechanism, as identified by HHS, to determine whether the ordered service adheres to specified appropriate use criteria (“AUC”).

Reimbursement penalties will apply in 2022 if this requirement is not met (and documented on the claim).

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Subsequently, the Medicare Access and CHIP Reauthorization Act of 2015 significantly revised the methodology for updating the Medicare physician fee schedule.

And more recently, Congress enacted legislation in 2017 that eliminated the Healthcare Reform Act’s “individual mandate” beginning in 2019 Congress continues to consider other healthcare reform legislation.

And more recently, Congress enacted legislation in 2017 that effectively eliminated the Healthcare Reform Act’s “individual mandate” beginning in 2019 Congress continues to consider other healthcare reform legislation.

There is no assurance that the Healthcare Reform Act, as currently enacted or as amended in the future, will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative, judicial or administrative changes relating to healthcare reform will affect our business.

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The Budget Control Act of 2011 and subsequent Congressional actions includes provisions to reduce the federal deficit.

These provisions have resulted in the imposition of 2% reductions in Medicare payments to providers, which went into effect on April 1, 2013 and will remain in effect through 2029.

These provisions have resulted in the imposition of 2% reductions in Medicare payments to providers, which went into effect on April 1, 2013 and will remain in effect through fiscal year 2030.

The CARES Act temporarily suspended the 2% payment adjustment for dates of service from May 1 through December 31, 2020, and the Consolidated Appropriations Act 2021 subsequently extended this suspension until March 31, 2021.

Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us, as part of any broader deficit reduction effort or legislative replacement to the Budget Control Act, could have an adverse impact on our business, results of operations, financial condition and cash flows.

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In the U.S., the FDA regulates, among other things, the pre-clinical testing, clinical trials, manufacturing, safety, efficacy, potency, labeling, storage, record keeping, quality systems, advertising, promotion, sale, distribution, and import and export of drug products.

We are required to register our business for permits and/or licenses with, and comply with the stringent requirements of the FDA, the NRC, the HHS, Health Canada, the EMA, the MHRA, the CFDA, state and provincial boards of pharmacy, state and provincial health departments and other federal, state and provincial agencies.

We are required to register our business for permits and/or licenses with, and comply with the stringent requirements of the FDA, the NRC, the HHS, Health Canada, the EMA, the MHRA, the NMPA, state and provincial boards of pharmacy, state and provincial health departments and other federal, state and provincial agencies.

law, for example, we are required to report certain adverse events and production problems, if any, to the FDA.

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Such a limitation or suspension could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We are also subject to laws and regulations that govern financial and other arrangements between pharmaceutical manufacturers and healthcare providers, including federal and state anti-kickback statutes, federal and state false claims laws and regulations and other fraud and abuse laws and regulations.

We must offer discounted pricing or rebates on purchases of pharmaceutical products under various federal and state healthcare programs, such as the Medicaid drug rebate program, the “federal ceiling price” drug pricing program, the 340B drug pricing program and the Medicare Part D Program.

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If our operations are found to be in violation of these laws or any other government regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, imprisonment, the curtailment or restructuring of our operations, or exclusion from state and federal healthcare programs including Medicare and Medicaid, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We no longer qualify as an “emerging growth company” as of December 31, 2019, and as a result, we will have to comply with increased disclosure and compliance requirements.

Based on the market value of our common stock held by non-affiliates which exceeded $700 million as of the last business day of June 2019, we no longer qualify as an “emerging growth company” but will instead be deemed to be a “large accelerated filer” as of December 31, 2019.

As a large accelerated filer, we will be subject to certain disclosure and compliance requirements that apply to other public companies but that did not previously apply to us due to our status as an emerging growth company.

These requirements include, but are not limited to:

The requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002;

Compliance with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;

The requirement that we provide full and more detailed disclosures regarding executive compensation;

The requirement that we hold a non-binding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously approved.

We expect that the loss of emerging growth company status and compliance with the additional requirements of being a large accelerated filer will increase our legal, accounting and financial compliance costs and costs associated with investor relations activities, and cause management and other personnel to divert attention from operational and other business matters to devote substantial time to public company reporting requirements.

In addition, if we are not able to comply with changing requirements in a timely manner, the market price of our stock could decline and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities, which would require additional financial and management resources.

As of the end of fiscal 2019, we are required to implement additional procedures and practices related to internal control over financial reporting, and we may identify deficiencies that we may not be able to remediate in time to meet the necessary deadline.

Starting as of the end of fiscal 2019, we are required to maintain additional procedures and practices related to internal control over financial reporting, and we may identify deficiencies that we may not be able to remediate in time to meet the necessary deadline.

Pursuant to Section 404 of the Sarbanes-Oxley Act, our management is required to report upon the effectiveness of our internal control over financial reporting.

Since we are deemed a large accelerated filer, our independent registered public accounting firm is required to attest to the effectiveness of our internal controls on an annual basis beginning with our Annual Report on Form 10-K for the year ended December 31, 2019.

The rules governing the standards that must be met for our management and independent

registered public accounting firm to assess our internal controls are complex and require significant documentation, testing and possible remediation of our existing controls and the incurrence of significant additional expenditures.

In connection with our evaluation of our internal controls, we may need to upgrade systems, including information technology;

implement additional financial and management controls, reporting systems, and procedures;

and hire additional accounting and finance staff.

Since we are no longer an “emerging growth company” and are now a “large accelerated filer”, our independent registered public accounting firm is required to attest to the effectiveness of our internal controls on an annual basis, starting with our Annual Report on Form 10-K for the year ended December 31, 2019.

The rules governing the standards that must be met for our management and independent registered public accounting firm to assess our internal controls are complex and require significant documentation, testing and possible remediation of our existing controls and the incurrence of significant additional expenditures.

Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations.

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Further, any delay in compliance with the auditor attestation provisions of Section 404 could subject us to a variety of administrative sanctions, including ineligibility for short-form resale registration, action by the SEC and the suspension or delisting of our common stock, which could reduce the trading price of our common stock and could harm our business.

Risks Related to Safety

Ultrasound contrast agents may cause side effects which could limit our ability to sell DEFINITY .

DEFINITY is an ultrasound contrast agent based on perflutren lipid microspheres.

In 2007, the FDA received reports of deaths and serious cardiopulmonary reactions following the administration of ultrasound micro-bubble contrast agents used in echocardiography.

Four of the 11 reported deaths were caused by cardiac arrest occurring either during or within 30 minutes following the administration of the contrast agent;

most of the serious but non-fatal reactions also occurred in this time frame.

As a result, in October 2007, the FDA requested t hat we and GE Healthcare, which distributes Optison, a competitor to DEFINITY, add a boxed warning to these products emphasizing the risk for serious cardiopulmonary reactions and that the use of these products was contraindicated in certain patients.

In a strong reaction by the cardiology community to the FDA’s new position, a letter was sent to the FDA, signed by 161 doctors, stating that the benefit of these ultrasound contrast agents outweighed the risks and urging that the boxed warning be removed.

In May 2008, the FDA substantially modified the boxed warning.

On May 2, 2011, the FDA held an advisory committee meeting to consider the status of ultrasound micro-bubble contrast agents and the boxed warning.

In October 2011, we received FDA approval of further modifications to the DEFINITY label, including:

further relaxing the boxed warning;

and including summary data from the post-approval CaRES (Contrast echocardiography Registry for Safety Surveillance) safety registry and the post-approval pulmonary hypertension study.

Bracco’s ultrasound contrast agent, Lumason, has substantially similar safety labeling as DEFINITY and Optison.

A heightened public or regulatory focus on the radiation risks of diagnostic imaging could have an adverse effect on our business .

We believe that there has been heightened public and regulatory focus on radiation exposure, including the concern that repeated doses of radiation used in diagnostic imaging procedures pose the potential risk of long-term cell damage, cancer and other diseases.

For example, starting in January 2012, CMS required the accreditation of facilities providing the technical component of advanced imaging services, including CT, MRI, PET and nuclear medicine, in non-hospital freestanding settings.

In August 2011, The Joint Commission (an independent, not-for-profit organization that accredits and certifies more than 20,500 healthcare organizations and programs in the U.S.) issued an alert on the radiation risks of diagnostic imaging and recommended specific actions for providing “the right test and the right dose through effective processes, safe technology and a culture of safety.” The Joint Commission has revised accreditation standards for diagnostic imaging in recent years, including standards related to dose optimization.

Heightened regulatory focus on risks caused by the radiation exposure received by diagnostic imaging patients could lead to increased regulation of radiopharmaceutical manufacturers or healthcare providers who perform procedures that use our imaging agents, which could make the procedures more costly, reduce the number of providers who perform procedures and/or decrease the demand for our products.

In addition, heightened public focus on or fear of radiation exposure could lead to decreased demand for our products by patients or by healthcare providers who order the procedures in which our agents are used.

Although we believe that our diagnostic imaging agents when properly used do not expose patients and healthcare providers to unsafe levels of radiation, any of the foregoing risks could have an adverse effect on our business, results of operations, financial condition and cash flows.

In the ordinary course of business, we may be subject to product liability claims and lawsuits, including potential class actions, alleging that our products have resulted or could result in an unsafe condition or injury .

Any product liability claim brought against us, with or without merit, could be time consuming and costly to defend and could result in an increase of our insurance premiums.

Although we have not had any such claims to date, claims that could be brought against us might not be covered by our insurance policies.

Furthermore, although we currently have product liability insurance coverage with policy limits that we believe are customary for pharmaceutical companies in the diagnostic medical imaging industry and adequate to provide us with insurance coverage for foreseeable risks, even where the claim is covered by our insurance, our insurance coverage might be inadequate and we would have to pay the amount of any settlement or judgment that is in excess of our policy limits.

We may not be able to obtain insurance on terms acceptable to us or at all, since insurance varies in cost and can be difficult to obtain.

Our failure to maintain adequate insurance coverage or successfully defend against product liability claims could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We use hazardous materials in our business and must comply with environmental laws and regulations, which can be expensive .

Our operations use hazardous materials and produce hazardous wastes, including radioactive, chemical and, in certain circumstances, biological materials and wastes.

We are subject to a variety of federal, state and local laws and regulations as well as non-U.S.

laws and regulations relating to the transport, use, handling, storage, exposure to and disposal of these materials and wastes.

Environmental laws and regulations are complex, change frequently and have become more stringent over time.

We are required to obtain, maintain and renew various environmental permits and nuclear licenses.

Although we believe that our safety procedures for transporting, using, handling, storing and disposing of, and limiting exposure to, these materials and wastes comply in all material respects with the standards prescribed by applicable laws and regulations, the risk of accidental contamination or injury cannot be eliminated.

We place a high priority on these safety procedures and seek to limit any inherent risks.

We generally contract with third parties for the disposal of wastes generated by our operations.

Prior to disposal, we store any low level radioactive waste at our facilities to decay until the materials are no longer considered radioactive.

Although we believe we have complied in all material respects with all applicable environmental, health and safety laws and regulations, we cannot assure you that we have been or will be in compliance with all such laws at all times.

If we violate these laws, we could be fined, criminally charged or otherwise sanctioned by regulators.

We may be required to incur further costs to comply with current or future environmental and safety laws and regulations.

In addition, in the event of accidental contamination or injury from these materials, we could be held liable for any damages that result and any such liability could exceed our resources.

We lease a small portion of our North Billerica, Massachusetts facility to PerkinElmer for the manufacturing, finishing and packaging of certain radioisotopes, including Strontium-90, which has physical characteristics that make it more challenging to work with and dispose of than our own commercial radioisotopes, including a much longer half-life.

We are fully indemnified by PerkinElmer under our lease for any property damage or personal injury resulting from their activities in our facility.

If any release or excursion of radioactive materials took place from their leased space that resulted in property damage or personal injury, the indemnification obligations were not honored, and we were forced to cover any related remediation, clean-up or other expenses, depending on the magnitude, the cost of such remediation, clean-up or other expenses could have a material adverse effect on our business, results of operations, financial condition and cash flows.

While we have budgeted for current and future capital and operating expenditures to maintain compliance with these laws and regulations, we cannot assure you that our costs of complying with current or future environmental, health and safety laws and regulations will not exceed our estimates or adversely affect our results of operations and financial condition.

Further, we cannot assure you that we will not be subject to additional environmental claims for personal injury, investigation or cleanup in the future based on our past, present or future business activities.

Risks Related to Our Business

Risks Related to Our Business Operations and Financial Results

The COVID-19 pandemic has had, and could continue to have, a material impact on our business, results of operation and financial condition, operating results, cash flows and prospects.

In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan China.

Less than four months later, in March 2020, the World Health Organization declared COVID-19 a pandemic.

While the outbreak initially was largely concentrated in China and caused significant disruptions in its economy, the virus has now spread throughout much of the world, including in Massachusetts, New York, New Jersey, Canada and Sweden, where our offices and manufacturing facilities are located.

Towards the end of the first quarter of 2020 we began to experience, and through the date of this filing we are continuing to experience, impacts to our business and operations related to the COVID-19 pandemic, including the impact of stay-at-home mandates and advisories, and a decline in the volume of procedures using our products.

In response to the pandemic, healthcare providers have, and may need to further, reallocate resources, such as physicians, staff and facilities, as they prioritize limited resources and personnel

capacity to focus on the treatment of patients with COVID-19 and implement limitations on access to hospitals and other medical institutions due to concerns about the potential spread of COVID-19 in such settings.

In particular, there has been a reduction in the number of echocardiograms performed in 2020 (approximately 31.5 million) as compared to the number performed in 2019 (approximately 35.1 million), in each case, according to a third party source.

There has also been a reduction in pulmonary ventilation studies in which our Xenon is used because of institutional concerns and professional society guidelines relating to the possible spread of COVID-19 to technicians and other patients, given that Xenon is both inhaled and exhaled by the patient.

As a result, Xenon sales have decreased.

We expect Xenon sales to continue to be at reduced levels so long as COVID-19 precautions remain in place.

These actions have significantly delayed the provision of other medical care including procedures involving our products, having an adverse effect on our revenue.

These measures and challenges may continue for the duration of the COVID-19 pandemic, and such duration is uncertain and may significantly reduce our revenue and cash flows while the pandemic continues and thereafter until we and our customers are able to resume normal business operations.

We cannot predict the magnitude or duration of the pandemic’s impact on our business.

In connection with the COVID-19 pandemic, the following risks could have a material effect on our business, financial condition, results of operations and prospects:

• The delay or cancellation by hospitals and clinics of the procedures in which our products are used as a result of their COVID-19 response efforts and the duration of such effects, thereby reducing sales of our products for an unknown period of time;

• The inability or unwillingness of some patients to visit hospitals or clinics in order to undergo procedures in which our products are used, thereby reducing sales of our products for an unknown period of time;

• The inability of some patients to pay for procedures and/or the co-pay associated with those procedures in which our products are used due to job loss or lack of insurance, thereby reducing sales of our products for an unknown period of time;

• The inability of our distributors, radiopharmacy customers, PET manufacturing partners, hospitals, clinics and other customers to conduct their normal operations, including supplying or conducting procedures in which our products are used, because of their COVID-19 response efforts, or the reduced capacity or productivity of their employees and contractors as a result of possible illness, quarantine or other inability to work, thereby reducing sales of our products for an unknown period of time;

• The financial challenges experienced by certain of our customers due to the COVID-19 pandemic resulting in increased pressure from those customers on the pricing of our commercial products;

• The inability of global suppliers of raw materials or components used in the manufacture of our products, or contract manufacturers of our products, to supply and/or transport those raw materials, components and products to us in a timely and cost effective manner due to shutdowns, interruptions or delays, limiting and potentially precluding the production of our finished products, impacting our ability to supply customers, reducing our sales, increasing our costs of goods sold, and reducing our absorption of overhead;

• The partial or complete delay or cancellation of international or domestic flights by our airfreight carriers, resulting in our inability to receive raw materials, components and products from our global suppliers or to ship and deliver our finished products to our domestic and international customers in a timely or cost effective manner, thereby potentially increasing our freight costs as we seek alternate, potentially more expensive, methods to ship raw materials, components or products, and negatively impacting our sales;

• The reduced capacity or productivity of our complex, on-campus operations as a result of possible illness, quarantine or other inability of our employees and contractors to work, despite all of the preventative measures we continue to undertake to protect the health and safety of our workforce;

• The illiquidity or insolvency of our suppliers, contract manufacturers (including our PET manufacturing partners) or freight carriers whose business activities could be shut down, interrupted or delayed;

• The illiquidity or insolvency of our distributors or customers, or their inability to pay our invoices in full or in a timely manner, due to the reduction in their revenues caused by the cancellation or delay of procedures and other factors, which could potentially reduce our cash flow, reduce our liquidity and increase our bad debt reserves;

• A portion of our raw materials or finished product inventory may expire due to reduced demand for our drugs;

• Delays in our ability, and the ability of our contract research organizations and development partners to conduct, enroll and complete clinical development programs such as our ARROW Phase 2 study in mCRPC, the flurpiridaz F 18 Phase 3 clinical

development program currently being conducted by GE Healthcare, or the Phase 1 trial of PSMA TTC being conducted by Bayer AG;

• Delays of regulatory reviews and approvals, including with respect to our product candidates and manufacturing facilities, by the FDA or other health or regulatory authorities;

• Decreased sales of those of our products that are promotionally sensitive, like DEFINITY, due to the reduction of in-person sales and marketing activities and training caused by travel restrictions, quarantines, other similar social distancing measures and more restrictive hospital access policies;

• Our ability to maintain employee morale and motivate and retain management personnel and other key employees as a result of our previous work week and salary reductions;

• A disruption or delay in regulatory approval for, and operation of, our new, on-campus manufacturing facility, which would delay implementation of our supply diversification strategy for certain of our key products and impact our ability to benefit from a lower cost of goods for those products;

• A reduction in revenue with continued incurrence of high fixed costs relating to our already-existing, complex and expensive radiopharmaceutical manufacturing facility could adversely affect our cash flows, liquidity and ability to comply with the financial covenants in our 2019 Facility, and there can be no assurance that any required waiver or consent related to any such failure to comply would be granted by our current lenders similar to the waiver of total net leverage ratio in exchange for a consolidated liquidity covenant agreed to in June 2020;

• The increased reliance on our personnel working from home, which may negatively impact productivity, or disrupt, delay or otherwise adversely impact our business;

• A delay in achieving, or inability to achieve, successful integration of Lantheus and Progenics, or the synergies, cost savings, innovation and other anticipated benefits of the acquisition due to impact of the COVID-19 pandemic on the operations, financial condition and prospects of our Company;

• The instability to worldwide economies, financial markets, social institutions, labor markets and the healthcare systems as a result of the COVID-19 pandemic, which could result in an economic downturn that could adversely impact our business, results of operations and financial condition, as well as that of our suppliers, distributors, customers or other business partners;

• A recurrence of the COVID-19 pandemic after social distancing and other similar measures have been relaxed.

The extent to which the COVID-19 pandemic impacts our business and our results of operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge in connection with the severity of the virus, the ability to treat and ultimately prevent it with vaccines, its potential recurrence or transformation into new or more contagious or virulent strains, and further actions that federal, state, local, or foreign governments may take to contain its impact.

Our business depends on our ability to successfully introduce new products and adapt to a changing technology and medical practice landscape.

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The field of diagnostic medical imaging is dynamic, with new products, including hardware, software and agents, continually being developed and existing products continually being refined.

Our own diagnostic imaging agents compete not only with other similarly administered imaging agents but also with imaging agents employed in different and often competing diagnostic modalities, and in the case of DEFINITY, echocardiography procedures without contrast.

New hardware, software or agents in a given diagnostic modality may be developed that provide benefits superior to the then-dominant hardware, software and agents in that modality, resulting in commercial displacement of the agents.

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To the extent there is technological obsolescence in any of our products that we manufacture, resulting in lower unit sales or decreased unit sales prices, we will have increased unit overhead allocable to the remaining market share, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

The process of developing new drugs and obtaining regulatory approval is complex, time-consuming and costly, and the outcome is not certain .

We currently have three active clinical development programs in the U.S.

- flurpiridaz F 18, LMI 1195 and DEFINITY for LVEF.

“Business—Regulatory Matters.” Satisfaction of all regulatory requirements typically takes many years and requires the expenditure of substantial resources.

In addition, it may take longer than we project to achieve study endpoints and complete data analysis for a trial or we may decide to slow down the enrollment in a trial in order to conserve financial resources.