What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 137 added, 89 removed, 563 unchanged (29% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30,

2023 December 31,

28 unchanged sentences

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

69,755 and 68,851 shares issued as of June 30, 2023 and December 31, 2022, respectively)

69,808 and 68,851 shares issued as of September 30, 2023 and December 31, 2022, respectively)

Additional paid-in capital 743,973 715,875

Treasury Stock at cost - 1,339 shares as of June 30, 2023 and December 31, 2022

Treasury Stock at cost - 1,339 shares as of September 30, 2023 and December 31, 2022

( 75,000 ) ( 75,000 )

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

Interest expense 5,054 1,626 14,978 4,604

Other income ( 4,482 ) ( 310 ) ( 7,713 ) ( 795 )

Other (income) expense ( 52,649 ) 1,101 ( 60,362 ) 306

Income before income taxes 159,956 83,016 272,540 202,962

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

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

Total other comprehensive income 426 413 307 2,809

Total other comprehensive (loss) income ( 83 ) 670 224 3,479

Comprehensive income $ 131,874 $ 61,902 $ 223,505 $ 150,731

3 unchanged sentences

(in thousands)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Common Stock Treasury Stock Additional

19 unchanged sentences

Balance, June 30, 2023 69,755 $ 698 1,339 $ ( 75,000 ) $ 729,733 $ ( 101,834 ) $ ( 952 ) $ 552,645

Six Months Ended June 30, 2022

Net income — — — — — — 131,957 — 131,957

Other comprehensive loss — — — — — — ( 83 ) ( 83 )

Stock option exercises and employee stock plan purchases 25 — — — 1,265 — — 1,265

Vesting of restricted stock awards and units 39 — — — ( 1 ) — — ( 1 )

Shares withheld to cover taxes ( 11 ) — — — ( 1,000 ) — — ( 1,000 )

Stock-based compensation — — — — 13,976 — — 13,976

Balance, September 30, 2023 69,808 $ 698 1,339 $ ( 75,000 ) $ 743,973 $ 30,123 $ ( 1,035 ) $ 698,759

Nine Months Ended September 30, 2022

Common Stock Treasury Stock Additional

19 unchanged sentences

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

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

8 unchanged sentences

Stock-based compensation 36,335 21,138

Gain on sale of RELISTOR licensed intangible asset associated with net sales royalties ( 51,789 ) —

Deferred taxes ( 57,649 ) 14,461

14 unchanged sentences

Acquisition of assets, net ( 45,345 ) —

Net cash used in investing activities ( 65,210 ) ( 5,733 )

Net cash provided by (used in) investing activities 18,008 ( 11,823 )

Financing activities

6 unchanged sentences

Effect of foreign exchange rates on cash, cash equivalents and restricted cash 139 ( 266 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 1,557 ) 72,919

Net increase in cash, cash equivalents and restricted cash 198,508 158,191

Cash, cash equivalents and restricted cash, beginning of period 417,241 100,651

3 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Reconciliation to amounts within the condensed consolidated balance sheets

2 unchanged sentences

Cash, cash equivalents and restricted cash at end of period $ 615,749 $ 258,842

Nine Months Ended

September 30,

Schedule of non-cash investing and financing activities

Additions of property, plant and equipment included in liabilities $ 8,573 $ 2,303

Right-of-use asset obtained in exchange for operating lease liabilities $ 29,625 $ —

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

7 unchanged sentences

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.

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.

5 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, 2023 are not necessarily indicative of the results that may be expected for the year ended December 31, 2023 or any future period.

The results of operations for the three and nine months ended September 30, 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.

10 unchanged sentences

Recent Accounting Pronouncements

The Company has not adopted any new accounting standards during the six months ended June 30, 2023.

The Company has not adopted any new accounting standards during the nine months ended September 30, 2023.

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) 2023 2022 2023 2022

14 unchanged sentences

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 August 2, 2023, the Company sold the right to its RELISTOR net sales royalties, which is classified as a licensed intangible asset (“RELISTOR royalty asset”), under its license agreement with Bausch Health Companies, Inc.

the Company retained the rights to future sales-based milestone payments.

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

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

10 unchanged sentences

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.

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.

Fair Value of Financial Instruments

8 unchanged sentences

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

June 30, 2023

September 30, 2023

(in thousands) Total Fair

11 unchanged sentences

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

During the three and six months ended June 30, 2023, there were no transfers into or out of Level 3.

During the three and nine months ended September 30, 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.

6 unchanged sentences

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 (also known as 131 I-MIP-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

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

The Company’s total potential payments related to the 2013 Acquisition are approximately $ 85.0 million.

5 unchanged sentences

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 June 30, 2023.

The following tables summarize quantitative information and assumptions pertaining to the fair value measurement of liabilities using Level 3 inputs at September 30, 2023.

Fair Value at Assumptions

(in thousands) June 30, 2023 December 31, 2022 Valuation Technique Unobservable Input June 30, 2023 December 31, 2022

(in thousands) September 30, 2023 December 31, 2022 Valuation Technique Unobservable Input September 30, 2023 December 31, 2022

Contingent consideration liability:

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

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

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

Period of expected milestone achievement and sales targets N/A 2022 - 2023

Probability of success N/A 100 %

9 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,

2023 2022 2023 2022

3 unchanged sentences

Fair value, end of period $ — $ 8,200 $ 2,500 $ 110,500

The change in fair value of the contingent financial liabilities resulted in a reduction of general and administrative expense of $ 8.9 million for the six months ended June 30, 2023 and was primarily due to changes in revenue forecasts and the passage of time (excluding the CVRs).

The change in fair value of the contingent financial liabilities resulted in a reduction of general and administrative expense of $ 9.5 million for the nine months ended September 30, 2023 and was primarily due to changes in revenue forecasts and the passage of time (excluding the CVRs).

The Company made the applicable cash payment related to the CVRs in May 2023.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

2 unchanged sentences

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

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.

In determining whether its deferred tax assets are realizable, the Company evaluated all available 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.

Accordingly, a long-term receivable is recorded to account for the expected value to the Company of future indemnification payments to be paid on behalf of the Company by BMS, net of actual tax benefits received by the Company.

The tax indemnification receivable is recorded within other long-term assets.

In accordance with the Company’s accounting policy, the change in the tax liabilities, penalties and interest associated with these obligations (net of any offsetting federal or state benefit) is recognized within income tax expense.

1 unchanged sentence

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 2023, the Company entered into a settlement agreement with one state, for which the Company was indemnified pursuant to the tax indemnification agreement, and accordingly reduced the amount of uncertain tax positions by $ 4.8 million.

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

Inventory consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

6 unchanged sentences

product is not probable, then inventory costs associated with such product are expensed during the period the costs are incurred.

The Company has no inventory pending regulatory approval as of June 30, 2023.

The Company has no inventory pending regulatory approval as of September 30, 2023.

Property, Plant and Equipment, Net

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

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

7 unchanged sentences

Total property, plant and equipment, net $ 140,293 $ 122,166

Depreciation and amortization expense related to property, plant and equipment, net, was $ 3.3 million for the three months ended June 30, 2023 and 2022, respectively, and $ 6.7 million and $ 6.4 million for the six months ended June 30, 2023 and 2022, respectively.

Depreciation and amortization expense related to property, plant and equipment, net, was $ 2.9 million and $ 3.9 million for the three months ended September 30, 2023 and 2022, respectively, and $ 9.6 million and $ 10.3 million for the nine months ended September 30, 2023 and 2022, respectively.

During the three months ended June 30, 2023, as a result of a decline in expected future cash flows related to a certain asset group, the Company determined certain impairment triggers had occurred.

7 unchanged sentences

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 June 30, 2023.

The Company determined that the fair value of the net assets being sold exceeded the carrying value as of September 30, 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.

The transaction is expected to close during the first half of 2024.

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,

2023 December 31,

12 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, 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:

As of September 30, 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 carrying value of asset retirement obligations:

(in thousands) Amount

1 unchanged sentence

Accretion expense 280

Balance at June 30, 2023 $ 22,729

Balance at September 30, 2023 $ 22,823

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, respectively, upon closure.

2 unchanged sentences

Intangibles, net, consisted of the following:

June 30, 2023

September 30, 2023

(in thousands) Useful Lives

24 unchanged sentences

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

The Company recorded amortization expense for its intangible assets of $ 12.4 million and $ 8.3 million for the three months ended June 30, 2023 and 2022, respectively and $ 23.5 million and $ 16.6 million for the six months ended June 30, 2023 and 2022, respectively.

The Company recorded amortization expense for its intangible assets of $ 11.7 million and $ 8.3 million for the three months ended September 30, 2023 and 2022, respectively, and $ 35.1 million and $ 24.9 million for the nine months ended September 30, 2023 and 2022, respectively.

On August 2, 2023, the Company sold the right to its RELISTOR royalty asset under its license agreement with Bausch;

the Company retained the rights to future sales-based milestone payments.

The Company received an initial payment of approximately $ 98.0 million in connection with the sale and has the right to receive an additional payment from the buyer of $ 5.0 million if worldwide net sales of RELISTOR in 2025 exceed a specified threshold.

The additional payment would be recognized upon

achievement of the specified threshold.

Decreases of $ 63.6 million of license assets and $ 17.5 million of associated accumulated amortization, as well as a gain of $ 51.8 million were recorded as a result of the sale.

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.

1 unchanged sentence

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

concluded that the carrying amount exceeded the fair value of the asset group, which had no value.

The Company concluded that the carrying amount exceeded the fair value of the asset group, which had no value.

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.

On August 15, 2023, the Company announced that it had made the decision to discontinue the production and promotion of AZEDRA and would be winding down its Somerset, New Jersey manufacturing site.

The Company currently intends to continue manufacturing AZEDRA into the first quarter of 2024, to the extent feasible, with the goal of providing doses of AZEDRA to current patients so they can complete their treatment regimen.

In February 2023, the Company entered into an agreement with Cerveau to purchase all of the outstanding capital stock of Cerveau for approximately $ 35.3 million.

8 unchanged sentences

Long-Term Debt, Net, and Other Borrowings

As of June 30, 2023, the Company’s maturities of principal obligations under its long-term debt and other borrowings are as follows:

As of September 30, 2023, the Company’s maturities of principal obligations under its long-term debt and other borrowings are as follows:

(in thousands) Amount

6 unchanged sentences

Total long-term debt, net and other borrowings $ 560,576

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”).

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.

2 unchanged sentences

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.

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, Letters of Credit, and the Swingline 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.

3 unchanged sentences

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

As of June 30, 2023, there were no outstanding borrowings under the 2022 Revolving Facility.

As of September 30, 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”).

45 unchanged sentences

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

As of June 30, 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 and $ 7.8 million related to the Notes for the three and six months ended June 30, 2023, respectively.

There were no conversions of Notes during the six months ended June 30, 2023.

As of September 30, 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 and $ 11.8 million related to the Notes for the three and nine months ended September 30, 2023, respectively.

There were no conversions of Notes during the nine months ended September 30, 2023.

Derivative Instruments

8 unchanged sentences

Accumulated Other Comprehensive (Loss) Income

The components of accumulated other comprehensive (loss) income, net of tax of zero and $ 1.1 million for the six months ended June 30, 2023 and 2022, respectively, consisted of the following:

The components of accumulated other comprehensive (loss) income, net of tax of zero and $ 1.5 million for the nine months ended September 30, 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 before reclassifications 307 — 307

Other comprehensive income before reclassifications 224 — 224

Amounts reclassified to earnings — — —

Balance at June 30, 2023 $ ( 952 ) $ — $ ( 952 )

Balance at September 30, 2023 $ ( 1,035 ) $ — $ ( 1,035 )

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

1 unchanged sentence

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

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

5 unchanged sentences

Operating and finance lease assets and liabilities are as follows:

(in thousands) Classification June 30,

(in thousands) Classification September 30,

2023 December 31,

10 unchanged sentences

The lease modification includes a lease of additional office and laboratory space at the Bedford location (the “Additional Premises”) for a term of 15 years and 4 months and extends the term of the lease for the Existing Premises to be coterminous with the term of the lease for the Additional Premises.

As a result of the extended term for the Existing Premises, the Company recorded an additional right-of-use asset and liability of $ 6.0 million.

As a result of the extended term for the Existing Premises, the Company recorded an additional right-of-use asset and liability of $ 6.0 million in May 2023.

The modification also contains a provision to convert the rent schedule of the Existing Premises from gross to triple net in 2024, which may result in an additional adjustment to the right-of-use asset and liability.

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

The lease payments for the Additional Premises are currently expected to commence in the second half of 2024 when renovation of the Additional Premises is expected to be completed.

The landlord provided notice to the Company that its renovations of the Additional Premises were completed.

The Company is currently in discussions with the landlord as to the status of the renovations.

As a result of the notice, the Company recorded an additional right-of-use asset and liability of $ 23.5 million as of September 1, 2023.

To determine the value of the additional right-of-use asset and liability, the Company was required to calculate the discount rate of the lease modification.

The discount rate was determined based on the expected lease term and by comparing interest rates in the market for similar borrowings with comparable credit quality of the Company.

The lease for the Additional Premises allows for the extension of five years to begin immediately upon the expiration of the original term.

Other information related to leases were as follows:

September 30,

2023 December 31,

Weighted-average remaining lease term (Years):

Operating leases 13.6 7.9

Finance leases 2.7 1.9

Weighted-average discount rate:

Operating leases 7.3 % 4.8 %

Finance leases 7.2 % 4.4 %

Net Income Per Common Share

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2023 2022 2023 2022

8 unchanged sentences

Antidilutive securities excluded from diluted net income per common share 435 52 422 226

Impact of the Notes

Impact of the Convertible 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 earnings exceeds the current share price, regardless of whether such dividend is declared.

During the six months ended June 30, 2023 and 2022, no such dividend was declared.

While this feature is considered to be a participating right, basic earnings per share is only impacted if the Company’s earnings exceeds the current share price, regardless of whether such dividend is declared.

During the nine months ended September 30, 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 June 30, 2023, the average price per share of the Company’s Common Stock exceeded the conversion price of the Notes.

During the six months ended June 30, 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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

Foreign currency (gains) losses $ ( 224 ) $ 125 $ 22 $ 44

Tax indemnification income, net ( 232 ) ( 396 ) ( 328 ) ( 792 )

Foreign currency losses $ 9 $ 145 $ 31 $ 189

Tax indemnification loss, net 3,672 1,460 3,344 668

Interest income ( 4,540 ) ( 504 ) ( 12,090 ) ( 551 )

Gain on sale of RELISTOR licensed intangible asset associated with net sales royalties ( 51,789 ) — ( 51,789 ) —

Other ( 1 ) — 142 —

Total other income $ ( 4,482 ) $ ( 310 ) $ ( 7,713 ) $ ( 795 )

Total other (income) expense, net $ ( 52,649 ) $ 1,101 $ ( 60,362 ) $ 306

Commitments and Contingencies

3 unchanged sentences

The costs and outcome of litigation, regulatory or other proceedings cannot be predicted with certainty, and some lawsuits, claims, actions or proceedings may be disposed of unfavorably to the Company and could have a material adverse effect on the Company’s results of operations or financial condition.

In addition, intellectual property disputes often have a risk of injunctive relief which, if imposed against the Company, could materially and adversely affect its financial condition or results of operations.

In addition, intellectual property disputes often

have a risk of injunctive relief which, if imposed against the Company, could materially and adversely affect its financial condition or results of operations.

If a matter is both probable to result in material liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible material loss or range of loss.

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

As of September 30, 2023, the Company did not have any material ongoing litigation to which the Company was a party.

Acquisition of Assets

2 unchanged sentences

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 stockholders of Cerveau (the “Selling Stockholders”) and paid an additional $ 10.0 million in May 2023 upon the successful completion of a technology transfer.

In February 2023, the Company made an upfront payment of approximately $ 35.3 million to the stockholders of Cerveau (the “Selling Stockholders”) and paid the Selling Stockholders an additional $ 10.0 million in May 2023 upon the 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.

5 unchanged sentences

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.

(“POINT”) as 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.

9 unchanged sentences

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 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.

Subsequent Events

On August 2, 2023, the Company entered into an agreement to sell the right to all of its RELISTOR net sales royalties under its license agreement with Bausch, relating to royalties payable in respect of the second quarter of 2023 and subsequent quarters.

Proceeds from this transaction will be used in the Company’s core businesses and product pipeline.

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