What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-02 compared with 2023-11-02 · 168 added, 144 removed, 238 unchanged (57% of the section changed)

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These forward-looking statements, including, in particular, statements about our plans, strategies, prospects and industry estimates are subject to risks and uncertainties.

These statements identify prospective information and can generally be identified by words such as “anticipates,” “believes,” “can,” “could,” “designed,” “estimates,” “expects,” “hopes,” “intends,” “launch,” “may,” “pipeline,” “plans,” “potential,” “predicts,” “seeks,” “should,” “target,” “will,” “would” and similar expressions, or by express or implied discussions regarding potential marketing approvals or new indications for the collaborations, products candidates or approved products described in this Quarterly Report on Form 10-Q, or regarding potential future revenues from such collaborations, product candidates and products.

These statements identify prospective information and can generally be identified by words such as “anticipates,” “believes,” “can,” “could,” “designed,” “estimates,” “expects,” “hopes,” “intends,” “launch,” “may,” “pipeline,” “plans,” “potential,” “predicts,” “seeks,” “should,” “target,” “will,” “would” and similar expressions, or by express or implied discussions regarding potential marketing approvals or new indications for the collaborations, product candidates or approved products described in this Quarterly Report on Form 10-Q, or regarding potential future revenues from such collaborations, product candidates and approved products.

Examples of forward-looking statements include statements we make relating to our outlook and expectations including, without limitation, in connection with:

(i) continued market expansion and penetration for our established commercial products, particularly PYLARIFY and DEFINITY, in a competitive environment in which other imaging agents have been approved and are being commercialized, and our ability to clinically and commercially differentiate our products from other products;

(ii) our ability to have third parties manufacture our products and our ability to manufacture DEFINITY in our in-house manufacturing facility;

(iii) the global availability of Molybdenum-99 (“Mo-99”) and other raw material and key components;

(iv) the efforts and timing for clinical development, regulatory approval and successful commercialization of our product candidates and new clinical applications and territories for our products, in each case, that we or our strategic partners may undertake;

(v) our strategies, future prospects, and our projected growth, including revenue related to our collaboration agreements with POINT Biopharma Global Inc.

(vi) our ability to successfully continue existing clinical development partnerships using MK-6240 as a research tool and to further develop and commercialize such research tool;

and (vii) our ability to identify and acquire or in-license additional diagnostic and therapeutic product opportunities in oncology and other strategic areas and continue to grow our pipeline of products.

(iv) our strategies, future prospects, and our projected growth, including revenue related to our collaboration agreements with POINT, including our ability to obtain FDA approval for PNT2002 and PNT2003;

(v) our ability to satisfy our obligations under our existing clinical development partnerships using MK-6240 as a research tool and under the license agreement through which we have rights to MK-6240, and to further develop and commercialize it as an approved product;

(vi) our ability to successfully execute on our agreements with Perspective, including finalizing the license agreements in the event we exercise our options to do so, the value of our current and any future equity interest in Perspective, and Perspective’s ability to successfully develop its alpha-particle therapy and innovative platform technology;

(vii) the efforts and timing for clinical development, regulatory approval and successful commercialization of our product candidates and new clinical applications and territories for our products, in each case, that we or our strategic partners may undertake;

and (viii) our ability to identify and acquire or in-license additional diagnostic and therapeutic product opportunities in oncology and other strategic areas and continue to grow our pipeline of products.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions.

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“Risk Factors” in this Quarterly Report on Form 10-Q.

We are the leading radiopharmaceutical-focused company, delivering life-changing science to enable clinicians to Find, Fight and Follow disease.

We are the leading radiopharmaceutical-focused company, delivering life-changing science to enable clinicians to Find, Fight and Follow disease to deliver better patient outcomes.

We classify our products in three categories:

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

Our Radiopharmaceutical Oncology diagnostics and therapeutics help healthcare professionals (“HCPs”) Find, Fight and Follow cancer.

Our Radiopharmaceutical Oncology diagnostics and therapeutic candidates help healthcare professionals (“HCPs”) Find, Fight and Follow cancer, with a focus in prostate cancer.

Our leading Precision Diagnostic products assist HCPs to Find and Follow diseases, with a focus in cardiology.

Our Strategic Partnerships focus on enabling precision medicine through the use of biomarkers, digital solutions and pharma solutions platforms.

Our 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.

We believe that our diagnostic products provide improved clinical insight that enables HCPs to better detect and characterize, or rule out, disease, with the potential to achieve better patient outcomes, reduce patient risk and limit overall costs throughout the healthcare system.

We produce and market our products throughout the U.S., selling primarily to hospitals, independent diagnostic testing facilities, government facilities, integrated delivery networks, radiopharmacies, clinics, and group practices.

Our 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.

We believe that our diagnostic products provide improved diagnostic information that enables HCPs to better detect and characterize, or rule out, disease, with the potential to achieve better patient outcomes, reduce patient risk and limit overall costs throughout the healthcare system.

We produce and market our products throughout the United States (the “United States” or the “U.S.”), selling primarily to hospitals, independent diagnostic testing facilities, and radiopharmacies.

We sell our products outside the U.S.

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Our executive offices are located in Bedford, Massachusetts, with additional offices in North Billerica, Massachusetts;

Somerset, New Jersey;

Montreal, Canada and Lund, Sweden.

Montreal, Canada;

and Lund, Sweden.

Recent Developments

Exclusive License for PNT2002 and PNT2003

On December 20, 2022, we announced the closing of a set of strategic collaborations with POINT Biopharma Global Inc.

(“POINT”), in which we were granted a license to exclusive worldwide rights (excluding Japan, South Korea, China (including Hong Kong, Macau and Taiwan), Singapore and Indonesia) to co-develop and commercialize POINT’s PNT2002 and PNT2003 product candidates.

CEO Succession Plan

On March 1, 2024, Brian Markison, our then Chair of the Board, became our Chief Executive Officer, and Mary Anne Heino, our then Chief Executive Officer, retired and became the Chair of the Board.

As part of this leadership transition, Mr.

Markison assumed the role of Executive Chair of the Board as of January 23, 2024 until the effectiveness of his Chief Executive Officer appointment in March, and Board Member Julie McHugh became Lead Independent Director.

Strategic Agreements with Perspective Therapeutics

On January 8, 2024, we entered into multiple strategic agreements with Perspective, a radiopharmaceutical company that is pursuing advanced treatment applications for cancers throughout the body.

Under the agreements, we 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 $28.0 million in cash.

We also agreed to purchase up to 19.99% of Perspective’s outstanding shares of common stock, subject to Perspective’s completion of a qualified third-party financing transaction and certain other closing conditions.

In addition, Perspective agreed to acquire the assets and associated lease of our radiopharmaceutical manufacturing facility in Somerset, New Jersey.

On January 22, 2024, Lantheus Alpha purchased 56,342,355 shares of Perspective’s common stock at a purchase price of $0.37 per share in a private placement transaction for approximately $20.8 million in cash resulting in an ownership of 11.39%.

The agreement also provided us with certain pro rata participation rights to maintain our ownership position in Perspective in the event that Perspective makes any public or non-public offering of any equity or voting securities, subject to certain exceptions.

On March 1, 2024, our subsidiary, Progenics, transferred the fixed assets and associated lease of our Somerset facility to Perspective, and the parties entered into a transition services arrangement by which we will provide Perspective certain services relating to final disposal of radioactive waste and certain other related services.

On March 6, 2024, we exercised our right to purchase additional shares of Perspective’s common stock by purchasing 60,431,039 shares at a price of $0.95 per share.

The total consideration for this additional purchase was approximately $57.4 million in cash, resulting in Lantheus Alpha holding approximately 19.90% of the outstanding Perspective common stock (or 17.35% on a fully diluted basis) as of March 6, 2024.

For more information, see Note 19, “Acquisition of Assets” in our consolidated financial statements herein.

Exclusive License for PNT2002 & PNT2003

On December 20, 2022, we announced the closing of a set of strategic collaborations with POINT, in which we were granted a license to exclusive worldwide rights (excluding Japan, South Korea, China (including Hong Kong, Macau and Taiwan), Singapore and Indonesia) to co-develop and commercialize POINT’s PNT2002 and PNT2003 product candidates.

PNT2002 is a PSMA-targeted radiopharmaceutical therapy in development for the treatment of metastatic castration-resistant prostate cancer (“mCRPC”).

PNT2003 is a somatostatin receptor (“SSTR”) therapy with non-carrier added lutetium-177, which is in registration to treat patients with SSTR-positive neuroendocrine tumors.

On December 27, 2023, Eli Lilly and Company announced the completion of its acquisition of POINT.

The acquisition is not expected to impact the status of the license agreements related to these product candidates or the work being performed in connection with those license agreements and our collaboration with POINT.

With respect to PNT2002, POINT is generally responsible for funding and development activities required for FDA approval, including generating all clinical and nonclinical data, analysis and other information, and we are responsible for preparing for and seeking regulatory approval, as well as performing and funding all future development and commercialization following such approval.

POINT will be responsible for all manufacturing of PNT2002, subject to certain exceptions described in the PNT2002 License Agreement.

POINT will be responsible for all manufacturing of PNT2002, subject to certain exceptions described in the license and collaboration agreement between Lantheus Two and POINT, dated November 11, 2022 (the “PNT2002 License Agreement”).

In April 2023, we announced with POINT that the FDA had granted Fast Track designation for PNT2002.

Fast Track is a process designed to facilitate the development and expedite the review of drugs to treat serious conditions and address unmet needs.

We expect to read out topline data from SPLASH, the phase 3 registrational trial for PNT2002, during the fourth quarter of 2023.

SPLASH is designed to evaluate the efficacy and safety of PNT2002 in patients with metastatic castration-resistant prostate cancer who have progressed following treatment with an androgen receptor pathway inhibitor or ARPI.

The study has three phases:

randomized treatment;

and long term follow up.

SPLASH commenced with a 27-patient safety and dosimetry lead-in, after which patients were randomized two to one to receive either PNT2002, or the alternate ARPI therapies like abiraterone or enzalutamide.

In total, 412 patients were randomized.

The primary endpoint is radiographic or imaging-based progression-free survival, as assessed by blinded independent central review.

At the time of primary endpoint analysis, we will also perform an interim analysis on overall survival which could provide important information for our future discussions with the FDA.

As is custom in long-term oncology studies, final overall survival analysis will be performed when data have matured sufficiently.

During the third quarter of 2023, we worked on establishing an Expanded Access Program, or EAP, for PNT2002.

EAP programs, which are also referred to as compassionate use programs, provide a potential pathway for patients with serious or life-threatening conditions to gain access to an investigational drug for treatment outside of a clinical trial.

We expect to open the EAP for PNT2002 during the fourth quarter of 2023.

With respect to PNT2003, POINT is responsible for curating all data, analysis and other information necessary for regulatory approval, and supporting us in the preparation of regulatory filings, and we are responsible for preparing for and seeking regulatory approval of all such applications, as well as performing and funding all future development and commercialization following such

POINT will be responsible for all manufacturing of PNT2003, subject to certain exceptions described in the PNT2003 License Agreement.

On December 18, 2023, we announced positive topline results from SPLASH.

SPLASH is designed to evaluate the efficacy and safety of PNT2002 in patients with mCRPC who have progressed following treatment with an androgen receptor pathway inhibitor (“ARPI”).

The SPLASH trial met its primary endpoint, demonstrating a median radiographic progression-free survival (rPFS) per blinded independent central review of 9.5 months for patients treated with PNT2002, compared to 6.0 months for patients treated with ARPI in the control arm, a statistically significant 29% reduction in the risk of radiographic progression or death (hazard ratio (“HR”) 0.71;

At the time of the analysis, interim overall survival (“OS”) results were immature (46% of protocol-specified target OS events reached), and the HR was 1.11.

We plan to analyze overall survival data when it has matured to 75% of protocol-specified target OS events, which we expect to occur in the third quarter of 2024.

PNT2002 demonstrated a favorable safety profile with grade ≥3 treatment-emergent adverse events (TEAEs) per Common Terminology Criteria for Adverse Events, serious TEAEs, and TEAEs leading to discontinuation occurring at lower rates in the PNT2002 arm than in the control arm (30.1%, 17.1%, and 1.9% versus 36.9%, 23.1%, and 6.2%, respectively).

The open-label study randomized 412 patients with PSMA-expressing mCRPC who had progressed on ARPI therapy and either refused or were not eligible for chemotherapy, in a 2:1 randomization ratio.

At the time of the analysis, 84.6% of patients who experienced progressive disease in the control arm subsequently crossed over to receive PNT2002.

SPLASH was conducted across the U.S., Canada, Europe, and the United Kingdom.

Eighty percent of SPLASH patients resided in North America and approximately ten percent of all participants were Black or African American.

During 2023, we worked on establishing an Expanded Access Program, (“EAP”), for PNT2002.

EAPs, which are also referred to as compassionate use programs, provide a potential pathway for patients with serious or life-threatening conditions to gain access to an investigational drug for treatment outside of a clinical trial.

The first patients in the EAP for PNT2002 began treatment during the first quarter of 2024.

With respect to PNT2003, POINT is responsible for curating all data, analysis and other information necessary for regulatory approval, and supporting us in the preparation of regulatory filings.

We are responsible for preparing for and seeking regulatory approval of all such applications, as well as performing and funding all future development and commercialization following such approval.

POINT will be responsible for all manufacturing of PNT2003, subject to certain exceptions described in the license and collaboration agreement between Lantheus Three and POINT, dated November 11, 2022 (the “PNT2003 License Agreement”).

On January 11, 2024, we announced that our ANDA for PNT2003 had been accepted for filing by the FDA.

On January 26, 2024, we were sued in the 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 our ANDA filing and Paragraph IV certification, consistent with the process established by the Hatch-Waxman Act.

Under the terms of the Hatch-Waxman Act, FDA approval of our ANDA filing could be subject to a stay of up to 30-months.

If our filing is stayed for the full 30-month period and we are successful in obtaining FDA approval, pending successful resolution of the Hatch-Waxman litigation, we would expect to launch PNT2003 in 2026, although no assurance of that approval or timing can be assured.

Based on the most recent update to the FDA’s online paragraph IV database listings, we believe we are the first applicant to have filed a substantially complete ANDA for Lutetium

Lu 177 Dotatate containing a Paragraph IV certification under the provisions of the Hatch-Waxman Act.

As the first applicant, if our ANDA is approved, we believe we will be eligible for 180 days of generic marketing exclusivity in the U.S.

For more information, see Note 19, “Acquisition of Assets” in our consolidated financial statements included herein.

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On February 6, 2023, we announced that we acquired Cerveau.

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

Under the terms of the agreement, we paid the Selling Stockholders an upfront payment of $35.0 million in February 2023 and paid an additional $10.0 million in May 2023 upon the successful completion of a technology transfer.

Cerveau holds the rights under a license agreement to develop and commercialize MK-6240, an investigational second-generation F 18-labeled PET imaging agent that targets Tau tangles in Alzheimer’s disease.

Under the terms of the purchase agreement, we paid the Selling Stockholders an upfront payment of $35.3 million in February 2023 and paid an additional $10.0 million in May 2023 upon the successful completion of a technology transfer.

The Selling Stockholders are also eligible to receive additional development and commercial milestone payments.

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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.

Pursuant to the terms of the stock purchase agreement for Cerveau, certain members of the Selling Stockholders will also provide transition and clinical development services for a prescribed time following the closing of the transaction.

Pursuant to the terms of the purchase agreement for Cerveau, certain Selling Stockholders also provided transition and clinical development services for a prescribed time following the closing of the transaction.

In September 2023, MK-6240 was granted Fast Track designation by the FDA.

In February 2024, we announced our collaboration with a National Institute on Aging-sponsored study called the Consortium for Clarity in ADRD Research Through Imaging (CLARiTI).

This agreement enables the consortium to use MK-6240 in its investigation of Alzheimer’s disease and related dementias.

The CLARiTI study will involve all 37 Alzheimer’s Disease Research Centers in the United States which will recruit 2,000 subjects and collect their imaging and blood-based biomarker data to generate etiologic profiles for cases of mixed dementia..

For more information, see Note 19, “Acquisition of Assets” in our consolidated financial statements included herein.

Sale of RELISTOR Licensed Intangible Asset Associated with Net Sales Royalties

On August 2, 2023, we sold the right to our RELISTOR net sales royalties, which is classified as a licensed intangible asset (“RELISTOR royalty asset”), under our license agreement with Bausch;

On August 2, 2023, we sold the right to our RELISTOR royalty asset, which is classified as a licensed intangible asset;

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

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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.

For more information, see Note 10, “Intangibles, Net” in our consolidated financial statements included herein.

Discontinuation of AZEDRA

On August 15, 2023, we announced our decision to discontinue the production and promotion of AZEDRA and that we would be winding down our Somerset, New Jersey manufacturing site.

We currently intend 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.

On August 15, 2023, we announced that we would discontinue the production and promotion of AZEDRA and wind down our Somerset, New Jersey manufacturing site.

We continued manufacturing AZEDRA during the first quarter of 2024, 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 we transferred the assets and associated lease of our Somerset, New Jersey radiopharmaceutical manufacturing facility to Perspective.

For more information, see Note 10, “Intangibles, Net” in our consolidated financial statements included herein.

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Continued Growth of PYLARIFY

PYLARIFY, an F 18-labeled PET imaging agent targeting prostate-specific membrane antigen (“PSMA”), was approved by the FDA in May 2021 and commercially launched in the U.S.

PYLARIFY, an F 18-labeled PET imaging agent targeting PSMA, was approved by the FDA in May 2021 and commercially launched in the U.S.

in June 2021.

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The successful growth of PYLARIFY is dependent on our ability to sustain PYLARIFY as the leading PSMA PET imaging agent in an increasingly competitive marketplace.

PYLARIFY’s competition includes two commercially available gallium-68-based PSMA imaging agents, a recently approved fluorine-18-based PSMA imaging agent, and other non-PSMA-based imaging agents commonly referred to as conventional imaging.

PYLARIFY’s competition includes two commercially available gallium-68-based PSMA imaging agents, an approved fluorine-18-based PSMA imaging agent, and other non-PSMA-based imaging agents commonly referred to as conventional imaging.

We previously hired additional employees to assist us with the commercialization of PYLARIFY, including in Sales, Marketing, Reimbursement, Quality and Medical Affairs, and we will continue to make commercial investments necessary to drive PYLARIFY awareness and adoption.

We believe that PYLARIFY currently has the largest dedicated field-based commercial team in the PSMA PET imaging agent space.

We received notification that our Healthcare Procedure Coding System (“HCPCS”) code, which enables streamlined billing, went into effect as of January 1, 2022.

In addition, effective January 1, 2022, the Centers for Medicare and Medicaid Services (“CMS”) granted Transitional Pass-Through Payment Status (“TPT Status”) in the hospital outpatient setting for PYLARIFY, enabling traditional Medicare to provide an incremental payment for PET/CT scans performed with PYLARIFY in that setting.

Continued growth and revenue contribution from PYLARIFY will also depend on our ability to differentiate PYLARIFY in light of the potential loss of Transitional Pass-Through Payment (“TPT Status”), including through flexible and dependable access to PYLARIFY nationally, a best in class customer experience and through long-term strategic partnerships.

Our HCPCS code, which enables streamlined billing, went into effect as of January 1, 2022.

In addition, effective January 1, 2022, CMS granted TPT Status in the hospital outpatient setting for PYLARIFY, enabling traditional Medicare to provide an incremental payment for PET/CT scans performed with PYLARIFY in that setting.

TPT Status for PYLARIFY could expire on December 31, 2024.

In July 2023, CMS, proposed possible changes to its regulations covering payment for diagnostic radiopharmaceuticals.

This included, for the first time since 2008, options for separate payment for diagnostics instead of the current packaged payment following expiration of TPT Status.

We, along with numerous industry organizations, submitted comments and we expect CMS to publish final 2024 regulations in November 2023.

In 2023 rulemaking for the 2024 payment calendar year, CMS recognized the challenges of patient access to diagnostic radiopharmaceuticals and requested feedback on various payment alternatives that could provide separate reimbursement for these items, but the agency did not adopt any of these proposals in the final rule, while stating that it would continue to evaluate this issue in subsequent rulemaking.

We intend to submit comments in connection with CMS’s 2024 rulemaking for 2025 payment calendar year to request that CMS establish separate payment for diagnostics instead of the current packaged payment following expiration of TPT Status.

Our plan to successfully grow PYLARIFY has also included highlighting its commercial and clinical value, as well as through strategic partnerships and collaborations, both for the commercialization of our product outside of the United States as well as for the use of our product potentially for additional indications or in connection with the development of PSMA-targeted therapeutics.

With respect to commercializing PYLARIFY outside of the U.S., we previously licensed exclusive rights to Curium to develop and commercialize piflufolastat F 18 in Europe.

In July 2023, Curium announced that it received marketing authorization for PYLCLARI from the European Commission.

In July 2023, Curium announced that it received marketing authorization from the European Commission for piflufolastat F 18, which is being commercialized in the EU under the brand name PYLCLARI.

With respect to the use of PYLARIFY in connection with the development of PSMA-targeted therapeutics, we have entered into multiple strategic collaborations with pharmaceutical companies.

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The IRONMAN is the International Registry for Men with Advanced Prostate Cancer, the Registry is accumulating contextualized clinical and imaging data from more than 100 institutions across the globe.

Recently, we also entered into an agreement with PIONEER (Prostate Cancer DIagnOsis and TreatmeNt Enhancement through the Power of Big Data in EuRope), led by the European Association of Urology (project Coordinator) and Bayer AG (private leader) to use our AI technology to help validate the clinical utility of PYLARIFY AI enabled PSMA biomarker to diagnose, treat and monitor prostate cancer patients.

During 2023, we also entered into an agreement with PIONEER (Prostate Cancer DIagnOsis and TreatmeNt Enhancement through the Power of Big Data in EuRope), led by the European Association of Urology (project Coordinator) and Bayer AG (private

leader) to use our AI technology to help validate the clinical utility of PYLARIFY AI enabled PSMA biomarker to diagnose, treat and monitor prostate cancer patients.

PIONEER is a European Network of Excellence for Big Data in Prostate Cancer, consisting of 34 private and public stakeholders in prostate cancer research and clinical care from across 9 countries.

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market currently has three echocardiography ultrasound enhancing agents approved by the FDA;

we estimate that DEFINITY will continue to hold at least an 80% market share.

we estimate that DEFINITY will continue to hold at least an 80% share of the U.S.

segment for ultrasound enhancing agents in echocardiography procedures.

As we continue to expand our microbubble franchise, our activities include:

• Expansion of Label – In March 2024, we received FDA approval for our supplemental new drug application for the use of DEFINITY in pediatric patients with suboptimal echocardiograms.

The FDA decision was based on usage data from three pediatric clinical trials conducted with DEFINITY.

• Patents – We continue to actively pursue additional patents in connection with DEFINITY and DEFINITY RT, both in the U.S.

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for DEFINITY, we have six Orange Book-listed method-of-use patents, one of which expires in 2035 and five of which expire in 2037, as well as additional manufacturing patents that are not Orange Book-listed expiring in 2037.

For DEFINITY RT, we have eight Orange Book-listed patents, including two composition of matter patents which expire in 2035.

• VIALMIX RFID – DEFINITY is activated through the use of medical devices branded as VIALMIX and VIALMIX RFID.

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The RFID tag, which is affixed to the vial label, enables the DEFINITY vial to be appropriately activated with the VIALMIX RFID activation device.

• DEFINITY RT - The formulation of DEFINITY that we have branded as DEFINITY RT became commercially available in the fourth quarter of 2021.

DEFINITY RT allows both storage and shipment at room temperature and provides clinicians an additional choice and allows for greater utility of this formulation in broader clinical settings.

Given its physical characteristics, we believe DEFINITY RT is also well-suited for inclusion in kits requiring microbubbles for other indications and applications (including in kits developed by third parties of the type described in the paragraph entitled Microbubble Franchise below).

• DEFINITY RT - The formulation of DEFINITY that we have branded as DEFINITY RT allows both storage and shipment at room temperature and provides clinicians an additional choice and use in broader clinical settings.

Expansion of Strategic Partnerships and Other Revenue

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Our Biomarkers are intended to support patient selection and the monitoring of disease progression.

For example, piflufolastat F 18 is currently being used by Curium, POINT and Regeneron in those companies’ prostate cancer therapeutic drug development programs.

For example, piflufolastat F 18 is currently being used by Curium and Regeneron in those companies’ prostate cancer therapeutic drug development programs, and was also used in the development of PNT2002.

Our acquisition of Cerveau in February 2023 added MK-6240 to our biomarker portfolio.

MK-6240 is currently being used in more than ninety active clinical trials for several Alzheimer’s disease therapeutic candidates being developed.

Most recently, in collaboration with Ratio Therapeutics, we initiated a Phase I study for LNTH-1363S to evaluate the pharmokinetics, biodistribution and radiation dosimetry in adult health volunteers.

LNTH-1363S is our novel fibroblast activation protein, alpha targeted, copper-64 labeled PET imaging agent candidate.

In addition, we continue to expand our Microbubble Platform.

In December 2022, we announced a strategic collaboration with SonoThera, Inc.

(“SonoThera”), which will use our microbubbles in combination with SonoThera’s ultrasound-guided, non-viral, gene therapy platform and treatments.

We also have additional collaborations with other partners that are generally designed to include our microbubble as part of a kit used with our partner’s medical device for therapeutic applications.

MK-6240 is currently being used in more than ninety active clinical trials for several Alzheimer’s disease therapeutic candidates.

Most recently, in collaboration with Ratio, we completed a Phase 1 study for LNTH-1363S to evaluate the pharmacokinetics, biodistribution and radiation dosimetry in adult healthy volunteers and plan to initiate a Phase 1/2a study in patients in 2024.

LNTH-1363S is our investigational fibroblast activation protein, copper-64 labeled PET imaging agent candidate that we believe could have broad potential imaging applicability and use in oncology.

With respect to our Microbubble Platform, we generally enter into collaborations with partners that are designed to include our microbubble as part of a kit used with our partner’s medical device for therapeutic applications.

In these collaborations, our microbubble is intended to be used as a vehicle to deliver a therapeutic drug.

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Automated Bone Scan Index (“aBSI”) automatically calculates the disease burden of prostate cancer by detecting and classifying bone scan tracer uptakes as metastatic or benign lesions using an artificial neural network.

The software is currently used as one of the correlative objectives of the DORA trial, an open-labeled, randomized, Phase III study of docetaxel versus docetaxel in combination with radium-223 (Ra-223) in subjects with metastatic castration-resistant prostate cancer.

The software is currently used as one of the correlative objectives of the DORA trial, an open-labeled, randomized, Phase 3 study of docetaxel versus docetaxel in combination with radium-223 (Ra-223) in subjects with mCRPC.

We offer our Digital Solutions to HCPs for clinical use and to pharmaceutical companies for development purposes, and in some cases, we also obtain clinical imaging data that we may use to further develop artificial intelligence solutions.

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We currently have Mo-99 supply agreements with Institute for Radioelements (“IRE”), running through December 31, 2024, with auto-renewal provisions that are terminable upon notice of non-renewal, and with NTP Radioisotopes (“NTP”), acting for itself and on behalf of its subcontractor, the Australian Nuclear Science and Technology Organisation (“ANSTO”), running through December 31, 2024.

Although we have the most globally diverse Mo-99 supply chain with IRE in Belgium, NTP in South Africa, and ANSTO in Australia, we still face supplier and logistical challenges in our Mo-99 supply chain.

When one supplier experiences outages, we generally rely on Mo-99 supply from the other providers to limit the impact of the outages.

Although we believe we have the most globally diverse Mo-99 supply with IRE in Belgium, NTP in South Africa, and ANSTO in Australia, we still face supplier and logistical challenges in our Mo-99 supply chain.

When one supplier experiences outages, we generally rely on Mo-99 supply from the other suppliers to limit the impact of the outages.

We believe we effectively manage these various supply chain challenges, but depending on reactor and processor schedules and operations, at times we have not been able to fill some or all of the demand for our TechneLite generators on certain manufacturing days.

A prolonged disruption of service from one of our three Mo-99 processing sites or one of their main Mo-99-producing reactors could have a negative effect on our business, results of operations, financial condition and cash flows.

Inventory Supply

We rely on a third party supplier, Jubilant HollisterStier (“JHS”), to supply a significant portion of DEFINITY as well as full supply of select other products.

On February 23, 2022, LMI entered into a Manufacturing and Supply Agreement (the “MSA”) with JHS, effective as of February 23, 2022, pursuant to which JHS will manufacture, and LMI will purchase, DEFINITY and select other products.

The new MSA supersedes all of the prior agreements of the parties.

The initial term of the MSA runs through December 31, 2027 and can be further extended by mutual agreement.

The MSA requires LMI to purchase from JHS specified percentages of its total requirements for DEFINITY, as well as specified quantities of select other products, each year during the contract term, except to the extent that LMI has the right to withhold payment for defective product and cancel orders for untimely delivery without penalty.

Either party can terminate the MSA upon the occurrence of certain events, including the material breach or bankruptcy of the other party.

In addition to JHS, we rely on Samsung BioLogics as our sole source manufacturer of DEFINITY RT.

In 2021, we completed the construction of a specialized in-house manufacturing facility at our North Billerica campus to produce DEFINITY.

Inventory Supply & Third Party Suppliers

We obtain a substantial portion of our imaging agents from third-party suppliers.

Jubilant HollisterStier (“JHS”) is currently a significant supplier of DEFINITY and our sole source manufacturer of NEUROLITE, CARDIOLITE and evacuation vials, the latter being an ancillary component for our TechneLite generators.

Our manufacturing and supply agreement with JHS (the “JHS MSA”) runs through December 31, 2027 and can be further extended by mutual agreement of the parties.

The JHS MSA requires us to purchase from JHS specified percentages of our total requirements for DEFINITY, as well as specified quantities of NEUROLITE, CARDIOLITE and evacuation vial products, each year during the contract term.

Either party can terminate the JHS MSA upon the occurrence of certain events, including the material breach or bankruptcy of the other party.

In addition to JHS, we rely on Samsung Biologics Co., Ltd.

as our sole source manufacturer of DEFINITY RT.

In 2021, we completed the construction of a specialized in-house manufacturing facility at our North Billerica campus to produce the formulation of DEFINITY that requires refrigerated storage.

On February 22, 2022, we received FDA approval of our supplemental new drug application authorizing commercial manufacturing of DEFINITY at our new facility.

We believe this facility will allow us to better manage DEFINITY manufacturing and inventory, reduce our costs in a potentially more price competitive environment, and provide us with supply chain redundancy.

We believe this investment provides supply chain redundancy, improved flexibility and reduced costs in a potentially more price competitive environment.

Radiopharmaceuticals are decaying radioisotopes with half-lives ranging from a few hours to several days.

Radiopharmaceutical finished goods, such as doses of PYLARIFY, AZEDRA and TechneLite generators cannot be kept in inventory because of their limited shelf lives and are subject to just-in-time manufacturing, processing and distribution, which takes place at our facilities in North Billerica, Massachusetts and Somerset, New Jersey, as well as at our PMF partner manufacturing facilities across the U.S.

Radiopharmaceutical finished goods, such as doses of PYLARIFY, cannot be kept in inventory because of their limited shelf lives and are subject to just-in-time manufacturing, processing and distribution, which takes place at our 54 PMF manufacturing sites across the U.S., with respect to PYLARIFY, and at our facilities in North Billerica, Massachusetts, with respect to our TechneLite generators and Xenon.

Research and Development Expenses

To ensure we remain the leading radiopharmaceutical-focused company in our industry, we have historically made and will continue to make substantial investments in new product development and lifecycle management for existing products, including:

• For PYLARIFY, our development of PYLARIFY resulted in approval by the FDA in May 2021.

• For PYLARIFY AI, our development of PYLARIFY AI resulted in a 510(k) clearance granted by the FDA in the third quarter of 2021 and an additional 510(k) clearance granted during the second quarter of 2022.

• For PNT2002 and PNT2003, we were granted a license to exclusive worldwide rights (excluding certain countries) for $260.0 million in upfront payments during the fourth quarter of 2022 and will potentially make additional payments as described below.

• For PYLARIFY, we recently enrolled the first patient in a clinical trial to determine whether PYLARIFY can detect the presence or absence of additional prostate cancer lesions in patients with favorable intermediate-risk prostate cancer, as well as how it may change the patient’s intended management.

We also continue to support investigator sponsored research with the potential to expand the clinical utility of PYLARIFY.

described below.

We also filed an ANDA for PNT2003 as described further in the section entitled “Exclusive License for PNT2002 and PNT2003” above.

• For LNTH-1363S, in collaboration with Ratio Therapeutics, we recently completed a Phase 1 study for LNTH-1363S to evaluate the pharmacokinetics, biodistribution and radiation dosimetry in adult healthy volunteers.

We plan to initiate a Phase 1/2a study in patients in 2024.

• For 1095, our PSMA-targeted iodine-131-labeled small molecule product candidate, we enrolled the last patient in our ARROW Phase 2 study during the second quarter of 2022.

Patients in this study will be followed for one year after their first treatment for all efficacy endpoints and survival and safety data will be collected for an additional year.

• We are also developing additional lifecycle management opportunities for PYLARIFY, including preparing a clinical study in favorable intermediate-risk prostate cancer patients, and exploring opportunities beyond prostate cancer.

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.

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In addition, after Lantheus Two achieves $500.0 million in cumulative gross profit, POINT is eligible to receive royalty payments of twenty percent of net sales of PNT2002.

Prior to achieving that financial

recoupment threshold, POINT is eligible to receive royalty payments of twenty percent on that portion of annual net sales of PNT2002 that generate annual gross profit in excess of specified levels.

Prior to achieving that financial recoupment threshold, POINT is eligible to receive royalty payments of twenty percent on that portion of annual net sales of PNT2002 that generate annual gross profit in excess of specified levels.

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.

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 Change $ Change % 2023 2022 Change $ Change %

(in thousands) 2024 2023 Change $ Change %

Revenues $ 369,975 $ 300,784 $ 69,191 23.0 %

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Total operating expenses 141,465 86,420 55,045 63.7 %

Operating income 112,361 85,743 26,618 31.0 % 227,156 207,872 19,284 9.3 %

Gain on sale of assets 6,254 — 6,254 N/A

Operating income (loss) 106,635 (9,344) 115,979 (1241.2) %

Interest expense 4,859 4,991 (132) (2.6) %

Other (income) expense (52,649) 1,101 (53,750) (4,881.9) % (60,362) 306 (60,668) (19,826.1) %

Income before income taxes 159,956 83,016 76,940 92.7 % 272,540 202,962 69,578 34.3 %

Income tax expense 27,999 21,784 6,215 28.5 % 49,259 55,710 (6,451) (11.6) %

Net income $ 131,957 $ 61,232 $ 70,725 115.5 % $ 223,281 $ 147,252 $ 76,029 51.6 %

Comparison of the Periods Ended September 30, 2023 and 2022

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

Other income (8,788) (3,231) (5,557) 172.0 %

Income (loss) before income taxes 171,268 (11,104) 182,372 (1642.4) %

Income tax expense (benefit) 40,202 (8,297) 48,499 (584.5) %

Net income (loss) $ 131,066 $ (2,807) $ 133,873 (4769.3) %

Comparison of the Periods Ended March 31, 2024 and 2023

We classify our revenues into three product categories:

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

Radiopharmaceutical Oncology includes PYLARIFY and AZEDRA.

Radiopharmaceutical Oncology consists of PYLARIFY and AZEDRA.

In 2023, we announced our decision to discontinue the production and promotion of AZEDRA and we do not expect AZEDRA revenue 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 out-licensing arrangements, partnerships that focus on facilitating precision medicine through the use of biomarkers, digital solutions and radiotherapeutic platforms, and on our other products, such as RELISTOR.

Strategic Partnerships and Other Revenue primarily includes out-licensing arrangements and partnerships that focus on facilitating precision medicine through the use of biomarkers, digital solutions and radiotherapeutic platforms.

Revenues are summarized by product category on a net basis as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 Change $ Change % 2023 2022 Change $ Change %

(in thousands) 2024 2023 Change $ Change %

PYLARIFY $ 258,870 $ 195,470 $ 63,400 32.4 %

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Total revenues $ 369,975 $ 300,784 $ 69,191 23.0 %

The increase in revenues for the three months ended September 30, 2023, is primarily driven by an increase in PYLARIFY, DEFINITY and TechneLite sales volume, as well as revenue generated by Cerveau, offset by the sale of the RELISTOR royalty asset as recorded in Strategic Partnerships and Other Revenue.

The increase in revenues for the nine months ended September 30, 2023, is primarily driven by an increase in PYLARIFY and DEFINITY sales volume, as well as revenue generated by Cerveau, as recorded in Strategic Partnerships and Other Revenue.

The increase is offset, in part, by a decrease in Strategic Partnerships and Other Revenue due to the revenue recognized from the Novartis licensing agreement in the prior year and the sale of the RELISTOR royalty asset in the current quarter.

The increase in revenues for the three months ended March 31, 2024, is primarily driven by an increase in PYLARIFY and DEFINITY sales volume, as well as revenue generated by Cerveau, offset by the sale of the RELISTOR royalty asset as recorded in Strategic Partnerships and Other Revenue.

Rebates and Allowances

Estimates for rebates and allowances represent our estimated obligations under contractual arrangements with customers and other third parties.

Estimates for rebates and allowances represent our estimated obligations under contractual arrangements with third parties.

Rebate accruals and allowances are recorded in the same period the related revenue is recognized, resulting in a reduction to revenue and the establishment of a liability which is included in accrued expenses.

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Payments or credits made during the period (13,921)

Balance, September 30, 2023 $ 11,699

The increase in gross profit for the three months ended September 30, 2023, as compared to the prior year period, is primarily due to increased PYLARIFY and DEFINITY sales volumes, partially offset by the decrease of RELISTOR royalty asset due to the sale of the asset.

The increase in gross profit for the nine months ended September 30, 2023, as compared to the prior year period, is primarily due to the increased PYLARIFY and DEFINITY sales volumes, partially offset by the impairment of the currently marketed intangible asset related to AZEDRA, the Novartis licensing payment in the prior year, amortization of Cerveau intangible assets, and the sale of the RELISTOR royalty asset.

Balance, March 31, 2024 $ 16,111

The increase in gross profit for the three months ended March 31, 2024, as compared to the prior year period, is primarily due to the impairment of the AZEDRA currently marketed intangible asset in the prior year not repeating, and an increase in PYLARIFY and DEFINITY sales volumes, partially offset by the decrease of the RELISTOR royalty asset due to the sale of the asset.

Sales and Marketing

Sales and marketing expenses consist primarily of salaries and other related costs for personnel in field sales, marketing, and customer service functions.

Other costs in sales and marketing expenses include the development and printing of advertising and promotional material, professional services, market research and sales meetings.

Sales and marketing expenses increased $12.0 million and $33.2 million for the three and nine months ended September 30, 2023, respectively, as compared to the prior year period.

This was primarily driven by our investment in sales and marketing efforts with an expansion of our PYLARIFY sales force intended to support and expand adoption of PYLARIFY and launch planning for PNT2002 and PNT2003.

Other costs in sales and marketing expenses include the development of advertising and promotional material, business analytics, professional services, market research and market access, and sales meetings.

Sales and marketing expenses increased $12.9 million for the three months ended March 31, 2024, as compared to the prior year period.

This was primarily driven by our investment in sales and marketing efforts in connection with the expansion of our PYLARIFY sales force and revised brand strategy intended to support and expand adoption of PYLARIFY in the first half of 2023.

General and Administrative

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Other costs included in general and administrative expenses are professional fees for information technology services, external legal fees, consulting and accounting services as well as bad debt expense, certain facility and insurance costs, including director and officer liability insurance.

General and administrative expenses increased $12.0 million for the three months ended September 30, 2023 compared to the prior period.

This was primarily driven by increased employee-related costs, investment in technology, net increase for the fair value adjustments to the contingent asset and liabilities, new lease expenses and higher professional fees.

General and administrative expenses decreased $8.8 million for the nine months ended September 30, 2023 compared to the prior period.

This was primarily driven by a $34.9 million net reduction for the fair value adjustments to the contingent asset and liabilities (refer to Note 4, “Fair Value of Financial Instruments”, for further details on contingent consideration liabilities, including CVRs).

This decrease is partially offset by increased employee-related costs, investment in technology, new lease expense and higher professional fees.

General and administrative expenses increased $24.6 million for the three months ended March 31, 2024 compared to the prior period.

This was primarily driven by investment in technology, higher stock compensation, increased headcount and employee-related costs, and higher professional fees.

Research and Development

Research and development expenses relate primarily to the development of new products to add to our portfolio and costs related to our medical affairs, medical information and regulatory functions.

Research and development expenses increased $1.9 million for the three months ended September 30, 2023 as compared to the prior year period.

This was primarily driven by increased headcount and employee-related costs, as well as Cerveau research and development expenses.

These increases were offset, in part, by lower clinical expenses related to our ARROW Phase 2 study.

Research and development expenses increased $21.4 million for the nine months ended September 30, 2023 as compared to the prior year period.

This was primarily driven by the AZEDRA IPR&D asset impairment loss of $15.6 million and higher employee-related costs driven by an increased headcount.

These increases were offset, in part, by lower clinical expenses related to our ARROW Phase 2 study.

Research and development expenses increased $17.5 million for the three months ended March 31, 2024 as compared to the prior year period.

This was primarily driven by an upfront option payment of $28.0 million to Perspective, increased headcount and employee-related costs as well as MK-6240 research and development expenses.

This increase was offset, in part, by a non-cash impairment charge in the prior year associated with an IPR&D asset of $15.6 million and lower clinical expenses related to our ARROW Phase 2 study.

Interest Expense

Interest expense increased by approximately $10.4 million for the nine months ended September 30, 2023 as compared to the prior year period due to the issuance of the Notes on December 8, 2022, which was partially offset by the interest rate swap agreements from the prior year.

Interest expense decreased by approximately $0.1 million for the three months ended March 31, 2024 as compared to the prior year period.

Investment in Equity Securities - Unrealized Gain

Investment in equity securities - unrealized gain relates to the fair value adjustment of the investment in equity securities for the three months ended March 31, 2024.

Income Tax Expense

Our effective tax rate for each reporting period is presented as follows:

Nine Months Ended

September 30,

Three Months Ended

Effective tax rate 23.5% 74.7%

Our effective tax rate for the nine months ended September 30, 2023 differs from the U.S.

statutory rate of 21% primarily due to the income tax benefits associated with stock compensation deductions, additional net operating losses available for utilization under Internal Revenue Code Section 382 as a result of the sale of our RELISTOR royalty asset, and the release of uncertain tax positions, partially offset by state income taxes.

The decrease in the effective income tax rate for the nine months ended September 30, 2023 is primarily due to the decrease in non-deductible contingency reserve expense and the income tax benefit associated with the additional net operating losses available for utilization as a result of the sale of our RELISTOR royalty asset.

Our effective tax rate for the three months ended March 31, 2024 differs from the U.S.

statutory rate of 21% primarily due to state income taxes, partially offset by the income tax benefits associated with stock compensation deductions.

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.

Liquidity and Capital Resources

The following table provides information regarding our cash flows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2024 2023

Net cash provided by operating activities $ 127,238 $ 108,500

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

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

Net cash used in financing activities $ (16,845) $ (8,669)

Net Cash Provided by Operating Activities

Net cash provided by operating activities of $193.0 million in the nine months ended September 30, 2023 was primarily comprised of net income adjusted for the net effect of non-cash items such as impairment of long-lived assets, depreciation, amortization and accretion expense, gain on sale of RELISTOR royalty asset, and stock-based compensation expense.

Net cash provided by operating activities of $127.2 million in the three months ended March 31, 2024 was primarily comprised of net income adjusted for the net effect of non-cash items such as unrealized gain on equity investment, charges incurred in connection with the Perspective IPR&D exclusive license option, depreciation, amortization and accretion expense, and stock-based compensation expense.

The primary working capital sources of cash were the timing of payments to large vendors.

The primary working capital uses of cash were a decrease to accruals related to the CVR payment, an increase in trade receivables associated primarily with the increase in PYLARIFY revenues, and an increase in inventory related to the timing of batch processes.

Net cash provided by operating activities of $176.4 million in the nine months ended September 30, 2022 was primarily comprised of net income adjusted for the net effect of non-cash items such as depreciation, amortization and accretion expense, the change in fair value of contingent assets and liabilities of $25.4 million (refer to Note 4, “Fair Value of Financial Instruments”, for further details on contingent consideration liabilities, including CVRs) and stock-based compensation expense.

The primary working capital sources of cash were the increase in billings associated with PYLARIFY sales and the timing of payments to large vendors.

The primary working capital uses of cash were an increase in trade receivables associated primarily with the increase in PYLARIFY revenues, and an increase in inventory related to the timing of batch processes.

Net cash provided by operating activities of $108.5 million in the three months ended March 31, 2023 was primarily comprised of net income adjusted for the net effect of non-cash items such as impairment of long-lived assets, depreciation, amortization and accretion expense and stock-based compensation expense.

The primary working capital sources of cash were the timing of payments for income taxes and to large vendors.

The primary working capital uses of cash were an increase in trade receivables associated primarily with the increase in PYLARIFY revenues.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities during the nine months ended September 30, 2023 was due to net cash proceeds of $98.0 million from the sale of RELISTOR royalty asset offset by $45.3 million for our asset acquisition of Cerveau and $34.5 million of capital expenditures.

Net cash used in investing activities during the nine months ended September 30, 2022 was primarily due to $13.6 million of capital expenditures offset by cash proceeds of $1.8 million received from the sale of our Puerto Rico subsidiary.

Net Cash Used in Investing Activities

Net cash used in investing activities during the three months ended March 31, 2024 was driven by an upfront option payment of $28.0 million to Perspective, $78.3 million for the purchase of equity securities, $8.3 million of capital expenditures partially offset by net cash proceeds of $8.0 million from the sale of the Somerset facility sublease and associated assets.

Net cash used in investing activities during the three months ended March 31, 2023 was due to $35.3 million for our asset acquisition of Cerveau and $9.2 million of capital expenditures.

Net Cash Used in Financing Activities

Net cash used in financing activities during the nine months ended September 30, 2023 is primarily attributable to the payments for minimum statutory tax withholding related to net share settlement of equity awards of $13.6 million and the CVR initial valuation as of June 30, 2020 of $3.7 million offset by proceeds of $3.5 million from stock option exercises.

Net cash used in financing activities during the nine months ended September 30, 2022 is primarily attributable to the payments on long-term debt and other borrowings of $7.9 million related to the 2019 Term Facility and payments for minimum statutory tax withholding related to net share settlement of equity awards of $7.2 million offset by proceeds of $7.5 million from stock option exercises.

Net cash used in financing activities during the three months ended March 31, 2024 is primarily attributable to the payments for minimum statutory tax withholding related to net share settlement of equity awards of $19.4 million offset by proceeds of $2.8 million from stock option exercises.

Net cash used in financing activities during the three months ended March 31, 2023 is primarily attributable to the payments for minimum statutory tax withholding related to net share settlement of equity awards of $11.2 million offset by proceeds of $1.8 million from stock option exercises.

External Sources of Liquidity

In December 2022, we voluntarily repaid our 2019 $200.0 million five-year term loan facility.

In addition, we replaced our $200.0 million revolving facility with the 2022 Revolving Facility.

In December 2022, we entered into the 2022 Revolving Facility.

The terms of the 2022 Revolving Facility are set forth in the Credit Agreement, dated as of December 2, 2022, by and among us, the lenders from time to time party thereto and Citizens Bank, N.A., as administrative agent and collateral agent (the “2022 Credit Agreement”).

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Please refer to Note 13, “Long-Term Debt, Net, and Other Borrowings” for further details on the 2022 Revolving Facility.

As of September 30, 2023, we were in compliance with all financial and other covenants under the 2022 Credit Agreement.

As of March 31, 2024, we were in compliance with all financial and other covenants under the 2022 Credit Agreement.

On December 8, 2022, we issued $575.0 million in aggregate principal amount of 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.

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• The continued costs of the ongoing commercialization of our products;

• Our investment in the further clinical development and commercialization of products and development candidates, including PNT2002, PNT2003, 1095 and MK-6240;

• Our investment in the further clinical development and commercialization of products and development candidates, as well as whether we exercise our option and co-development rights under the Perspective agreements;

• The costs of acquiring or in-licensing, developing, obtaining regulatory approval for, and commercializing, new products, businesses or technologies, including any potential related milestone or royalty payments, together with the costs of pursuing opportunities that are not eventually consummated;

• The costs of investing in our facilities, equipment and technology infrastructure, including with respect to the commencement of the Additional Premises;

• The costs of investing in our facilities, equipment and technology infrastructure;

• The costs and timing of establishing or amending manufacturing and supply arrangements for commercial supplies of our products and raw materials and components;

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• The costs of further commercialization of our existing products, particularly in international markets, including product marketing, sales and distribution and whether we obtain local partners to help share such commercialization costs;

• The legal costs relating to maintaining, expanding and enforcing our intellectual property portfolio, pursuing insurance or other claims and defending against product liability, regulatory compliance, intellectual property or other claims;

• The cost of interest on any additional borrowings which we may incur under our financing arrangements;

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However, we cannot provide assurance that such an amendment or waiver would be granted, or that additional capital will be available on acceptable terms, if at all.

At September 30, 2023, our only current committed external source of funds is our borrowing availability under our 2022 Revolving Facility.

We had $614.1 million of cash and cash equivalents as of September 30, 2023.

At March 31, 2024, our only current committed external source of funds is our borrowing availability under our 2022 Revolving Facility.

We had $718.3 million of cash and cash equivalents as of March 31, 2024.

Our 2022 Revolving Facility contains a number of affirmative, negative, reporting and financial covenants, in each case subject to certain exceptions and materiality thresholds.

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Accordingly, we may be limited in utilizing the full amount of our 2022 Revolving Facility as a source of liquidity.

Based on our current operating plans, we believe our balance of cash and cash equivalents, which totaled $614.1 million as of September 30, 2023, along with cash generated by ongoing operations and continued access to our 2022 Revolving Facility, will be sufficient to satisfy our cash requirements over the next twelve months and beyond.

Based on our current operating plans, we believe our balance of cash and cash equivalents, which totaled $718.3 million as of March 31, 2024, along with cash generated by ongoing operations and continued access to our 2022 Revolving Facility, will be sufficient to satisfy our cash requirements over the next twelve months and beyond.

Critical Accounting Policies and Estimates

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In addition, our reported financial condition and results of operations could vary due to a change in the application of a particular accounting standard.

There have been no significant changes to our critical accounting policies or in the underlying accounting assumptions and estimates used in such policies in the nine months ended September 30, 2023.

There have been no significant changes to our critical accounting policies or in the underlying accounting assumptions and estimates used in such policies in the three months ended March 31, 2024.

For further information, refer to our summary of significant accounting policies and estimates in our Annual Report on Form 10-K filed for the year ended December 31, 2023.

Off-Balance Sheet Arrangements

We are required to provide the Massachusetts Department of Public Health and New Jersey Department of Environmental Protection financial assurance demonstrating our ability to fund the decommissioning of our North Billerica, Massachusetts and Somerset, New Jersey production facilities, respectively, upon closure.

We are required to provide the Massachusetts Department of Public Health financial assurance demonstrating our ability to fund the decommissioning of our North Billerica, Massachusetts production facility upon closure.

We have provided this financial assurance in the form of a $30.3 million surety bond.

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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-Q

Item 2. Management’s Discussion and Analysis