What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-04 compared with 2022-11-03 · 229 added, 250 removed, 374 unchanged (56% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30,

2023 December 31,

4 unchanged sentences

Other current assets 10,949 13,092

Assets held for sale 7,200 —

Total current assets 773,274 677,616

9 unchanged sentences

Accounts payable 30,798 20,563

Short-term contingent liability 99,700 99,700

Accrued expenses and other liabilities 145,468 127,084

9 unchanged sentences

Common stock ($ 0.01 par value, 250,000 shares authorized;

68,809 and 67,739 shares issued and outstanding, respectively)

69,630 and 68,851 shares issued as of March 31, 2023 and December 31, 2022, respectively)

Additional paid-in capital 717,163 715,875

Treasury Stock at cost - 1,339 shares as of March 31, 2023 and December 31, 2022

( 75,000 ) ( 75,000 )

Accumulated deficit ( 195,965 ) ( 193,158 )

Accumulated other comprehensive income (loss) 2,994 ( 485 )

Accumulated other comprehensive loss ( 1,378 ) ( 1,259 )

Total stockholders’ equity 445,516 447,147

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Revenues $ 300,784 $ 208,880

6 unchanged sentences

Total operating expenses 86,420 70,145

Gain on sale of assets — — — 15,263

Operating income (loss) 85,743 ( 14,328 ) 207,872 ( 25,487 )

Operating (loss) income ( 9,344 ) 58,925

Interest expense 4,991 1,509

Gain on extinguishment of debt — — — ( 889 )

Other income ( 3,231 ) ( 485 )

Income (loss) before income taxes 83,016 ( 19,837 ) 202,962 ( 34,031 )

Income tax expense (benefit) 21,784 ( 6,422 ) 55,710 ( 2,967 )

Net income (loss) $ 61,232 $ ( 13,415 ) $ 147,252 $ ( 31,064 )

Net income (loss) per common share:

(Loss) income before income taxes ( 11,104 ) 57,901

Income tax (benefit) expense ( 8,297 ) 14,939

Net (loss) income $ ( 2,807 ) $ 42,962

Net (loss) income per common share:

Basic $ ( 0.04 ) $ 0.63

5 unchanged sentences

Lantheus Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive (Loss) Income

(in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income (loss) $ 61,232 $ ( 13,415 ) $ 147,252 $ ( 31,064 )

Net (loss) income $ ( 2,807 ) $ 42,962

Other comprehensive income:

1 unchanged sentence

Unrealized gain on cash flow hedges, net of tax — 2,256

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

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

Total other comprehensive (loss) income ( 119 ) 2,396

Comprehensive (loss) income $ ( 2,926 ) $ 45,358

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

2 unchanged sentences

(in thousands)

Nine Months Ended September 30, 2022

Common Stock Additional

Three Months Ended March 31, 2023

Common Stock Treasury Stock Additional

Capital Accumulated

2 unchanged sentences

Stockholders’

Shares Amount

Shares Amount Shares Amount

Balance, January 1, 2023 68,851 $ 689 1,339 $ ( 75,000 ) $ 715,875 $ ( 193,158 ) $ ( 1,259 ) $ 447,147

Net income — — — 42,962 — 42,962

Other comprehensive income — — — — 2,396 2,396

Net loss — — — — — ( 2,807 ) — ( 2,807 )

Other comprehensive loss — — — — — — ( 119 ) ( 119 )

Stock option exercises and employee stock plan purchases 120 1 — — 2,781 — — 2,782

3 unchanged sentences

Balance, March 31, 2023 69,630 $ 696 $ 1,339 $ ( 75,000 ) $ 717,163 $ ( 195,965 ) $ ( 1,378 ) $ 445,516

Net income — — — 43,058 — 43,058

Other comprehensive income — — — — 413 413

Stock option exercises and employee stock plan purchases 61 1 1,422 — — 1,423

Vesting of restricted stock awards and units 108 1 ( 1 ) — — —

Shares withheld to cover taxes ( 13 ) ( 1 ) ( 823 ) — — ( 824 )

Stock-based compensation — — 7,412 — — 7,412

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

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

Three Months Ended March 31, 2022

Common Stock Treasury Stock Additional

Capital Accumulated

2 unchanged sentences

Stockholders’

Shares Amount

Shares Amount Shares Amount

Balance, January 1, 2022 67,739 $ 677 $ — $ — $ 685,472 $ ( 221,225 ) $ ( 485 ) $ 464,439

6 unchanged sentences

Balance, March 31, 2022 68,570 $ 686 $ — $ — $ 691,516 $ ( 178,263 ) $ 1,911 $ 515,850

Net loss — — — ( 26,657 ) — ( 26,657 )

Other comprehensive income — — — — 240 240

Stock option exercises and employee stock plan purchases 116 1 2,042 — — 2,043

Vesting of restricted stock awards and units 51 1 ( 1 ) — — —

Shares withheld to cover taxes ( 9 ) — ( 193 ) — — ( 193 )

Stock-based compensation — — 4,588 — — 4,588

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)

Nine Months Ended

September 30,

Three Months Ended

Operating activities

Net income (loss) $ 147,252 $ ( 31,064 )

Net (loss) income $ ( 2,807 ) $ 42,962

Adjustments to reconcile net income to net cash flows from operating activities:

4 unchanged sentences

Changes in fair value of contingent assets and liabilities ( 1,400 ) 18,400

Gain on extinguishment of debt — ( 889 )

Provision for excess and obsolete inventory 680 2,519

Stock-based compensation 9,667 5,623

Gain on sale of assets — ( 15,263 )

Deferred taxes ( 35,863 ) 14,180

Long-term income tax receivable 668 3,092

Long-term indemnification receivable ( 96 ) ( 396 )

Long-term income tax payable and other long-term liabilities 123 779

11 unchanged sentences

Proceeds from sale of assets, net — 1,800

Net cash (used in) provided by investing activities ( 11,823 ) 8,227

Acquisition of assets, net ( 35,345 ) —

Net cash used in investing activities ( 44,513 ) ( 1,390 )

Financing activities

11 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Reconciliation to amounts within the condensed consolidated balance sheets

7 unchanged sentences

Unless the context otherwise requires, references to the “Company” and “Lantheus” refer to Lantheus Holdings, Inc.

and its direct and indirect wholly-owned subsidiaries, references to “Holdings” refer to Lantheus Holdings, Inc.

and not to any of its subsidiaries, references to “LMI” refer to Lantheus Medical Imaging, Inc., the direct subsidiary of Holdings, references to “Progenics” refer to Progenics Pharmaceuticals, Inc., a wholly-owned subsidiary of LMI, and references to “EXINI” refer to EXINI Diagnostics AB, a wholly-owned subsidiary of Progenics.

and its direct and indirect wholly-owned subsidiaries, references to “Lantheus Holdings” refer to Lantheus Holdings, Inc.

and not to any of its subsidiaries, references to “LMI” refer to Lantheus Medical Imaging, Inc., the direct subsidiary of Lantheus Holdings, references to “Cerveau,” “Lantheus Real Estate,” “Lantheus Two,” “Lantheus Three” and “Progenics” refer to Cerveau Technologies, Inc., Lantheus MI Real Estate, LLC, Lantheus Two, LLC, Lantheus Three, LLC and Progenics Pharmaceuticals, Inc., respectively, each a wholly-owned subsidiary of LMI, and references to “EXINI” refer to EXINI Diagnostics AB, a wholly-owned subsidiary of Progenics.

Solely for convenience, the Company refers to trademarks, service marks and trade names without the TM, SM and ® symbols.

1 unchanged sentence

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Holdings and its direct and indirect wholly-owned subsidiaries, including Progenics, and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“U.S.

The accompanying unaudited condensed consolidated financial statements include the accounts of Lantheus and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by generally accepted accounting principles in the United States (“U.S.

GAAP”) for complete financial statements.

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 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 results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ended December 31, 2023 or any future period.

The condensed consolidated balance sheet at December 31, 2022 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.

2 unchanged sentences

Progenics Acquisition

On June 19, 2020 (the “Closing Date”), pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of February 20, 2020 (the “Merger Agreement”), by and among Holdings, Plato Merger Sub, Inc., a wholly-owned subsidiary of Holdings (“Merger Sub”), and Progenics, Holdings completed the acquisition of Progenics by means of a merger of Merger Sub with and into Progenics, with Progenics surviving such merger as a wholly-owned subsidiary of Holdings (the “Progenics Acquisition”).

Subsequently, on June 22, 2020, Holdings contributed all of the capital stock of Progenics to LMI, thereby making Progenics an indirect subsidiary of Holdings.

In accordance with the Merger Agreement, at the effective time of the Progenics Acquisition (the “Effective Time”), each share of Progenics common stock, par value $ 0.0013 per share, issued and outstanding immediately prior to the Effective Time (other than shares of Progenics common stock owned by Holdings, Progenics or any of their wholly-owned subsidiaries) was automatically cancelled and converted into the right to receive (i) 0.31 (the “Exchange Ratio”) of a share of Holdings common stock, par value $ 0.01 per share, and (ii) one contingent value right (a “CVR”) tied to the financial performance of PyL (18F-DCFPyL), Progenics’ prostate-specific membrane antigen (“PSMA”) targeted imaging agent designed to visualize prostate cancer.

This agent was approved by the U.S.

Food and Drug Administration (“FDA”) on May 26, 2021 under the name PYLARIFY (piflufolastat F 18), and the commercial launch of this agent began in June 2021.

Each CVR entitles its holder to receive a pro rata share of aggregate cash payments equal to 40 % of U.S.

net sales generated by PYLARIFY in 2022 and 2023 in excess of $ 100.0 million and $ 150.0 million, respectively.

On June 19, 2020 (the “Closing Date”), pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of February 20, 2020 (the “Merger Agreement”), by and among Lantheus Holdings, Plato Merger Sub, Inc., a wholly-owned subsidiary of Lantheus Holdings (“Merger Sub”), and Progenics, Lantheus Holdings completed the acquisition of Progenics by means of a merger of Merger Sub with and into Progenics, with Progenics becoming an indirect subsidiary of Lantheus Holdings following the completion of such merger (the “Progenics Acquisition”).

In connection with the Progenics Acquisition, Lantheus Holdings issued contingent value rights (each a “CVR”) tied to the financial performance of PYLARIFY.

Each CVR entitles its holder to receive a pro rata share of aggregate cash payments equal to 40 % of United States (“U.S.”) net sales generated by PYLARIFY in 2022 and 2023 in excess of $ 100.0 million and $ 150.0 million, respectively.

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 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.

Based on the Company’s 2022 PYLARIFY net sales, the Company determined that the aggregate payment obligation under the CVRs is $ 99.7 million, which is the maximum amount payable under the CVRs.

The Company expects to make that payment during the second quarter of 2023 in full satisfaction of the CVRs.

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

Summary of Significant Accounting Policies

Recent Accounting Pronouncements

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

The Company has not adopted any new accounting standards during the three months ended March 31, 2023.

Revenue from Contracts with Customers

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

Major Products/Service Lines (in thousands) 2023 2022

2 unchanged sentences

License and royalty revenues (2)

5,926 5,395 40,738 18,087

Total revenues $ 300,784 $ 208,880

________________________________

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

(1) The Company’s product revenue includes PYLARIFY and DEFINITY among other products.

This category represents the delivery of physical goods.

2 unchanged sentences

The Company classifies its revenues into three product categories:

precision diagnostics, radiopharmaceutical oncology, and strategic partnerships and other revenue.

Radiopharmaceutical Oncology, Precision Diagnostics, and Strategic Partnerships and Other Revenue.

Radiopharmaceutical Oncology includes PYLARIFY and AZEDRA.

Precision Diagnostics includes DEFINITY, TechneLite and other diagnostic imaging products.

Radiopharmaceutical oncology consists primarily of PYLARIFY and AZEDRA.

Strategic partnerships and other revenue includes strategic partnerships and other arrangements related to other products of the Company, such as royalty revenue from our license of RELISTOR.

Strategic Partnerships and Other Revenue includes strategic partnerships and other arrangements related to other products of the Company, including our royalty revenue from our license of RELISTOR.

On January 31, 2022, the Company entered into a global settlement agreement with Novartis Pharma AG (“Novartis”), Advanced Accelerator Applications USA, Inc.

4 unchanged sentences

In accordance with the Company's ASC 606, Revenue from Contracts with Customers , assessment, Novartis is considered to be a customer.

The Company determined that the $ 24.0 million constituted a single element which was satisfied on the date of the execution of the Novartis Agreement.

The Company determined that the $ 24.0 million that Novartis paid to the Company pursuant to the Novartis Agreement constituted a single element which was satisfied on the date of the execution of the Novartis Agreement.

The Company determined that the license of intellectual property carried a fair value of $ 24.0 million.

As such, the Company assigned the value to the fair value of the license, which constitutes the entire transaction price and does not require further allocation.

The Company determined that the $ 24.0 million represented the point at which the licensee was able to use and benefit from the license and recognized revenue when the license was granted to Novartis upon execution of the Novartis Agreement.

As such, the Company assigned the value of the license to be $ 24.0 million, which constitutes the entire transaction price and does not require further allocation.

The Company determined that the $ 24.0 million represented the point at which Novartis, as the licensee, was able to use and benefit from the license and recognized revenue when the license was granted to Novartis upon execution of the Novartis Agreement.

The Company recognized the $ 24.0 million fee as revenue on its consolidated statement of operations for the quarter ended March 31, 2022.

The Company received the $ 24.0 million payment in April 2022.

Revenue by product category on a net basis is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022

PYLARIFY 195,470 92,777

Other radiopharmaceutical oncology 717 1,327

Total radiopharmaceutical oncology 196,187 94,104

DEFINITY $ 68,824 $ 58,328

2 unchanged sentences

Total precision diagnostics 95,617 86,198

PYLARIFY 143,754 7,724 366,763 7,997

Other radiopharmaceutical oncology 928 1,166 3,183 5,206

Total radiopharmaceutical oncology 144,682 8,890 369,946 13,203

Strategic partnerships and other revenue 8,980 28,578

Total revenues $ 300,784 $ 208,880

The Company’s performance obligations are typically part of contracts that have an original expected duration of one year or less.

The Company would be required to allocate a portion of its revenue received from commercial contracts to future reporting periods to the extent the Company had performance obligations that extended beyond one year.

However, the Company’s performance obligations are typically part of contracts that have an original expected duration of one year or less.

As such, the Company is not disclosing the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially satisfied) as of the end of the reporting period.

6 unchanged sentences

The Company develops these inputs based on the best information available, including its own data.

The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of money market funds, interest rate swaps, a contingent receivable and contingent consideration liabilities.

The Company’s financial assets and liabilities measured at fair value on a recurring basis currently consist of money market funds and contingent consideration liabilities.

The Company invests excess cash from its operating cash accounts in overnight investments and reflects these amounts in cash and cash equivalents in the condensed consolidated balance sheets at fair value using quoted prices in active markets for identical assets.

The fair value of the interest rate swaps is determined based on observable market-based inputs, including interest rate curves and reflects the contractual terms of these instruments, including the period to maturity.

Please refer to Note 13, “Derivative Instruments”, for further details on the interest rate swaps.

The Company recorded a contingent receivable and the contingent consideration liabilities resulting from the Progenics Acquisition at fair value based on inputs that are not observable in the market.

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

September 30, 2022

March 31, 2023

(in thousands) Total Fair

1 unchanged sentence

Money market $ 375,889 $ 375,889 $ — $ —

Interest rate swaps 5,660 — 5,660 —

Contingent receivable 8,200 — — 8,200

Total assets $ 375,889 $ 375,889 $ — $ —

5 unchanged sentences

Money market $ 342,646 $ 342,646 $ — $ —

Interest rate swaps 357 — 357 —

Contingent receivable 9,300 — — 9,300

Total assets $ 342,646 $ 342,646 $ — $ —

1 unchanged sentence

Total liabilities $ 111,600 $ — $ — $ 111,600

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.

related to a prior sale of certain intellectual property.

The Company has the right to receive $ 5.0 million upon regulatory approval and a 5 % royalty on net sales of approved products.

The Company considers the contingent receivable a Level 3 instrument (one with significant unobservable inputs) in the fair value hierarchy.

The estimated fair value was determined based on probability adjusted discounted cash flows that included significant estimates and assumptions pertaining to regulatory events and sales targets.

The most significant unobservable inputs are the probabilities of achieving regulatory approval of the development projects and subsequent commercial success.

During the three months ended March 31, 2023, there were no transfers into or out of Level 3.

As part of the Progenics Acquisition, the Company issued CVRs and recorded the fair value as part of consideration transferred.

2 unchanged sentences

Refer to Note 1, “Basis of Presentation” for further details on the CVRs.

The Company considers the contingent consideration liabilities relating to the CVRs a Level 3 instrument (one with significant unobservable inputs) in the fair value hierarchy.

The estimated fair value of these had been determined based on Monte Carlo simulation models that included significant estimates and assumptions pertaining to commercialization events and sales targets.

Because of revised revenue forecasts for the balance of 2022, the Company updated the valuation technique for the CVRs from the Monte Carlo simulation model to a probability adjusted discounted cash flow model as the Company currently expects to pay out the full amount of the CVRs from available cash in the first half of 2023 based on U.S.

net sales generated by PYLARIFY in 2022 and, under either valuation technique, the estimated liability would be approximately the same.

Based on the U.S.

net sales generated by PYLARIFY in 2022, the Company currently expects to pay out the maximum amount payable under the CVRs from available cash in the second quarter of 2023 in full satisfaction of the CVR obligation.

Even though the Company has calculated the total amount payable under the CVRs, for purposes of the table above, the Company considers the contingent consideration liabilities relating to the CVRs a Level 3 instrument.

The Company also assumed contingent consideration liabilities related to a previous acquisition completed by Progenics in 2013 (“2013 Acquisition”).

These contingent consideration liabilities include potential payments of up to $ 70.0 million if the Company attains certain net sales targets primarily for AZEDRA and 1095 and a $ 5.0 million 1095 commercialization milestone.

These contingent consideration liabilities include potential payments of up to $ 70.0 million if the Company

attains certain net sales targets primarily for AZEDRA and 1095 and a $ 5.0 million 1095 commercialization milestone.

Additionally, there is a potential payment of up to $ 10.0 million related to a 1404 commercialization milestone.

5 unchanged sentences

The Company records the contingent consideration liability at fair value with changes in estimated fair values recorded in general and administrative expenses in the condensed consolidated statements of operations.

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 September 30, 2022.

Fair Value at Assumptions

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

Contingent receivable:

Regulatory milestone $ 2,400 $ 2,500 Probability adjusted discounted cash flow model Period of expected milestone achievement 2023 2022

Probability of success 70 % 70 %

Discount rate 19 % 17 %

Royalties 5,800 6,800 Probability adjusted discounted cash flow model

Probability of success 10 % - 60 %

Discount rate 19 % 17 %

Total $ 8,200 $ 9,300

The Company can give no assurance that the actual amounts paid, if any, in connection with the contingent consideration liabilities, 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 liabilities using Level 3 inputs at March 31, 2023.

Fair Value at Assumptions

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

(in thousands) March 31, 2023 December 31, 2022 Valuation Technique Unobservable Input March 31, 2023 December 31, 2022

Contingent consideration liability:

Net sales targets - PYLARIFY (CVRs) $ 99,700 $ 73,200 Probability adjusted discounted cash flow model (as of 9/30/2022)

Monte Carlo simulation

(as of 12/31/2021) Period of expected milestone achievement and sales targets 2022 - 2023 2022 - 2023

Probability of success 100 % N/A

Discount rate N/A 17 %

Net sales targets - PYLARIFY (CVRs) $ 99,700 $ 99,700 Probability adjusted discounted cash flow model

Period of expected milestone achievement and sales targets 2022 - 2023 2022 - 2023

Probability of success 100 % 100 %

Discount rate N/A N/A

1095 commercialization milestone 1,700 1,700 Probability adjusted discounted cash flow model

8 unchanged sentences

Financial Assets Financial Liabilities

(in thousands) Nine Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) Three Months Ended

March 31, Three Months Ended

2023 2022 2023 2022

Fair value, beginning of period $ — $ 9,300 $ 111,600 $ 86,200

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

Changes in fair value included in net (loss) income — ( 400 ) ( 1,400 ) 18,000

Fair value, end of period $ — $ 8,900 $ 110,200 $ 104,200

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

The change in fair value of the contingent financial liabilities resulted in a reduction of general and administrative expense of $ 1.4 million for the three months ended March 31, 2023 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 second quarter of 2023.

As of March 31, 2023, 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.

Cumulative adjustments to the tax provision are

recorded in the reporting period in which a change in the estimated annual effective tax rate is determined.

Cumulative adjustments to the tax provision are recorded in the reporting period in which a change in the estimated annual effective tax rate is determined.

The Company’s income tax expense is presented below:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022

Income tax expense (benefit) $ 21,784 $ ( 6,422 ) $ 55,710 $ ( 2,967 )

Income tax (benefit) expense $ ( 8,297 ) $ 14,939

The Company regularly assesses its ability to realize its deferred tax assets.

Assessing the realizability of deferred tax assets requires significant management judgment.

In determining whether its deferred tax assets are more-likely-than-not realizable, the Company evaluated all available positive and negative evidence, and weighed the objective evidence and expected impact.

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 immaterial valuation allowances against the net deferred tax assets of certain of its foreign subsidiaries.

In determining whether its deferred tax assets are realizable, the Company evaluated all available positive and negative evidence, and weighed the objective evidence and expected impact.

The Company continues to retain 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) September 30,

(in thousands) March 31,

2023 December 31,

5 unchanged sentences

If future commercial use of the product is not probable, then inventory costs associated with such product are expensed during the period the costs are incurred.

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 September 30, 2022.

The Company has no inventory pending regulatory approval as of March 31, 2023.

Property, Plant and Equipment, Net

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

(in thousands) September 30,

(in thousands) March 31,

2023 December 31,

7 unchanged sentences

Total property, plant and equipment, net $ 127,478 $ 122,166

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.

Depreciation and amortization expense related to property, plant and equipment, net, was $ 3.4 million and $ 3.1 million for the three months ended March 31, 2023 and 2022, respectively.

Long-Lived Assets Held for Sale

During the first quarter of 2023, the Company committed to a plan to sell a portion of its land and buildings associated with its Billerica, Massachusetts campus.

Effective March 16, 2023, the Company entered into a purchase and sale agreement (the “P&S”) with a prospective buyer.

The assets were classified as held for sale and comprised entirely of property, plant and equipment, net.

The Company determined that the fair value of the net assets being sold exceeded the carrying value as of March 31, 2023.

The purchase price for the campus sale is $ 10.0 million in cash.

The transaction is expected to close during the second half of 2023.

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) September 30,

(in thousands) March 31,

2023 December 31,

3 unchanged sentences

Accrued professional fees 6,794 8,668

Short-term contingent liability (Note 4) 99,700 —

Other 50,380 25,525

4 unchanged sentences

Total other long-term liabilities $ 46,208 $ 46,155

Sale of Puerto Rico Subsidiary

During the fourth quarter of 2020, the Company entered into a stock purchase agreement (the “SPA”) with one of its existing radiopharmacy customers to sell all the stock of its Puerto Rico radiopharmacy subsidiary.

The assets were classified as held for sale and the Company determined that the fair value of the net assets being sold significantly exceeded the carrying value as of December 31, 2020.

The transaction was consummated on January 29, 2021.

The purchase price for the stock sale was $ 18.0 million in cash, including a holdback amount of $ 1.8 million which the Company received during the first quarter of 2022;

the purchase price also included a working capital adjustment.

The SPA contains customary representations, warranties and covenants by each of the parties.

Subject to certain limitations, the buyer will be indemnified for damages resulting from breaches or inaccuracies of the Company’s representations, warranties and covenants in the SPA.

The Company determined that this sale of certain net assets did not constitute a strategic shift that had a major effect on the Company’s operations or financial results.

As a result, this transaction was not classified as discontinued operations in the Company’s accompanying condensed consolidated financial statements.

The following table summarizes the major classes of assets and liabilities sold as of January 29, 2021, the date of sale:

(in thousands)

January 29, 2021

Current Assets:

Cash and cash equivalents

Accounts receivable, net

Other current assets

Total current assets

Non-Current Assets:

Property, plant & equipment, net

Intangibles, net

Other long-term assets

Total assets held for sale

Current Liabilities:

Accounts payable

Accrued expense and other liabilities

Total current liabilities

Non-Current Liabilities:

Asset Retirement Obligations

Other long-term liabilities

Total liabilities held for sale

The sale resulted in a pre-tax book gain of $ 15.3 million, which was recorded within operating income in the condensed consolidated statements of operations for the six months ended June 30, 2021.

Asset Retirement Obligations

The Company considers its legal obligation to remediate its facilities upon a decommissioning of its radioactive-related operations as an asset retirement obligation.

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

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 Company considers its legal obligation to remediate its facilities upon a potential decommissioning of its radioactive-related operations as an asset retirement obligation.

The Company has production facilities which manufacture and process radioactive materials at its North Billerica, Massachusetts and Somerset, New Jersey sites and currently has no plans to decommission either facility.

As of March 31, 2023, the liability is measured at the present value of the obligation expected to be incurred and is approximately $ 25.1 million.

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

2 unchanged sentences

Accretion expense 93

Accelerated costs 1,229

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 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.

Balance at March 31, 2023 $ 22,636

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, though the Company does not intend to close the facilities.

The Company has provided this financial assurance in the form of a $ 30.3 million surety bond.

1 unchanged sentence

Intangibles, net, consisted of the following:

September 30, 2022

March 31, 2023

(in thousands) Useful Lives

9 unchanged sentences

Developed technology 9 Straight-Line 2,400 ( 744 ) 1,656

IPR&D N/A N/A 15,640 — 15,640

Total $ 378,905 $ ( 159,042 ) $ 219,863

6 unchanged sentences

Accelerated 96,681 ( 95,009 ) 1,672

Currently marketed product 9 - 15

Currently marketed products 9 - 15

Straight-Line 275,700 ( 47,628 ) 228,072

4 unchanged sentences

Total $ 489,761 $ ( 174,476 ) $ 315,285

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.

Accordingly, the Company reclassified the associated asset of $ 132.8 million from IPR&D to currently marketed products and commenced amortization of the asset.

The Company recorded amortization expense for its intangible assets of $ 11.1 million and $ 8.3 million for the three months ended March 31, 2023 and 2022, respectively.

In March 2023, the Company stopped all development activities in relation to a future indication associated with AZEDRA, which is classified as an in process research and development (“IPR&D”) intangible asset.

The Company did not identify any alternative future uses or development programs for the asset, therefore the asset group, which consists of the IPR&D asset and a currently marketed product, was assessed for impairment as of March 31, 2023.

The Company considered several factors including market share, price and competitive product offerings in evaluating the quantitative impact of the future cash flows.

The Company concluded that the carrying amount exceeded the fair value of the asset group of zero.

Accordingly, in the three months ended March 31, 2023, the Company recorded a non-cash impairment charge associated with the IPR&D asset of $ 15.6 million in research and development expenses and a non-cash impairment charge of $ 116.4 million in cost of goods sold in the condensed consolidated statements of operations.

The below table summarizes the estimated aggregate amortization expense expected to be recognized on the above intangible assets:

4 unchanged sentences

Long-Term Debt, Net, and Other Borrowings

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

As of March 31, 2023, the Company’s maturities of principal obligations under its long-term debt and other borrowings are as follows:

(in thousands) Amount

1 unchanged sentence

Total principal outstanding 575,000

Unamortized debt discount ( 348 )

Unamortized debt issuance costs ( 16,628 )

3 unchanged sentences

Total long-term debt, net and other borrowings $ 558,536

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.

The Company recorded a gain on extinguishment of debt of $ 0.9 million related to the write-off of an unamortized debt premium offset by the prepayment amount.

In December 2022, the Company refinanced its existing credit facility, consisting of (i) a $ 200.0 million five-year term loan facility (the “2019 Term Facility”) and (ii) a $ 200.0 million five-year revolving credit facility (the “2019 Revolving Facility” and, together with the 2019 Term Facility, the “2019 Facility”), with a new $ 100.0 million delayed draw term loan facility (the “2022 Term Facility” and, the loans thereunder, the “Term Loans”) and a new $ 350.0 million five-year revolving credit facility (the “2022 Revolving Facility” and, together with the 2022 Term Facility, the “2022 Facility”).

The Company used approximately $ 7.8 million of cash on hand to primarily repay the principal amount of the loans outstanding related to the 2019 Facility through the nine months ended September 30, 2022.

In addition, in December 2022, the Company used approximately $ 167.6 million of cash on hand to repay in full the aggregate remaining principal amount of the loans outstanding under the 2019 Facility and to pay related interest, transaction fees and expenses.

The Company paid off the 2019 Term Facility using available cash and did not utilize another term loan to fund the payoff.

While the 2022 Term Facility allowed for a delayed draw term loan, the loan was not drawn upon.

The Company recorded a loss on extinguishment of debt of $ 0.6 million related to the write-off of unamortized debt issuance costs and debt discounts associated with the 2019 Term Facility.

In addition, the Company incurred and capitalized $ 2.7 million of new deferred financing costs related to the refinancing.

2022 Term Facility

The Company expected to draw from the 2022 Term Facility only if a proposed offering of notes by the Company was not consummated.

The commitment of the lenders to provide the 2022 Term Facility was terminated upon the completion of such note offering in December 2022.

The 2022 Term Facility included a commitment fee equal to 0.20 % per annum on the average daily unused amount of the 2022 Term Facility, which would have been payable commencing on January 16, 2023 and would have ended on the earliest of (i) the day the Term Loans under the 2022 Term Facility were funded, (ii) the last day of the delayed draw availability period and (iii) the day the commitments under the 2022 Term Facility were reduced to zero.

The Company did not draw from the 2022 Term Facility and, as such, no interest is due under this instrument.

2022 Revolving Facility

Under the terms of the 2022 Revolving Facility, the lenders are committed to extending credit to the Company from time to time until December 2, 2027 consisting of revolving loans (the “Revolving Loans”) in an aggregate principal amount not to exceed $ 350.0 million (the “Revolving Commitment”) at any time, including a $ 20.0 million sub-facility for the issuance of letters of credit (the “Letters of Credit”) and a $ 10.0 million sub-facility for swingline loans (the “Swingline Loans”).

The Letters of Credit, Swingline Loans and the Revolving Loans, if used, are expected to be used for working capital and for other general corporate purposes.

The Revolving Loans bear interest, with pricing based from time to time at the Company’s election, at (i) the secured overnight financing rate as published by the Federal Reserve Bank of New York on its website plus an applicable margin that ranges from 1.50 % to 2.50 % based on the Company’s total net leverage ratio or (ii) the alternative base rate plus an applicable margin that ranges from 0.50 % to 1.50 % based on the Company’s total net leverage ratio.

The 2022 Revolving Facility also includes an unused commitment fee at a rate ranging from 0.15 % to 0.35 % per annum based on the Company’s total net leverage ratio.

The Company is permitted to voluntarily prepay the Revolving Loans, in whole or in part, or reduce or terminate the Revolving Commitment, in each case, without premium or penalty.

On any business day on which the total amount of outstanding Revolving Loans, Letters of Credit and Swingline Loans exceeds the total Revolving Commitment, the Company must prepay the Revolving Loans in an amount equal to such excess.

The Company is not required to make mandatory prepayments under the 2022 Revolving Facility.

As of March 31, 2023, there were no outstanding borrowings under the 2022 Revolving Facility.

The Company has the right to request an increase to the Revolving Commitment in an aggregate principal amount of up to the sum of $ 335.0 million or consolidated EBITDA for the four consecutive fiscal quarters most recently ended, plus additional amounts in certain circumstances (collectively, the “Incremental Cap”), minus certain incremental term loans made pursuant to specified incremental term loan commitments (“Incremental Term Loans”).

The Company has the right to request Incremental Term Loans in an aggregate principal amount of up to the Incremental Cap less any incremental increases to the Revolving Commitment.

Proceeds of Incremental Term Loans may be used for working capital and for other general corporate purposes and will bear interest at rates agreed between the Company and the lenders providing the Incremental Term Loans.

2022 Facility Covenants

The 2022 Facility contains a number of affirmative, negative and reporting covenants, as well as financial maintenance covenants pursuant to which the Company is required to be in quarterly compliance, measured on a trailing four quarter basis, with two financial covenants.

The minimum interest coverage ratio, commencing with the fiscal quarter ended December 31, 2022, must be at least 3.00 to 1.00.

The maximum total net leverage ratio permitted by the financial covenant is displayed in the table below:

2022 Credit Agreement

Period Total Net Leverage Ratio

Q1 2023 to Q4 2023 4.00 to 1.00

Q1 2024 and thereafter 3.50 to 1.00

The 2022 Facility contains usual and customary restrictions on the ability of the Company and its subsidiaries to:

(i) incur additional indebtedness (ii) create liens;

(iii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets;

(iv) sell certain assets;

(v) pay dividends on, repurchase or make distributions in respect of capital stock or make other restricted payments;

(vi) make certain investments;

(vii) repay subordinated indebtedness prior to stated maturity;

and (viii) enter into certain transactions with its affiliates.

Upon an event of default, the Administrative Agent will have the right to declare the loans and other obligations outstanding under the 2022 Facility immediately due and payable and all commitments immediately terminated.

The 2022 Facility is guaranteed by Lantheus Holdings, and certain subsidiaries of LMI, including Progenics and Lantheus Real Estate, and obligations under the 2022 Facility are generally secured by first priority liens over substantially all of the assets of each of LMI, Lantheus Holdings, and certain subsidiaries of LMI, including Progenics and Lantheus Real Estate (subject to customary exclusions set forth in the transaction documents) owned as of December 2, 2022 or thereafter acquired.

Convertible Notes

On December 8, 2022, the Company issued $ 575.0 million in aggregate principal amount of 2.625 % Convertible Senior Notes due 2027 (the “Notes”), which includes $ 75.0 million in aggregate principal amount of Notes sold pursuant to the full exercise of the initial purchasers’ option to purchase additional Notes.

The Notes were issued under an indenture, dated as of December 8, 2022 (the “Indenture”), among the Company, LMI (the “Guarantor”), as Guarantor, and U.S.

Bank Trust Company, National Association, as Trustee.

The net proceeds from the issuance of the Notes were approximately $ 557.8 million after deducting the initial purchasers’ discounts and offering expenses payable by the Company.

The Notes are senior unsecured obligations of the Company.

The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor.

The Notes bear interest at a rate of 2.625 % per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2023, and will mature on December 15, 2027 unless earlier redeemed, repurchased or converted in accordance with their terms.

The initial conversion rate for the Notes is 12.5291 shares of the Company’s common stock per $1,000 in principal amount of Notes (which is equivalent to an initial conversion price of approximately $ 79.81 per share of the Company’s common stock, representing an initial conversion premium of approximately 42.5 % above the closing price of $ 56.01 per share of the Company’s common stock on December 5, 2022).

In no event shall the conversion rate per $1,000 in principal amount of notes exceed 17.8539 shares of the Company’s common stock.

Prior to the close of business on the business day immediately preceding September 15, 2027, the Notes may be converted at the option of the holders only upon occurrence of specified events and during certain periods, and thereafter until the close of business on the business day immediately preceding the maturity date, the Notes may be converted at any time.

The Company will satisfy any conversion by paying cash up to the aggregate principal amount of the Notes to be converted and by paying or delivering, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted.

The Company may redeem for cash all or any portion of the Notes, at its option, on or after December 22, 2025 if the closing sale price per share of the Company’s common stock exceeds 130 % of the conversion price of the Notes for a specified period of time.

The redemption price will be equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The Company evaluated the Notes upon completion of the sale and concluded on the following features:

• Conversion Feature:

The Company determined that the conversion feature qualifies for the classification of equity.

As a result, the conversion feature should not be bifurcated as a derivative instrument and the Notes were accounted for as a single liability.

• Redemption Features:

The redemption features were reviewed within the Notes and the Company determined that the redemption features are closely related to the Notes and as such should not be separately accounted for as a bifurcated derivative instrument.

• Additional Interest Features:

The Notes may result in additional interest if the Company fails to timely file any document that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

The Company will pay additional interest on the notes at a rate equal to 0.25 % to 0.50 % per annum based on the principal amount of notes outstanding for each day the Company failure to file has occurred or the notes are not otherwise freely tradable.

Further, if the notes are assigned a restricted CUSIP number or the notes are not otherwise freely tradable pursuant to Rule 144 under the Securities Act by holders other than our affiliates or holders that were our affiliates at any time during the three months immediately preceding as of the 385th day after the last date of original issuance of the notes offered hereby, the Company will pay additional interest on the notes at a rate equal to (i) 0.25 % to 0.50 % per annum based on the principal amount of notes outstanding for each day until the restrictive legend has been removed from the notes, the notes are assigned an unrestricted CUSIP and the notes are freely tradable.

The Company concluded that the interest feature is unrelated to the credit risk and should be bifurcated from the Notes, however, the Company assessed the probabilities of triggering events occurring under these features and does not expect to trigger the aforementioned events.

These events will continue to be monitored to determine whether the interest feature will be bifurcated if it has value.

As of March 31, 2023, the carrying value of the Notes was $ 575.0 million and the fair value of the liability was $ 575.0 million.

The Company recorded interest expense of approximately $ 3.9 million related to the Notes for the three months ended March 31, 2023.

Derivative Instruments

The Company uses interest rate swaps to reduce the variability in cash flows associated with a portion of the Company’s forecasted interest payments on its variable rate debt.

The Company has used, but does not currently use, interest rate swaps to reduce the variability in cash flows associated with portions of the Company’s interest payments on variable rate debt.

In March 2020, the Company entered into interest rate swap contracts to fix the LIBOR rate on a notional amount of $ 100.0 million through May 31, 2024.

The average fixed LIBOR rate on the interest rate swaps is approximately 0.82 %.

This agreement involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount.

The average fixed LIBOR rate on the interest rate swaps was approximately 0.82 %.

This agreement involved the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount.

The interest rate swaps were designated as cash flow hedges.

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 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) September 30, 2022 December 31, 2021

Derivatives type Classification

Interest rate swap Other long-term assets $ 5,660 $ 357

Accumulated Other Comprehensive Income (Loss)

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 accordance with hedge accounting, the interest rate swaps were recorded on the Company’s consolidated balance sheets at fair value, and changes in the fair value of the swap agreements were 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.

On December 2, 2022, the Company voluntarily terminated the interest rate swap contracts in connection with the refinancing of debt.

Upon termination, the Company received approximately $ 5.6 million in cash and the remaining balance of approximately $ 5.5 million in accumulated other comprehensive income related to the interest rate swap contracts were reclassified into earnings.

Accumulated Other Comprehensive (Loss) Income

The components of accumulated other comprehensive (loss) income, net of tax of zero and $ 0.9 million for the three months ended March 31, 2023 and 2022, respectively, consisted of the following:

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

Balance at January 1, 2023 $ ( 1,259 ) $ — $ ( 1,259 )

Other comprehensive (loss) income before reclassifications ( 463 ) 4,112 3,649

Other comprehensive loss before reclassifications ( 119 ) — ( 119 )

Amounts reclassified to earnings — — —

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

Balance at March 31, 2023 $ ( 1,378 ) $ — $ ( 1,378 )

Balance at January 1, 2022 $ ( 754 ) $ 269 $ ( 485 )

1 unchanged sentence

Amounts reclassified to earnings — 170 170

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

Balance at March 31, 2022 $ ( 614 ) $ 2,525 $ 1,911

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022

5 unchanged sentences

Operating and finance lease assets and liabilities are as follows:

(in thousands) Classification September 30,

(in thousands) Classification March 31,

2023 December 31,

7 unchanged sentences

Total leased liabilities $ 27,677 $ 28,204

The Company entered into an agreement in February 2022 to lease additional office space in Bedford, Massachusetts.

The facility is currently being renovated and the associated right-of-use asset and liability will be recorded once renovations are substantially complete.

The lease payments are expected to commence in the fourth quarter of 2022 when renovation of the facility is completed.

Net Income (Loss) Per Common Share

A summary of net income per common share is presented below:

The Company entered into an operating lease agreement in February 2022 for office space in Bedford, Massachusetts, under a lease agreement expiring in June 2031, which commenced and was recorded in December 2022 for $ 11.0 million.

Net (Loss) Income Per Common Share

A summary of net (loss) income per common share is presented below:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2023 2022

Net income (loss) $ 61,232 $ ( 13,415 ) $ 147,252 $ ( 31,064 )

Net (loss) income $ ( 2,807 ) $ 42,962

Basic weighted-average common shares outstanding 67,749 68,008

2 unchanged sentences

Diluted weighted-average common shares outstanding 67,749 70,051

Basic income (loss) per common share $ 0.89 $ ( 0.20 ) $ 2.15 $ ( 0.46 )

Diluted income (loss) per common share $ 0.86 $ ( 0.20 ) $ 2.08 $ ( 0.46 )

Basic (loss) income per common share $ ( 0.04 ) $ 0.63

Diluted (loss) income per common share $ ( 0.04 ) $ 0.61

Antidilutive securities excluded from diluted net income (loss) per common share 2,953 377

Impact of the Notes

The Company considered whether the Notes are participating securities through the two-class method.

The Company determined that if a cash dividend is paid that is greater than the then stock price, the holder of Notes will receive cash on an if-converted basis.

While this feature is considered to be a participating right;

basic earnings per share is only impacted if the Company’s earning exceeds the current share price, regardless of whether such dividend is declared.

During the three months ended March 31, 2023 and 2022, no such dividend was declared.

In addition, the Company is required to settle the principal amount of the Notes in cash upon conversion, and therefore, the Company uses the if-converted method for calculating any potential dilutive effect of the conversion option on diluted net income per share, if applicable, unless the application of the two-class method is dilutive.

The conversion option will have a dilutive impact on net income per share of Common Stock when the average price per share of the Company's common stock for a given period exceeds the conversion price of the Notes of $ 79.81 per share.

During the three months ended March 31, 2023, the average price per share of the Company's Common Stock was below the conversion price of the Notes.

Other income consisted of the following:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022

Foreign currency losses $ 145 $ 127 $ 189 $ 156

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

Foreign currency losses (gains) $ 246 $ ( 81 )

Tax indemnification income, net ( 96 ) ( 396 )

Interest income ( 3,523 ) ( 8 )

Other — 1 — —

Total other income $ ( 3,231 ) $ ( 485 )

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

As of March 31, 2023, the Company did not have any material ongoing litigation to which the Company was a party.

Acquisition of Assets

On February 6, 2023, the Company acquired Cerveau.

Cerveau’s primary asset is MK-6240, a second-generation F 18-labeled positron emission tomography (“PET”) imaging agent that targets Tau tangles in Alzheimer’s disease.

The Company determined that upon review of the Cerveau acquisition, the transaction did not meet the definition of a business combination and is therefore treated as an asset acquisition.

In February 2023, the Company made an upfront payment of approximately $ 35.3 million to the selling stockholders of Cerveau (the “Selling Stockholders”) and expects to pay an additional $ 10.0 million upon successful completion of a technology transfer.

The Company could pay up to an additional $ 51.0 million in milestone payments upon achievement of specified U.S.

regulatory milestones related to MK-6240.

The Selling Stockholders are also eligible to receive up to $ 1.2 billion in sales milestone payments upon the achievement of specified annual commercial sales thresholds of MK-6240 in the event the Company pursues commercialization as well as up to $ 13.5 million in research revenue milestones upon achievement of specified annual research revenue thresholds.

Additionally, the Company will pay to the Selling Stockholders up to double-digit royalty payments for research revenue and commercial sales.

Research revenue is derived from existing partnerships with pharmaceutical companies that use MK-6240 in clinical trials and includes milestone and dose-related payments.

The purchase agreement pursuant to which the Company purchased Cerveau specifies, among other things, that certain members of the Selling Stockholders will also provide transition and clinical development services for a prescribed time following the closing of the transaction.

In December 2022, the Company made upfront payments of $ 260.0 million to POINT Biopharma Global Inc.

(“Point”) as a part of an asset acquisition with the potential for additional milestone payments of approximately $ 1.8 billion for the two licensed assets based on U.S.

Food and Drug Administration (“FDA”) approval and net sales and commercial milestones.

Under the terms of the license agreement between Lantheus Two and POINT for PNT2002, Lantheus Two paid POINT an upfront cash payment of $ 250.0 million, and could pay up to an additional $ 281.0 million in milestone payments upon the achievement of specified U.S.

regulatory milestones related to PNT2002.

POINT is also eligible to receive up to $ 1.3 billion in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2002.

Under the terms of the license agreement between Lantheus Three and POINT for PNT2003, Lantheus Three paid POINT an upfront cash payment of $ 10.0 million, and could pay up to an additional $ 34.5 million in milestone payments upon the achievement

of specified U.S.

regulatory milestones related to PNT2003.

POINT is also eligible to receive up to $ 275.0 million in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2003.

Additionally, the Company will pay POINT royalties on net sales, beyond certain financial thresholds and subject to conditions, of 20 % for PNT2002 and 15 % for PNT2003.

Costs of IPR&D projects acquired as part of an asset acquisition that have no alternative future use are expensed when incurred, and therefore, a charge of $ 260.0 million was recognized in research and development expenses during the year ended December 31, 2022.

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 of fiscal year 2021, which resulted in a change in operating and reportable segments.

The Company now operates as one business segment:

The Company operates as one business segment:

the development, manufacture and sale of innovative imaging diagnostics, radiotherapeutics, and artificial intelligence solutions designed to enable clinicians to Find, Fight and Follow disease to deliver better patient outcomes.

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

The results of this operating segment are regularly reviewed by the Company’s chief operating decision maker, the 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.

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