What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 83 added, 55 removed, 541 unchanged (20% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30,

2022 December 31,

37 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

26 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

3 unchanged sentences

Unrealized gain on cash flow hedges, net of tax 1,049 98 3,942 851

Total other comprehensive income 413 240 2,809 1,048

Total other comprehensive income (loss) 670 ( 142 ) 3,479 906

Comprehensive income (loss) $ 61,902 $ ( 13,557 ) $ 150,731 $ ( 30,158 )

3 unchanged sentences

(in thousands)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Common Stock Additional

19 unchanged sentences

Balance, June 30, 2022 68,726 $ 687 $ 699,526 $ ( 135,205 ) $ 2,324 $ 567,332

Six Months Ended June 30, 2021

Net income — — — 61,232 — 61,232

Other comprehensive income — — — — 670 670

Stock option exercises and employee stock plan purchases 53 1 1,555 — — 1,556

Vesting of restricted stock awards and units 41 1 ( 1 ) — — —

Shares withheld to cover taxes ( 11 ) ( 1 ) ( 842 ) — — ( 843 )

Stock-based compensation — — 8,103 — — 8,103

Balance, September 30, 2022 68,809 $ 688 $ 708,341 $ ( 73,973 ) $ 2,994 $ 638,050

Nine Months Ended September 30, 2021

Common Stock Additional

19 unchanged sentences

Balance, June 30, 2021 67,592 $ 676 $ 676,059 $ ( 167,595 ) $ ( 1,000 ) $ 508,140

Net loss — — — ( 13,415 ) — ( 13,415 )

Other comprehensive loss — — — — ( 142 ) ( 142 )

Stock option exercises and employee stock plan purchases 48 1 960 — — 961

Vesting of restricted stock awards and units 23 — — — — —

Shares withheld to cover taxes ( 4 ) — ( 67 ) — — ( 67 )

Stock-based compensation — — 3,867 — — 3,867

Balance, September 30, 2021 67,659 $ 677 $ 680,819 $ ( 181,010 ) $ ( 1,142 ) $ 499,344

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating activities

2 unchanged sentences

Depreciation, amortization and accretion 36,048 30,088

Impairment of long-lived assets — 9,540

Asset retirement obligation acceleration 1,229 —

34 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Reconciliation to amounts within the condensed consolidated balance sheets

16 unchanged sentences

In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement have been included.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022 or any future period.

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022 or any future period.

The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S.

10 unchanged sentences

In no event will the Company’s aggregate payments in respect of the CVRs, together with any other non-stock consideration treated as paid in connection with the Progenics Acquisition, exceed 19.9 % of the total consideration the Company pays in the Progenics Acquisition.

Based on the Company’s current projections of 2022 PYLARIFY net sales, the Company believes that all of its aggregate payment obligations under the CVRs (which the Company currently estimates could be approximately $ 99.7 million) will become payable in the first half of 2023, although the Company can give no assurances to that effect.

Based on the Company’s 2022 PYLARIFY net sales, the Company believes that all of its aggregate payment obligations under the CVRs (which the Company currently estimates to be approximately $ 99.7 million) will become payable in the first half of 2023.

As a result of the acquisition, Holdings issued 26,844,877 shares of Holdings common stock and 86,630,633 CVRs to former Progenics stockholders and option holders.

1 unchanged sentence

Recent Accounting Pronouncements

The Company has not adopted any new accounting standards during the six months ended June 30, 2022 .

The Company has not adopted any new accounting standards during the nine months ended September 30, 2022.

Revenue from Contracts with Customers

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Major Products/Service Lines (in thousands) 2022 2021 2022 2021

5 unchanged sentences

________________________________

(1) The Company’s principal products include PYLARIFY, DEFINITY and TechneLite and are categorized within product revenue, net.

(1) The Company’s principal products include PYLARIFY, DEFINITY and TechneLite and are primarily categorized within product revenue, net.

This category represents the delivery of physical goods.

The Company applies the same revenue recognition policies and judgments for all its principal products.

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

23 unchanged sentences

The tables below present information about the Company’s assets and liabilities measured at fair value on a recurring basis:

June 30, 2022

September 30, 2022

(in thousands) Total Fair

15 unchanged sentences

Total liabilities $ 86,200 $ — $ — $ 86,200

During the three and six months ended June 30, 2022, there were no transfers into or out of Level 3.

During the three and nine months ended September 30, 2022, there were no transfers into or out of Level 3.

As part of the Progenics Acquisition, the Company acquired the right to receive certain future milestone and royalty payments due to Progenics from CytoDyn Inc.

22 unchanged sentences

The Company can give no assurance that the actual amounts paid, if any, in connection with the contingent consideration liabilities, including the CVRs, will be consistent with any recurring fair value estimate of such contingent consideration liabilities.

The following tables summarize quantitative information and assumptions pertaining to the fair value measurement of assets and liabilities using Level 3 inputs at June 30, 2022.

The following tables summarize quantitative information and assumptions pertaining to the fair value measurement of assets and liabilities using Level 3 inputs at September 30, 2022.

Fair Value at Assumptions

(in thousands) June 30, 2022 December 31, 2021 Valuation Technique Unobservable Input June 30, 2022 December 31, 2021

(in thousands) September 30, 2022 December 31, 2021 Valuation Technique Unobservable Input September 30, 2022 December 31, 2021

Contingent receivable:

7 unchanged sentences

Fair Value at Assumptions

(in thousands) June 30, 2022 December 31, 2021 Valuation Technique Unobservable Input June 30, 2022 December 31, 2021

(in thousands) September 30, 2022 December 31, 2021 Valuation Technique Unobservable Input September 30, 2022 December 31, 2021

Contingent consideration liability:

14 unchanged sentences

Financial Assets Financial Liabilities

(in thousands) Six Months Ended

June 30, Six Months Ended

(in thousands) Nine Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Fair value, beginning of period $ 9,300 $ 11,300 $ 86,200 $ 15,800

Changes in fair value included in net income ( 1,600 ) 2,100 25,300 28,000

Changes in fair value included in net income (loss) ( 1,100 ) 2,500 24,300 31,000

Fair value, end of period $ 8,200 $ 13,800 $ 110,500 $ 46,800

The change in fair value of the contingent financial asset and contingent financial liabilities, including the CVRs, resulted in an expense of $ 26.9 million for the six months ended June 30, 2022 and was primarily due to changes in revenue forecasts, changes in market conditions, an increase in discount rates (excluding the CVRs) and the passage of time.

The change in fair value of the contingent financial asset and contingent financial liabilities, including the CVRs, resulted in an expense of $ 25.4 million for the nine months ended September 30, 2022 and was primarily due to changes in revenue forecasts, changes in market conditions, an increase in discount rates (excluding the CVRs) and the passage of time.

The Company expects to make all applicable cash payments related to the CVRs in the first half of 2023.

As of June 30, 2022, the Company had $ 99.7 million in current liabilities to account for the expected payments related to the CVRs.

As of September 30, 2022, the Company had $ 99.7 million in current liabilities to account for the expected payments related to the CVRs.

The Company calculates income taxes at the end of each reporting period based on the estimated effective tax rate for the full year, adjusted for any discrete events which are recorded in the period they occur.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

4 unchanged sentences

The Company assessed the need for a valuation allowance against certain state tax credit carryforwards added through the Progenics Acquisition.

The Company continues to retain other valuation allowances of $ 1.2 million against the net deferred tax assets of Lantheus MI UK Limited, its U.K.

subsidiary, and $ 2.0 million against the net deferred tax assets of EXINI, its Sweden subsidiary.

The Company continues to retain other immaterial valuation allowances against the net deferred tax assets of certain of its foreign subsidiaries.

In connection with the Company’s acquisition of the medical imaging business from Bristol-Myers Squibb (“BMS”) in 2008, the Company recorded a liability for uncertain tax positions related to the acquired business and simultaneously entered into a tax indemnification agreement with BMS under which BMS agreed to indemnify the Company for any payments made to settle those uncertain tax positions with the state taxing authorities.

4 unchanged sentences

Assuming that the remaining receivable from BMS continues to be considered recoverable by the Company, there will be no effect on net income and no net cash outflows related to these liabilities.

During the third quarter of 2022, the Company entered into a settlement agreement with one state and accordingly reduced the amount of the uncertain tax positions by $ 2.2 million.

The Company continues to accrue interest on the outstanding uncertain tax positions.

The Company finalized the accounting for the Progenics Acquisition for income taxes in the first quarter of 2021 resulting in a reduction of deferred tax assets, primarily related to state research credit carryforwards and an increase to goodwill of $ 2.6 million.

Inventory consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2022 December 31,

6 unchanged sentences

As of December 31, 2021, the Company had $ 6.1 million of such product costs included in inventories related to DEFINITY that had been manufactured through the Company’s in-house manufacturing capabilities.

The Company received regulatory approval for the manufacture of DEFINITY at its new in-house manufacturing facility during the first quarter of 2022 and has no inventory pending regulatory approval as of June 30, 2022.

Property, Plant and Equipment, Net

Property, plant and equipment, net, consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2022 December 31,

7 unchanged sentences

Total property, plant and equipment, net $ 120,826 $ 116,772

Depreciation and amortization expense related to property, plant and equipment, net, was $ 3.3 million and $ 3.2 million for the three months ended June 30, 2022 and 2021, respectively, and $ 6.4 million and $ 6.2 million for the six months ended June 30, 2022 and 2021, respectively.

Depreciation and amortization expense related to property, plant and equipment, net, was $ 3.9 million and $ 3.6 million for the three months ended September 30, 2022 and 2021, respectively, and $ 10.3 million and $ 9.8 million for the nine months ended September 30, 2022 and 2021, respectively.

Accrued Expenses and Other Liabilities and Other Long-Term Liabilities

Accrued expenses and other liabilities and other long-term liabilities are comprised of the following:

(in thousands) June 30,

(in thousands) September 30,

2022 December 31,

45 unchanged sentences

The Company has production facilities which manufacture and process radioactive materials at its North Billerica, Massachusetts and Somerset, New Jersey sites.

As of June 30, 2022, the liability is measured at the present value of the obligation expected to be incurred, of approximately $ 26.4 million.

As of September 30, 2022, the liability is measured at the present value of the obligation expected to be incurred, of approximately $ 25.5 million.

The following table provides a summary of the changes in the Company’s asset retirement obligations:

3 unchanged sentences

Accelerated costs 1,229

Balance at June 30, 2022 $ 22,196

Balance at September 30, 2022 $ 23,358

In December 2021, the Company evaluated the accretion timeline of an asset group due to a revision in the planned period of use at the North Billerica site.

As a result of the accelerated timeline, the Company determined the asset group’s present value exceeded the current value recorded as of December 31, 2021.

Accordingly, the Company recorded a non-cash adjustment of $ 5.3 million to anticipate a revision in the end of useful life by the end of 2022.

Accordingly, the Company recorded a non-cash adjustment of $ 5.3 million in December 2021 to anticipate a revision in the end of useful life by the end of 2022.

The Company is required to provide the Massachusetts Department of Public Health and New Jersey Department of Environmental Protection financial assurance demonstrating the Company’s ability to fund the decommissioning of its North Billerica, Massachusetts and Somerset, New Jersey production facilities upon closure, although the Company has no current plans to close the facilities.

2 unchanged sentences

Intangibles, net, consisted of the following:

June 30, 2022

September 30, 2022

(in thousands) Useful Lives

25 unchanged sentences

Total $ 489,960 $ ( 141,450 ) $ 348,510

The Company recorded amortization expense for its intangible assets of $ 8.3 million and $ 6.1 million for the three months ended June 30, 2022 and 2021, respectively, and $ 16.6 million and $ 10.8 million for the six months ended June 30, 2022 and 2021, respectively.

The Company recorded amortization expense for its intangible assets of $ 8.3 million and $ 8.4 million for the three months ended September 30, 2022 and 2021, respectively, and $ 24.9 million and $ 19.1 million for the nine months ended September 30, 2022 and 2021, respectively.

In May 2021, PyL (18F-DCFPyL) was approved by the FDA under the name PYLARIFY.

6 unchanged sentences

Long-Term Debt, Net, and Other Borrowings

As of June 30, 2022, the Company’s maturities of principal obligations under its long-term debt and other borrowings are as follows:

As of September 30, 2022, the Company’s maturities of principal obligations under its long-term debt and other borrowings are as follows:

(in thousands) Amount

7 unchanged sentences

Total long-term debt, net and other borrowings $ 152,057

At June 30, 2022, the Company’s interest rate under the five-year secured term loan facility, which matures on June 30, 2024 (the “2019 Term Facility” and the loans thereunder, the “2019 Term Loans”) was 2.6 %.

On March 31, 2021, the Company voluntarily repaid in full the entire outstanding principal on the original $ 50.0 million loan agreement (the “Royalty-Backed Loan”) with a fund managed by HealthCare Royalty Partners III, L.P.

At September 30, 2022, the Company’s interest rate under the five-year secured term loan facility, which matures on June 30, 2024 (the “2019 Term Facility” and the loans thereunder, the “2019 Term Loans”) was 4.6 %.

On March 31, 2021, the Company voluntarily repaid in full the entire outstanding principal on its $ 50.0 million loan agreement (the “Royalty-Backed Loan”) with a fund managed by HealthCare Royalty Partners III, L.P.

in the amount of $ 30.9 million, which included a prepayment amount of $ 0.5 million, and terminated the agreement governing the Royalty-Backed Loan.

7 unchanged sentences

In accordance with hedge accounting, the interest rate swaps are recorded on the Company’s condensed consolidated balance sheets at fair value, and changes in the fair value of the swap agreements are recorded to other comprehensive loss and reclassified to interest expense in the period during which the hedged transaction affected earnings or it will become probable that the forecasted transaction would not occur.

At June 30, 2022, accumulated other comprehensive income included $ 2.3 million of pre-tax deferred gains that are expected to be reclassified to earnings during the next 12 months.

At September 30, 2022, accumulated other comprehensive income included $ 3.5 million of pre-tax deferred gains that are expected to be reclassified to earnings during the next 12 months.

The following table presents the location and fair value amounts of derivative instruments reported in the condensed consolidated balance sheets:

(in thousands) June 30, 2022 December 31, 2021

(in thousands) September 30, 2022 December 31, 2021

Derivatives type Classification

1 unchanged sentence

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax of $ 1.1 million and $ 0.2 million for the six months ended June 30, 2022 and 2021, respectively, consisted of the following:

The components of accumulated other comprehensive income (loss), net of tax of $ 1.5 million and $ 0.2 million for the nine months ended September 30, 2022 and 2021, respectively, consisted of the following:

(in thousands) Foreign currency translation Unrealized loss on cash flow hedges Accumulated other comprehensive income (loss)

2 unchanged sentences

Amounts reclassified to earnings — ( 170 ) ( 170 )

Balance at June 30, 2022 $ ( 838 ) $ 3,162 $ 2,324

Balance at September 30, 2022 $ ( 1,217 ) $ 4,211 $ 2,994

Balance at January 1, 2021 $ ( 630 ) $ ( 1,418 ) $ ( 2,048 )

1 unchanged sentence

Amounts reclassified to earnings — 539 539

Balance at June 30, 2021 $ ( 334 ) $ ( 666 ) $ ( 1,000 )

Balance at September 30, 2021 $ ( 575 ) $ ( 567 ) $ ( 1,142 )

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

5 unchanged sentences

Operating and finance lease assets and liabilities are as follows:

(in thousands) Classification June 30,

(in thousands) Classification September 30,

2022 December 31,

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2022 2021 2022 2021

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

Foreign currency (gains) losses $ 125 $ ( 13 ) $ 44 $ 29

Tax indemnification income, net ( 396 ) ( 158 ) ( 792 ) ( 731 )

Foreign currency losses $ 145 $ 127 $ 189 $ 156

Tax indemnification loss, net 1,460 3,823 668 3,092

Interest income ( 504 ) ( 11 ) ( 551 ) ( 39 )

9 unchanged sentences

If such loss is not probable or cannot be reasonably estimated, a liability is not recorded in its condensed consolidated financial statements.

As of June 30, 2022, the Company did not have any material ongoing litigation in which the Company was a party.

As of September 30, 2022, the Company did not have any material ongoing litigation to which the Company was a party.

Segment Information

In the first quarter of fiscal year 2021, the Company completed the evaluation of its operating and reporting structure, including the impact on the Company’s business of the acquisition of Progenics described in Note 1, and the sale of the Puerto Rico subsidiary in the first quarter, which resulted in a change in operating and reportable segments.

In the first quarter of fiscal year 2021, the Company completed the evaluation of its operating and reporting structure, including the impact on the Company’s business of the acquisition of Progenics described in Note 1, and the sale of the Puerto Rico subsidiary in the first quarter of fiscal year 2021, which resulted in a change in operating and reportable segments.

The Company now operates as one business segment:

1 unchanged sentence

This conclusion reflects the Company’s focus on the performance of the business on a consolidated worldwide basis.

The results of this operating segment are regularly reviewed by the Company’s chief operating decision maker, the President and Chief Executive Officer.

The Company’s

chief operating decision maker does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results.

The results of this operating segment are regularly reviewed by the Company’s chief operating decision maker, the President and Chief Executive

The Company’s chief operating decision maker does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements