Lantheus Holdings, Inc. 10-Q

Item 1. Financial Statements (Unaudited) Lantheus Holdings, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except par value) March 31, 2024 December 31, 2023 Assets Current assets Cash and cash equivalents $ 718,279 $ 713,656 Accounts receivable, net 337,389 284,292 Inventory 69,758 64,029 Other current assets 16,215 16,683 Assets held for sale 7,159 7,159 Total current assets 1,148,800 1,085,819 Investment in equity securities 138,960 — Property, plant and equipment, net 150,090 146,697 Intangibles, net 142,054 151,985 Goodwill 61,189 61,189 Deferred tax assets, net 138,898 150,198 Other long-term assets 51,343 55,261 Total assets $ 1,831,334 $ 1,651,149 Liabilities and stockholders’ equity Current liabilities Current portion of long-term debt and other borrowings $ 734 $ 823 Accounts payable 37,525 41,189 Accrued expenses and other liabilities 198,939 145,338 Total current liabilities 237,198 187,350 Asset retirement obligations 23,023 22,916 Long-term debt, net and other borrowings 562,466 561,670 Other long-term liabilities 63,107 63,321 Total liabilities 885,794 835,257 Commitments and contingencies (See Note 18) Stockholders’ equity Preferred stock ($ 0.01 par value, 25,000 shares authorized; no shares issued and outstanding) — — Common stock ($ 0.01 par value, 250,000 shares authorized; 70,635 and 69,863 shares issued as of March 31, 2024 and December 31, 2023, respectively) 706 699 Additional paid-in capital 756,443 757,727 Treasury Stock at cost - 1,339 shares as of March 31, 2024 and December 31, 2023 ( 75,000 ) ( 75,000 ) Retained earnings 264,569 133,503 Accumulated other comprehensive loss ( 1,178 ) ( 1,037 ) Total stockholders’ equity 945,540 815,892 Total liabilities and stockholders’ equity $ 1,831,334 $ 1,651,149 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Contents Lantheus Holdings, Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) Three Months Ended March 31, 2024 2023 Revenues $ 369,975 $ 300,784 Cost of goods sold 128,129 223,708 Gross profit 241,846 77,076 Operating expenses Sales and marketing 45,546 32,617 General and administrative 47,895 23,271 Research and development 48,024 30,532 Total operating expenses 141,465 86,420 Gain on sale of assets 6,254 — Operating income (loss) 106,635 ( 9,344 ) Interest expense 4,859 4,991 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 ) Diluted $ 1.87 $ ( 0.04 ) Weighted-average common shares outstanding: Basic 68,757 67,749 Diluted 70,095 67,749 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents Lantheus Holdings, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (in thousands) Three Months Ended March 31, 2024 2023 Net income (loss) $ 131,066 $ ( 2,807 ) Other comprehensive income (loss): Foreign currency translation ( 141 ) ( 119 ) Comprehensive income (loss) $ 130,925 $ ( 2,926 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents Lantheus Holdings, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) (in thousands) Three Months Ended March 31, 2024 Common Stock Treasury Stock Additional Paid-In Capital Retained earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Shares Amount Balance, January 1, 2024 69,863 $ 699 1,339 $ ( 75,000 ) $ 757,727 $ 133,503 $ ( 1,037 ) $ 815,892 Net income — — — — — 131,066 — 131,066 Other comprehensive loss — — — — — — ( 141 ) ( 141 ) Stock option exercises and employee stock plan purchases 86 1 — — 2,756 — — 2,757 Vesting of restricted stock awards and units 988 9 — — ( 9 ) — — — Shares withheld to cover taxes ( 302 ) ( 3 ) — — ( 19,415 ) — — ( 19,418 ) Stock-based compensation — — — — 15,384 — — 15,384 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 Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity Shares Amount Shares Amount Balance, January 1, 2023 68,851 $ 689 1,339 $ ( 75,000 ) $ 715,875 $ ( 193,158 ) $ ( 1,259 ) $ 447,147 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 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents Lantheus Holdings, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended March 31, 2024 2023 Operating activities Net income (loss) $ 131,066 $ ( 2,807 ) Adjustments to reconcile net income to net cash flows from operating activities: Depreciation, amortization and accretion 15,445 14,615 Impairment of long-lived assets — 132,052 Amortization of debt related costs 1,073 1,082 Changes in fair value of contingent assets and liabilities — ( 1,400 ) Provision for excess and obsolete inventory 2,757 680 Stock-based compensation 15,384 9,667 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 ) Long-term indemnification receivable — ( 96 ) Long-term income tax payable and other long-term liabilities 439 123 Other 1,696 1,225 Changes in assets and liabilities which provided (used) cash: Accounts receivable ( 55,440 ) ( 24,681 ) Inventory ( 8,494 ) ( 7,124 ) Other current assets 4,023 2,479 Accounts payable ( 3,462 ) 6,747 Accrued expenses and other liabilities 50,449 11,801 Net cash provided by operating activities 127,238 108,500 Investing activities Capital expenditures ( 8,273 ) ( 9,168 ) Acquisition of assets, net — ( 35,345 ) 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 ) Proceeds from stock option exercises 934 1,842 Proceeds from issuance of common stock 1,823 940 Payments for minimum statutory tax withholding related to net share settlement of equity awards ( 19,418 ) ( 11,154 ) Net cash used in financing activities ( 16,845 ) ( 8,669 ) Effect of foreign exchange rates on cash, cash equivalents and restricted cash 770 ( 98 ) Net increase in cash, cash equivalents and restricted cash 4,634 55,220 Cash, cash equivalents and restricted cash, beginning of period 715,285 417,241 Cash, cash equivalents and restricted cash, end of period $ 719,919 $ 472,461 5 Table of Contents Lantheus Holdings, Inc. Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited) (in thousands) Three Months Ended March 31, 2024 2023 Reconciliation to amounts within the condensed consolidated balance sheets Cash and cash equivalents $ 718,279 $ 470,863 Restricted cash included in other long-term assets 1,640 1,598 Cash, cash equivalents and restricted cash at end of period $ 719,919 $ 472,461 Three Months Ended March 31, 2024 2023 Schedule of non-cash investing and financing activities Additions of property, plant and equipment included in liabilities $ 6,853 $ 8,443 Lease liability settled through transfer of lease $ 376 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents Lantheus Holdings, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Note Regarding Company References and Trademarks Unless the context otherwise requires, references to the “Company” and “Lantheus” refer to Lantheus Holdings, Inc. and its direct and indirect wholly-owned subsidiaries; references to “Lantheus Holdings” refer to Lantheus Holdings, Inc. and not to any of its subsidiaries; references to “LMI” refer to Lantheus Medical Imaging, Inc., the direct subsidiary of Lantheus Holdings; references to “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.; Lantheus MI Real Estate, LLC; Lantheus Two, LLC; Lantheus Three, LLC; and Progenics Pharmaceuticals, Inc., respectively, each a wholly-owned subsidiary of LMI, and references to “EXINI” refer to EXINI Diagnostics AB, a wholly-owned subsidiary of Progenics. Solely for convenience, the Company refers to trademarks, service marks and trade names without the TM, SM and ® symbols. Those references are not intended to indicate, in any way, that the Company will not assert, to the fullest extent permitted under applicable law, its rights to its trademarks, service marks and trade names. 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Lantheus and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement have been included. The results of operations for the three 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. GAAP for complete financial statements. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 of the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities Exchange Commission (“SEC”) on February 22, 2024. Progenics Acquisition On June 19, 2020 (the “Closing Date”), pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of February 20, 2020 (the “Merger Agreement”), by and among Lantheus Holdings, Plato Merger Sub, Inc., a wholly-owned subsidiary of Lantheus Holdings (“Merger Sub”), and Progenics, Lantheus Holdings completed the acquisition of Progenics by means of a merger of Merger Sub with and into Progenics, with Progenics becoming an indirect subsidiary of Lantheus Holdings following the completion of such merger (the “Progenics Acquisition”). In connection with the Progenics Acquisition, Lantheus Holdings issued 26,844,877 shares of Lantheus Holdings common stock and 86,630,633 contingent value rights (each a “CVR”) tied to the financial performance of PYLARIFY to former Progenics stockholders and option holders. Each CVR entitled its holder to receive a pro rata share of aggregate cash payments equal to 40 % of United States (“U.S.”) net sales generated by PYLARIFY in 2022 and 2023 in excess of $ 100.0 million and $ 150.0 million, respectively. The Company’s aggregate payments in respect of the CVRs, together with any other non-stock consideration treated as paid in connection with the Progenics Acquisition, was capped at 19.9 % of the total consideration the Company paid in the Progenics Acquisition. Based on the Company’s 2022 PYLARIFY net sales, the Company determined that the aggregate payment obligation under the CVRs was $ 99.6 million, which was the maximum amount payable. The Company paid out this amount in May 2023 in full satisfaction of the CVRs. 2. Summary of Significant Accounting Policies Investments 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. 7 Table of Contents Recent Accounting Pronouncements 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. 3. Revenue from Contracts with Customers The following table summarizes revenue by revenue source as follows: Three Months Ended March 31, Major Products/Service Lines (in thousands) 2024 2023 Product revenue, net (1) $ 369,313 $ 292,256 License and royalty revenues 662 8,528 Total revenues $ 369,975 $ 300,784 ________________________________ (1) The Company’s product revenue includes PYLARIFY and DEFINITY among other products. This category represents the delivery of physical goods. The Company applies the same revenue recognition policies and judgments for all its principal products. The Company classifies its revenues into three product categories: Radiopharmaceutical Oncology, Precision Diagnostics, and Strategic Partnerships and Other Revenue. Radiopharmaceutical Oncology includes PYLARIFY and AZEDRA. In 2023, the Company announced its decision to discontinue the production and promotion of AZEDRA and it does not expect 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. 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. (“Bausch”); the Company retained the rights to future sales-based milestone payments. Revenue by product category on a net basis is as follows: Three Months Ended March 31, (in thousands) 2024 2023 PYLARIFY $ 258,870 $ 195,470 Other radiopharmaceutical oncology 384 717 Total radiopharmaceutical oncology 259,254 196,187 DEFINITY 76,564 68,824 TechneLite 21,714 20,986 Other precision diagnostics 5,932 5,807 Total precision diagnostics 104,210 95,617 Strategic partnerships and other revenue 6,511 8,980 Total revenues $ 369,975 $ 300,784 8 Table of Contents 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. 4. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability of fair value measurements, financial instruments are categorized based on a hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: • Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. • Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). • Level 3 — Unobservable inputs that reflect a Company’s estimates about the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data. The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of money market funds, 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: March 31, 2024 (in thousands) Total Fair Value Level 1 Level 2 Level 3 Assets: Money market funds $ 543,369 $ 543,369 $ — $ — Investment securities 138,960 138,960 — — Total assets $ 682,329 $ 682,329 $ — $ — Liabilities: Contingent consideration liabilities $ 2,700 $ — $ — $ 2,700 Total liabilities $ 2,700 $ — $ — $ 2,700 December 31, 2023 (in thousands) Total Fair Value Level 1 Level 2 Level 3 Assets: Money market funds $ 574,131 $ 574,131 $ — $ — Total assets $ 574,131 $ 574,131 $ — $ — Liabilities: Contingent consideration liabilities $ 2,700 $ — $ — $ 2,700 Total liabilities $ 2,700 $ — $ — $ 2,700 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 9 Table of Contents 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 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. The Company considers the contingent consideration liabilities relating to the 2013 Acquisition each a Level 3 instrument (one with significant unobservable inputs) in the fair value hierarchy. The estimated fair value of these was determined based on probability adjusted discounted cash flows and Monte Carlo simulation models that included significant estimates and assumptions pertaining to commercialization events and sales targets. The most significant unobservable inputs with respect to 1095 and 1404 are the probabilities of achieving regulatory approval of those development projects and subsequent commercial success. Significant changes in any of the probabilities of success, the probabilities as to the periods in which sales targets and milestones will be achieved, discount rates or underlying revenue forecasts would result in a significantly higher or lower fair value measurement. The Company records the contingent consideration liability at fair value with changes in estimated fair values recorded in general and administrative expenses in the condensed consolidated statements of operations. The Company can give no assurance that the actual amounts paid, if any, in connection with the contingent consideration liabilities, will be consistent with any recurring fair value estimate of such contingent consideration liabilities. The following tables summarize quantitative information and assumptions pertaining to the fair value measurement of liabilities using Level 3 inputs at March 31, 2024. Fair Value at Assumptions (in thousands) March 31, 2024 December 31, 2023 Valuation Technique Unobservable Input March 31, 2024 December 31, 2023 Contingent consideration liability: 1095 commercialization milestone 1,800 1,800 Probability adjusted discounted cash flow model Period of expected milestone achievement 2026 2026 Probability of success 40 % 40 % Discount rate 4.6 % 4.1 % Net sales targets - AZEDRA and 1095 900 900 Monte Carlo simulation Probability of success and sales targets 0 % - 40 % 0 % - 40 % Discount rate 16 % 15 % Total $ 2,700 $ 2,700 For those financial instruments with significant Level 3 inputs, the following table summarizes the activities for the periods indicated: 10 Table of Contents Financial Liabilities (in thousands) Three Months Ended March 31, 2024 2023 Fair value, beginning of period $ 2,700 $ 111,600 Changes in fair value included in net (loss) income — ( 1,400 ) Fair value, end of period $ 2,700 $ 110,200 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. 5. Income Taxes 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 (benefit) and effective tax rate are presented below: Three Months Ended March 31, (in thousands) 2024 2023 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. 6. Inventory Inventory consisted of the following: (in thousands) March 31, 2024 December 31, 2023 Raw materials $ 26,043 $ 31,259 Work in process 23,553 13,807 Finished goods 20,162 18,963 Total inventory $ 69,758 $ 64,029 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 March 31, 2024. 11 Table of Contents 7. Property, Plant and Equipment, Net Property, plant and equipment, net, consisted of the following: (in thousands) March 31, 2024 December 31, 2023 Land $ 9,480 $ 9,480 Buildings 73,531 73,441 Machinery, equipment and fixtures 101,016 102,576 Computer software 50,121 27,259 Construction in progress 23,728 40,964 257,876 253,720 Less: accumulated depreciation and amortization ( 107,786 ) ( 107,023 ) Total property, plant and equipment, net $ 150,090 $ 146,697 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. The Company reviewed revised undiscounted cash flows that were estimated to be generated by the asset group as of June 30, 2023. Based on the undiscounted cash flow analysis, the Company determined that the asset group had net carrying values that exceeded their estimated undiscounted future cash flows. The Company then estimated the fair value of the asset group based on their discounted cash flows. The carrying value exceeded the fair value and as a result, the Company recorded a noncash impairment of $ 6.0 million for the six months ended June 30, 2023 in cost of goods sold in the consolidated statements of operations. 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 During the first quarter of 2023, the Company committed to a plan to sell a portion of its land and buildings associated with its Billerica, Massachusetts campus. Effective March 16, 2023, the Company entered into a purchase and sale agreement (the “P&S”) with a prospective buyer. The assets were classified as held for sale and comprised entirely of property, plant and equipment, net. The Company determined that the fair value of the net assets being sold exceeded the carrying value as of March 31, 2024. The purchase price for the campus sale is $ 10.0 million in cash. The transaction is expected to close during the second quarter of 2024. 12 Table of Contents 8. 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) March 31, 2024 December 31, 2023 Compensation and benefits $ 19,113 $ 36,331 Freight, distribution and operations 89,584 67,529 Accrued rebates, discounts and chargebacks 16,111 16,070 Accrued professional fees 19,442 10,244 Other 54,689 15,164 Total accrued expenses and other liabilities $ 198,939 $ 145,338 Operating lease liabilities (Note 15) $ 54,124 $ 54,453 Long-term contingent liabilities (Note 4) 2,700 2,700 Other long-term liabilities 6,283 6,168 Total other long-term liabilities $ 63,107 $ 63,321 9. Asset Retirement Obligations 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 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: (in thousands) Amount Balance at January 1, 2024 $ 22,916 Accretion expense 107 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. 10. Intangibles, Net Intangibles, net, consisted of the following: March 31, 2024 (in thousands) Useful Lives (in years) Amortization Method Cost Accumulated Amortization Net Trademarks 15 - 25 Straight-Line $ 13,540 $ ( 12,252 ) $ 1,288 Customer relationships 15 - 25 Accelerated 157,916 ( 122,327 ) 35,589 Currently marketed products 9 - 15 Straight-Line 132,800 ( 41,966 ) 90,834 Licenses 11 - 16 Straight-Line 22,233 ( 9,280 ) 12,953 Developed technology 9 Straight-Line 2,400 ( 1,010 ) 1,390 Total $ 328,889 $ ( 186,835 ) $ 142,054 13 Table of Contents December 31, 2023 (in thousands) Useful Lives (in years) Amortization Method Cost Accumulated Amortization Net Trademarks 15 - 25 Straight-Line $ 13,540 $ ( 12,216 ) $ 1,324 Customer relationships 15 - 25 Accelerated 157,995 ( 117,574 ) 40,421 Currently marketed products 9 - 15 Straight-Line 132,800 ( 38,277 ) 94,523 Licenses 11 - 16 Straight-Line 22,233 ( 7,972 ) 14,261 Developed technology 9 Straight-Line 2,400 ( 944 ) 1,456 Total $ 328,968 $ ( 176,983 ) $ 151,985 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; the Company retained the rights to future sales-based milestone payments. The Company received an initial payment of approximately $ 98.0 million in connection with the sale and has the right to receive an additional payment from the buyer of $ 5.0 million if worldwide net sales of RELISTOR in 2025 exceed a specified threshold. The additional payment would be recognized upon achievement of the specified threshold. Decreases of $ 63.6 million of license assets and $ 17.5 million of associated accumulated amortization, as well as a gain of $ 51.8 million were recorded as a result of the sale. In March 2023, the Company stopped all development activities in relation to a future indication associated with AZEDRA, which 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. See Note 19, “Acquisition of Assets” for further discussion of the Cerveau acquisition. The below table summarizes the estimated aggregate amortization expense expected to be recognized on the above intangible assets: (in thousands) Amount Remainder of 2024 $ 29,795 2025 24,409 2026 25,206 2027 19,680 2028 16,195 2029 and thereafter 26,769 Total $ 142,054 14 Table of Contents 11. Long-Term Debt, Net, and Other Borrowings 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 Remainder of 2024 $ — 2025 — 2026 — 2027 575,000 Total principal outstanding 575,000 Unamortized debt issuance costs ( 13,064 ) Finance lease liabilities 1,264 Total 563,200 Less: current portion ( 734 ) Total long-term debt, net and other borrowings $ 562,466 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”). The Revolving Loans, Letters of Credit, and the Swingline Loans, if used, are expected to be used for working capital and for other general corporate purposes. The Revolving Loans bear interest, with pricing based from time to time at the Company’s election, at (i) the secured overnight financing rate as published by the Federal Reserve Bank of New York on its website plus an applicable margin that ranges from 1.50 % to 2.50 % based on the Company’s total net leverage ratio or (ii) the alternative base rate plus an applicable margin that ranges from 0.50 % to 1.50 % based on the Company’s total net leverage ratio. The 2022 Revolving Facility also includes an unused commitment fee at a rate ranging from 0.15 % to 0.35 % per annum based on the Company’s total net leverage ratio. The Company is permitted to voluntarily prepay the Revolving Loans, in whole or in part, or reduce or terminate the Revolving Commitment, in each case, without premium or penalty. On any business day on which the total amount of outstanding Revolving Loans, Letters of Credit and Swingline Loans exceeds the total Revolving Commitment, the Company must prepay the Revolving Loans in an amount equal to such excess. The Company is not required to make mandatory prepayments under the 2022 Revolving Facility. As of March 31, 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”). The Company has the right to request Incremental Term Loans in an aggregate principal amount of up to the Incremental Cap less any incremental increases to the Revolving Commitment. Proceeds of Incremental Term Loans may be used for working capital and for other general corporate purposes and will bear interest at rates agreed between the Company and the lenders providing the Incremental Term Loans. 2022 Facility Covenants The 2022 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: 2022 Credit Agreement Period Total Net Leverage Ratio Q1 2024 and thereafter 3.50 to 1.00 15 Table of Contents 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; (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; (iv) sell certain assets; (v) pay dividends on, repurchase or make distributions in respect of capital stock or make other restricted payments; (vi) make certain investments; (vii) repay subordinated indebtedness prior to stated maturity; and (viii) enter into certain transactions with its affiliates. Upon an event of default, the Administrative Agent will have the right to declare the loans and other obligations outstanding under the 2022 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”), a wholly owned subsidiary of the Company, as Guarantor, and U.S. Bank Trust Company, National Association, as Trustee. The net proceeds from the issuance of the Notes were approximately $ 557.8 million after deducting the initial purchasers’ discounts and offering expenses payable by the Company. The Notes are senior unsecured obligations of the Company. The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor. The Notes bear interest at a rate of 2.625 % per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2023, and will mature on December 15, 2027 unless earlier redeemed, repurchased or converted in accordance with their terms. The initial conversion rate for the Notes is 12.5291 shares of the Company’s common stock per $1,000 in principal amount of Notes (which is equivalent to an initial conversion price of approximately $ 79.81 per share of the Company’s common stock, representing an initial conversion premium of approximately 42.5 % above the closing price of $ 56.01 per share of the Company’s common stock on December 5, 2022). In no event shall the conversion rate per $1,000 in principal amount of notes exceed 17.8539 shares of the Company’s common stock. Prior to the close of business on the business day immediately preceding September 15, 2027, the Notes may be converted at the option of the holders only upon occurrence of specified events and during certain periods, and thereafter until the close of business on the business day immediately preceding the maturity date, the Notes may be converted at any time. The Company will satisfy any conversion by paying cash up to the aggregate principal amount of the Notes to be converted and by paying or delivering, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted. The Company may redeem for cash all or any portion of the Notes, at its option, on or after December 22, 2025 if the closing sale price per share of the Company’s common stock exceeds 130 % of the conversion price of the Notes for a specified period of time. The redemption price will be equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company evaluated the Notes upon completion of the sale and concluded on the following features: • Conversion Feature: The Company determined that the conversion feature qualifies for the classification of equity. As a result, the conversion feature should not be bifurcated as a derivative instrument and the Notes were accounted for as a single liability. • Redemption Features: The redemption features were reviewed within the Notes and the Company determined that the redemption features are closely related to the Notes and as such should not be separately accounted for as a bifurcated derivative instrument. • Additional Interest Features: The Notes may result in additional interest if the Company fails to timely file any document that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The Company will pay additional interest on the notes at a rate equal to 0.25 % to 0.50 % per annum based on the principal amount of notes outstanding for each day the Company failure to file has occurred or the notes are not otherwise freely tradable. Further, if the notes are assigned a restricted CUSIP number or the notes are not otherwise freely tradable pursuant to Rule 144 under the Securities Act by holders other than 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 16 Table of Contents credit risk and should be bifurcated from the Notes, however, the Company assessed the probabilities of triggering events occurring under these features and does not expect to trigger the aforementioned events. These events will continue to be monitored to determine whether the interest feature will be bifurcated if it has value. As of March 31, 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. 12. 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. 13. Accumulated Other Comprehensive (Loss) Income 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 loss before reclassifications ( 141 ) ( 141 ) Amounts reclassified to earnings — — Balance at March 31, 2024 $ ( 1,178 ) $ ( 1,178 ) Balance at January 1, 2023 $ ( 1,259 ) $ ( 1,259 ) Other comprehensive loss before reclassifications ( 119 ) ( 119 ) Amounts reclassified to earnings — — Balance at March 31, 2023 $ ( 1,378 ) $ ( 1,378 ) 14. Stock-Based Compensation The following table presents stock-based compensation expense recognized in the Company’s accompanying condensed consolidated statements of operations: Three Months Ended March 31, (in thousands) 2024 2023 Cost of goods sold $ 2,632 $ 1,642 Sales and marketing 2,792 2,262 General and administrative 7,763 4,402 Research and development 2,197 1,361 Total stock-based compensation expense $ 15,384 $ 9,667 17 Table of Contents 15. Leases Operating and finance lease assets and liabilities are as follows: (in thousands) Classification March 31, 2024 December 31, 2023 Assets Operating Other long-term assets $ 44,382 $ 45,325 Finance Property, plant and equipment, net 1,224 1,438 Total leased assets $ 45,606 $ 46,763 Liabilities Current Operating Accrued expenses and other liabilities $ 1,980 $ 1,904 Finance Current portion of long-term debt and other borrowings 734 823 Noncurrent Operating Other long-term liabilities 54,124 54,453 Finance Long-term debt, net and other borrowings 530 625 Total leased liabilities $ 57,368 $ 57,805 On May 4, 2023, the Company entered into a modification to the operating lease for office space in Bedford, Massachusetts (the “Existing Premises”) that was executed in February 2022. The lease commenced and was recorded in December 2022 for $ 11.0 million and the initial term was set to expire in June 2031. The lease modification includes a lease of additional office and laboratory space at the Bedford location (the “Additional Premises”) for a term of 15 years and 4 months and extends the term of the lease for the Existing Premises to be coterminous with the term of the lease for the Additional Premises. As a result of the extended term for the Existing Premises, the Company recorded an additional right-of-use asset and liability of $ 6.0 million in May 2023. The modification also contains a provision to convert the rent schedule of the Existing Premises from gross to triple net in 2024, which may result in an additional adjustment to the right-of-use asset and liability. In September 2023, the landlord provided notice to the Company that its renovations of the Additional Premises were completed. As a result of the notice, the Company recorded an additional right-of-use asset and liability of $ 23.5 million as of September 1, 2023. To determine the value of the additional right-of-use asset and liability, the Company was required to calculate the discount rate of the lease modification. The discount rate was determined based on the expected lease term and by comparing interest rates in the market for similar borrowings with comparable credit quality of the Company. The lease for the Additional Premises allows for the extension of five years to begin immediately upon the expiration of the original term. 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: March 31, 2024 December 31, 2023 Weighted-average remaining lease term (Years): Operating leases 13.3 13.5 Finance leases 2.0 2.3 Weighted-average discount rate: Operating leases 7.4 % 7.3 % Finance leases 6.2 % 6.2 % 18 Table of Contents 16. Net Income (Loss) Per Common Share A summary of net income (loss) per common share is presented below: Three Months Ended March 31, (in thousands, except per share amounts) 2024 2023 Net income (loss) $ 131,066 $ ( 2,807 ) Basic weighted-average common shares outstanding 68,757 67,749 Effect of dilutive stock options 235 — Effect of dilutive restricted stock 1,103 — Effect of convertible debt instrument — — Diluted weighted-average common shares outstanding 70,095 67,749 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 The Company considered whether the Notes are participating securities through the two-class method. The Company determined that if a cash dividend is paid that is greater than the then stock price, the holder of Notes will receive cash on an if-converted basis. While this feature is considered to be a participating right, basic earnings per share is only impacted if the Company’s earnings exceeds the current share price, regardless of whether such dividend is declared. During the 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. The conversion option will have a dilutive impact on net income per share of Common Stock when the average price per share of the Company's common stock for a given period exceeds the conversion price of the Notes of $ 79.81 per share. 17. Other Income Other income consisted of the following: Three Months Ended March 31, (in thousands) 2024 2023 Foreign currency (gain) loss $ ( 217 ) $ 246 Tax indemnification (income), net — ( 96 ) Interest income ( 8,548 ) ( 3,523 ) Other ( 23 ) 142 Total other (income) expense, net $ ( 8,788 ) $ ( 3,231 ) 18. Commitments and Contingencies Legal Proceedings From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. In addition, the Company has in the past been, and may in the future be, subject to investigations by governmental and regulatory authorities, which expose it to greater risks associated with litigation, regulatory or other proceedings, as a result of which the Company could be required to pay significant fines or penalties. 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 19 Table of Contents 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 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. 19. Acquisition of Assets On February 6, 2023, the Company acquired Cerveau. Cerveau holds the rights under a license agreement to develop and commercialize MK-6240, an investigational second-generation F 18-labeled positron emission tomography (“PET”) imaging agent that targets Tau tangles in Alzheimer’s disease. The Company determined that upon review of the Cerveau acquisition, the transaction did not meet the definition of a business combination and is therefore treated as an asset acquisition. In February 2023, the Company made an upfront payment of approximately $ 35.3 million to the Selling Stockholders and paid the Selling Stockholders an additional $ 10.0 million in May 2023 upon the successful completion of a technology transfer. The Company could pay up to an additional $ 51.0 million in milestone payments upon achievement of specified U.S. regulatory milestones related to MK-6240. The Selling Stockholders are also eligible to receive up to $ 1.2 billion in sales milestone payments upon the achievement of specified annual commercial sales thresholds of MK-6240 in the event the Company pursues commercialization, as well as up to $ 13.5 million in research revenue milestones upon achievement of specified annual research revenue thresholds. Additionally, the Company will pay to the Selling Stockholders up to double-digit royalty payments for research revenue and commercial sales. Research revenue is derived from existing partnerships with pharmaceutical companies that use MK-6240 in clinical trials and includes milestone and dose-related payments. The purchase agreement pursuant to which the Company purchased Cerveau 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. (“POINT”) as part of an asset acquisition with the potential for additional milestone payments of approximately $ 1.8 billion for the two licensed assets based on U.S. Food and Drug Administration (“FDA”) approval and net sales and commercial milestones. Under the terms of the license agreement between Lantheus Two and POINT for PNT2002, Lantheus Two paid POINT an upfront cash payment of $ 250.0 million, and could pay up to an additional $ 281.0 million in milestone payments upon the achievement of specified U.S. and ex-U.S. regulatory milestones related to PNT2002. POINT is also eligible to receive up to $ 1.3 billion in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2002. Under the terms of the license agreement between Lantheus Three and POINT for PNT2003, Lantheus Three paid POINT an upfront cash payment of $ 10.0 million, and could pay up to an additional $ 34.5 million in milestone payments upon the achievement of specified U.S. and ex-U.S. regulatory milestones related to PNT2003. POINT is also eligible to receive up to $ 275.0 million in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2003. Additionally, the Company will pay POINT royalties on net sales, beyond certain financial thresholds and subject to conditions, of 20 % for PNT2002 and 15 % for PNT2003. Costs of IPR&D projects acquired as part of an asset acquisition that have no alternative future use are expensed when incurred, and therefore, a charge of $ 260.0 million was recognized in research and development expenses during the year ended December 31, 2022. 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. 20 Table of Contents 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. 21 Table of Contents