What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-23 · 225 added, 319 removed, 1061 unchanged (34% of the section changed)

30 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Convertible Notes— Refer to Notes 2 and 13 to the financial statements

Intangible Assets — Non-Cash Impairment Charge for AZEDRA Intangible Asset Group — Refer to Note 10 to the financial statements

Critical Audit Matter Description

On December 8, 2022, the Company issued $575 million in aggregate principal amount of 2.625% Convertible Senior Notes due 2027 (the “Notes”), which includes $75 million in aggregate principal amount of Notes sold pursuant to the full exercise of the initial purchasers’ option to purchase additional Notes.

The Notes include conversion and redemption features that the Company determined should not be bifurcated as derivative instruments.

We identified the accounting for the conversion feature and redemption features of the Notes to be a critical audit matter given the complexity in applying the accounting framework, including the determination of whether those features of the Notes should be bifurcated from the Notes and accounted for separately as a derivative instrument.

The complexities required a high degree of auditor judgment and an increased extent of audit effort, including the involvement of professionals in our firm with specialized skills and knowledge in the accounting for financial instruments.

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

The asset group, which consisted of the IPR&D asset and a currently marketed product (the “AZEDRA intangible asset group”), was assessed for impairment.

The Company considered several factors in estimating the future projections of revenues and cash flows of the AZEDRA intangible asset group as part of the impairment testing.

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

As a result of such assessment, the Company recorded a non-cash impairment charge in research and development expenses relating to the IPR&D asset and a non-cash impairment charge in cost of goods sold relating to the currently marketed indication of AZEDRA in the consolidated statement of operations for the year ended December 31, 2023.

We identified management’s estimates of future projections of revenue and cash flows used to determine the fair value of the AZEDRA intangible asset group used to record the non-cash impairment charge as a critical audit matter because of the significant estimates made by management.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates of future projections of revenues and cash flows.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s judgments of the accounting treatment of the conversion and redemption features of the Notes included the following among others:

• We tested the design and effectiveness of internal controls over the evaluation of the features of the Notes and the related accounting conclusions.

• With the assistance of professionals in our firm with specialized skills and knowledge in financial instruments we evaluated the appropriateness of the accounting conclusions, including the accounting for the conversion and redemption features.

• We tested the completeness and accuracy of the Notes terms and assumptions utilized in the accounting conclusions through comparison to the underlying agreements and supporting documentation.

Our audit procedures related to management’s estimates of future revenues and cash flows used to record the non-cash impairment charge for the AZEDRA intangible asset group included the following, among others:

• We tested the effectiveness of controls over management’s review of the estimates of future projections of revenue and cash flows used to record the non-cash impairment charge for the AZEDRA intangible asset group.

• We assessed the reasonableness of management’s estimates of future projections of revenues and cash flows for the AZEDRA intangible asset group by:

◦ Comparing historical results to the Company’s strategic plans.

◦ Making inquiries of management and corroborating inquiries with the Company’s strategic planning group.

◦ Reading internal communications to management and the Board of Directors.

• We evaluated whether the estimates of future projections of revenues and cash flows for AZEDRA were consistent with evidence obtained in other areas of the audit.

/s/ Deloitte & Touche LLP

10 unchanged sentences

Other current assets 16,683 13,092

Assets held for sale 7,159 —

Total current assets 1,085,819 677,616

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Additional paid-in capital 757,727 715,875

Treasury Stock at cost - 1,339 and no shares as of December 31, 2022 and 2021, respectively

Accumulated deficit ( 193,158 ) ( 221,225 )

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

( 75,000 ) ( 75,000 )

Retained earnings (accumulated deficit) 133,503 ( 193,158 )

Accumulated other comprehensive loss ( 1,037 ) ( 1,259 )

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Loss (gain) on extinguishment of debt — 588 ( 889 )

Other loss (income) 1,703 7,350 ( 2,198 )

Other (income) loss, net ( 66,320 ) 1,703 7,350

Income (loss) before income taxes 410,943 26,719 ( 75,038 )

Income tax (benefit) expense ( 1,348 ) ( 3,759 ) 1,994

Income tax expense (benefit) 84,282 ( 1,348 ) ( 3,759 )

Net income (loss) $ 326,661 $ 28,067 $ ( 71,279 )

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Realized loss on cash flow hedges, net of tax — ( 269 ) —

Unrealized gain (loss) on cash flow hedges, net of tax — 1,687 ( 1,418 )

Total other comprehensive (loss) income ( 774 ) 1,563 ( 1,088 )

Unrealized gain on cash flow hedges, net of tax — — 1,687

Total other comprehensive income (loss) 222 ( 774 ) 1,563

Comprehensive income (loss) $ 326,883 $ 27,293 $ ( 69,716 )

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Common Stock Treasury Stock Additional

Capital Accumulated

Deficit Accumulated

Capital Retained Earnings Accumulated

Comprehensive

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Shares withheld to cover taxes ( 107 ) ( 1 ) — — ( 2,045 ) — — ( 2,046 )

Issuance of common stock, net of $ 3,776 issuance costs

26,845 269 — — 394,065 — — 394,334

Fair value of replacement stock options related to precombination services — — — — 7,125 — — 7,125

Stock-based compensation — — — — 15,934 — — 15,934

Balance, December 31, 2021 67,739 677 — — 685,472 ( 221,225 ) ( 485 ) 464,439

Net loss — — — — — ( 71,279 ) — ( 71,279 )

Net income — — — — — 28,067 — 28,067

Other comprehensive income — — — — — — ( 774 ) ( 774 )

2 unchanged sentences

Shares withheld to cover taxes ( 144 ) ( 1 ) — — ( 7,758 ) — — ( 7,759 )

Repurchase of common stock — — 1,339 ( 75,000 ) — — — ( 75,000 )

Stock-based compensation — — — — 29,262 — — 29,262

5 unchanged sentences

Shares withheld to cover taxes ( 195 ) ( 2 ) — — ( 14,392 ) — — ( 14,394 )

Repurchase of common stock — — 1,339 ( 75,000 ) — — — ( 75,000 )

Stock-based compensation — — — — 50,507 — — 50,507

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Stock-based compensation 50,507 29,262 15,934

(Gain) loss on disposal of assets — ( 15,263 ) 2,250

Gain on disposal of assets ( 51,789 ) — ( 15,263 )

Deferred taxes ( 55,632 ) ( 48,016 ) 4,437

2 unchanged sentences

Other 4,855 4,059 2,512

Increases (decreases) in cash from operating assets and liabilities:

Changes in assets and liabilities which provided (used) cash:

Accounts receivable ( 68,637 ) ( 128,460 ) ( 33,102 )

9 unchanged sentences

Acquisition of assets ( 45,345 ) ( 260,000 ) —

Lending on bridge loan — — ( 10,000 )

Cash acquired in acquisition of business — — 17,562

Net cash (used in) provided by investing activities ( 276,547 ) 3,683 ( 4,912 )

Net cash provided by (used in) investing activities 5,939 ( 276,547 ) 3,683

Financing activities

Proceeds from issuance of common stock 1,933 1,375 767

Equity issuance costs — — ( 3,777 )

Debt issuance costs — ( 95 ) —

Proceeds from issuance of long-term debt, net — 557,750 —

Contingent value rights settlement ( 3,700 ) — —

Payments on long-term debt and other borrowings ( 717 ) ( 175,385 ) ( 43,348 )

4 unchanged sentences

Repurchase of common stock — ( 75,000 ) —

Net cash provided by (used in) financing activities 311,691 ( 39,332 ) ( 21,861 )

Net cash (used in) provided by financing activities ( 13,062 ) 311,691 ( 39,332 )

Effect of foreign exchange rates on cash and cash equivalents ( 93 ) ( 335 ) ( 310 )

Net increase (decrease) in cash and cash equivalents and restricted cash 316,590 17,957 ( 10,225 )

Net increase in cash and cash equivalents and restricted cash 298,044 316,590 17,957

Cash and cash equivalents and restricted cash, beginning of year 417,241 100,651 82,694

7 unchanged sentences

Cash and cash equivalents $ 713,656 $ 415,652 $ 98,508

Cash and cash equivalents included in assets held for sale — — 941

Restricted cash included in other long-term assets 1,629 1,589 2,143

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Additions of property, plant and equipment included in liabilities $ 6,978 $ 2,370 $ 1,262

Consideration transferred in acquisition $ — $ — $ 419,009

Right-of-use asset obtained in exchange for operating lease liabilities $ 29,396 $ 11,019 $ 683

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

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Lantheus Holdings, Inc., a Delaware corporation, is the parent company of Lantheus Medical Imaging, Inc.

(“LMI”) and LMI is the parent company of Progenics Pharmaceuticals, Inc., a Delaware corporation (“Progenics”).

See “Progenics Acquisition”.

(“LMI”) and LMI is the parent company of Progenics Pharmaceuticals, Inc., a Delaware corporation (“Progenics”), and Cerveau Technologies, Inc.

See “Progenics Acquisition” and “Acquisition of Assets”, respectively.

The Company develops, manufactures and commercializes innovative diagnostic and therapeutic products that assist clinicians in the diagnosis and treatment of cancer, heart disease and other diseases.

The Company believes its diagnostic products result in improved diagnostic information that enables healthcare providers to better detect and characterize, or rule out, disease, potentially achieving improved patient outcomes, reducing patient risk and limiting overall costs throughout the healthcare system.

The Company’s commercial products are used by oncologists, urologists, nuclear medicine physicians, cardiologists, sonographers, technologists, radiologists, and internal medicine physicians working in a variety of clinical settings.

The Company produces and markets its products throughout the U.S., selling primarily to hospitals, independent diagnostic testing facilities, government facilities, integrated delivery networks, radiopharmacies, clinics, and group practices.

The Company’s commercial products are used by cardiologists, internal medicine physicians, nuclear medicine physicians, oncologists, radiologists, sonographers, technologists, and urologists working in a variety of clinical settings.

The Company produces and markets its products throughout the U.S., selling primarily to hospitals, independent diagnostic testing facilities, and radiopharmacies.

The Company sells its products outside the U.S.

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Sales of the Company’s prostate cancer diagnostic imaging agent, PYLARIFY (as defined below), are generated in the U.S.

through a PYLARIFY direct sales team and a sales team at some of our positron emission tomography (“PET”) manufacturing facilities (“PMF”) partners.

through an internal PYLARIFY sales team, as well as a sales team at some of the Company’s positron emission tomography (“PET”) manufacturing facilities (“PMF”) partners.

Sales of the Company’s ultrasound enhancing agent, DEFINITY, are generated in the U.S.

and Canada through a DEFINITY direct sales team.

In the U.S., the Company’s other nuclear imaging products, including TechneLite, Xenon, NEUROLITE and CARDIOLITE, are primarily sold to commercial radiopharmacies, the majority of which are controlled by or associated with Cardinal, RLS, UPPI, PharmaLogic and Jubilant Radiopharma.

through an internal DEFINITY sales team.

In the U.S., the Company’s other nuclear imaging products, including TechneLite, Xenon, NEUROLITE and CARDIOLITE, are primarily sold to commercial radiopharmacies, the majority of which are controlled by or associated with PharmaLogic, Cardinal, RLS, UPPI, and Jubilant Radiopharma.

Research revenue is derived from existing partnerships with pharmaceutical companies that use our products and product candidates in clinical trials and includes milestone and dose-related payments.

A small portion of the Company’s nuclear imaging product sales in the U.S.

are generated through the Company’s direct sales force to hospitals and clinics that maintain their own in-house radiopharmaceutical preparation capabilities.

We have licensed RELISTOR to Bausch, and the Company collects quarterly royalties based on those sales.

AZEDRA sales are generated in the U.S.

through an AZEDRA direct sales team.

The Company also maintains its own direct sales force in Canada for certain of its products.

are generated through the Company’s internal sales force to hospitals and clinics that maintain their own in-house radiopharmaceutical preparation capabilities.

In Europe, Australia, Asia-Pacific, Central America and South America, the Company generally relies on third-party distributors to market, sell and distribute its nuclear imaging and ultrasound enhancing agent products, either on a country-by-country basis or on a multi-country regional basis.

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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”).

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.

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 determined that the aggregate payment obligation under the CVRs was $ 99.7 million.

The Company expects to make that payment during 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.

In connection with the Progenics Acquisition, Lantheus Holdings issued 26,844,877 shares of Lantheus Holdings common stock and 86,630,633 contingent value rights (each a “CVR”) tied to the financial performance of PYLARIFY to former Progenics stockholders and option holders.

Each CVR entitled 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.

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, was capped at 19.9 % of the total consideration the Company paid in the Progenics Acquisition.

Based on the Company’s 2022 PYLARIFY net sales, the Company determined that the aggregate payment obligation under the CVRs was $ 99.6 million, which was the maximum amount payable.

The Company paid out this amount in May 2023 in full satisfaction of the CVRs.

Summary of Significant Accounting Policies

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Certain accounts receivable may be fully reserved when the Company becomes aware of any specific collection issues.

The Company periodically reviews the aging of receivables, payment history and customer creditworthiness to determine if adjustments to the allowance for bad debt is necessary.

Allowance for bad debt has been immaterial for all years presented.

The Company periodically reviews the aging of receivables, payment history and customer creditworthiness to determine if adjustments to the allowance for doubtful accounts is necessary.

Allowance for doubtful accounts has been immaterial for all years presented.

The Company accounts for income taxes using an asset and liability approach.

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The Company periodically reviews its accounts receivable for collectability and provides for an allowance for doubtful accounts to the extent that amounts are not expected to be collected.

The Company sells primarily to hospitals, independent diagnostic testing facilities, government facilities, integrated delivery networks, radiopharmacies, clinics, and group practices.

The Company sells primarily to hospitals, independent diagnostic testing facilities, and radiopharmacies.

As of December 31, 2023 and 2022, no customer accounted for greater than 10% of accounts receivable, net.

4 unchanged sentences

The Company currently relies on JHS as its significant manufacturer of DEFINITY and its sole source manufacturer of NEUROLITE, CARDIOLITE and evacuation vials for TechneLite.

The Company relies on Samsung Biologics Co., Ltd.

(“SBL”) as its sole source manufacturer of DEFINITY RT.

The Company has Mo-99 supply agreements with IRE of Belgium, running through December 31, 2024, with auto-renewal provisions and terminable upon notice of non-renewal, and with NTP and its subcontractor ANSTO, running through December 31, 2024.

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If future commercial use of the product is not probable, then inventory costs associated with such product are expensed as 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 had no inventory pending regulatory approval as of December 31, 2022.

The Company had no inventory pending regulatory approval as of December 31, 2023.

Property, Plant and Equipment, net

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Certain costs to obtain or develop computer software are capitalized and amortized over the estimated useful life of the software.

Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the related assets and recorded throughout costs of goods sold and operating expenses in the associated functional expense category which utilizes the associated asset.

Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the related assets and recorded

in costs of goods sold and operating expenses in the associated functional expense category which utilizes the associated asset.

The estimated useful lives of the major classes of depreciable assets are as follows:

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The difference, if any, between the net asset value and the proceeds is included in operating income.

Included within machinery, equipment and fixtures are spare parts.

Included within machinery and equipment are spare parts.

Spare parts include replacement parts relating to plant & equipment and are either recognized as an expense when consumed or reclassified and capitalized as part of the related asset and depreciated over the remaining useful life of the related asset.

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The method used to estimate the fair values of intangible assets incorporates significant assumptions regarding the estimates a market participant would make in order to evaluate an asset, including a market participant’s use of the asset and the appropriate discount rates.

Acquired in-process research and development (“IPR&D”) is recognized at fair value and initially characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use.

Acquired IPR&D is recognized at fair value and initially characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use.

Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill.

3 unchanged sentences

The Company recorded a measurement period adjustment of $ 2.6 million related to deferred taxes for the three months ended March 31, 2021, which finalized all measurement period adjustments related to the Progenics Acquisition.

Goodwill is not amortized but is instead tested for impairment at least annually and whenever events or circumstances indicate that it is more likely-than-not that they may be impaired.

Goodwill is not amortized but is instead tested for impairment at least annually and whenever events or circumstances indicate that it is more likely-than-not that it may be impaired.

The Company has elected to perform the annual test for goodwill impairment as of October 31 of each year.

3 unchanged sentences

The Company estimates the fair value of its reporting units using discounted cash flow or other valuation models, such as comparative transactions and market multiples.

The Company did no t recognize any goodwill impairment charges during the years ended December 31, 2022, 2021 or 2020.

The Company performed a qualitative assessment and did no t recognize any goodwill impairment charges during the years ended December 31, 2023, 2022 or 2021.

Intangible and Long-Lived Assets

22 unchanged sentences

Convertible Notes

Effective as of January 1, 2021, the Company early adopted the provisions of ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

Upon adoption, the Company determined there was no impact for the year ended December 31, 2021.

The provisions of ASU 2020-06 became applicable for the year ended December 31, 2022 in connection with the issuance of the Notes.

This ASU provides guidance to simplify the complexity associated with accounting for convertible instruments and derivatives.

For convertible instruments, the number of major separation models required were reduced.

Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for

embedded conversion features.

The Company evaluates convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for.

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The Company’s long-term debt has triggering events that would impact the fair value of the instruments.

The Company determined that no triggering event has occurred during the year ended December 31, 2022.

Since no triggering events have occurred, the estimated fair value of the Company’s long term debt approximates its carrying values.

The Company determined that no triggering event has occurred during the years ended December 31, 2023 and December 31, 2022.

As of December 31, 2023, the fair value of the Company’s convertible debt was estimated to be approximately $ 644.3 million based on external pricing data, including quoted market prices of these instruments and was classified as a Level 1 measurement within the fair value hierarchy.

As of December 31, 2022, the carrying value of the Company’s convertible debt approximated fair value and was classified as a Level 1 measurement within the fair value hierarchy.

The fair value See Note 4, “Fair Value of Financial Instruments”.

Contingent Consideration Liabilities

The estimated fair value of contingent consideration liabilities, initially measured and recorded on the acquisition date, are considered to be a Level 3 instrument and are reviewed quarterly, or whenever events or circumstances occur that indicate a change in fair value.

The estimated fair value of contingent consideration liabilities are initially measured and recorded on the acquisition date, are considered to be a Level 3 instrument and are reviewed quarterly, or whenever events or circumstances occur that indicate a change in fair value.

The contingent consideration liabilities are recorded at fair value at the end of each reporting period with changes in estimated fair values recorded in general and administrative expenses in the consolidated statements of operations.

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Significant changes in the probabilities as to the periods in which milestones will be achieved would result in a significantly lower or higher fair value measurement.

The Company's acquisitions accounted for as asset acquisitions may also include contingent consideration payments to be made for sales-based milestones, development and regulatory milestones.

The Company assesses whether such contingent consideration meets the definition of a derivative.

Contingent consideration payments in an asset acquisition not required to be accounted for as derivatives are recognized when the contingency is resolved, and the consideration is paid or becomes payable.

Contingent consideration payments required to be accounted for as derivatives are recorded at fair value on the date of the acquisition and are subsequently remeasured to fair value at each reporting date.

Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.

Derivative Instruments

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(in thousands) 2023 2022 2021

Foreign currency losses (gains) $ 256 $ 274 $ 260

Tax indemnification expense (income), net 9,554 7,121 ( 2,218 )

Foreign currency losses $ 21 $ 256 $ 274

Tax indemnification expense, net 4,943 9,554 7,121

Interest income ( 19,638 ) ( 2,613 ) ( 45 )

Interest rate swap termination — ( 5,494 ) —

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

Other 143 — —

Total other loss (income) $ 1,703 $ 7,350 $ ( 2,198 )

Total other (income) loss $ ( 66,320 ) $ 1,703 $ 7,350

Comprehensive Income (Loss)

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Changes in these assumptions could impact the Company’s future reported results.

The Company has production facilities which manufacture and process radioactive materials at its North Billerica, Massachusetts campus.

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

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

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Recent Accounting Pronouncements

The Company has not adopted any new accounting standards during the year ended December 31, 2022.

In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance.

Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.

The guidance in this update is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024.

The Company is currently in the process of evaluating the effects of this pronouncement on our related disclosures.

In December 2023, the FASB also issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations.

The requirements of the ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.

Revenue from Contracts with Customers

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______________________________

(1) The Company’s principal products include PYLARIFY, DEFINITY, and TechneLite and are 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.

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

1 unchanged sentence

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.

In 2023, the Company announced its decision to discontinue the production and promotion of AZEDRA and it does not expect AZEDRA to contribute to the business after the first quarter of 2024.

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.

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

(“AAA”), Endocyte, Inc.

(“Endocyte”) and their affiliates (the “Novartis Agreement”) to settle certain disputes between the parties.

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 RELISTOR royalty asset under its license agreement with Bausch;

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

During the fourth quarter of 2023, the Company earned a $ 15.0 million sales-based milestone payment.

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

and their affiliates (the “Novartis Agreement”) to settle certain disputes between the parties.

Under the Novartis Agreement, Novartis agreed to make a lump sum payment to the Company, as well as to reimburse the Company for certain fees and expenses in connection with certain German litigation, and the Company agreed to license certain intellectual property to Novartis.

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(in thousands) 2023 2022 2021

PYLARIFY $ 851,303 $ 527,405 $ 43,414

Other radiopharmaceutical oncology 3,130 4,102 5,473

Total radiopharmaceutical oncology 854,433 531,507 48,887

DEFINITY 279,768 244,993 232,759

2 unchanged sentences

Total precision diagnostics 390,118 356,682 351,025

PYLARIFY 527,405 43,414 —

Other radiopharmaceutical oncology 4,102 5,473 10,022

Total radiopharmaceutical oncology 531,507 48,887 10,022

Strategic Partnerships and other revenue 51,878 46,872 25,296

1 unchanged sentence

Product Revenue, Net

The Company sells its products principally to hospitals, independent diagnostic testing facilities, government facilities, integrated delivery networks, radiopharmacies, clinics, and group practices.

The Company sells its products principally to hospitals, independent diagnostic testing facilities, and radiopharmacies.

The Company considers customer purchase orders, which in some cases are governed by master sales or group purchasing organization agreements, to be the contracts with a customer.

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Any such adjustments are recorded on a cumulative catch-up basis, which would affect license and royalty revenues and earnings in the period of adjustment.

At December 31, 2022, the Company is constraining variable consideration related to development milestone payments requiring regulatory approvals and sales milestone payments related to achievement of certain sales targets.

At December 31, 2023, the variable consideration for the milestone payments is constrained and is excluded from contract price until the milestone is achieved by the customer.

Royalty Revenues:

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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.

Please refer to Note 8, “Business Combinations”, for further details on the acquisition.

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

2 unchanged sentences

Value Level 1 Level 2 Level 3

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

Money market funds $ 574,131 $ 574,131 $ — $ —

Total assets $ 574,131 $ 574,131 $ — $ —

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Value Level 1 Level 2 Level 3

Money market $ 40,140 $ 40,140 $ — $ —

Interest rate swaps 357 — 357 —

Contingent receivable 9,300 — — 9,300

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

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

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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 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.

During the fourth quarter of 2022, the Company reduced the probability to zero as CytoDyn withdrew their regulatory application.

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

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

Each CVR entitled 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, subject to a maximum cap.

Refer to Note 1, “Description of Business” 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.

Based on the U.S.

net sales generated by PYLARIFY in 2022, the Company currently expects to pay out the full amount of the CVRs from available cash in the first half of 2023.

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

The Company paid out the maximum amount payable under the CVRs from available cash in May 2023 in full satisfaction of the CVR obligation.

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 (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 milestone.

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The Company records the contingent consideration liability at fair value with changes in estimated fair values recorded in general and administrative expenses in the 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 as of December 31, 2022.

Fair Value as of Assumptions

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

Contingent receivable:

Regulatory milestone $ — $ 2,500 Probability adjusted discounted cash flow model Period of expected milestone achievement N/A 2022

Probability of success 0 % 70 %

Discount rate N/A 17 %

Royalties — 6,800 Probability adjusted discounted cash flow model

Probability of success 0 % 10 % - 60 %

Discount rate N/A 17 %

Total $ — $ 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 as of December 31, 2023.

Fair Value as of Assumptions

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Contingent consideration liability:

Net sales targets - PYLARIFY (CVRs) $ 99,700 $ 73,200 Probability adjusted discounted cash flow model (as of 12/31/2022)

Monte Carlo simulation

(as of 12/31/2021)

Period of expected milestone achievement and sales targets 2022 - 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 %

Discount rate N/A 17 %

1095 commercialization milestone 1,800 1,700 Probability adjusted discounted cash flow model

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Changes in fair value included in net income (loss) — ( 9,300 ) ( 9,275 ) 25,400

Cash Payments — — ( 99,625 ) —

Fair value, end of period $ — $ — $ 2,700 $ 111,600

The change in fair value of the contingent financial asset and contingent financial liabilities, including the CVRs, resulted in a general and administrative expense of $ 9.3 million for the year ended December 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 first half of 2023.

As of December 31, 2022, the Company had $ 99.7 million in current liabilities to account for the expected payments related to the CVRs.

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

The components of income (loss) before provision (benefit) for income taxes consists of the following:

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( 55,632 ) ( 48,016 ) 4,437

Income tax (benefit) expense $ ( 1,348 ) $ ( 3,759 ) $ 1,994

Income tax expense (benefit) $ 84,282 $ ( 1,348 ) $ ( 3,759 )

The reconciliation of income taxes at the U.S.

federal statutory rate to the income tax (benefit) expense is as follows:

federal statutory rate to the income tax expense (benefit) is as follows:

(in thousands) 2023 2022 2021

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Permanent items 1,042 2,309 1,764

Acquisition costs - Progenics — — 2,723

Recognition of deferred tax asset - assets held for sale — — ( 3,000 )

Sale of RELISTOR licensed intangible asset associated with net sales royalties ( 10,817 ) — —

Section 162(m) 307 247 1,028

Uncertain tax positions ( 5,045 ) ( 12,629 ) ( 8,952 )

Other tax credits ( 4,085 ) ( 990 ) ( 1,065 )

Tax credits ( 2,118 ) ( 4,085 ) ( 990 )

State and local taxes 18,726 67 656

Impact on deferred taxes of change in tax rate ( 330 ) 4,169 3,049

Non-deductible changes in fair value of contingent assets and liabilities 5,422 15,015 230

Changes in fair value of contingent assets and liabilities ( 1,948 ) 5,422 15,015

Foreign tax rate differential 128 68 23

Valuation allowance ( 4 ) ( 30 ) ( 400 )

Benefit of windfall related to stock compensation ( 4,612 ) ( 1,164 ) ( 128 )

Stock compensation ( 3,941 ) ( 4,612 ) ( 1,164 )

Change in indemnification deferred tax asset 1,240 2,343 1,786

Other 744 ( 228 ) 184

Income tax (benefit) expense $ ( 1,348 ) $ ( 3,759 ) $ 1,994

Income tax expense (benefit) $ 84,282 $ ( 1,348 ) $ ( 3,759 )

The components of deferred income tax assets (liabilities) are as follows:

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Deferred Tax Assets

Federal benefit of state tax liabilities $ 1,739 $ 4,292

Federal benefit of state taxes payable $ 263 $ 1,739

Reserves, accruals and other 18,923 31,532

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Capitalized research and development 17,142 79,946

Amortization of intangibles other than goodwill — 502

Stock compensation 9,266 —

Intangible assets 25,214 —

Net operating loss carryforwards 80,184 88,014

Depreciation — 1,102

Lease liability 14,365 —

Deferred tax assets 165,357 202,150

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Reserves, accruals and other — ( 5,354 )

Right-of-use asset ( 11,543 ) —

Intangible assets — ( 80,770 )

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Under the Act, research and experimental expenditures incurred for tax years beginning after December 31, 2021, must be capitalized and amortized ratably over five or fifteen years for tax purposes, depending on where the research activities are conducted.

If the requirement to capitalize Section 174 expenditures is not modified, it may also impact our effective tax rate and our cash tax liability in future years.The increase in worldwide net deferred tax asset is primarily due to the tax capitalization of the Company’s current year research and development expenses that are not currently deductible in 2022, offset by utilization of a portion of its net operating losses.

If the requirement to capitalize Section 174 expenditures is not modified, it may impact our cash tax liability in future years.

The increase in worldwide net deferred tax assets is primarily due to the tax capitalization of the Company’s current year research and development expenses that are not currently deductible in 2023 and the decrease in deferred tax liabilities related to the AZEDRA and RELISTOR royalty intangible assets, partially offset by utilization of net operating losses.

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

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

As of December 31, 2022 and 2021, the Company maintains a valuation allowance of $ 3.5 million and $ 3.9 million, respectively, related to net deferred tax assets of certain of its foreign subsidiaries and U.S.

acquired tax credits.

As of December 31, 2023 and 2022, the Company maintains a valuation allowance of $ 3.6 million and $ 3.5 million, respectively, primarily related to net deferred tax assets of certain of its foreign subsidiaries.

Utilization of net operating loss carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“IRC Section 382”) and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions.

These ownership changes may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively.

In general, an ownership change, as defined by IRC Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.

In general, an ownership change, as defined by IRC Section 382, results from transactions which impact the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.

At December 31, 2023, the Company had U.S.

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The Company has state research credit carryforwards of $ 2.1 million, which will expire between 2026 and 2038.

The Company has state investment tax credit carryforwards of $ 1.4 million net of federal impact which have no expiration date.

The Company has state investment tax credit carryforwards of $ 0.8 million which have no expiration date.

The Company’s U.S.

federal income tax returns are subject to examination for three years after the filing date of the return.

The state and foreign income tax returns are subject to examination for periods varying from three to four years after filing, depending on the specific jurisdictions’ statutes of limitation, and in the case of Sweden, up to six years after the end of the financial year.

The state and foreign income tax returns are subject to examination for periods varying from three to four years after filing, depending on the specific jurisdiction’s statutes of limitation, and in the case of Sweden, up to six years after the end of the financial year.

A reconciliation of the Company’s changes in uncertain tax positions for 2023 and 2022 is as follows:

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Balance of uncertain tax positions as of December 31, 2022 1,480

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 an agreement to indemnify with BMS for any payments made to settle those uncertain tax positions with the taxing authorities.

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

Additions related to current year tax positions 3,749

Reductions related to prior year tax positions ( 688 )

Settlements ( 442 )

Lapse of statute of limitations —

Balance of uncertain tax positions as of December 31, 2023 $ 4,099

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 an indemnification agreement with BMS for any payments made to settle those uncertain tax positions with the taxing authorities.

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

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Assuming that the 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.

As of December 31, 2022 and 2021, total liabilities for uncertain tax positions including interest and penalties were $ 8.3 million and $ 20.9 million, respectively, consisting of uncertain tax positions of $ 1.5 million and $ 3.7 million, respectively, interest accruals of $ 6.4 million and $ 16.5 million, respectively, and penalty accruals of $ 0.4 million and $ 0.8 million, respectively.

As of December 31, 2022 and 2021, these liabilities were included in other long-term liabilities.

Included in the 2022, 2021 and 2020 tax provisions are a benefit of $ 12.6 million, a benefit of $ 9.0 million and an expense of $ 2.8 million, respectively, relating to accrual of interest, net of benefits for reversals of uncertain tax positions recognized upon settlements, effective settlements, or lapses of relevant statutes of limitation.

The total long-term asset related to the indemnification was $ 3.9 million and $ 13.5 million at December 31, 2022 and 2021, respectively.

Included in other (income) loss for the years ended December 31, 2023, 2022 and 2021, is tax indemnification expense (income), net of $ 4.9 million, $ 9.6 million and $ 7.1 million, respectively.

On August 16, 2022, the “Inflation Reduction Act” (H.R.

5376) was signed into law in the United States.

We do not currently expect the Inflation Reduction Act to have a material impact on our financial results.

As of December 31, 2023 and 2022, total liabilities for uncertain tax positions including interest and penalties were $ 5.4 million and $ 8.3 million, respectively, consisting of uncertain tax positions of $ 4.1 million and $ 1.5 million, respectively, interest accruals of $ 1.3 million and $ 6.4 million, respectively, and no penalty accruals as of December 31, 2023 and $ 0.4 million of penalty accruals as of December 31, 2022.

The increase in uncertain tax positions during the year ended December 31, 2023 was primarily related to certain acquired tax attributes.

As of December 31, 2023, $ 1.3 million, $ 3.2 million, and $ 0.9 million of these liabilities were recorded in current liabilities, other long-term liabilities, and as a reduction of deferred tax assets, respectively.

As of December 31, 2022 these liabilities were included in other long-term liabilities.

Included in the 2023, 2022 and 2021 tax provisions are benefits of $ 5.0 million, $ 12.6 million and $ 9.0 million, respectively, relating to reversals of uncertain tax positions recognized upon settlements, effective settlements, or lapses of relevant statutes of limitation, partially offset by interest accruals.

Inventory consisted of the following:

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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 to manufacture DEFINITY at its new in-house manufacturing facility during the first quarter of 2022 and has no inventory pending regulatory approval as of December 31, 2022.

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

Property, Plant and Equipment, Net

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Please refer to Note 16, “Leases” for further details.

Business Combinations

On June 19, 2020, the Company completed the Progenics Acquisition.

The acquisition combined the commercialization, supply chain and manufacturing expertise of the Company with the currently commercialized products and research and development pipeline of Progenics.

Progenics brought to the Company several commercial products and a pipeline of product candidates that further diversify the Company’s commercial and clinical development portfolios.

Under the terms of the Merger Agreement, the Company acquired all the issued and outstanding shares of Progenics common stock for a purchase price of $ 419.0 million by means of an all-stock transaction, which includes options to purchase Holdings common stock (“Replacement Stock Options”) for precombination services as well as CVRs.

The CVRs were accounted for as contingent consideration, the fair value of which was determined using a Monte Carlo simulation.

Additionally, the fair value of the Replacement Stock Options was recorded as a component of consideration transferred.

Finally, as a result of the Progenics Acquisition, Lantheus effectively settled an existing bridge loan with Progenics at the recorded amount (principal and accrued interest) of $ 10.1 million, representing the effective settlement of a preexisting relationship.

This effective settlement of the bridge loan was treated as a component of consideration transferred.

The Company determined that the bridge loan was at market terms and no gain or loss was recorded upon settlement.

The acquisition date fair value of the consideration transferred in the acquisition consisted of the following:

(in thousands)

Issuance of common stock $ 398,110

Fair value of replacement stock options 7,125

Fair value of bridge loan settled at close 10,074

Fair value of contingent considerations (CVRs) 3,700

Total consideration transferred $ 419,009

The transaction was accounted for as a business combination which requires that assets acquired and liabilities assumed be recognized at their fair value as of the acquisition date.

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed on the acquisition date, its estimates and assumptions are subject to refinement.

Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions.

The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations.

The following table summarizes the provisional amounts recognized for assets acquired and liabilities assumed as of the acquisition date, as well as measurement period adjustments made to the amounts initially recorded in June 2020.

The measurement period adjustments primarily resulted from finalizing the fair values of certain intangible assets and liabilities, deferred taxes and other changes to certain tangible assets and liability accounts.

Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date.

The related impact to net loss that would have been recognized in previous periods if the adjustments were recognized as of the acquisition date is immaterial to the consolidated financial statements.

(in thousands) Amounts Recognized as of Acquisition Date

(as previously reported) Measurement Period Adjustments Amounts Recognized as of Acquisition Date (as adjusted)

Cash and cash equivalents $ 15,421 $ — $ 15,421

Accounts receivable 5,787 — 5,787

Inventory 915 160 1,075

Other current assets 3,250 434 3,684

Property, plant and equipment 14,972 — 14,972

Identifiable intangible assets (weighted-average useful life):

Currently marketed product ( 15 years)

142,100 800 142,900

Licenses ( 11.5 years)

87,500 ( 1,700 ) 85,800

Developed technology ( 9 years)

3,000 ( 600 ) 2,400

IPR&D 150,900 200 151,100

Other long-term assets 37,631 — 37,631

Accounts payable ( 1,616 ) — ( 1,616 )

Accrued expenses and other liabilities ( 8,207 ) ( 80 ) ( 8,287 )

Other long-term liabilities ( 30,778 ) ( 380 ) ( 31,158 )

Long-term debt and other borrowings ( 40,200 ) — ( 40,200 )

Deferred tax liabilities ( 3,717 ) ( 2,258 ) ( 5,975 )

Goodwill 42,051 3,424 45,475

Total consideration transferred $ 419,009 $ — $ 419,009

Intangible assets acquired consist of currently marketed products, licenses, developed technology and in-process research and development (“IPR&D”).

The fair value of the acquired intangible assets was determined based on estimated future revenues, royalty rates and discount rates, among other variables and estimates.

The acquired intangible assets subject to amortization were assigned useful lives based on the expected use of the assets and the regulatory and economic environment within which they are being used and are being amortized on a straight-line basis over the respective estimated useful lives.

The estimated fair values of the IPR&D assets were determined based on the present values of the expected cash flows to be generated by the respective underlying assets.

The Company used a discount rate of 23.0 % and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions.

As part of the Progenics Acquisition, the Company acquired the right to receive certain future milestone and royalty payments due to Progenics, related to a prior sale of certain intellectual property.

The estimated fair value of the acquired contingent receivable of $ 10.1 million was determined by applying a probability adjusted discounted cash flow model based on estimated future expected payments and recorded in other long-term assets.

The goodwill recognized is attributable to future technologies that are not separately identifiable that could potentially add to the currently developed and pipeline products and Progenics’ assembled workforce.

Future technologies did not meet the criteria for recognition separately from goodwill because they are part of the future development and growth of the business.

Goodwill of $ 45.5 million recognized in connection with the acquisition is not deductible for tax purposes.

The Company recognized $ 11.9 million of acquisition-related costs, including legal, accounting, compensation arrangements and other related fees that were expensed when incurred in the year ended December 31, 2020, respectively.

These costs are recorded in general and administrative expenses in the consolidated statements of operations.

Progenics Pro Forma Financial Information

Progenics has been included in the Company’s consolidated financial statements since the acquisition date.

Progenics contributed revenues of $ 12.4 million, as well as a net loss of $ 27.1 million to the Company’s consolidated statement of operations for the year ended December 31, 2020.

The following unaudited pro forma financial information presents the Company’s results as if the Progenics Acquisition had occurred on January 1, 2019:

December 31, 2020

(in thousands) Amount

Pro forma revenue $ 350,315

Pro forma net loss $ 29,190

The unaudited pro forma financial information for all periods presented adjusts for the effects of material business combination items, including amortization of acquired intangible assets, transaction-related costs, adjustments to interest expense related to the assumption of long-term debt, retention and severance bonuses and the corresponding income tax effects of each.

These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been achieved had the Progenics Acquisition actually taken place on January 1, 2019.

In addition, these results are not intended to be a projection of future results and do not reflect events that may occur after the Progenics Acquisition, including, but not limited to, revenue enhancements, cost savings or operating synergies that the combined company may achieve as a result of the Progenics Acquisition.

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.

The Company reviewed revised undiscounted cash flows that were estimated to be generated by the asset group as of June 30, 2023.

Based on the undiscounted cash flow analysis, the Company determined that the asset group had net carrying values that exceeded their estimated undiscounted future cash flows.

The Company then estimated the fair value of the asset group based on their discounted cash flows.

The carrying value exceeded the fair value and as a result, the Company recorded a noncash impairment of $ 6.0 million for the six months ended June 30, 2023 in cost of goods sold in the consolidated statements of operations.

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 September 30, 2023.

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

The transaction is expected to close in the second or third quarter of 2024.

Sale of Puerto Rico Subsidiary

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As a result, this transaction was not classified as discontinued operations in the Company’s accompanying 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 $ 540

Accounts receivable, net 1,959

Inventory 530

Other current assets 65

Total current assets 3,094

Non-Current Assets:

Property, plant & equipment, net 780

Intangibles, net 96

Other long-term assets 774

Total assets held for sale $ 4,744

Current Liabilities:

Accounts payable $ 185

Accrued expense and other liabilities 369

Total current liabilities 554

Non-Current Liabilities:

Asset retirement obligations 306

Other long-term liabilities 588

Total liabilities held for sale $ 1,448

The sale resulted in a pre-tax book gain of $ 15.3 million, which was recorded within operating income (loss) in the consolidated statements of operations for the year ended December 31, 2021.

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

The Company previously operated a production facility which manufactured and processed radioactive materials at its San Juan, Puerto Rico site.

As of December 31, 2020, the liability for the San Juan, Puerto Rico site was recorded in liabilities held for sale and the sale was consummated on January 29, 2021.

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

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Balance, December 31, 2022 22,543

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.

The Company recorded a non-cash adjustment of $ 5.3 million in 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.

Accretion expense 373

Balance, December 31, 2023 $ 22,916

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

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Developed technology 9 Straight-Line 2,400 ( 944 ) 1,456

IPR&D N/A N/A 15,640 — 15,640

Total $ 328,968 $ ( 176,983 ) $ 151,985

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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 performed its annual impairment test of its IPR&D intangible assets as of October 31, 2020.

As a result of a timing delay in the development of an AZEDRA IPR&D intangible asset due to the impact of COVID-19, the Company determined that the carrying value of $ 18.3 million exceeded the fair value of the asset.

Accordingly, the Company recorded a non-cash impairment charge of $ 2.7 million for the year ended December 31, 2020 in research and development expenses in the consolidated statements of operations.

The estimated fair value of the AZEDRA IPR&D intangible asset was determined based on the present values of the expected cash flows.

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.

During the fourth quarter of 2023, the Company earned a $ 15.0 million sales-based milestone payment.

In March 2023, the Company stopped all development activities in relation to a future indication associated with AZEDRA, which was classified as an IPR&D intangible asset.

The asset group, which consisted of the IPR&D asset and a currently marketed product (the “AZEDRA intangible asset group”), was assessed for impairment.

The Company considered several factors in estimating the future projections of revenues and cash flows of the AZEDRA intangible asset group as part of the impairment testing.

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

The Company recorded a non-cash impairment charge of $ 15.6 million in research and development expenses relating to the IPR&D asset and $ 116.4 million in cost of goods sold relating to the currently marketed indication of AZEDRA in the consolidated statement of operations for the year ended December 31, 2023.

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 will 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.

See Note 7, “Property, Plant and Equipment, Net” for impairment analysis.

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

In May 2023, upon successful completion of a technology transfer, the Company paid $ 10.0 million to the selling stockholders of Cerveau.

This additional contingent payment was capitalized as part of the

asset cost and increased the Company’s customer relationship intangible assets.

See Note 21, “Acquisition of Assets” for further discussion of the Cerveau acquisition.

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

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Total $ 151,985

Changes in the carrying amounts of goodwill for the years ended December 31, 2022 and 2021, were as follows:

(in thousands) 2022 2021

Balance, Beginning of year $ 61,189 $ 58,632

Increase from acquisition — 2,557

Balance, End of year $ 61,189 $ 61,189

Accrued Expenses and Other Liabilities and Other Long-Term Liabilities

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Total long-term debt, net, and other borrowings $ 561,670

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”).

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.

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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

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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.

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.

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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 maximum total net leverage ratio permitted by the financial covenant, commencing with the fiscal quarter ending March 31, 2024, is 3.50 to 1.00.

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

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

LMI, Holdings, and certain subsidiaries of LMI, including Progenics and Lantheus MI Real Estate, LLC (subject to customary exclusions set forth in the transaction documents) owned as of December 2, 2022 or thereafter acquired.

Convertible Notes

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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 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.

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The Company recorded interest expense of approximately $ 15.1 million related to the Notes for the year ended December 31, 2023.

Royalty-Backed Loan

On June 19, 2020, as a result of the acquisition, the Company assumed Progenics’ outstanding debt as of such date in the amount of $ 40.2 million.

Progenics, through a wholly-owned subsidiary MNTX Royalties Sub LLC (“MNTX Royalties”), entered into a $ 50.0 million loan agreement (the “Royalty-Backed Loan”) with a fund managed by HealthCare Royalty Partners III, L.P.

(“HCRP”) on November 4, 2016.

The Royalty-Backed Loan bore interest at a per annum rate of 9.5 % and was scheduled to mature on June 30, 2025.

On March 31, 2021, the Company voluntarily repaid in full the entire outstanding principal on the Royalty-Backed Loan 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.

Derivative Instruments

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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 (loss) related to the interest rate swap contracts were reclassified into earnings.

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

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

Derivatives type Classification

Interest rate swap Other long-term assets $ — $ 357

Accumulated Other Comprehensive Loss

The components of Accumulated Other Comprehensive Loss, net of tax of zero and $ 0.1 million for the year ended December 31, 2022 and 2021, respectively, consisted of the following:

The components of Accumulated Other Comprehensive Loss, net of tax of zero and zero for the year ended December 31, 2023 and 2022, respectively, consisted of the following:

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

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Other comprehensive income (loss) before reclassifications 222 — 222

Amounts reclassified to earnings — ( 6,107 ) ( 6,107 )

Balance at December 31, 2023 $ ( 1,037 ) $ — $ ( 1,037 )

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Vesting of the TSR Awards is based on the Company’s level of attainment of specified TSR targets relative to the percentage appreciation of a specified index of companies for the respective three-year period and is also subject to the continued employment of the grantees.

The number of shares

that are earned over the performance period ranges from 0 % to 200 % of the initial award.

The number of shares that are earned over the performance period ranges from 0 % to 200 % of the initial award.

The fair value of these awards are based on a Monte Carlo simulation valuation model with the following assumptions:

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The weighted average grant-date fair value for TSR Awards granted during the fiscal years ended December 31, 2023, 2022 and 2021 was $ 127.75 , $ 95.31 and $ 31.25 per share, respectively.

The total fair value of TSR Awards vested in fiscal years 2022, 2021 and 2020 was $ 8.8 million, $ 2.0 million and zero , respectively.

The total fair value of TSR Awards vested in fiscal years 2023, 2022 and 2021 was $ 8.2 million, $ 8.8 million and $ 2.0 million, respectively.

Common Stock Repurchases

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In the year ended December 31, 2022, the Company purchased approximately 1.3 million shares of their outstanding common stock for $ 75.0 million as part of the program.

The Company did no t purchase any shares of their outstanding common stock in the years ended December 31, 2021 and 2020, respectively.

The Company did no t purchase any shares of its outstanding common stock in the year ended December 31, 2023.

The Company determines if an arrangement is a lease at inception.

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The Company entered into an operating lease related to office space in Somerset, New Jersey, under a lease agreement expiring in August 2026, which was recorded in October 2021 for $ 0.7 million.

The Company entered into an operating

lease agreement in February 2022 to lease 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.

The Company entered into an operating lease agreement in February 2022 to lease 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.

On May 4, 2023, the Company entered into a modification to the operating lease for office space in Bedford, Massachusetts, (the “Existing Premises”) that was executed in February 2022.

The lease commenced and was recorded in December 2022 for $ 11.0 million and the initial term was set to expire in June 2031.

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 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.

In September 2023, the landlord provided notice to the Company that its renovations of the Additional Premises were completed.

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.

Leases with an initial term of 12 months or less are not recorded on the balance sheet as the Company has elected to apply the short-term lease exemption.

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Interest on lease liabilities 81 28

Short-term lease expense — 8

Total lease expense $ 5,503 $ 2,251

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Prepaid Expenses $ 16,437 $ 12,887

Current Contingent Asset (Note 4) — 2,500

Other Current Assets 246 205

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ROU Asset (Note 16) $ 45,325 $ 19,033

Long-term Contingent Asset (Note 4) — 6,800

Other Long-Term Assets 9,936 15,322

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Effect of dilutive restricted stock 1,428 1,745 —

Effect of convertible debt instrument 199 — —

Diluted weighted-average common shares outstanding 70,239 70,671 67,486

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Antidilutive securities excluded from diluted net income (loss) per common share 421 358 2,893

Impact of the Notes

Impact of the Convertible Notes

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

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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 market 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 year ended December 31, 2022, the weighted average price per share of the Company's Common Stock was below the conversion price of the Notes.

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.

Commitments and Contingencies

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The Company has entered into license agreements in which fixed payments have been committed to be paid on an annual basis.

As of December 31, 2022, future fixed payments required under license agreements are $ 0.1 million.

As of December 31, 2023, no future fixed payments are required under license agreements.

The Company may be required to pay additional amounts up to approximately $ 264.4 million in contingent payments under the Company’s license agreements.

These contingent payments include potential milestone or contractual payment obligations contingent upon the

achievement or occurrence of future milestones or events and the amounts and timing of such potential obligations are unknown or uncertain.

contingent payments include potential milestone or contractual payment obligations contingent upon the achievement or occurrence of future milestones or events and the amounts and timing of such potential obligations are unknown or uncertain.

Legal Proceedings

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

On January 26, 2024, the Company was sued in the United States District Court for the District of Delaware by Advanced Accelerator Applications USA, Inc.

and Advanced Accelerator Applications SA, each a Novartis entity, for patent infringement in response to the filing of our ANDA and Paragraph IV certification, consistent with the process established by the Hatch-Waxman Act.

Because the outcome of litigation is uncertain, the Company cannot predict how or when this matter will ultimately be resolved.

The Company maintains a qualified 401(k) plan (the “401(k) Plan”) for its U.S.

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Acquisition of Assets

On February 6, 2023, the Company acquired Cerveau.

Cerveau holds the rights under a license agreement to develop and commercialize MK-6240, an investigational 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 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.

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 as a part of an asset acquisition with the potential for additional milestone payments of approximately $ 1.8 billion between 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 PNT2002 License Agreement, Lantheus Two, LLC 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.

Under the terms of the PNT2002 License Agreement, 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 PNT2003 License Agreement, Lantheus Three, LLC 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.

Under the terms of the PNT2003 License Agreement, 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.

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Segment Information

In the first quarter of 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 Notes 1 and 8, and the sale of the Puerto Rico subsidiary in the first quarter, which resulted in a change in operating and reportable segments.

The Company now 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 Officer.

The Company operates as one business segment.

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 Event

On February 6, 2023, the Company acquired Cerveau Technologies, Inc.

Cerveau’s asset is MK-6240, a second-generation F 18-labeled PET imaging agent that targets Tau tangles in Alzheimer’s disease that will expand our Pharma Services business.

Under the terms of the agreement, Lantheus paid an upfront payment of $ 35 million and potentially will pay additional development and commercial milestone payments.

Additionally, Lantheus will pay double-digit royalty payments for research revenue and commercial sales.

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

Structured as a stock purchase, the agreement specifies, among other things, that the seller will also provide transition and clinical development services for a prescribed time following the closing of the transaction.

On January 9, 2024, the Company entered into multiple strategic agreements with Perspective Therapeutics, Inc.

(“Perspective”), a radiopharmaceutical company that is pioneering advanced treatment applications for cancers throughout the body.

Under the agreements:

• The Company obtained an option to exclusively license Perspective’s Pb212-VMT-⍺-NET, a clinical stage alpha therapy in development for the treatment of neuroendocrine tumors, and an option to co-develop certain early stage therapeutic candidates targeting prostate cancer using Perspective’s innovative platform technology, for an aggregate upfront payment of $ 28 million in cash;

• Lantheus agreed to purchase up to 19.9 % of Perspective’s outstanding shares of common stock for up to approximately $ 33 million, subject to completion of a qualified third party financing transaction and certain other closing conditions;

• Perspective agreed to acquire the assets and associated lease of Lantheus’ radiopharmaceutical manufacturing facility in Somerset, New Jersey for an undisclosed price, subject to customary closing conditions including regulatory approval.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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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-K

Item 8. Financial Statements and Supplementary Data