What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 170 added, 227 removed, 473 unchanged (46% of the section changed)

3 unchanged sentences

(in thousands, except par value)

September 30,

2024 December 31,

6 unchanged sentences

Total current assets 1,148,800 1,085,819

Investment in equity securities 138,960 —

Property, plant and equipment, net 150,090 146,697

8 unchanged sentences

Accounts payable 37,525 41,189

Short-term contingent liability — 99,700

Accrued expenses and other liabilities 198,939 145,338

9 unchanged sentences

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

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

70,635 and 69,863 shares issued as of March 31, 2024 and December 31, 2023, respectively)

Additional paid-in capital 756,443 757,727

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

Treasury Stock at cost - 1,339 shares as of March 31, 2024 and December 31, 2023

( 75,000 ) ( 75,000 )

Accumulated deficit 30,123 ( 193,158 )

Retained earnings 264,569 133,503

Accumulated other comprehensive loss ( 1,178 ) ( 1,037 )

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Revenues $ 369,975 $ 300,784

6 unchanged sentences

Total operating expenses 141,465 86,420

Operating income 112,361 85,743 227,156 207,872

Gain on sale of assets 6,254 —

Operating income (loss) 106,635 ( 9,344 )

Interest expense 4,859 4,991

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

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

Income tax expense 27,999 21,784 49,259 55,710

Net income $ 131,957 $ 61,232 $ 223,281 $ 147,252

Net income per common share:

Investment in equity securities - unrealized gain ( 60,704 ) —

Other income ( 8,788 ) ( 3,231 )

Income (loss) before income taxes 171,268 ( 11,104 )

Income tax expense (benefit) 40,202 ( 8,297 )

Net income (loss) $ 131,066 $ ( 2,807 )

Net income (loss) per common share:

Basic $ 1.91 $ ( 0.04 )

5 unchanged sentences

Lantheus Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income $ 131,957 $ 61,232 $ 223,281 $ 147,252

Other comprehensive income:

Net income (loss) $ 131,066 $ ( 2,807 )

Other comprehensive income (loss):

Foreign currency translation ( 141 ) ( 119 )

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

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

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

Comprehensive income (loss) $ 130,925 $ ( 2,926 )

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

2 unchanged sentences

(in thousands)

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Common Stock Treasury Stock Additional

Capital Accumulated

Deficit Accumulated

Capital Retained earnings Accumulated

Comprehensive

2 unchanged sentences

Balance, January 1, 2024 69,863 $ 699 1,339 $ ( 75,000 ) $ 757,727 $ 133,503 $ ( 1,037 ) $ 815,892

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

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

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

Vesting of restricted stock awards and units 813 8 — — ( 8 ) — — —

Shares withheld to cover taxes ( 154 ) ( 2 ) — — ( 11,152 ) — — ( 11,154 )

Stock-based compensation — — — — 9,667 — — 9,667

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

Net income — — — — — 131,066 — 131,066

Other comprehensive income — — — — — — 426 426

Stock option exercises and employee stock plan purchases 73 1 — — 1,346 — — 1,347

Vesting of restricted stock awards and units 68 1 — — ( 1 ) — — —

Shares withheld to cover taxes ( 16 ) — — — ( 1,467 ) — — ( 1,467 )

Stock-based compensation — — — — 12,692 — — 12,692

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

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

Other comprehensive loss — — — — — — ( 141 ) ( 141 )

3 unchanged sentences

Stock-based compensation — — — — 15,384 — — 15,384

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

Nine Months Ended September 30, 2022

Balance, March 31, 2024 70,635 $ 706 1,339 $ ( 75,000 ) $ 756,443 $ 264,569 $ ( 1,178 ) $ 945,540

Three Months Ended March 31, 2023

Common Stock Treasury Stock Additional

5 unchanged sentences

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

Net income — — — — — 42,962 — 42,962

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

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

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

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

3 unchanged sentences

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

Net income — — — — — 43,058 — 43,058

Other comprehensive income — — — — — — 413 413

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

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

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

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

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

Net income — — — — — 61,232 — 61,232

Other comprehensive income — — — — — — 670 670

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

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

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

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

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

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

2 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating activities

Net income $ 223,281 $ 147,252

Net income (loss) $ 131,066 $ ( 2,807 )

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

1 unchanged sentence

Impairment of long-lived assets — 132,052

Asset retirement obligation acceleration — 1,229

Amortization of debt related costs 1,073 1,082

2 unchanged sentences

Stock-based compensation 15,384 9,667

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

Gain on disposal of assets ( 6,254 ) —

Unrealized gain on investment in equity securities ( 60,704 ) —

Charges incurred in connection with acquired IPR&D 28,000 —

Deferred taxes 11,260 ( 35,863 )

2 unchanged sentences

Other 1,696 1,225

(Decreases) increases in cash from operating assets and liabilities:

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

Accounts receivable ( 55,440 ) ( 24,681 )

1 unchanged sentence

Other current assets 4,023 2,479

Other long-term assets — ( 533 )

Accounts payable ( 3,462 ) 6,747

3 unchanged sentences

Capital expenditures ( 8,273 ) ( 9,168 )

Proceeds from sale of assets, net 97,839 1,800

Acquisition of assets, net — ( 35,345 )

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

Proceeds from sale of assets 8,000 —

Purchases of investment in equity securities ( 78,256 ) —

Acquisition of exclusive license option ( 28,000 ) —

Net cash used in investing activities ( 106,529 ) ( 44,513 )

Financing activities

Payments on long-term debt and other borrowings ( 184 ) ( 297 )

Contingent value rights settlement ( 3,700 ) —

Proceeds from stock option exercises 934 1,842

9 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Reconciliation to amounts within the condensed consolidated balance sheets

2 unchanged sentences

Cash, cash equivalents and restricted cash at end of period $ 719,919 $ 472,461

Nine Months Ended

September 30,

Three Months Ended

Schedule of non-cash investing and financing activities

Additions of property, plant and equipment included in liabilities $ 6,853 $ 8,443

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

Lease liability settled through transfer of lease $ 376 $ —

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

7 unchanged sentences

references to “LMI” refer to Lantheus Medical Imaging, Inc., the direct subsidiary of Lantheus Holdings;

references to “Lantheus Alpha” refer to Lantheus Alpha Therapy, LLC, the direct subsidiary of Lantheus Holdings;

references to “Cerveau,” “Lantheus Real Estate,” “Lantheus Two,” “Lantheus Three” and “Progenics” refer to Cerveau Technologies, Inc.;

10 unchanged sentences

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

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ended December 31, 2023 or any future period.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ended December 31, 2024 or any future period.

The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S.

9 unchanged sentences

Summary of Significant Accounting Policies

Equity investments with readily determinable fair values for which the Company does not have significant influence over the investee are measured at fair value on a recurring basis.

Equity investments without readily determinable fair values for which the Company does not have significant influence over the investee are measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative).

For equity investments for which the Company does not have significant influence over the investee, changes in the value of unsold equity investments are recorded in investment in equity securities – unrealized gain (loss).

Equity investments for which the Company has significant influence over the investee are measured using the equity method unless the Company elects to apply the fair value option to account for the investment.

Recent Accounting Pronouncements

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

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

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

Major Products/Service Lines (in thousands) 2024 2023

2 unchanged sentences

License and royalty revenues 662 8,528

438 5,926 16,582 40,738

Total revenues $ 369,975 $ 300,784

3 unchanged sentences

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

(2) The Company recognized $ 24.0 million license revenue in the first quarter of 2022 related to an agreement with Novartis Pharma AG.

The Company classifies its revenues into three product categories:

1 unchanged sentence

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 revenues from AZEDRA to contribute to the business after the first quarter of 2024.

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

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

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

Strategic Partnerships and Other Revenue includes strategic partnerships and other arrangements related to other products of the Company.

On August 2, 2023, the Company sold its rights to the RELISTOR net sales royalty asset (the “RELISTOR royalty asset”) under its license agreement with Bausch Health Companies, Inc.

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

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

(“AAA”), Endocyte, Inc.

(“Endocyte”) 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 litigation, and the Company agreed to license certain intellectual property to Novartis.

In addition, the Company agreed to supply PYLARIFY for clinical purposes at an arms-length value which will be recorded revenue in the future as product is provided.

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

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

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

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

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

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

8 unchanged sentences

Total revenues $ 369,975 $ 300,784

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

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

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

As such, the Company is not

disclosing the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially satisfied) as of the end of the reporting period.

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

Fair Value of Financial Instruments

5 unchanged sentences

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

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

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

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

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

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

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

September 30, 2023

March 31, 2024

(in thousands) Total Fair

Value Level 1 Level 2 Level 3

Money market $ 562,210 $ 562,210 $ — $ —

Money market funds $ 543,369 $ 543,369 $ — $ —

Investment securities 138,960 138,960 — —

Total assets $ 682,329 $ 682,329 $ — $ —

4 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 $ — $ —

1 unchanged sentence

Total liabilities $ 2,700 $ — $ — $ 2,700

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

During the three months ended March 31, 2024, there were no transfers into or out of Level 3.

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

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, “Basis of Presentation” for further details on the CVRs.

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.

Based on the U.S.

net sales generated by PYLARIFY in 2022, the Company paid out the maximum amount payable under the CVRs from available cash in May 2023 in full satisfaction of the CVR obligation.

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

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 (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.

Additionally, there is a potential payment of up to $ 10.0 million commercialization milestone related to a prostate cancer product candidate we refer to as “1404” that we have outlicensed to ROTOP Pharmaka GmbH.

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

5 unchanged sentences

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

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

The following tables summarize quantitative information and assumptions pertaining to the fair value measurement of liabilities using Level 3 inputs at March 31, 2024.

Fair Value at Assumptions

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

(in thousands) March 31, 2024 December 31, 2023 Valuation Technique Unobservable Input March 31, 2024 December 31, 2023

Contingent consideration liability:

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 %

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

7 unchanged sentences

For those financial instruments with significant Level 3 inputs, the following table summarizes the activities for the periods indicated:

Financial Assets Financial Liabilities

(in thousands) Nine Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Financial Liabilities

(in thousands) Three Months Ended

Fair value, beginning of period $ 2,700 $ 111,600

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

Cash payments — — ( 99,625 ) —

Fair value, end of period $ 2,700 $ 110,200

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

There was no change in fair value of the contingent financial liabilities for the three months ended March 31, 2024.

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

As of March 31, 2024, the carrying value of the Company’s convertible debt was $ 575.0 million and the fair value of the Company’s convertible debt was estimated to be approximately $ 636.0 million based on quoted market prices of these instruments and was classified as a Level 1 measurement within the fair value hierarchy.

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

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

The Company’s income tax expense is presented below:

The Company’s income tax expense (benefit) and effective tax rate are presented below:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

Income tax expense $ 27,999 $ 21,784 $ 49,259 $ 55,710

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

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

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

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

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

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

As these reserves change, adjustments are included in income tax expense while the offsetting adjustment is included in other income.

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

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

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

Income tax expense (benefit) $ 40,202 $ ( 8,297 )

Effective tax rate 23.5 % 74.7 %

The decrease in the effective income tax rate for the three months ended March 31, 2024 is primarily due to the impact of our stock compensation deductions in relation to the pretax income for the three months ended March 31, 2024 and the pretax loss for the three months ended March 31, 2023.

Inventory consisted of the following:

(in thousands) September 30,

(in thousands) March 31,

2024 December 31,

4 unchanged sentences

Inventory costs associated with products that have not yet received regulatory approval are capitalized if the Company believes there is probable future commercial use of the product and future economic benefit of the asset.

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.

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

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.

The Company has no inventory pending regulatory approval as of March 31, 2024.

Property, Plant and Equipment, Net

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

(in thousands) September 30,

(in thousands) March 31,

2024 December 31,

7 unchanged sentences

Total property, plant and equipment, net $ 150,090 $ 146,697

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

Depreciation and amortization expense related to property, plant and equipment, net, was $ 5.4 million and $ 3.4 million for the three months ended March 31, 2024 and 2023, respectively.

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

2 unchanged sentences

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 condensed consolidated statements of operations.

On January 8, 2024, the Company entered into an agreement with Perspective Therapeutics, Inc.

(“Perspective”) to transfer the sublease for the property at 110 Clyde Rd, Somerset, New Jersey as well as sell the associated assets at the Somerset facility for $ 8.0 million.

The transfer of the lease and completion of the asset sale occurred on March 1, 2024.

The sale of assets resulted in a derecognition to the right-of-use asset of $ 0.4 million, the lease liability of $ 0.4 million and remaining property, plant and equipment of $ 0.8 million.

The Company also incurred commission expense of $ 1.0 million related to the transaction.

The Company recorded a gain of $ 6.3 million for the three months ended March 31, 2024 within operating income.

See Note 19, “Acquisition of Assets” for further discussion of the Perspective acquisition.

Long-Lived Assets Held for Sale

2 unchanged sentences

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

The Company determined that the fair value of the net assets being sold exceeded the carrying value as of September 30, 2023.

The Company determined that the fair value of the net assets being sold exceeded the carrying value as of March 31, 2024.

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

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

The transaction is expected to close during the second quarter of 2024.

Accrued Expenses and Other Liabilities and Other Long-Term Liabilities

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

(in thousands) September 30,

(in thousands) March 31,

2024 December 31,

6 unchanged sentences

Operating lease liabilities (Note 15) $ 54,124 $ 54,453

Long-term contingent liability (Note 4) 2,500 11,900

Long-term contingent liabilities (Note 4) 2,700 2,700

Other long-term liabilities 6,283 6,168

2 unchanged sentences

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

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

As of September 30, 2023, the liability is measured at the present value of the obligation expected to be incurred and is approximately $ 25.1 million.

The Company has a production facility that manufactures and processes radioactive materials at its North Billerica, Massachusetts site.

As of March 31, 2024, the asset retirement liability is measured at the present value of the asset retirement liability expected to be incurred and is approximately $ 25.1 million.

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

2 unchanged sentences

Accretion expense 107

Balance at September 30, 2023 $ 22,823

The Company is required to provide the Massachusetts Department of Public Health and New Jersey Department of Environmental Protection financial assurance demonstrating the Company’s ability to fund the decommissioning of its North Billerica, Massachusetts and Somerset, New Jersey production facilities, respectively, upon closure.

Balance at March 31, 2024 $ 23,023

The Company is required to provide the Massachusetts Department of Public Health financial assurance demonstrating the Company’s ability to fund the decommissioning of its North Billerica, Massachusetts production facility upon closure.

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

1 unchanged sentence

Intangibles, net, consisted of the following:

September 30, 2023

March 31, 2024

(in thousands) Useful Lives

22 unchanged sentences

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

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

The Company recorded amortization expense for its intangible assets of $ 9.9 million and $ 11.1 million for the three months ended March 31, 2024 and 2023, respectively.

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

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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.

The additional payment would be recognized upon achievement of the specified threshold.

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

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

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

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

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

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

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

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

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

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

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.

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 quarter ended March 31, 2023.

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

The Company continued manufacturing AZEDRA during the first quarter of 2024, in order to provide doses of AZEDRA to then-current patients so they could complete their treatment regimen.

No AZEDRA was manufactured after March 1, 2024, when the Company transferred the assets and associated lease of its Somerset, New Jersey radiopharmaceutical manufacturing facility to Perspective.

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 (the “Selling Stockholders”).

This additional contingent payment was capitalized as part of the asset cost and increased the Company’s customer relationship intangible assets.

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Long-Term Debt, Net, and Other Borrowings

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

As of March 31, 2024, the Company’s maturities of principal obligations under its long-term debt and other borrowings are as follows:

(in thousands) Amount

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Total long-term debt, net and other borrowings $ 562,466

In December 2022, the Company refinanced its existing credit facility, consisting of (i) a $ 200.0 million five-year term loan facility (the “2019 Term Facility”) and (ii) a $ 200.0 million five-year revolving credit facility (the “2019 Revolving Facility” and,

together with the 2019 Term Facility, the “2019 Facility”), with a new $ 100.0 million delayed draw term loan facility (the “2022 Term Facility” and, the loans thereunder, the “Term Loans”) and a new $ 350.0 million five-year revolving credit facility (the “2022 Revolving Facility” and, together with the 2022 Term Facility, the “2022 Facility”).

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

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

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

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

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

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

2022 Revolving Facility

In December 2022, the Company entered into a $ 350.0 million five-year revolving credit facility (the “2022 Revolving Facility”).

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

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

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

As of March 31, 2024, there were no outstanding borrowings under the 2022 Revolving Facility.

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

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2022 Facility Covenants

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

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

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

The minimum interest coverage ratio 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:

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Period Total Net Leverage Ratio

Q3 2023 to Q4 2023 4.00 to 1.00

Q1 2024 and thereafter 3.50 to 1.00

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

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

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

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

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

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

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

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

Convertible Notes

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

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

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

Bank Trust Company, National Association, as Trustee.

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

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

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

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

The Company concluded that the interest feature is unrelated to the

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

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

As of September 30, 2023, the carrying value of the Notes was $ 575.0 million and the fair value of the liability was $ 575.0 million.

The Company recorded interest expense of approximately $ 3.9 million and $ 11.8 million related to the Notes for the three and nine months ended September 30, 2023, respectively.

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

As of March 31, 2024, the carrying value of the Notes was $ 575.0 million, the Notes had an unamortized discount of zero , and the fair value of the liability was $ 636.0 million.

The Company recorded interest expense of approximately $ 3.8 million related to the Notes for the three months ended March 31, 2024.

There were no conversions of Notes during the three months ended March 31, 2024.

Derivative Instruments

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

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

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

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

The interest rate swaps were designated as cash flow hedges.

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

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

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

Accumulated Other Comprehensive (Loss) Income

The components of accumulated other comprehensive (loss) income, net of tax of zero and $ 1.5 million for the nine months ended September 30, 2023 and 2022, respectively, consisted of the following:

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

The components of accumulated other comprehensive (loss) income, net of tax of zero for the three months ended March 31, 2024 and 2023 consisted of the following:

(in thousands) Foreign currency translation Accumulated other comprehensive (loss)

Balance at January 1, 2024 $ ( 1,037 ) $ ( 1,037 )

Other comprehensive income before reclassifications 224 — 224

Other comprehensive loss before reclassifications ( 141 ) ( 141 )

Amounts reclassified to earnings — —

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

Balance at March 31, 2024 $ ( 1,178 ) $ ( 1,178 )

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

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

Other comprehensive loss before reclassifications ( 119 ) ( 119 )

Amounts reclassified to earnings — —

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

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

Stock-Based Compensation

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

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Operating and finance lease assets and liabilities are as follows:

(in thousands) Classification September 30,

(in thousands) Classification March 31,

2024 December 31,

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

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

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

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.

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

On March 1, 2024, the Company transferred the sublease and completed the asset sale of the Somerset, New Jersey facility.

See Note 7, “Property, Plant and Equipment, Net” for further discussion on the lease transfer.

Other information related to leases were as follows:

September 30,

2024 December 31,

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Finance leases 6.2 % 6.2 %

Net Income Per Common Share

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

Net Income (Loss) Per Common Share

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2024 2023

Net income $ 131,957 $ 61,232 $ 223,281 $ 147,252

Net income (loss) $ 131,066 $ ( 2,807 )

Basic weighted-average common shares outstanding 68,757 67,749

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Diluted weighted-average common shares outstanding 70,095 67,749

Basic income per common share $ 1.93 $ 0.89 $ 3.27 $ 2.15

Diluted income per common share $ 1.88 $ 0.86 $ 3.18 $ 2.08

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

Basic income (loss) per common share $ 1.91 $ ( 0.04 )

Diluted income (loss) per common share $ 1.87 $ ( 0.04 )

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

Impact of the Convertible Notes

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

During the nine months ended September 30, 2023 and 2022, no such dividend was declared.

During the three months ended March 31, 2024 and 2023, no such dividend was declared.

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023

Foreign currency losses $ 9 $ 145 $ 31 $ 189

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

Foreign currency (gain) loss $ ( 217 ) $ 246

Tax indemnification (income), net — ( 96 )

Interest income ( 8,548 ) ( 3,523 )

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

Other ( 23 ) 142

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

In addition, intellectual property disputes often

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

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

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

If a matter is both probable to result in material liability and the amount of loss can be reasonably estimated, the

Company estimates and discloses the possible material loss or range of loss.

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

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

As of March 31, 2024, 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 the Company’s Abbreviated New Drug Application (“ANDA”) and Paragraph IV certification in connection with PNT2003, 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.

Acquisition of Assets

On February 6, 2023, the Company acquired Cerveau.

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

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.

In February 2023, the Company made an upfront payment of approximately $ 35.3 million to 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.

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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.

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

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

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

Segment Information

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.

On January 8, 2024, the Company entered into an agreement with Perspective to participate in the next qualified financing to purchase shares of Perspective common stock (“Perspective Shares”).

On January 22, 2024, the Company purchased 56,342,355 Perspective Shares, representing 11.39 % of the outstanding shares of Perspective common stock , at the fair market offering price of $ 0.37 per share.

Included within the agreement is a covenant which allows for the Company to designate one observer to Perspective’s board of directors.

The observer will have the option to attend any or all board meetings in a nonvoting capacity, will receive any board materials, except under certain instances where attorney-client privilege is necessary, where the material relates to business or contractual relationship with the Company, to avoid bona fide conflict of interest, exposure of trade secrets or relating to a change of control transaction.

The Company also purchased 60,431,039 Perspective Shares at a fair market purchase price of $ 0.95 per share as an investor in a private placement transaction on March 6, 2024, which resulted in the Company holding a cumulative 19.90 % of the outstanding Perspective Shares (or 17.35 % on a fully diluted basis) after giving effect to the closing of the private placement transaction.

The Company does not have the ability to exercise significant influence over operating and financial policies of Perspective given the Company’s board observer is nonvoting, and there is otherwise no participation in policy-making processes, no interchange of managerial personnel, and no sharing of technology.

Also effective January 8, 2024, the Company obtained the following options and rights from Perspective for an aggregate upfront payment of $ 28.0 million in cash:

• An exclusive option from Perspective to negotiate for an exclusive license under the rights of Perspective and its affiliates to Perspective’s Pb212-VMT-⍺-NET, a clinical stage alpha therapy developed for the treatment of neuroendocrine tumors , to develop, manufacture, commercialize and otherwise exploit the VMT-α-NET Product.

• A right to co-fund the investigational new drug application (“IND”)-enabling studies for early-stage therapeutic candidates targeting prostate-specific membrane antigen and gastrin releasing peptide receptor and, prior to IND filing, a right to negotiate for an exclusive license to such candidates.

• A right of first offer and last look protections for any third party merger and acquisition transactions involving Perspective for a twelve-month period.

Costs of IPR&D projects acquired as part of an asset acquisition that have no alternative future use are expensed when incurred, and therefore, a charge of $ 28.0 million was recognized in research and development expenses during the three months ended March 31, 2024.

Also effective January 8, 2024, the Company entered into an agreement with Perspective to transfer the sublease for the property at 110 Clyde Rd, Somerset, New Jersey as well as the associated assets at the Somerset facility for $ 8.0 million.

The transfer of the lease and completion of the asset sale occurred on March 1, 2024 at which time the Company had no further continuing legal obligations related to the lease.

See Note 7, “Property, Plant, and Equipment, Net” for additional details.

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

What changed 10-Q

Item 1. Financial Statements