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Item 2. Management’s Discussion and Analysis

2024-11-06 compared with 2024-07-31 · 157 added, 133 removed, 283 unchanged (51% of the section changed)

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Cautionary Note Regarding Forward-Looking Statements

Some of the statements contained in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Some of the statements contained in this Quarterly Report on Form 10-Q (“Form 10-Q”) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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 “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.

These statements identify prospective information and can generally be identified by words such as “believes,” “can,” “commitment,” “could,” “designed,” “estimates,” “expects,” “generate,” “impact,” “increasing,” “intends,” “launch,” “likely,” “long-term,” “maintain,” “may,” “pipeline,” “plans,” “potential,” “predict,” “remain,” “seek,” “should,” “sustain,” “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 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 U.S.

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

(“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, 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.

(vi) our ability to successfully execute on our agreements with Perspective Therapeutics, Inc.

(“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) our ability to successfully identify strategic transaction opportunities, such as our investment in Radiopharm Theranostics Limited (“Radiopharm”) common stock, and the value of such current and any future equity interests;

(viii) 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 (ix) 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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These statements are neither statements of historical fact nor guarantees or assurances of future performance.

The matters referred to in the forward-looking statements contained in this Quarterly Report on Form 10-Q may not in fact occur.

The matters referred to in the forward-looking statements contained in this Form 10-Q may not in fact occur.

We caution you, therefore, against relying on any of these forward-looking statements.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, and in Part II, Item 1A.

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

Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date on which it is made.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2023, and in Part II, Item 1A.

“Risk Factors” in this Form 10-Q.

Any forward-looking statement made by us in this Form 10-Q speaks only as of the date on which it is made.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.

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Our global Internet site is www.lantheus.com.

We routinely make available important information, including copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the SEC, free of charge on our website at investor.lantheus.com.

We routinely make available important information, including copies of our Form 10-K, Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”), free of charge on our website at investor.lantheus.com.

We recognize our website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with our disclosure obligations under SEC Regulation FD.

Information contained on our website shall not be deemed incorporated into, or to be part of this Quarterly Report on Form 10-Q, and any website references are not intended to be made through active hyperlinks.

Our reports filed with, or furnished to, the SEC are also available on the SEC’s website at www.sec.gov, and for Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, in an iXBRL (Inline Extensible Business Reporting Language) format.

Information contained on our website shall not be deemed incorporated into, or to be part of this Form 10-Q, and any website references are not intended to be made through active hyperlinks.

Our reports filed with, or furnished to, the SEC are also available on the SEC’s website at www.sec.gov, and for Form 10-Ks and Form 10-Qs, in an iXBRL (Inline Extensible Business Reporting Language) format.

iXBRL is an electronic coding language used to create interactive financial statement data over the Internet.

The information on our website is neither part of nor incorporated by reference into this Quarterly Report on Form 10-Q.

The following discussion and analysis of our financial condition and results of operations should be read together with the condensed consolidated financial statements and the related notes included in Item 1 of this Quarterly Report on Form 10-Q as well as the other factors described in Part I, Item 1A.

“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and in Part II, Item 1A.

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

The information on our website is neither part of nor incorporated by reference into this Form 10-Q.

The following discussion and analysis of our financial condition and results of operations should be read together with the condensed consolidated financial statements and the related notes included in Item 1 of this Form 10-Q as well as the other factors described in Part I, Item 1A.

“Risk Factors” in our Form 10-K for the year ended December 31, 2023, and in Part II, Item 1A.

“Risk Factors” in this Form 10-Q.

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

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

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

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

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 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 believe that our diagnostic products provide 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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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”).

On June 27, 2024,we announced we had acquired from Life Molecular Imaging Ltd.

(“Life Molecular Imaging”) the global rights to Life Molecular Imaging’s clinical stage RM2, a gastrin-releasing peptide receptor (“GRPR”)-targeting agent, including the associated novel, clinical-stage radiotherapeutic and radiodiagnostic pair, previously referred to as 177Lu-DOTA-RM2 and 68Ga-DOTA-RM2 (and which we now refer to as LNTH-2402 and LNTH-2401, respectively), for an upfront payment of $35.0 million plus a $1.0 million payment made prior to the acquisition, 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.

First-in-human dosimetry showed a favorable safety and dosimetry profile and confirmed preclinical data demonstrating dose-dependent efficacy of LNTH-2402.

We intend to begin a Phase 1/2a study with LNTH-2402 in prostate cancer patients in 2025.

We expect LNTH-2401 could be used as a companion diagnostic.

For more information, see Note 19, "Acquisition of Assets" in our condensed 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.

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

Under the terms of the agreement, we paid the stockholders of Meilleur (“Meilleur Stockholders”) an upfront payment of $32.9 million and expects to pay additional development and commercial milestone payments.

Additionally, we will pay double-digit royalty payments for research revenue and, in the event we pursue 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.

Pursuant to the terms of the Meilleur stock purchase agreement, certain Meilleur Stockholders are providing 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.

For more information, see Note 19, "Acquisition of Assets" in our condensed 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.

On June 15, 2024, we entered into an agreement with 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”)-targeted nanobody, a preclinical stage therapy and to a monoclonal antibody that targets LRRC15, a preclinical therapeutic candidate targeting osteosarcoma.

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.

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

Chief Executive Officer Succession

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

As part of this leadership transition, Mr.

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

Strategic Agreements with Perspective Therapeutics

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

Strategic Agreements with Perspective Therapeutics, Inc.

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

Under the agreements, we obtained an option to exclusively license Perspective’s Pb212-VMT- ⍺-NET, a clinical stage alpha therapy in development for the treatment of neuroendocrine tumors, and an option to co-develop certain early-stage therapeutic candidates targeting prostate cancer using Perspective’s innovative platform technology for an aggregate upfront payment of $28.0 million in cash.

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

We also agreed to purchase up to 19.99% of Perspective’s outstanding shares of common stock (“Perspective Shares”), 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 Somerset Facility.

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 resulting in an ownership of 11.39%.

On January 22, 2024, we purchased 56,342,355 Perspective Shares at a purchase price of $0.37 per share in a private placement transaction for approximately $20.8 million, representing 11.39% of the outstanding Perspective Shares.

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 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, 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.

On March 1, 2024, we 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 Perspective Shares and purchased 60,431,039 shares at a price of $0.95 per share.

The total consideration for this additional purchase was approximately $57.4 million, resulting in Lantheus Alpha holding approximately 19.90% of the outstanding Perspective Shares (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 Perspective Shares.

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

Exclusive License for PNT2002 and PNT2003

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

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

On December 27, 2023, Eli Lilly and Company acquired 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.

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

seeking regulatory approval, as well as performing and funding all future development and commercialization following such approval.

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

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

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

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

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

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

On September 15, 2024, we presented additional clinical data from initial topline results of SPLASH during the European Society of Medical Oncology Congress 2024.

We recently completed the second interim analysis for SPLASH at 75% of protocol pre-specified target OS events reached.

The results for both rPFS and OS did not materially change from the interim analysis that was performed at 46% of pre-specified OS events.

The OS results and hazard ratio in the intention-to-treat population remain confounded by the overwhelming number of patients who crossed over to receive PNT2002.

Crossover adjusted analyses were post-hoc, and we are continuing to review the data and perform additional subset analyses in collaboration with our partner that may be compelling to the FDA in preparation for an interaction on our path forward.

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

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

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

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

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

On January 11, 2024, we announced that our Abbreviated New Drug Application (“ANDA”) for PNT2003 had been accepted for filing by the FDA.

On January 26, 2024, we were sued in the District Court for the District of Delaware by Advanced Accelerator Applications USA, Inc.

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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.

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

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 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.

Under the terms of the purchase agreement, we paid the stockholders of Cerveau (“Cerveau 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 Cerveau 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.

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

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

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

In February 2024, we announced 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.

The CLARiTI study will involve all 37 Alzheimer’s Disease Research Centers in the United States and 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, if approved, that we will be successful in commercialization.

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

Sale of RELISTOR Licensed Intangible Asset Associated with Net Sales Royalties

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

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

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

Discontinuation of AZEDRA

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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.

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

Key Factors Affecting Our Results

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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.

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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..

In November 2024, CMS released the final rule for its calendar year 2025 Medicare Hospital Outpatient Prospective Payment System or OPPS which recognizes the value and need for broad access to diagnostic radiopharmaceuticals.

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

When implemented on January 1, 2025, CMS will 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.

The calendar year 2025 payment rate for PYLARIFY is listed in Addendum B of the final rule and is equal to the current PYLARIFY payment rate.

Our plan to successfully grow PYLARIFY includes conveying 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.

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

“Business - Strategic Partnerships and Other Revenue – Oncology” in our Annual Report on Form 10-K for the year ended December 31, 2023.

In connection with the acquisition of Progenics in June 2020, we issued CVRs tied to the financial performance of PYLARIFY.

“Business - Strategic Partnerships and Other Revenue – Oncology” in our Form 10-K for the year ended December 31, 2023.

In connection with the acquisition of Progenics in June 2020, we issued contingent value rights (each a “CVR”) tied to the financial performance of PYLARIFY.

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

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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.

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

The activation rate and time are controlled by VIALMIX RFID through the use of radio-frequency identification technology (“RFID”) to ensure reproducible activation of DEFINITY.

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We continue to seek ways to further increase the overall value of our portfolio of products and product candidates.

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.

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, 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.

Our Strategic Partnerships and Other Revenue category includes our Strategic Partnerships, Digital Solutions, and Biomarker Solutions businesses and is focused on enabling precision medicine with biomarker 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, 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.

In September, GE Health announced that it had received FDA approval of Flyrcado (Flurpiridaz F-18) for coronary artery disease diagnosis.

• 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.

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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.

◦ aPROMISE, which is also known 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.

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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, generate data, embed our technologies in the clinical ecosystem and establish the clinical utility of product candidates and research tools in our pipeline.

• Biomarker Solutions – We use our Biomarker Solutions business to offer our Biomarker 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 Biomarker 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.

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.

For example, piflufolastat F 18 is currently being used by Curium Pharma and Regeneron Pharmaceuticals in their respective prostate cancer therapeutic drug development programs, and was also used in the development of PNT2002.

MK-6240 is a widely utilized tau PET tracer in Alzheimer’s disease studies with over 100 ongoing academic and industry clinical trials, many for late-stage therapeutic candidates.

NAV-4694 is being used in academic and industry sponsored studies.

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.

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

Global Mo-99 Supply

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

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

Our manufacturing and supply agreement with JHS (the “JHS MSA”)

runs through December 31, 2027 and can be further extended by mutual agreement of the parties.

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

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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.

On February 22, 2022, we received FDA approval of our supplemental new drug application (“NDA”) 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.

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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.

• For PYLARIFY, we are conducting 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.

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• 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 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.

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

We initiated a Phase 1/2a study in patients in 2024.

• For RM2, we acquired global rights for an upfront payment of $35.0 million plus a $1.0 million payment made prior to the acquisition, 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.

See Note 19, "Acquisition of Assets" in our condensed 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.

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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 payment of $10.0 million, and could pay up to an additional $34.5 million in milestone payments upon the achievement of specified U.S.

Under the terms of the PNT2003 License Agreement, Lantheus Three paid POINT an upfront 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.

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.

In addition, POINT is eligible to receive royalty payments of fifteen percent of net sales of PNT2003.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

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Interest expense 4,903 5,054 (151) (3.0) % 14,624 14,978 (354) (2.4) %

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

Investment in equity securities - unrealized gain (37,325) — (37,325) N/A (75,492) — (75,492) N/A

Other income (9,953) (52,649) 42,696 (81.1) % (27,785) (60,362) 32,577 (54.0) %

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Net income $ 131,093 $ 131,957 $ (864) (0.7) % $ 324,232 $ 223,281 $ 100,951 45.2 %

Comparison of the Periods Ended June 30, 2024 and 2023

Comparison of the Periods Ended September 30, 2024 and 2023

We classify our revenues into three product categories:

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

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

Strategic Partnerships and Other Revenue primarily includes out-licensing arrangements and partnerships for our biomarker, digital solutions and radiotherapeutic platforms, inclusive of MK-6240 and NAV-4694.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

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Total revenues $ 378,734 $ 319,946 $ 58,788 18.4 % $ 1,142,800 $ 942,430 $ 200,370 21.3 %

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

The increase in revenues for the three and nine months ended September 30, 2024, is primarily driven by an increase in PYLARIFY and DEFINITY sales volumes, as well as revenue generated from sales for investigational use of NAV-4694 resulting from the acquisition of Meilleur in June 2024.

The increase in revenues were offset for the nine months ended September 30, 2024, when compared to the same period of 2023, by a decrease in net sales royalties in 2024 primarily due to the sale of the rights to our RELISTOR net sales royalties.

Net sales royalties related to RELISTOR were recorded in Strategic Partnerships and Other Revenue prior to August 2, 2023.

Rebates and Allowances

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These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes and growth, Medicaid rebate programs for our products, administrative fees of group purchasing organizations, and certain distributor related commissions.

The calculation of the accrual for these rebates and allowances is based on an estimate of the third-party’s expected purchases and the resulting applicable contractual rebate to be earned over a contractual period.

An analysis of the amount of, and change in, reserves is summarized as follows:

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Payments or credits made during the period (36,939)

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.

Balance, September 30, 2024

The increase in gross profit for the three months ended September 30, 2024, as compared to the prior year period, is primarily due to the increase in PYLARIFY and DEFINITY sales volumes, as well as milestone revenue related to an out-licensed asset from Progenics.

The increase in gross profit for the nine months ended September 30, 2024, as compared to the prior year period, is 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 net royalty sales due to the sale of the rights to the royalties in August 2023.

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 $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.

Sales and marketing expenses increased $6.3 million and $27.8 million for the three and nine months ended September 30, 2024, respectively, as compared to the prior year periods.

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.

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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 $21.3 million and $45.9 million for the three and six months ended June 30, 2024, respectively, as compared to the prior period.

General and administrative expenses increased $4.8 million and $50.7 million for the three and nine months ended September 30, 2024, respectively, as compared to prior year periods.

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.

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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 $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.

Research and development expenses increased $9.7 million for the three months ended September 30, 2024 as compared to the prior year period.

This was primarily driven by increased employee-related costs resulting from an increase in headcount as well as an increase in project costs, including research and development expenses related to our acquisition of the rights to develop and commercialize NAV-4694 through our acquisition of Meilleur in June 2024.

Research and development expenses increased $71.9 million for the nine months ended September 30, 2024 as compared to the prior year period.

This was primarily driven by in-process research and development (“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.

In addition, there was an increase in employee-related costs resulting from an increase in headcount 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 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.

Interest expense decreased by approximately $0.2 million and $0.4 million for the three and nine months ended September 30, 2024, respectively, as compared to the prior year period.

Investment in Equity Securities - Unrealized Gains

Investment in equity securities - unrealized gain increased $37.3 million and $75.5 million for the three and nine months ended September 30, 2024, respectively, primarily due to a $39.5 million and $77.6 million increase in fair value of our investment in shares of Perspective’s common stock for the three and nine months ended September 30, 2024, respectively.

This was partially offset by a $2.1 million decrease in fair value of our investment in shares of Radiopharm during the same periods.

Income Tax Expense

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

Six Months Ended

Nine Months Ended

September 30,

Effective tax rate 24.9% 18.1%

Our effective tax rate for the six months ended June 30, 2024 differs from the U.S.

Our effective tax rate for the nine months ended September 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 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.

The increase in the effective income tax rate for the nine months ended September 30, 2024 is primarily due to a benefit recorded in the nine months ended September 30, 2023 related to the sale of the Company’s RELISTOR royalty asset, which resulted in additional net operating losses becoming available for utilization under Internal Revenue Code Section 382.

There was no such comparable amount recorded in 2024.

Liquidity and Capital Resources

The following table provides information regarding our cash flows:

Six Months Ended

Nine Months Ended

September 30,

(in thousands) 2024 2023

Net cash provided by operating activities $ 387,020 $ 192,973

Net cash used in investing activities $ (151,615) $ (65,210)

Net cash (used in) provided by investing activities $ (219,413) $ 18,008

Net cash used in financing activities $ (14,877) $ (12,612)

Net Cash Provided by Operating Activities

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.

Net cash provided by operating activities of $387.0 million in the nine months ended September 30, 2024 was primarily comprised of net income adjusted for the net effect of non-cash items such as unrealized gain on investment in equity securities, 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 $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.

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

Net cash used in investing activities during the nine months ended September 30, 2024 was driven by an upfront option payment of $28.0 million to Perspective, $36.0 million of payments for the Life Molecular Imaging asset purchase, $42.9 million payments to the Meilleur Stockholders for the acquisition of Meilleur, $2.0 million for the Radiopharm asset purchase, $83.2 million for the purchase of equity securities, and $35.3 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 provided by investing activities during the nine months ended September 30, 2023 was due to the net cash proceeds of $98.0 million from the sale of RELISTOR royalty asset offset by $45.3 million for our asset acquisition of Cerveau and $34.5 million of capital expenditures.

Net Cash Used in Financing Activities

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.

Net cash used in financing activities during the nine months ended September 30, 2024 is primarily attributable to the payments for minimum statutory tax withholding related to net share settlement of equity awards of $21.7 million offset by proceeds of $7.2 million from stock option exercises.

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

External Sources of Liquidity

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

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

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

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 $335.0 million or consolidated earnings before interest, taxes, depreciation and amortization 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.

The 2022 Revolving Facility includes a $20.0 million sub-facility for the issuance of Letters of Credit.

The 2022 Revolving Facility includes a $10.0 million sub-facility for Swingline Loans.

The 2022 Revolving Facility includes a $20.0 million sub-facility for the issuance of letters of credit (the “Letters of Credit”).

The 2022 Revolving Facility includes a $10.0 million sub-facility for swingline loans (the “Swingline Loans”).

The Letters of Credit, Swingline Loans and the borrowings under the 2022 Revolving Facility are expected to be used for working capital and other general corporate purposes.

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

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.

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

As of September 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 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 the Indenture.

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 us.

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

On August 2, 2023, we sold the right to our RELISTOR royalty asset under our license agreement with Bausch Health Companies, Inc.;

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

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If we experience one or more of these events in the future, we may be required to further implement expense reductions, such as a delay or elimination of discretionary spending in all functional areas, as well as scaling back select operating and strategic initiatives.

If our capital resources become insufficient to meet our future capital requirements, we would need to finance our cash needs through public or private equity offerings, debt financings, assets securitizations, sale-leasebacks or other financing or strategic alternatives, to the extent such transactions are permissible under the covenants of our 2022 Credit Agreement.

As discussed in Note 11, "Long-Term Debt, Net, and Other Borrowings" in our condensed consolidated financial statements, during the third quarter of 2024, the Notes became convertible for the fourth quarter of 2024, the quarter immediately following the quarter when conditions for conversion are met, at the option of the holder of the Notes, as stated in the terms of the Notes.

We reclassified the carrying value of the Notes from long-term debt, net and other borrowings to current portion of long-term debt, net and other borrowings on our condensed consolidated balance sheet as of September 30, 2024, in accordance with accounting guidance.

If our capital resources become insufficient to meet our future capital requirements, including payments we may be required to make upon conversion of the Notes, we would need to finance our cash needs through public or private equity offerings, debt financings, assets securitizations, sale-leasebacks or other financing or strategic alternatives, to the extent such transactions are permissible under the covenants of our 2022 Credit Agreement.

Additional equity or debt financing, or other transactions, may not be available on acceptable terms, if at all.

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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 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.

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

We had $866.4 million of cash and cash equivalents as of September 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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Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S.

The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.

The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect our reported assets and liabilities, revenues and expenses, and other financial information.

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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 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.

There have been no significant changes to our critical accounting policies or in the underlying accounting assumptions and estimates used in such policies in the nine months ended September 30, 2024.

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

Off-Balance Sheet Arrangements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis