What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-07-31 compared with 2024-05-02 · 146 added, 136 removed, 270 unchanged (51% 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, 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.

These statements identify prospective information and can generally be identified by words such as “believes,” “can,” “could,” “designed,” “estimates,” “expects,” “impact,” “intends,” “launch,” “likely,” “may,” “pipeline,” “plans,” “potential,” “predict,” “seek,” “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:

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

(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;

(iv) our strategies, future prospects, and our projected growth, including revenue related to our collaboration agreements with POINT, including our ability to obtain U.S.

Food and Drug Administration (“FDA”) approval for PNT2002 and PNT2003;

(v) our ability to satisfy our obligations under our existing clinical development partnerships using MK-6240 or NAV-4694 as a research tool and under the license agreements through which we have rights to MK-6240 and NAV-4694, and to further develop and commercialize MK-6240 and NAV-4694 as approved products;

(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.

(vii) the efforts and timing for clinical development, regulatory approval, adequate coding, coverage and payment 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, Alzheimer’s disease and other strategic areas and continue to grow and advance 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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Radiopharmaceutical Oncology, Precision Diagnostics, and Strategic Partnerships and Other Revenue.

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

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

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

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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 believe that our diagnostic products provide 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.

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.

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Recent Developments

CEO Succession Plan

Exclusive License for RM2

On June 27, 2024,we announced we had acquired the global rights to Life Molecular Imaging’s clinical stage RM2, which targets the GRPR, including the associated novel, clinical-stage radiotherapeutic and radiodiagnostic pair, referred to as 177Lu-DOTA-RM2 and 68Ga-DOTA-RM2, for an upfront payment of $35.0 million plus a $1.0 million payment made prior to the close date, and potential regulatory milestone payments plus royalties (the “Life Molecular Asset Purchase”).

GRPR is a member of the bombesin G protein-coupled receptor family, which has been found to be overexpressed in multiple cancers, including prostate, breast and lung.

First-in-human dosimetry showed a favorable safety and dosimetry profile and confirmed preclinical data demonstrating dose-dependent efficacy of 177Lu-DOTA-RM2.

We intend to begin a Phase 1/2a study with 177Lu-DOTA-RM2 in prostate cancer patients in 2025.

We expect 68Ga-DOTA-RM2 will be used as a companion diagnostic.

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

Acquisition of NAV-4694

On June 18, 2024, we acquired Meilleur, including its asset NAV-4694, an investigational F 18-labeled PET imaging agent that targets beta amyloids in Alzheimer’s disease.

Under the terms of the agreement, we paid the Meilleur Stockholders an upfront payment of $32.9 million and potentially will pay additional development and commercial milestone payments.

Additionally, we will pay double-digit royalty payments for research revenue and, in the event the Company pursues commercialization, commercial sales.

Research revenue is derived from existing partnerships with pharmaceutical companies and academic institutions that use NAV-4694 in clinical trials.

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

In 2023, Meilleur announced its collaboration with the National Institute on Aging-sponsored study called the Consortium for Clarity in ADRD Research Through Imaging (CLARiTI) that enables the consortium to use NAV-4694 in its investigation of Alzheimer’s disease and related dementias.

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

Exclusive License for Radiopharm Theranostics Limited

On June 15, 2024, we entered into an agreement with Radiopharm Theranostics Limited (“Radiopharm”) to acquire all of Radiopharm’s global, exclusive rights to two licensed preclinical assets for an upfront payment of $2.0 million (the “Radiopharm Asset Purchase”).

We acquired global, exclusive rights to both a Trophoblast cell surface antigen 2 (“TROP2”) targeting nanobody, a preclinical stage therapy developed for the treatment of prostate tumors, and to a monoclonal antibody that targets LRRC15, a preclinical therapeutic candidate targeting prostate cancer.

In connection with this acquisition, we are assuming the underlying license agreements related to the two preclinical assets, together with their respective milestone and royalty payment obligations.

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

CEO Succession

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.

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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%.

In addition, Perspective agreed to acquire the assets and associated lease of our Somerset Facility.

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 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 pursuant to 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.

The total consideration for this additional purchase was approximately $57.4 million, 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.

On June 14, 2024, Perspective effected a 1-for-10 reverse stock split, after which we held 11,677,339 shares of Perspective’s common stock.

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

Exclusive License for PNT2002 & PNT2003

Exclusive License for PNT2002 and 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.

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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.

The acquisition has not impacted 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.

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

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

On December 18, 2023, we announced positive topline results from the Phase 3 registrational clinical trial for PNT2002 (“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”).

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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.

We have established an Expanded Access Program, (“EAP”), for PNT2002, and the first patients began treatment during the first quarter of 2024.

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.

In June of 2024, Endocycte, Inc., Novartis and Purdue Research Foundation sued POINT and Eli Lilly and Co alleging that POINT’s manufacturing and sale of PNT2002 infringes an Endocyte patent that discloses PSMA-binding conjugates useful for delivery targeted therapeutic, diagnostic and imaging agents, including radiopharmaceuticals.

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.

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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.

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 there can be no assurance of that approval or timing.

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.

Acquisition of Cerveau Technologies, Inc.

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

On February 6, 2023, we acquired Cerveau.

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.

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

Under the terms of the purchase agreement, we paid the Selling Stockholders an upfront payment of $35.3 million in February 2023 and 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, in the event the Company pursues commercialization, commercial milestone payments.

We will pay 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.

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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.

In February 2024, we announced the inclusion of MK-6240 in the National Institute on Aging-sponsored study called CLARiTI that 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.

Recently, we held a pre-NDA meeting with the FDA and we expect to submit an NDA for MK-6240 in 2025, but we can provide no assurance that we will meet that expected timeline, that our NDA will be accepted by the FDA, that MK-6240 will be approved by the FDA or that we will be successful in commercializing MK-6240.

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

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Discontinuation of AZEDRA

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.

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

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.

No AZEDRA was manufactured after March 1, 2024, when we transferred the assets and associated sublease of our Somerset Facility to Perspective.

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

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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, an 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.

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 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.

Continued growth and revenue contribution from PYLARIFY will also depend on our ability to differentiate PYLARIFY, including through flexible and dependable access to PYLARIFY, a best in class customer experience and through long-term strategic partnerships.

Our Healthcare Procedure Coding System 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 Service (“CMS”) granted Transitional Pass-Through Payment (“TPT Status”) in the hospital outpatient setting for PYLARIFY, enabling traditional Medicare fee-for-service to provide separate payment for PYLARIFY in addition to the payment for the PET/CT procedure in that setting.

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

In July 2024, CMS released the CY2025 Proposed Hospital Outpatient Prospective Payment System or OPPS rule which recognizes the value and need for broad access to diagnostic radiopharmaceuticals.

The rule proposes separate payment for those diagnostic radiopharmaceuticals with per day costs greater than $630.

If implemented in the final rule in November, CMS would maintain separate payment for PYLARIFY after the expiration of transitional pass-through for the approximately 20% of patients with traditional Medicare fee-for-service insurance coverage who are treated in the hospital outpatient setting.

Our plan to successfully grow PYLARIFY includes highlighting its commercial and clinical value, expanding its use in appropriate new patient populations, and through strategic partnerships and collaborations, including outside of the U.S..

Internationally, 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 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.

We have entered into multiple strategic collaborations with pharmaceutical companies in connection with the development of PSMA-targeted therapeutics.

Additional information on collaborations using PYLARIFY are described further under Part I, Item 1.

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We paid $99.6 million to the CVR holders during May 2023 in full satisfaction of our obligations under the CVRs.

PYLARIFY AI Use

During 2021, we announced that EXINI was granted 510(k) clearance by the FDA in the U.S.

and received European Conformity Marking (“CE marking”) in Europe for aPROMISE.

We commercially launched aPROMISE under the name PYLARIFY AI in the U.S.

in November 2021.

During the second quarter of 2022, we received a new 510(k) clearance for an updated version of our PYLARIFY AI platform.

PYLARIFY AI is artificial intelligence medical device software developed to assist with the reading and quantification of PYLARIFY scans.

The technology automatically analyzes a PSMA PET/CT image to segment anatomical regions – 51 bones and 12 soft tissue organs.

This image segmentation enables automated localization, detection and quantification of potential PSMA-avid lesions in a PSMA PET/CT image, which data is then incorporated into the reporting system used by physicians.

During the third quarter of 2023, in collaboration with Curium, we customized and released our PYLARIFY AI platform for use in Europe.

At the European Association of Nuclear Medicine meeting in Vienna, the PYLARIFY AI presentation was awarded the Top Rated Oral Presentation for response evaluation of metastatic prostate cancer patients.

Also in the third quarter of 2023, we announced a data agreement with the Prostate Cancer Clinical Trial Consortium (PCCTC) on its IRONMAN Registry for development and validation of PSMA biomarkers with PYLARIFY AI.

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.

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.

Continued Growth of DEFINITY

We believe we will be able to increase use of DEFINITY through continued education of physicians and healthcare providers about the benefits of ultrasound enhancing agents in suboptimal echocardiograms.

We believe we will be able to increase use of DEFINITY through continued education of physicians and HCPs about the benefits of ultrasound enhancing agents in suboptimal echocardiograms.

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

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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.

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

and internationally.

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.

for DEFINITY, we have Orange Book-listed method-of-use patents, as well as additional manufacturing patents that are not Orange Book-listed.

• 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 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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We are evaluating a number of different opportunities to collaborate, in-license or acquire additional products, product candidates, businesses and technologies to drive our future growth.

In particular, we are focused on late-stage radiopharmaceutical therapeutic and diagnostic product opportunities in oncology and other strategic areas that will complement our existing portfolio.

Our Strategic Partnerships and Other Revenue category includes our Strategic Partnerships, Pharma Solutions and Digital Solutions businesses and is focused on enabling precision medicine with biomarkers and digital solutions.

In particular, we are focused on late-stage radiopharmaceutical therapeutic and diagnostic product opportunities in oncology, neurology, and other strategic areas that will complement our existing portfolio.

Our Strategic Partnerships and Other Revenue category includes our Strategic Partnerships, Digital Solutions, and Pharma Solutions businesses and is focused on enabling precision medicine with biomarkers and digital solutions.

• Strategic Partnerships – We seek to monetize our assets through our Strategic Partnerships business, by optimizing core assets geographically and by driving value through non-core assets.

For example, with respect to PYLARIFY, we have licensed the development and commercialization rights of that imaging agent in Europe to Curium.

Similarly, we licensed the commercialization rights for flurpiridaz fluorine-18 to GE Healthcare Limited.

For example, we licensed the commercialization rights for piflufolastat F 18 in Europe to Curium and for flurpiridaz, a fluorine-18-based PET Myocardial Perfusion Imaging agent designed to assess blood flow to the heart in patients suspected of coronary artery disease, to GE Healthcare Limited.

• Digital Solutions – Our Digital Solutions are designed to enhance imaging value and the throughput, reproducibility and reliability of image analysis, as well as to inform treatment selection and response to therapy.

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 .

Our Digital Solutions include artificial intelligence medical device software, such as aPROMISE and Automated Bone Scan Index (“aBSI”), both of which are FDA cleared and CE marked.

◦ aPROMISE, which is currently sold as PYLARIFY AI in the U.S., is designed to allow healthcare professionals and researchers to perform standardized quantitative assessment of PSMA PET/computed tomography (“CT”) images in prostate cancer, including those images obtained by using PYLARIFY.

In June 2024, we announced that aPROMISE was available on the syngo.via platform, from Siemens Healthineers, via its OpenApps Digital Marketplace.

◦ 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 3 study of docetaxel versus docetaxel in combination with radium-223 (Ra-223) in subjects with mCRPC.

• Pharma Solutions – We use our Pharma Solutions business to offer our Biomarkers and Microbubble Platforms to pharmaceutical and start-up companies to support their research and development of therapeutic drugs and devices.

The strategic goal of our Pharma Solutions business is to gain early access to innovation, de-risk the development, data generation and co-funding of our pipeline through collaborations, embed our technologies in the clinical ecosystem and establish the clinical utility of product candidates and research tools in our pipeline.

The strategic goal of our Pharma Solutions business is to gain early access to innovation, de-risk the development, generate data, embed our technologies in the clinical ecosystem and establish the clinical utility of product candidates and research tools in our pipeline.

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 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.

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.

MK-6240 has been used in more than ninety clinical trials for several Alzheimer’s disease therapeutic candidates and NAV-4694 is being used in academic and industry investigational therapeutic trials.

With respect to our Microbubble Platform, we generally enter into collaborations with partners seeking 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.

Our Digital Solutions include aPROMISE and aBSI (as defined below), both of which are FDA cleared and CE marked.

aPROMISE, which is currently sold as PYLARIFY AI in the U.S., is artificial intelligence medical device software that is designed to allow healthcare professionals and researchers to perform standardized quantitative assessment of PSMA PET/CT images in prostate cancer, including those images obtained by using PYLARIFY.

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.

Global Mo-99 Supply

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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.

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

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 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, 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.

and our TechneLite generators and Xenon manufactured at our facilities in North Billerica, Massachusetts.

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:

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

• 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.

• 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.

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

• For MK-6240, we acquired the right to the investigational asset for an upfront payment of $35.3 million in February 2023 and an additional $10.0 million in May 2023 upon the successful completion of a technology transfer and will potentially make additional milestone and royalty payments.

We recently held a pre-NDA meeting with the FDA and are expecting to submit an NDA for MK-6240 in 2025.

• For NAV-4694, we acquired the rights to the investigational asset for an upfront payment of $32.9 million and will potentially make additional milestone and royalty payments.

• 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.

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.

• For RM2, we acquired global rights for an upfront payment of $35.0 million plus a $1.0 million payment made prior to the close date, and will potentially make additional milestone and royalty payments.

We plan to initiate a Phase 1/2a study in prostate cancer patients in 2025.

• For TROP2 and LRRC15, we acquired the rights to the preclinical assets and the underlying license agreements for $2 million and will potentially make additional milestone and royalty payments.

See Note 19, "Acquisition of Assets" in our consolidated financial statements herein for additional information on potential milestone and royalty payments related to the product candidates listed above.

Under the terms of the PNT2002 License Agreement, Lantheus Two paid POINT an upfront 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.

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.

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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.

regulatory milestones related to PNT2003.

Under the terms of the PNT2003 License Agreement, Lantheus Three, LLC paid POINT an upfront payment of $10.0 million, and could pay up to an additional $34.5 million in milestone payments upon the achievement of specified U.S.

regulatory milestones.

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.

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Three Months Ended

(in thousands) 2024 2023 Change $ Change %

June 30, Six Months Ended

(in thousands) 2024 2023 Change $ Change % 2024 2023 Change $ Change %

Revenues $ 394,091 $ 321,700 $ 72,391 22.5 % $ 764,066 $ 622,484 $ 141,582 22.7 %

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Total operating expenses 153,045 78,508 74,537 94.9 % 294,510 164,928 129,582 78.6 %

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

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

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

Operating income 102,729 124,139 (21,410) (17.2) % 209,364 114,795 94,569 82.4 %

Interest expense 4,862 4,933 (71) (1.4) % 9,721 9,924 (203) (2.0) %

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

Investment in equity securities - unrealized loss (gain) 22,537 — 22,537 N/A (38,167) — (38,167) N/A

Other income (9,044) (4,482) (4,562) 101.8 % (17,832) (7,713) (10,119) 131.2 %

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

Income before income taxes 84,374 123,688 (39,314) (31.8) % 255,642 112,584 143,058 127.1 %

Income tax expense 22,301 29,557 (7,256) (24.5) % 62,503 21,260 41,243 194.0 %

Net income $ 62,073 $ 94,131 $ (32,058) (34.1) % $ 193,139 $ 91,324 $ 101,815 111.5 %

Comparison of the Periods Ended June 30, 2024 and 2023

We classify our revenues into three product categories:

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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.

In the first quarter of 2024, the Company discontinued the production of AZEDRA.

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

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.

Strategic Partnerships and Other Revenue primarily includes out-licensing arrangements and partnerships for our biomarkers, digital solutions and radiotherapeutic platforms.

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

Three Months Ended

(in thousands) 2024 2023 Change $ Change %

June 30, Six Months Ended

(in thousands) 2024 2023 Change $ Change % 2024 2023 Change $ Change %

PYLARIFY $ 273,255 $ 210,522 $ 62,733 29.8 % $ 532,125 $ 405,992 $ 126,133 31.1 %

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Total revenues $ 394,091 $ 321,700 $ 72,391 22.5 % $ 764,066 $ 622,484 $ 141,582 22.7 %

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.

The increase in revenues for the three and six months ended June 30, 2024, is primarily driven by an increase in PYLARIFY, DEFINITY and TechneLite sales volumes, 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

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Payments or credits made during the period (25,308)

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.

Balance, June 30, 2024

The increase in gross profit for the three and six months ended June 30, 2024, as compared to the prior year periods, are primarily due to the impairment of the AZEDRA marketed intangible asset, which was recorded in 2023 and not in 2024, 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

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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.

Sales and marketing expenses increased $8.6 million and $21.5 million for the three and six months ended June 30, 2024, respectively, as compared to the prior year period.

This was primarily driven by our investment in sales and marketing efforts, including an expansion of our PYLARIFY sales force, functional support, and brand strategy intended to support and expand adoption of PYLARIFY and launch planning for new assets.

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 $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.

General and administrative expenses increased $21.3 million and $45.9 million for the three and six months ended June 30, 2024, respectively, as 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, primarily related to business development activity.

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 $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.

Research and development expenses increased $44.7 million for the three months ended June 30, 2024 as compared to the prior year period.

This was primarily driven by IPR&D expense of $36.0 million related to the Life Molecular Asset Purchase and $2.0 million related to the Radiopharm Asset Purchase, increased headcount and employee-related costs, and increased project costs including MK-6240 research and development expenses.

Research and development expenses increased $62.2 million for the six months ended June 30, 2024 as compared to the prior year period.

This was primarily driven by IPR&D expense of $36.0 million related to the Life Molecular Asset Purchase, $2.0 million related to the Radiopharm Asset Purchase, and an upfront option payment of $28.0 million to Perspective, increased headcount and employee-related costs, and increased project costs, including 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 Phase 2 study for 1095.

Interest Expense

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.

Interest expense decreased by approximately $0.1 million and $0.2 million for the three and six months ended June 30, 2024, respectively, as compared to the prior year period.

Investment in Equity Securities - Unrealized Loss (Gain)

Investment in equity securities - unrealized loss (gain) increased $22.5 million for the three months and decreased $(38.2) million for the six months ended June 30, 2024, respectively, due to the fair value adjustment of the investment in shares of Perspective’s common stock.

Income Tax Expense

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

Three Months Ended

Six Months Ended

Effective tax rate 24.4% 18.9%

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

Our effective tax rate for the six months ended June 30, 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.

The increase in the effective income tax rate for the six months ended June 30, 2024 is primarily due to the decrease in the Company’s stock compensation deductions and the change in fair value of our contingent consideration liabilities.

Liquidity and Capital Resources

The following table provides information regarding our cash flows:

Three Months Ended

Six Months Ended

(in thousands) 2024 2023

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Net Cash Provided by Operating Activities

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.

Net cash provided by operating activities of $212.0 million in the six months ended June 30, 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 options, charges related to Radiopharm’s licensed assets, charges related to Life Molecular Imaging’s RM2 license, depreciation, amortization and accretion expense, and stock-based compensation expense.

The primary working capital sources of cash is attributable to 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 operating activities of $76.2 million in the six months ended June 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 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 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 investing activities during the six months ended June 30, 2024 was driven by an upfront option payment of $28.0 million to Perspective, $1.0 million upfront payment to Life Molecular Imaging, $32.9 million upfront payment to the Meilleur Stockholders, $78.3 million for the purchase of equity securities, and $19.4 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 six months ended June 30, 2023 was due to $45.3 million for our asset acquisition of Cerveau and $19.9 million of capital expenditures.

Net Cash Used in Financing Activities

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.

Net cash used in financing activities during the six months ended June 30, 2024 is primarily attributable to the payments for minimum statutory tax withholding related to net share settlement of equity awards of $20.4 million offset by proceeds of $4.3 million from stock option exercises.

Net cash used in financing activities during the six months ended June 30, 2023 is primarily attributable to the payments for minimum statutory tax withholding related to net share settlement of equity awards of $12.6 million and the CVR initial valuation as of June 30, 2020 of $3.7 million offset by proceeds of $3.2 million from stock option exercises.

External Sources of Liquidity

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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”).

We have the right to request an increase to the 2022 Revolving Facility or request the establishment of one or more new incremental term loan facilities, in an aggregate principal amount of up to $335 million or consolidated EBITDA for the four consecutive fiscal quarters most recently ended, plus additional amounts, in certain circumstances.

We have the right to request an increase to the 2022 Revolving Facility or request the establishment of one or more new incremental term loan facilities, in an aggregate principal amount

of up to $335 million or consolidated EBITDA for the four consecutive fiscal quarters most recently ended, plus additional amounts, in certain circumstances.

Under the terms of the 2022 Revolving Facility, the lenders thereunder agreed to extend credit to us from time to time until December 2, 2027 consisting of revolving loans in an aggregate principal amount not to exceed $350.0 million at any time.

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Please refer to Note 11, "Long-Term Debt, Net, and Other Borrowings" for further details on the 2022 Revolving Facility.

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

As of June 30, 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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we retained the rights to future sales-based milestone payments.

We received an initial payment of approximately $98.0 million in connection with the sale and have 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.

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

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

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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 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.

At June 30, 2024, our only current committed external source of funds is our borrowing availability under our 2022 Revolving Facility.

We had $757.0 million of cash and cash equivalents as of June 30, 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 $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.

Based on our current operating plans, we believe our balance of cash and cash equivalents, 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 three months ended March 31, 2024.

There have been no significant changes to our critical accounting policies with the exception of the investment policy or in the underlying accounting assumptions and estimates used in such policies in the six months ended June 30, 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 financial assurance demonstrating our ability to fund the decommissioning of our North Billerica, Massachusetts production facility upon closure.

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

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

Since inception, we have not engaged in any other off-balance sheet arrangements, including structured finance, special purpose entities or variable interest entities.

We have not engaged in any other off-balance sheet arrangements, including structured finance, special purpose entities or variable interest entities.

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