UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36569


LANTHEUS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)


Delaware		35-2318913
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

~~331 Treble Cove~~201 Burlington Road, South Building		~~01862~~01730
~~North Billerica,~~Bedford,	MA
(Address of principal executive offices)		(Zip Code)


(978)			671-8001
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	LNTH	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Table of Contents

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act) Yes ☐ No ☑

The registrant had ~~68,832,088~~68,430,697 shares of common stock, $0.01 par value, outstanding as of ~~October~~July 28, ~~2022.~~2023.

Table of Contents

LANTHEUS HOLDINGS, INC.

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2122
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3534
Item 4.	Controls and Procedures	3534
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4038
Item 3.	Defaults Upon Senior Securities	4038
Item 4.	Mine Safety Disclosures	4038
Item 5.	Other Information	4038
Item 6.	Exhibits	4140
SIGNATURES		4241

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Lantheus Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except par value)


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	257,259	$	98,508	Cash and cash equivalents	$	414,076	$	415,652
Accounts receivable, net	Accounts receivable, net	197,276		89,336		Accounts receivable, net	256,277		213,397
Inventory	Inventory	34,793		35,129		Inventory	51,801		35,475
Other current assets	Other current assets	12,570		12,818		Other current assets	22,906		13,092

Assets held for sale						Assets held for sale	7,159		—
Total current assets	Total current assets	501,898		235,791		Total current assets	752,219		677,616
Property, plant and equipment, net	Property, plant and equipment, net	120,826		116,772		Property, plant and equipment, net	129,981		122,166
Intangibles, net	Intangibles, net	323,591		348,510		Intangibles, net	221,004		315,285
Goodwill	Goodwill	61,189		61,189		Goodwill	61,189		61,189
Deferred tax assets, net	Deferred tax assets, net	46,806		62,764		Deferred tax assets, net	134,201		110,647
Other long-term assets	Other long-term assets	41,628		38,758		Other long-term assets	39,126		34,355
Total assets	Total assets	$	1,095,938	$	863,784	Total assets	$	1,337,720	$	1,321,258
Liabilities and stockholders’ equity	Liabilities and stockholders’ equity					Liabilities and stockholders’ equity
Current liabilities	Current liabilities					Current liabilities
Current portion of long-term debt and other borrowings	Current portion of long-term debt and other borrowings	$	15,372	$	11,642	Current portion of long-term debt and other borrowings	$	384	$	354

Accounts payable	Accounts payable	30,135		20,787		Accounts payable	38,861		20,563
Short-term contingent liability						Short-term contingent liability	—		99,700
Accrued expenses and other liabilities	Accrued expenses and other liabilities	190,477		58,068		Accrued expenses and other liabilities	114,798		127,084

Total current liabilities	Total current liabilities	235,984		90,497		Total current liabilities	154,043		247,701
Asset retirement obligations	Asset retirement obligations	23,358		20,833		Asset retirement obligations	22,729		22,543
Long-term debt, net and other borrowings	Long-term debt, net and other borrowings	152,057		163,121		Long-term debt, net and other borrowings	559,235		557,712
Other long-term liabilities	Other long-term liabilities	46,489		124,894		Other long-term liabilities	49,068		46,155
Total liabilities	Total liabilities	457,888		399,345		Total liabilities	785,075		874,111
Commitments and contingencies (See Note 19)
Commitments and contingencies (See Note 18)						Commitments and contingencies (See Note 18)
Stockholders’ equity	Stockholders’ equity					Stockholders’ equity
Preferred stock ($0.01 par value, 25,000 shares authorized; no shares issued and outstanding)	Preferred stock ($0.01 par value, 25,000 shares authorized; no shares issued and outstanding)	—		—		Preferred stock ($0.01 par value, 25,000 shares authorized; no shares issued and outstanding)	—		—
Common stock ($0.01 par value, 250,000 shares authorized; 68,809 and 67,739 shares issued and outstanding, respectively)		688		677
Common stock ($0.01 par value, 250,000 shares authorized; 69,755 and 68,851 shares issued as of June 30, 2023 and December 31, 2022, respectively)						Common stock ($0.01 par value, 250,000 shares authorized; 69,755 and 68,851 shares issued as of June 30, 2023 and December 31, 2022, respectively)	698		689
Additional paid-in capital	Additional paid-in capital	708,341		685,472		Additional paid-in capital	729,733		715,875
Treasury Stock at cost - 1,339 shares as of June 30, 2023 and December 31, 2022						Treasury Stock at cost - 1,339 shares as of June 30, 2023 and December 31, 2022	(75,000)		(75,000)
Accumulated deficit	Accumulated deficit	(73,973)		(221,225)		Accumulated deficit	(101,834)		(193,158)
Accumulated other comprehensive income (loss)		2,994		(485)
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(952)		(1,259)
Total stockholders’ equity	Total stockholders’ equity	638,050		464,439		Total stockholders’ equity	552,645		447,147
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,095,938	$	863,784	Total liabilities and stockholders’ equity	$	1,337,720	$	1,321,258

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

Table of Contents

Lantheus Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues	Revenues	$	239,292	$	102,073	$	671,895	$	295,646	Revenues	$	321,700	$	223,723	$	622,484	$	432,603
Cost of goods sold	Cost of goods sold	91,859		59,404		257,363		165,859		Cost of goods sold	119,053		85,694		342,761		165,504
Gross profit	Gross profit	147,433		42,669		414,532		129,787		Gross profit	202,647		138,029		279,723		267,099
Operating expenses	Operating expenses									Operating expenses
Sales and marketing	Sales and marketing	25,414		17,195		73,260		48,999		Sales and marketing	36,456		27,492		69,073		47,846
General and administrative	General and administrative	23,759		28,550		93,945		87,865		General and administrative	26,151		32,598		49,422		70,186
Research and development	Research and development	12,517		11,252		39,455		33,673		Research and development	15,901		14,735		46,433		26,938
Total operating expenses	Total operating expenses	61,690		56,997		206,660		170,537		Total operating expenses	78,508		74,825		164,928		144,970
Gain on sale of assets		—		—		—		15,263
Operating income (loss)		85,743		(14,328)		207,872		(25,487)

Operating income										Operating income	124,139		63,204		114,795		122,129
Interest expense	Interest expense	1,626		1,569		4,604		6,224		Interest expense	4,933		1,469		9,924		2,978
Gain on extinguishment of debt		—		—		—		(889)

Other income	Other income	1,101		3,940		306		3,209		Other income	(4,482)		(310)		(7,713)		(795)
Income (loss) before income taxes		83,016		(19,837)		202,962		(34,031)
Income tax expense (benefit)		21,784		(6,422)		55,710		(2,967)
Net income (loss)		$	61,232	$	(13,415)	$	147,252	$	(31,064)
Net income (loss) per common share:
Income before income taxes										Income before income taxes	123,688		62,045		112,584		119,946
Income tax expense										Income tax expense	29,557		18,987		21,260		33,926
Net income										Net income	$	94,131	$	43,058	$	91,324	$	86,020
Net income per common share:										Net income per common share:
Basic	Basic	$	0.89	$	(0.20)	$	2.15	$	(0.46)	Basic	$	1.38	$	0.63	$	1.34	$	1.26
Diluted	Diluted	$	0.86	$	(0.20)	$	2.08	$	(0.46)	Diluted	$	1.33	$	0.61	$	1.31	$	1.22
Weighted-average common shares outstanding:	Weighted-average common shares outstanding:									Weighted-average common shares outstanding:
Basic	Basic	68,756		67,623		68,482		67,409		Basic	68,371		68,674		68,062		68,343
Diluted	Diluted	71,075		67,623		70,669		67,409		Diluted	71,014		70,796		69,957		70,412

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

Table of Contents

Lantheus Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income (loss)		$	61,232	$	(13,415)	$	147,252	$	(31,064)
Net income										Net income	$	94,131	$	43,058	$	91,324	$	86,020
Other comprehensive income:	Other comprehensive income:									Other comprehensive income:

Foreign currency translation	Foreign currency translation	(379)		(240)		(463)		55		Foreign currency translation	426		(224)		307		(84)
Unrealized gain on cash flow hedges, net of tax	Unrealized gain on cash flow hedges, net of tax	1,049		98		3,942		851		Unrealized gain on cash flow hedges, net of tax	—		637		—		2,893
Total other comprehensive income (loss)		670		(142)		3,479		906
Comprehensive income (loss)		$	61,902	$	(13,557)	$	150,731	$	(30,158)
Total other comprehensive income										Total other comprehensive income	426		413		307		2,809
Comprehensive income										Comprehensive income	$	94,557	$	43,471	$	91,631	$	88,829

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

Table of Contents

Lantheus Holdings, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(in thousands)


		Nine Months Ended September 30, 2022										Six Months Ended June 30, 2023
		Common Stock			Additional Paid-In Capital	Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity					Common Stock					Treasury Stock		Additional Paid-In Capital	Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		Shares	Amount												Shares		Amount				Total Stockholders’ Equity								Amount
Balance, January 1, 2022		67,739	$	677		$	685,472	$	(221,225)	$	(485)		$	464,439
Balance, January 1, 2023																Balance, January 1, 2023	68,851	$	689			1,339	$	(75,000)	$	715,875	$	(193,158)		$	(1,259)	$	447,147
Net loss																Net loss	—	—				—	—		—		(2,807)			—		(2,807)

Other comprehensive loss																Other comprehensive loss	—	—				—	—		—		—			(119)		(119)
Stock option exercises and employee stock plan purchases																Stock option exercises and employee stock plan purchases	120	1				—	—		2,781		—			—		2,782
Vesting of restricted stock awards and units																Vesting of restricted stock awards and units	813	8				—	—		(8)		—			—		—
Shares withheld to cover taxes																Shares withheld to cover taxes	(154)	(2)				—	—		(11,152)		—			—		(11,154)
Stock-based compensation																Stock-based compensation	—	—				—	—		9,667		—			—		9,667
Balance, March 31, 2023																Balance, March 31, 2023	69,630	$	696			1,339	$	(75,000)	$	717,163	$	(195,965)		$	(1,378)	$	445,516
Net income	Net income	—	—			—		42,962		—			42,962			Net income	—	—				—	—		—		94,131			—		94,131

Other comprehensive income	Other comprehensive income	—	—			—		—		2,396			2,396			Other comprehensive income	—	—				—	—		—		—			426		426
Stock option exercises and employee stock plan purchases	Stock option exercises and employee stock plan purchases	296	3			5,931		—		—			5,934			Stock option exercises and employee stock plan purchases	73	1				—	—		1,346		—			—		1,347
Vesting of restricted stock awards and units	Vesting of restricted stock awards and units	645	7			(7)		—		—			—			Vesting of restricted stock awards and units	68	1				—	—		(1)		—			—		—
Shares withheld to cover taxes	Shares withheld to cover taxes	(110)	(1)			(5,503)		—		—			(5,504)			Shares withheld to cover taxes	(16)	—				—	—		(1,467)		—			—		(1,467)
Stock-based compensation	Stock-based compensation	—	—			5,623		—		—			5,623			Stock-based compensation	—	—				—	—		12,692		—			—		12,692
Balance, March 31, 2022		68,570	$	686		$	691,516	$	(178,263)	$	1,911		$	515,850
Net income		—	—			—		43,058		—			43,058
Balance, June 30, 2023																Balance, June 30, 2023	69,755	$	698			1,339	$	(75,000)	$	729,733	$	(101,834)		$	(952)	$	552,645

Other comprehensive income		—	—			—		—		413			413
Stock option exercises and employee stock plan purchases		61	1			1,422		—		—			1,423
Vesting of restricted stock awards and units		108	1			(1)		—		—			—
Shares withheld to cover taxes		(13)	(1)			(823)		—		—			(824)
Stock-based compensation		—	—			7,412		—		—			7,412
Balance, June 30, 2022		68,726	$	687		$	699,526	$	(135,205)	$	2,324		$	567,332
Net income		—	—			—		61,232		—			61,232
Other comprehensive income		—	—			—		—		670			670
Stock option exercises and employee stock plan purchases		53	1			1,555		—		—			1,556
Vesting of restricted stock awards and units		41	1			(1)		—		—			—
Shares withheld to cover taxes		(11)	(1)			(842)		—		—			(843)
Stock-based compensation		—	—			8,103		—		—			8,103
Balance, September 30, 2022		68,809	$	688		$	708,341	$	(73,973)	$	2,994		$	638,050


	Six Months Ended June 30, 2022
	Common Stock			Treasury Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount			Shares									Amount
Balance, January 1, 2022	67,739	$	677		—	$	—	$	685,472	$	(221,225)	$	(485)		$	464,439
Net income	—	—			—	—		—		42,962		—			42,962

Other comprehensive income	—	—			—	—		—		—		2,396			2,396
Stock option exercises and employee stock plan purchases	296	3			—	—		5,931		—		—			5,934
Vesting of restricted stock awards and units	645	7			—	—		(7)		—		—			—
Shares withheld to cover taxes	(110)	(1)			—	—		(5,503)		—		—			(5,504)
Stock-based compensation	—	—			—	—		5,623		—		—			5,623
Balance, March 31, 2022	68,570	$	686		—	$	—	$	691,516	$	(178,263)	$	1,911		$	515,850
Net income	—	—			—	—		—		43,058		—			43,058
Other comprehensive income	—	—			—	—		—		—		413			413
Stock option exercises and employee stock plan purchases	61	1			—	—		1,422		—		—			1,423
Vesting of restricted stock awards and units	108	1			—	—		(1)		—		—			—
Shares withheld to cover taxes	(13)	(1)			—	—		(823)		—		—			(824)
Stock-based compensation	—	—			—	—		7,412		—		—			7,412
Balance, June 30, 2022	68,726	$	687		—	$	—	$	699,526	$	(135,205)	$	2,324		$	567,332

Table of Contents

Nine Months Ended September 30, 2021
Common Stock Additional
Paid-In
Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Loss Total
Stockholders’
Equity
Shares Amount
Balance, January 1, 2021 66,875 $ 669 $ 665,530 $ (149,946) $ (2,048) $ 514,205
Net income — — — 9,008 — 9,008
Other comprehensive income — — — — 808 808
Stock option exercises and employee stock plan purchases 155 1 2,379 — — 2,380
Vesting of restricted stock awards and units 489 5 (5) — — —
Shares withheld to cover taxes (85) (1) (1,598) — — (1,599)
Stock-based compensation — — 3,317 — — 3,317
Balance, March 31, 2021 67,434 $ 674 $ 669,623 $ (140,938) $ (1,240) $ 528,119
Net loss — — — (26,657) — (26,657)
Other comprehensive income — — — — 240 240
Stock option exercises and employee stock plan purchases 116 1 2,042 — — 2,043
Vesting of restricted stock awards and units 51 1 (1) — — —
Shares withheld to cover taxes (9) — (193) — — (193)
Stock-based compensation — — 4,588 — — 4,588
Balance, June 30, 2021 67,592 $ 676 $ 676,059 $ (167,595) $ (1,000) $ 508,140
Net loss — — — (13,415) — (13,415)
Other comprehensive loss — — — — (142) (142)
Stock option exercises and employee stock plan purchases 48 1 960 — — 961
Vesting of restricted stock awards and units 23 — — — — —
Shares withheld to cover taxes (4) — (67) — — (67)
Stock-based compensation — — 3,867 — — 3,867
Balance, September 30, 2021 67,659 $ 677 $ 680,819 $ (181,010) $ (1,142) $ 499,344

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

Table of Contents

Lantheus Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Operating activities	Operating activities					Operating activities
Net income (loss)		$	147,252	$	(31,064)
Net income						Net income	$	91,324	$	86,020
Adjustments to reconcile net income to net cash flows from operating activities:	Adjustments to reconcile net income to net cash flows from operating activities:					Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation, amortization and accretion	Depreciation, amortization and accretion	36,048		30,088		Depreciation, amortization and accretion	30,375		23,893
Impairment of long-lived assets	Impairment of long-lived assets	—		9,540		Impairment of long-lived assets	138,050		—
Asset retirement obligation acceleration	Asset retirement obligation acceleration	1,229		—		Asset retirement obligation acceleration	—		500
Amortization of debt related costs	Amortization of debt related costs	737		430		Amortization of debt related costs	2,155		491
Changes in fair value of contingent assets and liabilities	Changes in fair value of contingent assets and liabilities	25,400		28,500		Changes in fair value of contingent assets and liabilities	(8,975)		26,900
Gain on extinguishment of debt		—		(889)

Provision for excess and obsolete inventory	Provision for excess and obsolete inventory	4,980		2,317		Provision for excess and obsolete inventory	3,179		3,185
Stock-based compensation	Stock-based compensation	21,138		11,772		Stock-based compensation	22,359		13,035

Gain on sale of assets		—		(15,263)

Deferred taxes	Deferred taxes	14,461		1,028		Deferred taxes	(39,616)		6,598
Long-term income tax receivable		668		3,092
Long-term indemnification receivable						Long-term indemnification receivable	(327)		(793)
Long-term income tax payable and other long-term liabilities	Long-term income tax payable and other long-term liabilities	(538)		(3,617)		Long-term income tax payable and other long-term liabilities	1,386		1,154
Other	Other	3,188		1,724		Other	1,735		2,172
(Decreases) increases in cash from operating assets and liabilities:	(Decreases) increases in cash from operating assets and liabilities:					(Decreases) increases in cash from operating assets and liabilities:
Accounts receivable	Accounts receivable	(112,031)		(7,721)		Accounts receivable	(39,078)		(100,994)
Inventory	Inventory	(4,666)		(625)		Inventory	(19,255)		(2,013)
Other current assets	Other current assets	314		1,998		Other current assets	(9,260)		744
Other long-term assets	Other long-term assets	(533)		—		Other long-term assets	—		(533)
Accounts payable	Accounts payable	8,409		4,776		Accounts payable	14,186		(861)
Accrued expenses and other liabilities	Accrued expenses and other liabilities	30,374		3,941		Accrued expenses and other liabilities	(112,004)		23,363
Net cash provided by operating activities	Net cash provided by operating activities	176,429		40,027		Net cash provided by operating activities	76,234		82,861
Investing activities	Investing activities					Investing activities
Capital expenditures	Capital expenditures	(13,623)		(7,596)		Capital expenditures	(19,865)		(7,533)
Proceeds from sale of assets, net	Proceeds from sale of assets, net	1,800		15,823		Proceeds from sale of assets, net	—		1,800

Net cash (used in) provided by investing activities		(11,823)		8,227
Acquisition of assets, net						Acquisition of assets, net	(45,345)		—
Net cash used in investing activities						Net cash used in investing activities	(65,210)		(5,733)
Financing activities	Financing activities					Financing activities

Payments on long-term debt and other borrowings	Payments on long-term debt and other borrowings	(7,891)		(40,757)		Payments on long-term debt and other borrowings	(528)		(5,219)

Contingent value rights settlement						Contingent value rights settlement	(3,700)		—
Proceeds from stock option exercises	Proceeds from stock option exercises	7,538		4,616		Proceeds from stock option exercises	3,189		6,780
Proceeds from issuance of common stock	Proceeds from issuance of common stock	1,375		768		Proceeds from issuance of common stock	940		577
Payments for minimum statutory tax withholding related to net share settlement of equity awards	Payments for minimum statutory tax withholding related to net share settlement of equity awards	(7,171)		(1,859)		Payments for minimum statutory tax withholding related to net share settlement of equity awards	(12,621)		(6,328)
Net cash used in financing activities	Net cash used in financing activities	(6,149)		(37,232)		Net cash used in financing activities	(12,720)		(4,190)
Effect of foreign exchange rates on cash, cash equivalents and restricted cash	Effect of foreign exchange rates on cash, cash equivalents and restricted cash	(266)		(99)		Effect of foreign exchange rates on cash, cash equivalents and restricted cash	139		(19)
Net increase in cash, cash equivalents and restricted cash		158,191		10,923
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(1,557)		72,919
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	100,651		82,694		Cash, cash equivalents and restricted cash, beginning of period	417,241		100,651
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	258,842	$	93,617	Cash, cash equivalents and restricted cash, end of period	$	415,684	$	173,570

Table of Contents

Lantheus Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (Continued)

(Unaudited)

(in thousands)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Reconciliation to amounts within the condensed consolidated balance sheets	Reconciliation to amounts within the condensed consolidated balance sheets					Reconciliation to amounts within the condensed consolidated balance sheets
Cash and cash equivalents	Cash and cash equivalents	$	257,259	$	91,475	Cash and cash equivalents	$	414,076	$	171,427
Restricted cash included in other long-term assets	Restricted cash included in other long-term assets	1,583		2,142		Restricted cash included in other long-term assets	1,608		2,143
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	258,842	$	93,617	Cash, cash equivalents and restricted cash at end of period	$	415,684	$	173,570

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

Table of Contents

Lantheus Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note Regarding Company References and Trademarks

Unless the context otherwise requires, references to the “Company” and “Lantheus” refer to Lantheus Holdings, Inc. and its direct and indirect wholly-owned ~~subsidiaries,~~subsidiaries; references to ~~“Holdings”~~“Lantheus Holdings” refer to Lantheus Holdings, Inc. and not to any of its ~~subsidiaries,~~subsidiaries; references to “LMI” refer to Lantheus Medical Imaging, Inc., the direct subsidiary of ~~Holdings,~~Lantheus Holdings; references to “Cerveau,” “Lantheus Real Estate,” “Lantheus Two,” “Lantheus Three” and “Progenics” refer to Cerveau Technologies, Inc., Lantheus MI Real Estate, LLC, Lantheus Two, LLC, Lantheus Three, LLC and Progenics Pharmaceuticals, Inc., respectively, each a wholly-owned subsidiary of LMI, and references to “EXINI” refer to EXINI Diagnostics AB, a wholly-owned subsidiary of Progenics. Solely for convenience, the Company refers to trademarks, service marks and trade names without the TM, SM and ® symbols. Those references are not intended to indicate, in any way, that the Company will not assert, to the fullest extent permitted under applicable law, its rights to its trademarks, service marks and trade names.

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of ~~Holdings and its direct and indirect wholly-owned subsidiaries, including Progenics,~~Lantheus and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by generally accepted accounting principles in the United States ~~of America~~ (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement have been included. The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 are not necessarily indicative of the results that may be expected for the year ended December 31, ~~2022~~2023 or any future period.

The condensed consolidated balance sheet at December 31, ~~2021~~2022 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 of the Company’s most recent Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the Securities Exchange Commission (“SEC”) on February ~~24, 2022.~~23, 2023.

Progenics Acquisition

On June 19, 2020 (the “Closing Date”), pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of February 20, 2020 (the “Merger Agreement”), by and among Lantheus Holdings, Plato Merger Sub, Inc., a wholly-owned subsidiary of Lantheus Holdings (“Merger Sub”), and Progenics, Lantheus Holdings completed the acquisition of Progenics by means of a merger of Merger Sub with and into Progenics, with Progenics ~~surviving~~becoming an indirect subsidiary of Lantheus Holdings following the completion of such merger ~~as a wholly-owned subsidiary of Holdings~~ (the “Progenics Acquisition”). ~~Subsequently, on June 22, 2020, Holdings contributed all of the capital stock of Progenics to LMI, thereby making Progenics an indirect subsidiary of Holdings.~~

In ~~accordance~~connection with ~~the Merger Agreement, at the effective time of~~ the Progenics Acquisition, ~~(the “Effective Time”), each share of Progenics common stock, par value $0.0013 per share,~~Lantheus Holdings issued ~~and outstanding immediately prior to the Effective Time (other than~~26,844,877 shares of Progenics common stock owned by Holdings, Progenics or any of their wholly-owned subsidiaries) was automatically cancelled and converted into the right to receive (i) 0.31 (the “Exchange Ratio”) of a share ofLantheus Holdings common stock ~~par value $0.01 per share,~~ and ~~(ii) one~~86,630,633 contingent value ~~right (a~~rights (each a “CVR”) tied to the financial performance of ~~PyL (18F-DCFPyL), Progenics’ prostate-specific membrane antigen (“PSMA”) targeted imaging agent designed~~PYLARIFY to ~~visualize prostate cancer. This agent was approved by the U.S. Food~~former Progenics stockholders and ~~Drug Administration (“FDA”) on May 26, 2021 under the name PYLARIFY (piflufolastat F 18), and the commercial launch of this agent began in June 2021.~~option holders. Each CVR ~~entitles~~entitled its holder to receive a pro rata share of aggregate cash payments equal to 40% of United States (“U.S.”) net sales generated by PYLARIFY in 2022 and 2023 in excess of $100.0 million and $150.0 million, respectively. ~~In no event will the~~The Company’s aggregate payments in respect of the CVRs, together with any other non-stock consideration treated as paid in connection with the Progenics Acquisition, ~~exceed~~was capped at 19.9% of the total consideration the Company ~~pays~~paid in the Progenics Acquisition. Based on the Company’s 2022 PYLARIFY net sales, the Company ~~believes~~determined that ~~all of its~~the aggregate payment ~~obligations~~obligation under the CVRs ~~(which~~was $99.6 million, which was the maximum amount payable. The Company ~~currently estimates to be approximately $99.7 million) will become payable~~paid out this amount in ~~the first half of 2023. As a result~~May 2023 in full satisfaction of the ~~acquisition, Holdings issued 26,844,877 shares of Holdings common stock and 86,630,633 CVRs to former Progenics stockholders and option holders.~~CVRs.

2. Summary of Significant Accounting Policies

Recent Accounting Pronouncements

The Company has not adopted any new accounting standards during the ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023.

Table of Contents

3. Revenue from Contracts with Customers

The following table summarizes revenue by revenue source as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
Major Products/Service Lines (in thousands)	Major Products/Service Lines (in thousands)	2022		2021		2022		2021		Major Products/Service Lines (in thousands)	2023		2022		2023		2022
Product revenue, net(1)	Product revenue, net(1)	$	233,366	$	96,678	$	631,157	$	277,559	Product revenue, net(1)	$	314,084	$	217,782	$	606,340	$	397,791
License and royalty revenues(2)	License and royalty revenues(2)	5,926		5,395		40,738		18,087		License and royalty revenues(2)	7,616		5,941		16,144		34,812
Total revenues	Total revenues	$	239,292	$	102,073	$	671,895	$	295,646	Total revenues	$	321,700	$	223,723	$	622,484	$	432,603

(1)The Company’s ~~principal products include PYLARIFY, DEFINITY and TechneLite and are primarily categorized within~~ product revenue ~~net.~~includes PYLARIFY and DEFINITY among other products. This category represents the delivery of physical goods. The Company applies the same revenue recognition policies and judgments for all its principal products.

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

The Company classifies its revenues into three product categories: ~~precision diagnostics, radiopharmaceutical oncology,~~Radiopharmaceutical Oncology, Precision Diagnostics, and ~~strategic partnerships~~Strategic Partnerships and ~~other revenue.~~Other Revenue. Radiopharmaceutical Oncology includes PYLARIFY and AZEDRA. Precision ~~diagnostics~~Diagnostics includes DEFINITY, TechneLite and other diagnostic imaging products. ~~Radiopharmaceutical oncology consists primarily of PYLARIFY~~Strategic Partnerships and ~~AZEDRA. Strategic partnerships and other revenue~~Other Revenue includes strategic partnerships and other arrangements related to other products of the Company, ~~such as~~including our royalty revenue from our license of RELISTOR.

On January 31, 2022, the Company entered into a global settlement agreement with Novartis Pharma AG (“Novartis”), Advanced Accelerator Applications USA, Inc. (“AAA”), Endocyte, Inc. (“Endocyte”) and their affiliates (the “Novartis Agreement”) to settle certain disputes between the parties. Under the Novartis Agreement, Novartis agreed to make a lump sum payment to the Company, as well as to reimburse the Company for certain fees and expenses in connection with certain ~~German~~ litigation, and the Company agreed to license certain intellectual property to Novartis. In addition, the Company agreed to supply PYLARIFY for clinical purposes at an arms-length value which will be recorded revenue in the future as product is provided. In accordance with the Company's ASC 606, Revenue from Contracts with Customers,, assessment, Novartis is considered to be a customer. The Company determined that the $24.0 million that Novartis paid to the Company pursuant to the Novartis Agreement constituted a single element which was satisfied on the date of the execution of the Novartis Agreement. The Company determined that the license of intellectual property carried a fair value of $24.0 million. As such, the Company assigned the value ~~to the fair value~~ of the license to be $24.0 million, which constitutes the entire transaction price and does not require further allocation. The Company determined that the $24.0 million represented the point at which Novartis, as the licensee, was able to use and benefit from the license and recognized revenue when the license was granted to Novartis upon execution of the Novartis Agreement. The Company recognized the $24.0 million fee as revenue on its consolidated statement of operations for the quarter ended March 31, 2022. ~~The Company received the $24.0 million payment in April 2022.~~

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
PYLARIFY										PYLARIFY	$	210,522	$	130,232	$	405,992	$	223,009
Other radiopharmaceutical oncology										Other radiopharmaceutical oncology	818		928		1,535		2,255
Total radiopharmaceutical oncology										Total radiopharmaceutical oncology	211,340		131,160		407,527		225,264
DEFINITY	DEFINITY	$	60,740	$	57,636	$	181,374	$	173,448	DEFINITY	70,529		62,306		139,353		120,634
TechneLite	TechneLite	22,094		22,680		64,139		69,252		TechneLite	21,594		19,440		42,580		42,045
Other precision diagnostics	Other precision diagnostics	6,175		7,563		16,803		21,289		Other precision diagnostics	5,454		5,363		11,261		10,628
Total precision diagnostics	Total precision diagnostics	89,009		87,879		262,316		263,989		Total precision diagnostics	97,577		87,109		193,194		173,307
PYLARIFY		143,754		7,724		366,763		7,997
Other radiopharmaceutical oncology		928		1,166		3,183		5,206
Total radiopharmaceutical oncology		144,682		8,890		369,946		13,203
Strategic partnerships and other revenue	Strategic partnerships and other revenue	5,601		5,304		39,633		18,454		Strategic partnerships and other revenue	12,783		5,454		21,763		34,032
Total revenues	Total revenues	$	239,292	$	102,073	$	671,895	$	295,646	Total revenues	$	321,700	$	223,723	$	622,484	$	432,603

The Company would be required to allocate a portion of its revenue received from commercial contracts to future reporting periods to the extent the Company had performance obligations that extended beyond one year. However, the Company’s performance obligations are typically part of contracts that have an original expected duration of one year or less. As such, the Company is not disclosing the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially satisfied) as of the end of the reporting period.

Table of Contents

4. Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability of fair value measurements, financial instruments are categorized based on a hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

•Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•Level 3 — Unobservable inputs that reflect a Company’s estimates about the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

The Company’s financial assets and liabilities measured at fair value on a recurring basis currently consist of money market funds ~~interest rate swaps, a contingent receivable~~ and contingent consideration liabilities. The Company invests excess cash from its operating cash accounts in overnight investments and reflects these amounts in cash and cash equivalents in the condensed consolidated balance sheets at fair value using quoted prices in active markets for identical assets. The fair value of the interest rate swaps is determined based on observable market-based inputs, including interest rate curves and reflects the contractual terms of these instruments, including the period to maturity. Please refer to Note 13, “Derivative Instruments”, for further details on the interest rate swaps. The Company recorded a contingent receivable and the contingent consideration liabilities resulting from the Progenics Acquisition at fair value based on inputs that are not observable in the market.

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


		September 30, 2022									June 30, 2023
(in thousands)	(in thousands)	Total Fair Value		Level 1		Level 2		Level 3		(in thousands)	Total Fair Value		Level 1		Level 2		Level 3
Assets:	Assets:									Assets:
Money market	Money market	$	176,909	$	176,909	$	—	$	—	Money market	$	302,605	$	302,605	$	—	$	—
Interest rate swaps		5,660		—		5,660		—
Contingent receivable		8,200		—		—		8,200

Total assets	Total assets	$	190,769	$	176,909	$	5,660	$	8,200	Total assets	$	302,605	$	302,605	$	—	$	—
Liabilities:	Liabilities:									Liabilities:
Contingent consideration liabilities	Contingent consideration liabilities	$	110,500	$	—	$	—	$	110,500	Contingent consideration liabilities	$	3,000	$	—	$	—	$	3,000
Total liabilities	Total liabilities	$	110,500	$	—	$	—	$	110,500	Total liabilities	$	3,000	$	—	$	—	$	3,000


		December 31, 2021									December 31, 2022
(in thousands)	(in thousands)	Total Fair Value		Level 1		Level 2		Level 3		(in thousands)	Total Fair Value		Level 1		Level 2		Level 3
Assets:	Assets:									Assets:
Money market	Money market	$	40,140	$	40,140	$	—	$	—	Money market	$	342,646	$	342,646	$	—	$	—
Interest rate swaps		357		—		357		—
Contingent receivable		9,300		—		—		9,300

Total assets	Total assets	$	49,797	$	40,140	$	357	$	9,300	Total assets	$	342,646	$	342,646	$	—	$	—
Liabilities:	Liabilities:									Liabilities:
Contingent consideration liabilities	Contingent consideration liabilities	$	86,200	$	—	$	—	$	86,200	Contingent consideration liabilities	$	111,600	$	—	$	—	$	111,600
Total liabilities	Total liabilities	$	86,200	$	—	$	—	$	86,200	Total liabilities	$	111,600	$	—	$	—	$	111,600

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, there were no transfers into or out of Level 3.

~~Table of Contents~~

As part of the Progenics Acquisition, the Company acquired the right to receive certain future milestone and royalty payments due to Progenics from CytoDyn Inc. related to a prior sale of certain intellectual property. The Company has the right to receive $5.0 million upon regulatory approval and a 5% royalty on net sales of approved products. The Company considers the contingent receivable a Level 3 instrument (one with significant unobservable inputs) in the fair value hierarchy. The estimated fair value was determined based on probability adjusted discounted cash flows that included significant estimates and assumptions pertaining to regulatory events and sales targets. The most significant unobservable inputs are the probabilities of achieving regulatory approval of the development projects and subsequent commercial success.

As part of the Progenics Acquisition, the Company issued CVRs and recorded the fair value as part of consideration transferred. Each CVR ~~entitles~~entitled its holder to receive a pro rata share of aggregate cash payments equal to 40% of U.S. net sales generated by PYLARIFY in 2022 and 2023 in excess of $100.0 million and $150.0 million, respectively, subject to a maximum cap. Refer to Note 1, “Basis of Presentation” for further details on the CVRs. ~~The Company considers~~Based on the contingent consideration liabilities relating to the CVRs a Level 3 instrument (one with significant unobservable inputs) in the fair value hierarchy. The estimated fair value of these had been determined based on Monte Carlo simulation models that included significant estimates and assumptions pertaining to commercialization events and sales targets. Because of revised revenue forecasts for the balance of 2022, the Company updated the valuation technique for the CVRs from the Monte Carlo simulation model to a probability adjusted discounted cash flow model as the Company currently expects to pay out the full amount of the CVRs from available cash in the first half of 2023 based on U.S. net sales generated by PYLARIFY in 2022, ~~and,~~the Company paid out the maximum amount payable under ~~either valuation technique,~~ the ~~estimated liability would be approximately~~CVRs from available cash in May 2023 in full satisfaction of the ~~same.~~CVR obligation.

The Company also assumed contingent consideration liabilities related to a previous acquisition completed by Progenics in 2013 (“2013 Acquisition”). These contingent consideration liabilities include potential payments of up to $70.0 million if the Company attains certain net sales targets primarily for AZEDRA and 1095 (also known as 131 I-MIP-1095) and a $5.0 million 1095 commercialization milestone. Additionally, there is a potential payment of up to $10.0 million related to a 1404 commercialization

Table of Contents

milestone. The Company’s total potential payments related to the 2013 Acquisition are approximately $85.0 million. The Company considers the contingent consideration liabilities relating to the 2013 Acquisition each a Level 3 instrument (one with significant unobservable inputs) in the fair value hierarchy. The estimated fair value of these was determined based on probability adjusted discounted cash flows and Monte Carlo simulation models that included significant estimates and assumptions pertaining to commercialization events and sales targets. The most significant unobservable inputs with respect to 1095 and 1404 are the probabilities of achieving regulatory approval of those development projects and subsequent commercial success.

Significant changes in any of the probabilities of success, the probabilities as to the periods in which sales targets and milestones will be achieved, discount rates or underlying revenue forecasts would result in a significantly higher or lower fair value measurement. The Company records the contingent consideration liability at fair value with changes in estimated fair values recorded in general and administrative expenses in the condensed consolidated statements of operations. The Company can give no assurance that the actual amounts paid, if any, in connection with the contingent consideration liabilities, ~~including the CVRs,~~ will be consistent with any recurring fair value estimate of such contingent consideration liabilities.

The following tables summarize quantitative information and assumptions pertaining to the fair value measurement of ~~assets and~~ liabilities using Level 3 inputs at ~~September~~June 30, ~~2022.~~2023.

Fair Value at Assumptions
(in thousands) September 30, 2022 December 31, 2021 Valuation Technique Unobservable Input September 30, 2022 December 31, 2021
Contingent receivable:
Regulatory milestone $ 2,400 $ 2,500 Probability adjusted discounted cash flow model Period of expected milestone achievement 2023 2022
Probability of success 70 % 70 %
Discount rate 19 % 17 %
Royalties 5,800 6,800 Probability adjusted discounted cash flow model
Probability of success 10% - 60% 10% - 60%
Discount rate 19 % 17 %
Total $ 8,200 $ 9,300

~~Table of Contents~~


		Fair Value at						Assumptions					Fair Value at						Assumptions
(in thousands)	(in thousands)	September 30, 2022		December 31, 2021		Valuation Technique	Unobservable Input	September 30, 2022		December 31, 2021		(in thousands)	June 30, 2023		December 31, 2022		Valuation Technique	Unobservable Input	June 30, 2023		December 31, 2022
Contingent consideration liability:	Contingent consideration liability:											Contingent consideration liability:
Net sales targets - PYLARIFY (CVRs)	Net sales targets - PYLARIFY (CVRs)	$	99,700	$	73,200	Probability adjusted discounted cash flow model (as of 9/30/2022) Monte Carlo simulation (as of 12/31/2021)	Period of expected milestone achievement and sales targets	2022 - 2023		2022 - 2023		Net sales targets - PYLARIFY (CVRs)	$	—	$	99,700	Probability adjusted discounted cash flow model	Period of expected milestone achievement and sales targets	May 2023		2022 - 2023
							Probability of success	100	%	N/A								Probability of success	N/A		100	%
							Discount rate	N/A		17	%
1095 commercialization milestone	1095 commercialization milestone	1,700		1,900		Probability adjusted discounted cash flow model						1095 commercialization milestone	1,700		1,700		Probability adjusted discounted cash flow model
							Period of expected milestone achievement	2026		2026								Period of expected milestone achievement	2026		2026
							Probability of success	40	%	40	%							Probability of success	40	%	40	%
							Discount rate	3.7	%	1.3	%							Discount rate	4.1	%	3.8	%

Net sales targets - AZEDRA and 1095	Net sales targets - AZEDRA and 1095	9,100		11,100		Monte Carlo simulation						Net sales targets - AZEDRA and 1095	1,300		10,200		Monte Carlo simulation
							Probability of success and sales targets	20% - 100%		40% - 100%								Probability of success and sales targets	40% - 100%		20% - 100%
							Discount rate	18% - 19%		16% - 17%								Discount rate	16% - 17%		16% - 17%
Total	Total	$	110,500	$	86,200							Total	$	3,000	$	111,600

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

Financial Assets Financial Liabilities
(in thousands) Nine Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Fair value, beginning of period $ 9,300 $ 11,300 $ 86,200 $ 15,800
Changes in fair value included in net income (loss) (1,100) 2,500 24,300 31,000
Fair value, end of period $ 8,200 $ 13,800 $ 110,500 $ 46,800

Table of Contents


	Financial Assets				Financial Liabilities
(in thousands)	Six Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Fair value, beginning of period	$	—	$	9,300	$	111,600	$	86,200

Changes in fair value included in net (loss) income	—		(1,600)		(8,975)		25,300
Cash payments	—		—		(99,625)		—
Fair value, end of period	$	—	$	7,700	$	3,000	$	111,500

The change in fair value of the contingent financial ~~asset and contingent financial~~ liabilities ~~including the CVRs,~~ resulted in ana reduction of general and administrative expense of ~~$25.4~~$8.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and was primarily due to changes in revenue forecasts ~~changes in market conditions, an increase in discount rates (excluding the CVRs)~~ and the passage of ~~time.~~time (excluding the CVRs). The Company ~~expects to make all~~made the applicable cash ~~payments~~payment related to the CVRs in ~~the first half of~~May 2023. ~~As of September 30, 2022, the Company had $99.7 million in current liabilities to account for the expected payments related to the CVRs.~~

5. Income Taxes

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

~~Table of Contents~~

recorded in the reporting period in which a change in the estimated annual effective tax rate is determined. The Company’s income tax expense is presented below:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Income tax expense (benefit)		$	21,784	$	(6,422)	$	55,710	$	(2,967)
Income tax expense										Income tax expense	$	29,557	$	18,987	$	21,260	$	33,926

The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realizability of deferred tax assets requires significant management judgment. In determining whether its deferred tax assets are ~~more-likely-than-not~~ realizable, the Company evaluated all available positive and negative evidence, and weighed the objective evidence and expected impact. The Company ~~assessed the need for a valuation allowance against certain state tax credit carryforwards added through the Progenics Acquisition. The Company~~ continues to retain ~~other~~ immaterial valuation allowances against the net deferred tax assets of certain of its foreign subsidiaries.

In connection with the Company’s acquisition of the medical imaging business from Bristol-Myers Squibb (“BMS”) in 2008, the Company recorded a liability for uncertain tax positions related to the acquired business and simultaneously entered into a tax indemnification agreement with BMS under which BMS agreed to indemnify the Company for any payments made to settle those uncertain tax positions with the state taxing authorities. Accordingly, a long-term receivable is recorded to account for the expected value to the Company of future indemnification payments to be paid on behalf of the Company by BMS, net of actual tax benefits received by the Company. The tax indemnification receivable is recorded within other long-term assets.

In accordance with the Company’s accounting policy, the change in the tax liabilities, penalties and interest associated with these obligations (net of any offsetting federal or state benefit) is recognized within income tax expense. As these reserves change, adjustments are included in income tax expense while the offsetting adjustment is included in other income. Assuming that the remaining receivable from BMS continues to be considered recoverable by the Company, there will be no effect on net income and no net cash outflows related to these liabilities.

During the third quarter of 2022, the Company entered into a settlement agreement with one state and accordingly reduced the amount of the uncertain tax positions by $2.2 million. The Company continues to accrue interest on the outstanding uncertain tax positions.

The Company finalized the accounting for the Progenics Acquisition for income taxes in the first quarter of 2021 resulting in a reduction of deferred tax assets, primarily related to state research credit carryforwards and an increase to goodwill of $2.6 million.

6. Inventory

Inventory consisted of the following:


(in thousands)	(in thousands)	September 30, 2022		December 31, 2021		(in thousands)	June 30, 2023		December 31, 2022
Raw materials	Raw materials	$	17,699	$	15,505	Raw materials	$	25,312	$	19,987
Work in process	Work in process	8,203		13,042		Work in process	11,403		8,234
Finished goods	Finished goods	8,891		6,582		Finished goods	15,086		7,254
Total inventory	Total inventory	$	34,793	$	35,129	Total inventory	$	51,801	$	35,475

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

Table of Contents

product is not probable, then inventory costs associated with such product are expensed during the period the costs are incurred. As of December 31, 2021, the Company had $6.1 million of such product costs included in inventories related to DEFINITY that had been manufactured through the Company’s in-house manufacturing capabilities. The Company ~~received regulatory approval for the manufacture of DEFINITY at its new in-house manufacturing facility during the first quarter of 2022 and~~ has no inventory pending regulatory approval as of ~~September~~June 30, ~~2022.~~2023.

~~Table of Contents~~

7. Property, Plant and Equipment, Net

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


(in thousands)	(in thousands)	September 30, 2022		December 31, 2021		(in thousands)	June 30, 2023		December 31, 2022
Land	Land	$	13,450	$	13,450	Land	$	9,480	$	13,450
Buildings	Buildings	72,497		73,559		Buildings	70,467		76,329
Machinery, equipment and fixtures	Machinery, equipment and fixtures	88,507		83,608		Machinery, equipment and fixtures	94,670		92,604
Computer software	Computer software	25,740		24,384		Computer software	26,373		25,864
Construction in progress	Construction in progress	17,918		10,686		Construction in progress	29,931		14,047
		218,112		205,687			230,921		222,294
Less: accumulated depreciation and amortization	Less: accumulated depreciation and amortization	(97,286)		(88,915)		Less: accumulated depreciation and amortization	(100,940)		(100,128)
Total property, plant and equipment, net	Total property, plant and equipment, net	$	120,826	$	116,772	Total property, plant and equipment, net	$	129,981	$	122,166

Depreciation and amortization expense related to property, plant and equipment, net, was ~~$3.9 million and $3.6~~$3.3 million for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$10.3~~$6.7 million and ~~$9.8~~$6.4 million for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, respectively.

During the three months ended June 30, 2023, as a result of a decline in expected future cash flows related to a certain asset group, the Company determined certain impairment triggers had occurred. The Company reviewed revised undiscounted cash flows that were estimated to be generated by the asset group as of June 30, 2023. Based on the undiscounted cash flow analysis, the Company determined that the asset group had net carrying values that exceeded their estimated undiscounted future cash flows. The Company then estimated the fair value of the asset group based on their discounted cash flows. The carrying value exceeded the fair value and ~~2021, respectively.~~as a result, the Company recorded a noncash impairment of $6.0 million for the six months ended June 30, 2023 in cost of goods sold in the condensed consolidated statements of operations.

Long-Lived Assets Held for Sale

During the first quarter of 2023, the Company committed to a plan to sell a portion of its land and buildings associated with its Billerica, Massachusetts campus. Effective March 16, 2023, the Company entered into a purchase and sale agreement (the “P&S”) with a prospective buyer. The assets were classified as held for sale and comprised entirely of property, plant and equipment, net. The Company determined that the fair value of the net assets being sold exceeded the carrying value as of June 30, 2023. The purchase price for the campus sale is $10.0 million in cash. The transaction is expected to close during the second half of 2023.

8. Accrued Expenses and Other Liabilities and Other Long-Term Liabilities

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

(in thousands) September 30,
2022 December 31,
2021
Compensation and benefits $ 26,205 $ 22,730
Freight, distribution and operations 35,619 16,157
Accrued rebates, discounts and chargebacks 13,247 10,977
Accrued professional fees 4,562 2,850
Short-term contingent liability (Note 4) 99,700 —
Other 11,144 5,354
Total accrued expenses and other liabilities $ 190,477 $ 58,068
Operating lease liabilities (Note 16) $ 15,354 $ 16,546
Long-term contingent liability (Note 4) 10,800 86,200
Other long-term liabilities 20,335 22,148
Total other long-term liabilities $ 46,489 $ 124,894

~~9. Sale of Puerto Rico Subsidiary~~

During the fourth quarter of 2020, the Company entered into a stock purchase agreement (the “SPA”) with one of its existing radiopharmacy customers to sell all the stock of its Puerto Rico radiopharmacy subsidiary. The assets were classified as held for sale and the Company determined that the fair value of the net assets being sold significantly exceeded the carrying value as of December 31, 2020. The transaction was consummated on January 29, 2021.

The purchase price for the stock sale was $18.0 million in cash, including a holdback amount of $1.8 million which the Company received during the first quarter of 2022; the purchase price also included a working capital adjustment. The SPA contains customary representations, warranties and covenants by each of the parties. Subject to certain limitations, the buyer will be indemnified for damages resulting from breaches or inaccuracies of the Company’s representations, warranties and covenants in the SPA.

The Company determined that this sale of certain net assets did not constitute a strategic shift that had a major effect on the Company’s operations or financial results. As a result, this transaction was not classified as discontinued operations in the Company’s accompanying condensed consolidated financial statements.

~~The following table summarizes the major classes of assets and liabilities sold as of January 29, 2021, the date of sale:~~


(in thousands)	June 30, 2023		December 31, 2022
Compensation and benefits	$	25,059	$	30,425
Freight, distribution and operations	60,206		49,067
Accrued rebates, discounts and chargebacks	11,087		13,399
Accrued professional fees	7,288		8,668

Other	11,158		25,525
Total accrued expenses and other liabilities	$	114,798	$	127,084

Operating lease liabilities (Note 16)	$	31,252	$	25,442
Long-term contingent liability (Note 4)	3,000		11,900
Other long-term liabilities	14,816		8,813
Total other long-term liabilities	$	49,068	$	46,155

1413

Table of Contents



~~(in thousands)~~	~~January 29, 2021~~
~~Current Assets:~~
~~Cash and cash equivalents~~	$	~~540~~
~~Accounts receivable, net~~	~~1,959~~
~~Inventory~~	~~530~~
~~Other current assets~~	65
~~Total current assets~~	~~3,094~~
~~Non-Current Assets:~~
~~Property, plant & equipment, net~~	~~780~~
~~Intangibles, net~~	96
~~Other long-term assets~~	~~774~~
~~Total assets held for sale~~	$	~~4,744~~

~~Current Liabilities:~~
~~Accounts payable~~	$	~~185~~
~~Accrued expense and other liabilities~~	~~369~~
~~Total current liabilities~~	~~554~~
~~Non-Current Liabilities:~~
~~Asset retirement obligations~~	~~306~~
~~Other long-term liabilities~~	~~588~~
~~Total liabilities held for sale~~	$	~~1,448~~

~~The sale resulted in a pre-tax book gain of $15.3 million, which was recorded within operating income in the condensed consolidated statements of operations for the six months ended June 30, 2021.~~

~~10.~~9. Asset Retirement Obligations

The Company considers its legal obligation to remediate its facilities upon a potential decommissioning of its radioactive-related operations as an asset retirement obligation. The Company has production facilities which manufacture and process radioactive materials at its North Billerica, Massachusetts and Somerset, New Jersey sites. As of ~~September~~June 30, ~~2022,~~2023, the liability is measured at the present value of the obligation expected to be incurred ofand is approximately ~~$25.5~~$25.1 million.

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


(in thousands)	Amount
Balance at January 1, ~~2022~~2023	$	~~20,833~~22,543
Accretion expense	~~1,296~~186
~~Accelerated costs~~	~~1,229~~
Balance at ~~September~~June 30, ~~2022~~2023	$	~~23,358~~22,729

In December 2021, the Company evaluated the accretion timeline of an asset group due to a revision in the planned period of use at the North Billerica site. As a result of the accelerated timeline, the Company determined the asset group’s present value exceeded the current value recorded as of December 31, 2021. Accordingly, the Company recorded a non-cash adjustment of $5.3 million in December 2021 to anticipate a revision in the end of useful life by the end of 2022.

The Company is required to provide the Massachusetts Department of Public Health and New Jersey Department of Environmental Protection financial assurance demonstrating the Company’s ability to fund the decommissioning of its North Billerica, Massachusetts and Somerset, New Jersey production facilities, respectively, upon ~~closure, although the Company has no current plans to close the facilities.~~closure. The Company has provided this financial assurance in the form of a $30.3 million surety bond.

~~Table of Contents~~

~~11.~~10. Intangibles, Net

Intangibles, net, consisted of the following:


		September 30, 2022									June 30, 2023
(in thousands)	(in thousands)	Useful Lives (in years)	Amortization Method	Cost		Accumulated Amortization		Net		(in thousands)	Useful Lives (in years)	Amortization Method	Cost		Accumulated Amortization		Net
Trademarks	Trademarks	15 - 25	Straight-Line	$	13,540	$	(11,924)	$	1,616	Trademarks	15 - 25	Straight-Line	$	13,540	$	(12,143)	$	1,397
Customer relationships	Customer relationships	15 - 25	Accelerated	96,682		(94,866)		1,816		Customer relationships	5 - 25	Accelerated	158,017		(104,827)		53,190
Currently marketed products	Currently marketed products	9 - 15	Straight-Line	275,700		(41,557)		234,143		Currently marketed products	9	Straight-Line	132,800		(30,899)		101,901
Licenses	Licenses	11 - 16	Straight-Line	85,800		(17,214)		68,586		Licenses	11 - 16	Straight-Line	85,800		(22,874)		62,926
Developed technology	Developed technology	9	Straight-Line	2,400		(610)		1,790		Developed technology	9	Straight-Line	2,400		(810)		1,590
IPR&D		N/A	N/A	15,640		—		15,640

Total	Total			$	489,762	$	(166,171)	$	323,591	Total			$	392,557	$	(171,553)	$	221,004

December 31, 2021
(in thousands) Useful Lives
(in years) Amortization Method Cost Accumulated Amortization Net
Trademarks 15 - 25 Straight-Line $ 13,540 $ (11,510) $ 2,030
Customer relationships 15 - 25 Accelerated 96,880 (94,630) 2,250
Currently marketed product 9 - 15 Straight-Line 275,700 (23,345) 252,355
Licenses 11 - 16 Straight-Line 85,800 (11,555) 74,245
Developed technology 9 Straight-Line 2,400 (410) 1,990
IPR&D N/A N/A 15,640 — 15,640
Total $ 489,960 $ (141,450) $ 348,510


	December 31, 2022
(in thousands)	Useful Lives (in years)	Amortization Method	Cost		Accumulated Amortization		Net
Trademarks	15 - 25	Straight-Line	$	13,540	$	(12,061)	$	1,479
Customer relationships	15 - 25	Accelerated	96,681		(95,009)		1,672
Currently marketed products	9 - 15	Straight-Line	275,700		(47,628)		228,072
Licenses	11 - 16	Straight-Line	85,800		(19,101)		66,699
Developed technology	9	Straight-Line	2,400		(677)		1,723
IPR&D	N/A	N/A	15,640		—		15,640
Total			$	489,761	$	(174,476)	$	315,285

The Company recorded amortization expense for its intangible assets of ~~$8.3~~$12.4 million and ~~$8.4~~$8.3 million for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively and ~~$24.9~~$23.5 million and ~~$19.1~~$16.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

In ~~May 2021, PyL (18F-DCFPyL) was approved by the FDA under the name PYLARIFY. Accordingly,~~March 2023, the Company ~~reclassified~~stopped all development activities in relation to a future indication associated with AZEDRA, which is classified as an in process research and development (“IPR&D”) intangible asset. The Company did not identify any alternative future uses or development programs for the asset, therefore the asset group, which consists of the IPR&D asset and a currently marketed product, was assessed for impairment as of March 31, 2023. The Company considered several factors including market share, price and competitive product offerings in evaluating the quantitative impact of the future cash flows. The Company

Table of Contents

concluded that the carrying amount exceeded the fair value of the asset group, which had no value. Accordingly, in the three months ended March 31, 2023, the Company recorded a non-cash impairment charge associated with the IPR&D asset of ~~$132.8~~$15.6 million ~~from IPR&D~~in research and development expenses and a non-cash impairment charge of $116.4 million in cost of goods sold in the condensed consolidated statements of operations.

In February 2023, the Company entered into an agreement with Cerveau to ~~currently marketed products and commenced amortization~~purchase all of the ~~asset.~~outstanding capital stock of Cerveau for approximately $35.3 million. In May 2023, upon successful completion of a technology transfer, the Company paid $10.0 million to the selling stockholders of Cerveau. This additional contingent payment was capitalized as part of the asset cost and increased the Company’s customer relationship intangible assets. See Note 19, “Acquisition of Assets” for further discussion of the Cerveau acquisition.

The below table summarizes the estimated aggregate amortization expense expected to be recognized on the above intangible assets:

(in thousands) Amount
Remainder of 2022 $ 8,310
2023 32,634
2024 32,563
2025 32,508
2026 32,497
2027 and thereafter 169,439
Total $ 307,951


(in thousands)	Amount
Remainder of 2023	$	24,118
2024	42,045
2025	30,991
2026	31,790
2027	26,263
2028 and thereafter	65,797
Total	$	221,004

~~Table of Contents~~

~~12.~~11. Long-Term Debt, Net, and Other Borrowings

As of ~~September~~June 30, ~~2022,~~2023, the Company’s maturities of principal obligations under its long-term debt and other borrowings are as follows:


(in thousands)	(in thousands)	Amount		(in thousands)	Amount
Remainder of 2022		$	3,750
2023		15,000
Remainder of 2023				Remainder of 2023	$	—
2024	2024	148,750		2024	—
2025				2025	—

2026				2026	—
2027				2027	575,000
Total principal outstanding	Total principal outstanding	167,500		Total principal outstanding	575,000
Unamortized debt discount		(348)

Unamortized debt issuance costs	Unamortized debt issuance costs	(301)		Unamortized debt issuance costs	(15,736)

Finance lease liabilities	Finance lease liabilities	578		Finance lease liabilities	355

Total	Total	167,429		Total	559,619
Less: current portion	Less: current portion	(15,372)		Less: current portion	(384)
Total long-term debt, net and other borrowings	Total long-term debt, net and other borrowings	$	152,057	Total long-term debt, net and other borrowings	$	559,235

~~At September 30,~~In December 2022, the ~~Company’s interest rate under the~~Company refinanced its existing credit facility, consisting of (i) a $200.0 million five-year ~~secured~~ term loan facility ~~which matures on June 30, 2024~~ (the “2019 Term Facility”) and (ii) a $200.0 million five-year revolving credit facility (the “2019 Revolving Facility” and, together with the 2019 Term Facility, the “2019 Facility”), with a new $100.0 million delayed draw term loan facility (the “2022 Term Facility” and, the loans thereunder, the ~~“2019~~“Term Loans”) and a new $350.0 million five-year revolving credit facility (the “2022 Revolving Facility” and, together with the 2022 Term ~~Loans”~~Facility, the “2022 Facility”) ~~was 4.6%~~.

~~On March 31, 2021,~~The Company used approximately $7.8 million of cash on hand to primarily repay the principal amount of the loans outstanding related to the 2019 Facility through the nine months ended September 30, 2022. In addition, in December 2022, the Company ~~voluntarily repaid~~used approximately $167.6 million of cash on hand to repay in full the ~~entire outstanding~~aggregate remaining principal ~~on its $50.0 million loan agreement (the “Royalty-Backed Loan”) with a fund managed by HealthCare Royalty Partners III, L.P. in the~~ amount of ~~$30.9 million, which included~~the loans outstanding under the 2019 Facility and to pay related interest, transaction fees and expenses.

The Company paid off the 2019 Term Facility using available cash and did not utilize another term loan to fund the payoff. While the 2022 Term Facility allowed for a ~~prepayment amount of $0.5 million, and terminated~~delayed draw term loan, the ~~agreement governing the Royalty-Backed Loan.~~loan was not drawn upon. The Company recorded a ~~gain~~loss on extinguishment of debt of ~~$0.9~~$0.6 million related to the write-off of an unamortized debt ~~premium offset~~issuance costs and debt discounts associated with

Table of Contents

the 2019 Term Facility. In addition, the Company incurred and capitalized $2.7 million of new deferred financing costs related to the refinancing.

2022 Term Facility

The Company expected to draw from the 2022 Term Facility only if a proposed offering of notes by the ~~prepayment amount.~~Company was not consummated. The commitment of the lenders to provide the 2022 Term Facility was terminated upon the completion of such note offering in December 2022. The 2022 Term Facility included a commitment fee equal to 0.20% per annum on the average daily unused amount of the 2022 Term Facility, which would have been payable commencing on January 16, 2023 and would have ended on the earliest of (i) the day the Term Loans under the 2022 Term Facility were funded, (ii) the last day of the delayed draw availability period and (iii) the day the commitments under the 2022 Term Facility were reduced to zero. The Company did not draw from the 2022 Term Facility and, as such, no interest is due under this instrument.

2022 Revolving Facility

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

The Revolving Loans bear interest, with pricing based from time to time at the Company’s election, at (i) the secured overnight financing rate as published by the Federal Reserve Bank of New York on its website plus an applicable margin that ranges from 1.50% to 2.50% based on the Company’s total net leverage ratio or (ii) the alternative base rate plus an applicable margin that ranges from 0.50% to 1.50% based on the Company’s total net leverage ratio. The 2022 Revolving Facility also includes an unused commitment fee at a rate ranging from 0.15% to 0.35% per annum based on the Company’s total net leverage ratio.

The Company is permitted to voluntarily prepay the Revolving Loans, in whole or in part, or reduce or terminate the Revolving Commitment, in each case, without premium or penalty. On any business day on which the total amount of outstanding Revolving Loans, Letters of Credit and Swingline Loans exceeds the total Revolving Commitment, the Company must prepay the Revolving Loans in an amount equal to such excess. The Company is not required to make mandatory prepayments under the 2022 Revolving Facility. As of June 30, 2023, there were no outstanding borrowings under the 2022 Revolving Facility.

The Company has the right to request an increase to the Revolving Commitment in an aggregate principal amount of up to the sum of $335.0 million or consolidated EBITDA for the four consecutive fiscal quarters most recently ended, plus additional amounts in certain circumstances (collectively, the “Incremental Cap”), minus certain incremental term loans made pursuant to specified incremental term loan commitments (“Incremental Term Loans”). The Company has the right to request Incremental Term Loans in an aggregate principal amount of up to the Incremental Cap less any incremental increases to the Revolving Commitment. Proceeds of Incremental Term Loans may be used for working capital and for other general corporate purposes and will bear interest at rates agreed between the Company and the lenders providing the Incremental Term Loans.

2022 Facility Covenants

The 2022 Facility contains a number of affirmative, negative and reporting covenants, as well as financial maintenance covenants pursuant to which the Company is required to be in quarterly compliance, measured on a trailing four quarter basis, with two financial covenants. The minimum interest coverage ratio, commencing with the fiscal quarter ended December 31, 2022, must be at least 3.00 to 1.00. The maximum total net leverage ratio permitted by the financial covenant is displayed in the table below:

2022 Credit Agreement


Period			Total Net Leverage Ratio
Q2 2023 to Q4 2023			4.00 to 1.00
Q1 2024 and thereafter			3.50 to 1.00

The 2022 Facility contains usual and customary restrictions on the ability of the Company and its subsidiaries to: (i) incur additional indebtedness (ii) create liens; (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; (iv) sell certain assets; (v) pay dividends on, repurchase or make distributions in respect of capital stock or make other restricted payments; (vi) make certain investments; (vii) repay subordinated indebtedness prior to stated maturity; and (viii) enter into certain transactions with its affiliates.

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

Table of Contents

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

Convertible Notes

On December 8, 2022, the Company issued $575.0 million in aggregate principal amount of 2.625% Convertible Senior Notes due 2027 (the “Notes”), which includes $75.0 million in aggregate principal amount of Notes sold pursuant to the full exercise of the initial purchasers’ option to purchase additional Notes. The Notes were issued under an indenture, dated as of December 8, 2022 (the “Indenture”), among the Company, LMI (the “Guarantor”), as Guarantor, and U.S. Bank Trust Company, National Association, as Trustee. The net proceeds from the issuance of the Notes were approximately $557.8 million after deducting the initial purchasers’ discounts and offering expenses payable by the Company.

The Notes are senior unsecured obligations of the Company. The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor. The Notes bear interest at a rate of 2.625% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2023, and will mature on December 15, 2027 unless earlier redeemed, repurchased or converted in accordance with their terms. The initial conversion rate for the Notes is 12.5291 shares of the Company’s common stock per $1,000 in principal amount of Notes (which is equivalent to an initial conversion price of approximately $79.81 per share of the Company’s common stock, representing an initial conversion premium of approximately 42.5% above the closing price of $56.01 per share of the Company’s common stock on December 5, 2022). In no event shall the conversion rate per $1,000 in principal amount of notes exceed 17.8539 shares of the Company’s common stock. Prior to the close of business on the business day immediately preceding September 15, 2027, the Notes may be converted at the option of the holders only upon occurrence of specified events and during certain periods, and thereafter until the close of business on the business day immediately preceding the maturity date, the Notes may be converted at any time. The Company will satisfy any conversion by paying cash up to the aggregate principal amount of the Notes to be converted and by paying or delivering, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted. The Company may redeem for cash all or any portion of the Notes, at its option, on or after December 22, 2025 if the closing sale price per share of the Company’s common stock exceeds 130% of the conversion price of the Notes for a specified period of time. The redemption price will be equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The Company evaluated the Notes upon completion of the sale and concluded on the following features:

•Conversion Feature: The Company determined that the conversion feature qualifies for the classification of equity. As a result, the conversion feature should not be bifurcated as a derivative instrument and the Notes were accounted for as a single liability.

•Redemption Features: The redemption features were reviewed within the Notes and the Company determined that the redemption features are closely related to the Notes and as such should not be separately accounted for as a bifurcated derivative instrument.

•Additional Interest Features: The Notes may result in additional interest if the Company fails to timely file any document that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The Company will pay additional interest on the notes at a rate equal to 0.25% to 0.50% per annum based on the principal amount of notes outstanding for each day the Company failure to file has occurred or the notes are not otherwise freely tradable. Further, if the notes are assigned a restricted CUSIP number or the notes are not otherwise freely tradable pursuant to Rule 144 under the Securities Act by holders other than our affiliates or holders that were our affiliates at any time during the three months immediately preceding as of the 385th day after the last date of original issuance of the notes offered hereby, the Company will pay additional interest on the notes at a rate equal to (i) 0.25% to 0.50% per annum based on the principal amount of notes outstanding for each day until the restrictive legend has been removed from the notes, the notes are assigned an unrestricted CUSIP and the notes are freely tradable. The Company concluded that the interest feature is unrelated to the credit risk and should be bifurcated from the Notes, however, the Company assessed the probabilities of triggering events occurring under these features and does not expect to trigger the aforementioned events. These events will continue to be monitored to determine whether the interest feature will be bifurcated if it has value.

As of June 30, 2023, the carrying value of the Notes was $575.0 million and the fair value of the liability was $575.0 million. The Company recorded interest expense of approximately $3.9 million and $7.8 million related to the Notes for the three and six months ended June 30, 2023, respectively. There were no conversions of Notes during the six months ended June 30, 2023.

~~13.~~

Table of Contents

12. Derivative Instruments

The Company ~~uses~~has used, but does not currently use, interest rate swaps to reduce the variability in cash flows associated with ~~a portion~~portions of the Company’s ~~forecasted~~ interest payments on ~~its~~ variable rate debt. In March 2020, the Company entered into interest rate swap contracts to fix the LIBOR rate on a notional amount of $100.0 million through May 31, 2024. The average fixed LIBOR rate on the interest rate swaps iswas approximately 0.82%. This agreement ~~involves~~involved the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. The interest rate swaps were designated as cash flow hedges. In accordance with hedge accounting, the interest rate swaps ~~are~~were recorded on the Company’s ~~condensed~~ consolidated balance sheets at fair value, and changes in the fair value of the swap agreements ~~are~~were recorded to other comprehensive loss and reclassified to interest expense in the period during which the hedged transaction affected earnings or it will become probable that the forecasted transaction would not occur. ~~At September 30,~~

On December 2, 2022, the Company voluntarily terminated the interest rate swap contracts in connection with the refinancing of debt. Upon termination, the Company received approximately $5.6 million in cash and the remaining balance of approximately $5.5 million in accumulated other comprehensive income ~~included $3.5 million of pre-tax deferred gains that are expected~~related to bethe interest rate swap contracts were reclassified ~~to earnings during the next 12 months.~~

~~The following table presents the location and fair value amounts of derivative instruments reported in the condensed consolidated balance sheets:~~

(in thousands) September 30, 2022 December 31, 2021
Derivatives type Classification
Assets:
Interest rate swap Other long-term assets $ 5,660 $ 357
into earnings.

~~14.~~13. Accumulated Other Comprehensive (Loss) Income ~~(Loss)~~

The components of accumulated other comprehensive (loss) income, ~~(loss),~~ net of tax of ~~$1.5 million~~zero and ~~$0.2~~$1.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, consisted of the following:

~~Table of Contents~~


(in thousands)	(in thousands)	Foreign currency translation		Unrealized loss on cash flow hedges		Accumulated other comprehensive income (loss)		(in thousands)	Foreign currency translation		Unrealized loss on cash flow hedges		Accumulated other comprehensive income (loss)
Balance at January 1, 2023								Balance at January 1, 2023	$	(1,259)	$	—	$	(1,259)
Other comprehensive loss before reclassifications								Other comprehensive loss before reclassifications	307		—		307
Amounts reclassified to earnings								Amounts reclassified to earnings	—		—		—
Balance at June 30, 2023								Balance at June 30, 2023	$	(952)	$	—	$	(952)

Balance at January 1, 2022	Balance at January 1, 2022	$	(754)	$	269	$	(485)	Balance at January 1, 2022	$	(754)	$	269	$	(485)
Other comprehensive (loss) income before reclassifications	Other comprehensive (loss) income before reclassifications	(463)		4,112		3,649		Other comprehensive (loss) income before reclassifications	(84)		2,710		2,626
Amounts reclassified to earnings	Amounts reclassified to earnings	—		(170)		(170)		Amounts reclassified to earnings	—		183		183
Balance at September 30, 2022		$	(1,217)	$	4,211	$	2,994

Balance at January 1, 2021		$	(630)	$	(1,418)	$	(2,048)
Other comprehensive income before reclassifications		55		312		367
Amounts reclassified to earnings		—		539		539
Balance at September 30, 2021		$	(575)	$	(567)	$	(1,142)
Balance at June 30, 2022								Balance at June 30, 2022	$	(838)	$	3,162	$	2,324

~~15.~~14. Stock-Based Compensation

The following table presents stock-based compensation expense recognized in the Company’s accompanying condensed consolidated statements of operations:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Cost of goods sold	Cost of goods sold	$	1,268	$	144	$	3,263	$	1,672	Cost of goods sold	$	2,231	$	1,083	$	3,873	$	1,995
Sales and marketing	Sales and marketing	1,745		684		4,433		1,726		Sales and marketing	1,959		1,675		4,221		2,688
General and administrative	General and administrative	3,991		2,330		10,777		6,641		General and administrative	6,670		3,784		11,072		6,786
Research and development	Research and development	1,099		709		2,665		1,733		Research and development	1,832		870		3,193		1,566
Total stock-based compensation expense	Total stock-based compensation expense	$	8,103	$	3,867	$	21,138	$	11,772	Total stock-based compensation expense	$	12,692	$	7,412	$	22,359	$	13,035

~~16.~~

Table of Contents

15. Leases

Operating and finance lease assets and liabilities are as follows:


(in thousands)	(in thousands)	Classification	September 30, 2022		December 31, 2021		(in thousands)	Classification	June 30, 2023		December 31, 2022
Assets	Assets						Assets
Operating	Operating	Other long-term assets	$	8,293	$	8,788	Operating	Other long-term assets	$	24,205	$	19,033
Finance	Finance	Property, plant and equipment, net	679		556		Finance	Property, plant and equipment, net	400		582
Total leased assets	Total leased assets		$	8,972	$	9,344	Total leased assets		$	24,605	$	19,615
Liabilities	Liabilities						Liabilities
Current	Current						Current
Operating	Operating	Accrued expenses and other liabilities	$	1,677	$	1,599	Operating	Accrued expenses and other liabilities	$	1,601	$	2,177
Finance	Finance	Current portion of long-term debt and other borrowings	372		392		Finance	Current portion of long-term debt and other borrowings	384		354
Noncurrent	Noncurrent						Noncurrent
Operating	Operating	Other long-term liabilities	15,354		16,546		Operating	Other long-term liabilities	31,252		25,442
Finance	Finance	Long-term debt, net and other borrowings	206		299		Finance	Long-term debt, net and other borrowings	(29)		231
Total leased liabilities	Total leased liabilities		$	17,609	$	18,836	Total leased liabilities		$	33,208	$	28,204

~~The~~On May 4, 2023, the Company entered into ~~an agreement in February 2022~~a modification to the operating lease ~~additional~~for office space in Bedford, ~~Massachusetts.~~Massachusetts, (the “Existing Premises”) that was executed in February 2022. The ~~facility is~~lease commenced and was recorded in December 2022 for $11.0 million and the initial term was set to expire in June 2031. The lease modification includes a lease of additional office and laboratory space at the Bedford location (the “Additional Premises”) for a term of 15 years and 4 months and extends the term of the lease for the Existing Premises to be coterminous with the term of the lease for the Additional Premises. As a result of the extended term for the Existing Premises, the Company recorded an additional right-of-use asset and liability of $6.0 million. The modification also contains a provision to convert the rent schedule of the Existing Premises from gross to triple net in 2024, which may result in an additional adjustment to the right of use asset and liability. The Additional Premises are currently being renovated and the associated right-of-use asset and liability will be recorded once renovations are substantially complete. The lease payments for the Additional Premises are currently expected to commence in the ~~fourth quarter~~second half of ~~2022~~2024 when renovation of the ~~facility~~Additional Premises is expected to be completed.

~~Table of Contents~~

~~17.~~16. Net Income ~~(Loss)~~ Per Common Share

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2022		2021		2022		2021		(in thousands, except per share amounts)	2023		2022		2023		2022
Net income (loss)		$	61,232	$	(13,415)	$	147,252	$	(31,064)
Net income										Net income	$	94,131	$	43,058	$	91,324	$	86,020

Basic weighted-average common shares outstanding	Basic weighted-average common shares outstanding	68,756		67,623		68,482		67,409		Basic weighted-average common shares outstanding	68,371		68,674		68,062		68,343
Effect of dilutive stock options	Effect of dilutive stock options	455		—		452		—		Effect of dilutive stock options	399		443		391		441
Effect of dilutive restricted stock	Effect of dilutive restricted stock	1,864		—		1,735		—		Effect of dilutive restricted stock	1,447		1,679		1,504		1,628

Effect of convertible debt instrument										Effect of convertible debt instrument	797		—		—		—
Diluted weighted-average common shares outstanding	Diluted weighted-average common shares outstanding	71,075		67,623		70,669		67,409		Diluted weighted-average common shares outstanding	71,014		70,796		69,957		70,412

Basic income (loss) per common share		$	0.89	$	(0.20)	$	2.15	$	(0.46)
Diluted income (loss) per common share		$	0.86	$	(0.20)	$	2.08	$	(0.46)
Basic income per common share										Basic income per common share	$	1.38	$	0.63	$	1.34	$	1.26
Diluted income per common share										Diluted income per common share	$	1.33	$	0.61	$	1.31	$	1.22

Antidilutive securities excluded from diluted net income (loss) per common share		52		3,051		226		3,051
Antidilutive securities excluded from diluted net income per common share										Antidilutive securities excluded from diluted net income per common share	349		268		389		196

Impact of the Notes

The Company considered whether the Notes are participating securities through the two-class method. The Company determined that if a cash dividend is paid that is greater than the then stock price, the holder of Notes will receive cash on an if-converted basis.

Table of Contents

While this feature is considered to be a participating right; basic earnings per share is only impacted if the Company’s earnings exceeds the current share price, regardless of whether such dividend is declared. During the six months ended June 30, 2023 and 2022, no such dividend was declared. In addition, the Company is required to settle the principal amount of the Notes in cash upon conversion, and therefore, the Company uses the if-converted method for calculating any potential dilutive effect of the conversion option on diluted net income per share, if applicable, unless the application of the two-class method is dilutive. The conversion option will have a dilutive impact on net income per share of Common Stock when the average price per share of the Company's common stock for a given period exceeds the conversion price of the Notes of $79.81 per share. During the three months ended June 30, 2023, the average price per share of the Company’s Common Stock exceeded the conversion price of the Notes. During the six months ended June 30, 2023, the average price per share of the Company's Common Stock was below the conversion price of the Notes.

~~18.~~17. Other Income

Other income consisted of the following:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Foreign currency losses		$	145	$	127	$	189	$	156
Tax indemnification loss, net		1,460		3,823		668		3,092
Foreign currency (gains) losses										Foreign currency (gains) losses	$	(224)	$	125	$	22	$	44
Tax indemnification income, net										Tax indemnification income, net	(232)		(396)		(328)		(792)
Interest income	Interest income	(504)		(11)		(551)		(39)		Interest income	(4,027)		(39)		(7,550)		(47)

Other	Other	—		1		—		—		Other	1		—		143		—
Total other income	Total other income	$	1,101	$	3,940	$	306	$	3,209	Total other income	$	(4,482)	$	(310)	$	(7,713)	$	(795)

~~19.~~18. Commitments and Contingencies

Legal Proceedings

From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. In addition, the Company has in the past been, and may in the future be, subject to investigations by governmental and regulatory authorities, which expose it to greater risks associated with litigation, regulatory or other proceedings, as a result of which the Company could be required to pay significant fines or penalties. The costs and outcome of litigation, regulatory or other proceedings cannot be predicted with certainty, and some lawsuits, claims, actions or proceedings may be disposed of unfavorably to the Company and could have a material adverse effect on the Company’s results of operations or financial condition. In addition, intellectual property disputes often have a risk of injunctive relief which, if imposed against the Company, could materially and adversely affect its financial condition or results of operations. If a matter is both probable to result in material liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible material loss or range of loss. If such loss is not probable or cannot be reasonably estimated, a liability is not recorded in its condensed consolidated financial statements.

As of ~~September~~June 30, ~~2022,~~2023, the Company did not have any material ongoing litigation to which the Company was a party.

Table of Contents

19. Acquisition of Assets

On February 6, 2023, the Company acquired Cerveau. Cerveau’s primary asset is MK-6240, a second-generation F 18-labeled positron emission tomography (“PET”) imaging agent that targets Tau tangles in Alzheimer’s disease. The Company determined that upon review of the Cerveau acquisition, the transaction did not meet the definition of a business combination and is therefore treated as an asset acquisition.

In February 2023, the Company made an upfront payment of approximately $35.3 million to the stockholders of Cerveau (the “Selling Stockholders”) and paid an additional $10.0 million in May 2023 upon the successful completion of a technology transfer. The Company could pay up to an additional $51.0 million in milestone payments upon achievement of specified U.S. regulatory milestones related to MK-6240. The Selling Stockholders are also eligible to receive up to $1.2 billion in sales milestone payments upon the achievement of specified annual commercial sales thresholds of MK-6240 in the event the Company pursues commercialization, as well as up to $13.5 million in research revenue milestones upon achievement of specified annual research revenue thresholds. Additionally, the Company will pay to the Selling Stockholders up to double-digit royalty payments for research revenue and commercial sales. Research revenue is derived from existing partnerships with pharmaceutical companies that use MK-6240 in clinical trials and includes milestone and dose-related payments. The purchase agreement pursuant to which the Company purchased Cerveau specifies, among other things, that certain members of the Selling Stockholders will also provide transition and clinical development services for a prescribed time following the closing of the transaction.

In December 2022, the Company made upfront payments of $260.0 million to POINT Biopharma Global Inc. (“POINT”) as a part of an asset acquisition with the potential for additional milestone payments of approximately $1.8 billion for the two licensed assets based on U.S. Food and Drug Administration (“FDA”) approval and net sales and commercial milestones.

Under the terms of the license agreement between Lantheus Two and POINT for PNT2002, Lantheus Two paid POINT an upfront cash payment of $250.0 million, and could pay up to an additional $281.0 million in milestone payments upon the achievement of specified U.S. and ex-U.S. regulatory milestones related to PNT2002. POINT is also eligible to receive up to $1.3 billion in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2002.

Under the terms of the license agreement between Lantheus Three and POINT for PNT2003, Lantheus Three paid POINT an upfront cash payment of $10.0 million, and could pay up to an additional $34.5 million in milestone payments upon the achievement of specified U.S. and ex-U.S. regulatory milestones related to PNT2003. POINT is also eligible to receive up to $275.0 million in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2003.

Additionally, the Company will pay POINT royalties on net sales, beyond certain financial thresholds and subject to conditions, of 20% for PNT2002 and 15% for PNT2003. Costs of IPR&D projects acquired as part of an asset acquisition that have no alternative future use are expensed when incurred, and therefore, a charge of $260.0 million was recognized in research and development expenses during the year ended December 31, 2022.

20. Segment Information

In the first quarter of fiscal year 2021, the Company completed the evaluation of its operating and reporting structure, including the impact on the Company’s business of the acquisition of Progenics described in Note 1, and the sale of the Puerto Rico subsidiary in the first quarter of fiscal year 2021, which resulted in a change in operating and reportable segments. The Company ~~now~~ operates as one business segment: the development, manufacture and sale of innovative imaging diagnostics, radiotherapeutics, and artificial intelligence solutions designed to enable clinicians to Find, Fight and Follow disease to deliver better patient outcomes. This conclusion reflects the Company’s focus on the performance of the business on a consolidated worldwide basis. The results of this operating segment are regularly reviewed by the Company’s chief operating decision maker, the ~~President and~~ Chief Executive

~~Table of Contents~~

Officer. The Company’s chief operating decision maker does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results.

21. Subsequent Events

On August 2, 2023, the Company entered into an agreement to sell the right to all of its RELISTOR net sales royalties under its license agreement with Bausch, relating to royalties payable in respect of the second quarter of 2023 and subsequent quarters. The Company received an initial payment of approximately $98.0 million in connection with the sale and has the right to receive an additional payment from the buyer of $5.0 million if worldwide net sales of RELISTOR in 2025 exceed a specified threshold. Proceeds from this transaction will be used in the Company’s core businesses and product pipeline.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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”). 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,” “predicts,” “seeks,” “should,” “target,” “will,” “would” and similar expressions, or by express or implied discussions regarding potential marketing approvals or new indications for the collaborations, products candidates or approved products described in this Quarterly Report on Form 10-Q, or regarding potential future revenues from such collaborations, product candidates and products. Examples of forward-looking statements include statements we make relating to our outlook and expectations including, without limitation, in connection with: (i) our ability to continue to grow PYLARIFY as a commercial product, including (A) our ability to obtain FDA approval for additional positron emission tomography (“PET”) manufacturing facilities (“PMFs”) to manufacture PYLARIFY, (B) the ability of PMFs to manufacture PYLARIFY to meet product demand, (C) our ability to sell PYLARIFY to customers, (D) our ability to obtain and maintain adequate coding, coverage and payment for PYLARIFY, and (E) our ability to establish PYLARIFY as a leading PSMA PET imaging agent in an increasingly competitive environment in which other PSMA PET imaging agents have been approved and additional ones are in development; (ii) continued market expansion and penetration for our established commercial products, particularly PYLARIFY and DEFINITY, in ~~the face of segment competition~~a competitive environment in which other imaging agents have been approved and ~~potential generic competition, including as a result of patent~~are being commercialized, and ~~regulatory exclusivity expirations~~our ability to clinically and ~~challenges; (iii) the global Molybdenum-99 (“Mo-99”) supply; (iv)~~commercially differentiate our products from other products; (ii) our ability to have third ~~party manufacturers~~parties manufacture our products and our ability to manufacture DEFINITY in our in-house manufacturing facility; ~~(v) our ability to successfully launch PYLARIFY AI as a commercial product; (vi) the continuing impact of~~(iii) the global ~~COVID-19 pandemic on our business, supply chain, financial condition~~availability of Molybdenum-99 (“Mo-99”) and ~~prospects; (vii)~~other raw material and key components; (iv) the efforts and timing for clinical development, ~~and~~ regulatory approval and successful commercialization of our product candidates and new clinical applications and territories for our products, in each case, that we ~~may develop, including 1095 and NM-01,~~ or ~~that~~ our strategic partners may undertake; (v) our strategies, future prospects, and our projected growth, including revenue related to our collaboration agreements with POINT Biopharma Global Inc. (vi) our ability to successfully continue existing clinical development partnerships using MK-6240 as a research tool and to further develop ~~including piflufolastat F 18 in Europe~~ and ~~flurpiridaz fluorine-18 (“F 18”); (viii)~~commercialize such research tool; and (vii) our ability to identify and acquire or in-license additional diagnostic and therapeutic product opportunities in oncology and other strategic areas; and (ix) the potential reclassification by the FDA of certain of our products and product candidates from drugs to devices with the expense, complexity and potentially more limited competitive protection such reclassification could cause.areas. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, such statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. 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. 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, ~~2021,~~2022, 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. 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. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Available Information

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 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. 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.

~~Table of Contents~~

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, ~~2021,~~2022, and in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q.

Overview

Table of Contents

Our Business

WeWith more than 65 years of experience in delivering life-changing science, we are ~~an established leader and fully integrated provider~~ committed to ~~improving~~delivering better patient outcomes and improving lives through diagnostics, radiotherapeutics and artificial intelligence solutions that enable clinicians to Find, Fight and Follow disease. We classify our products in three categories: ~~precision~~Radiopharmaceutical Oncology, Precision Diagnostics, and Strategic Partnerships and Other Revenue. Our Radiopharmaceutical Oncology diagnostics ~~radiopharmaceutical oncology,~~ and ~~strategic partnerships and other revenue. Our leading precision diagnostic products assist~~therapeutics help healthcare professionals (“HCPs”) ~~Find and Follow diseases in non-oncologic conditions. Our radiopharmaceutical oncology diagnostics and therapeutics help HCPs~~ Find, Fight and Follow cancer. Our ~~strategic partnerships~~leading Precision Diagnostic products assist HCPs to Find and ~~other revenue category focuses~~Follow diseases, with a focus in cardiology. Our Strategic Partnerships focus on ~~facilitating~~enabling precision medicine through the use of biomarkers, ~~artificial intelligence~~digital solutions and ~~radiotherapeutic~~pharma services platforms, and ~~also~~ includes ~~royalty revenue from~~ our license of ~~RELISTOR.~~RELISTOR to Bausch Health Companies, Inc. (“Bausch”).

Our commercial products are used by oncologists, urologists, nuclear medicine physicians, cardiologists, ~~urologists, oncologists,~~sonographers, technologists, radiologists, and internal medicine physicians ~~nuclear medicine physicians, radiologists, sonographers and technologists~~ working in a variety of clinical settings. We believe that our diagnostic products provide improved ~~diagnostic information~~clinical insight that enables HCPs to better detect and characterize, or rule out, disease, with the potential to achieve better patient outcomes, reduce patient risk and limit overall costs ~~for payors and~~ throughout the healthcare system.

We produce and market our products throughout the ~~United States (the “U.S.”)~~U.S., selling primarily to ~~clinics, group practices,~~ hospitals, independent diagnostic testing facilities, government facilities, integrated delivery networks, radiopharmacies, clinics, and ~~radiopharmacies.~~group practices. We sell our products outside the U.S. through a combination of direct distribution in Canada and third party distribution relationships in Europe, Canada, Australia, Asia-Pacific, Central America and South America.

Our ~~headquarters~~executive offices are located in ~~North Billerica,~~Bedford, Massachusetts, with additional offices in North Billerica, Massachusetts; Somerset, New Jersey; Montreal, Canada and Lund, Sweden.

Recent Developments

Exclusive License for PNT2002 and PNT2003

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

With respect to PNT2002, POINT is generally responsible for funding and development activities required for FDA approval, including generating all clinical and nonclinical data, analysis and other information, and we are responsible for preparing for and seeking regulatory approval, as well as performing and funding all future development and commercialization following such approval. POINT will be responsible for all manufacturing of PNT2002, subject to certain exceptions described in the PNT2002 License Agreement.

In April 2023, we announced with POINT that the FDA had granted Fast Track designation for PNT2002. Fast Track is a process designed to facilitate the development and expedite the review of drugs to treat serious conditions and address unmet needs.

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

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. Cerveau’s asset is MK-6240, a second-generation F 18-labeled PET imaging agent that targets Tau tangles in Alzheimer’s disease. Under the terms of the agreement, we paid the Selling Stockholders an upfront payment of $35.0 million in February 2023 and paid an additional $10.0 million in May 2023 upon the successful completion of a technology transfer. 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. Research revenue is derived from existing partnerships with pharmaceutical companies that use MK-6240 in clinical trials and includes milestone and dose-related payments. Pursuant to the terms of the stock purchase agreement for Cerveau, certain members of the Selling Stockholders will also provide transition and clinical development services for a prescribed time following the closing of the transaction.

Table of Contents

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

Key Factors Affecting Our Results

Our business and financial performance have been, and continue to be, ~~affected~~impacted by the following:

Continued Growth of PYLARIFY ~~Ongoing Commercial Launch and Revenue Growth~~

~~On May 27, 2021, we announced that the FDA had approved~~ PYLARIFY, an F 18-labeled PET imaging agent targeting prostate-specific membrane antigen (“PSMA”)~~. PYLARIFY is a product~~, was approved by the FDA in ~~our radiopharmaceutical oncology product category. We~~May 2021 and commercially launched ~~PYLARIFY~~ in the U.S. in June 2021.

PYLARIFY is a radioactive diagnostic agent indicated for PET imaging of PSMA-positive lesions in men with prostate cancer with suspected metastasis who are candidates for initial definitive therapy and with suspected recurrence based on elevated serum prostate-specific antigen (“PSA”) levels. PYLARIFY works by binding to PSMA, a protein that is overexpressed on the surface of more than 90% of primary and metastatic prostate cancer cells. PYLARIFY works with PET/computed tomography (“CT”) technology to produce a combined PET/CT scan that enables the reader of the PET/CT scan to detect and locate the disease.

According to the American Cancer Society, prostate cancer is the second most common cancer in American men -- one in eight American men will be diagnosed with prostate cancer in their lifetimes and over 3.0 million American men are living with prostate cancer today. Based on estimates from third party sources regarding the incidence of prostate cancer in men in the U.S., we believe the market potential for all PSMA PET imaging agents in the U.S. could be up to 250,000 annual scans, comprised of 90,000 scans for patients with intermediate unfavorable or high/very high risk of suspected metastases of prostate cancer; 130,000 scans for patients with suspected recurrence of prostate cancer; and 30,000 scans for patients with metastatic castration-resistant prostate cancer (“mCRPC”) who may be under consideration for PSMA-targeted therapy for the treatment of adult patients with PSMA-positive mCRPC who have already been treated with other anticancer treatments (androgen receptor pathway inhibition and taxane-based chemotherapy). However, because we are still early in the commercialization of PYLARIFY, we can give no assurance as to how clinical practice may evolve or our ultimate market penetration.

In March 2022, we announced a strategic collaboration with Novartis to include PYLARIFY in prostate cancer trials with ~~Pluvicto,~~PLUVICTO, Novartis’ ~~recently approved~~ PSMA-targeted therapeutic. ~~As part of the~~In addition, in 2022, we entered into an agreement with ~~Novartis, we will supply~~Curium to add PYLARIFY

~~Table~~ to its PSMA-targeted therapeutic clinical trial referred to by Curium as ECLIPSE. Both of ~~Contents~~

these collaborations, as well as other 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 ~~selection of patients with prostate cancer for the trials, and Novartis will provide all PYLARIFY-related clinical imaging data to us. In addition,~~year ended December 31, 2022.

Also, during 2022, the National Comprehensive Cancer Center updated its guidelines and the Society for Nuclear Medicine and Molecular Imaging updated its appropriate use criteria, ~~earlier this year,~~ both noting that PSMA PET imaging agents, including PYLARIFY, can be used for patient selection for PSMA-targeted radioligand therapy.

~~Upon commercial launch in June~~During 2021, ~~PYLARIFY was immediately available in select parts of the U.S. Over the course of the remainder of 2021 and into~~ 2022 PYLARIFY availability expanded into additional regions and is now broadly available nationwide. We continue to expand the U.S. footprint for PYLARIFY with new PMFs, increased capacity at existing PMFs and added redundancy in key geographic areas, while broadening our customer base and market access coverage to serve our customers and the ~~U.S. prostate cancer community.~~

~~The commercial launch~~first half of ~~PYLARIFY has been complex and expensive. Throughout 2021,~~2023, we hired additional employees to assist us with the commercialization of PYLARIFY, including in ~~sales, marketing, reimbursement, quality~~Sales, Marketing, Reimbursement, Quality and medical affairs. To manufacture PYLARIFY, we assembled and qualified a nationwide network of PMFs with radioisotope-producing cyclotrons that make F 18, which has a 110-minute half-life, so PYLARIFY is manufactured and distributed rapidly to end-users. After being made on a cyclotron at a PMF, the F 18 is then combined with certain chemical ingredients in specially designed chemistry synthesis boxes to manufacture PYLARIFY. The finished PYLARIFY is then quality control tested and transferred to a radiopharmacist who prepares and dispenses patient-specific doses of the final product. Because each of the PMFs manufacturing these products is deemed by the FDA to be a separate manufacturing site, each has to be separately approved by the FDA. Although PYLARIFY is now broadly available nationwide and we continue to seek qualification for additional PMFs, we can give no assurance that the FDA will continue to approve PMFs in accordance with our planned roll-out schedule. If FDA approval of manufacturing sites is delayed or withdrawn, our future business, results of operations, financial condition and cash flows could be adversely affected.Medical Affairs.

In addition to ~~the~~our network of ~~PMFs,~~PET manufacturing facilities (“PMFs”), we ~~have also been working~~partnered with academic medical centers in the U.S. that have radioisotope-producing cyclotrons ~~and which~~who have expressed an interest in manufacturing PYLARIFY. For this initiative, we enter into a fee-for-service arrangement under which the academic medical center’s PMF manufactures and supplies batches of PYLARIFY, and its radiopharmacy prepares patient-ready unit doses, in each case for and on behalf of us. We then sell those unit doses to the academic medical center’s hospitals and clinics, and in some instances, to additional customers in the academic medical center’s geographic area, in each case, under separate purchase agreements. The academic medical center’s PMF’s ability to manufacture and supply batches of PYLARIFY is subject to FDA approval, and we can give no assurance that the FDA will approve such PMFs in accordance with our planned roll-out schedule.

Our commercial launch ~~also~~ required obtaining necessary market access which included, but was not limited to, adequate coding, coverage and payment for PYLARIFY, including ~~not only~~ coverage from Medicare, Medicaid and other government payors, as well as private ~~payors, but also appropriate payment levels, to adequately cover our customers’ costs of using PYLARIFY in PSMA PET/CT imaging procedures.~~payors. We received notification that our Healthcare Procedure Coding System (“HCPCS”) code, which enables streamlined billing, went into effect as of January 1, 2022. In addition, effective January 1, 2022, the Centers for Medicare and Medicaid Services (“CMS”) granted Transitional Pass-Through Payment Status (“TPT Status”) in the hospital outpatient setting ~~(“TPT Status”)~~ for PYLARIFY, enabling traditional Medicare to provide an incremental payment for PET/CT scans performed with PYLARIFY in that setting. TPT Status for PYLARIFY ~~is expected to~~could expire on December 31, 2024. After TPT Status expires, under current Medicare rules, PYLARIFY, similar to other diagnostic radiopharmaceuticals, would not be separately reimbursed in the hospital outpatient setting, but rather would be included as part of the facility fee a hospital otherwise receives for a PET/CT imaging procedure, and the facility fee does not always adequately cover the total cost of the procedure. We can give no assurance that any CMS reimbursement in the hospital outpatient setting that follows the expiration of TPT Status will be adequate to cover the cost of a PYLARIFY PET/CT imaging procedure.

The successful growth of PYLARIFY is ~~also~~ dependent on our ability to ~~establish~~sustain PYLARIFY as athe leading PSMA PET imaging agent in an increasingly competitive ~~environment in which other PSMA PET imaging agents have been approved and additional ones are in development.~~marketplace. PYLARIFY’s competition ~~is primarily~~includes two commercially available gallium-68-based PSMA imaging agents, ~~as well as~~a recently approved fluorine-18-based PSMA imaging agent, and other non-PSMA-based imaging ~~agents. We also could face potential competition from an F 18 PSMA PET imaging agent currently under review by the FDA. To the extent we lose market share~~agents, commonly referred to existing or future competitors, such loss of market share could have an adverse impact on our future business, results of operations, financial condition and cash flows. Moreover, because we are still early in the commercialization of PYLARIFY, we can give no assurance as ~~to how clinical practice may evolve or our ultimate market penetration or market share.~~

We actively pursue patents in connection with PYLARIFY, both in the U.S. and internationally. In the U.S. for PYLARIFY, we have four Orange Book-listed patents, including composition of matter patents, the last of which expires in 2037. Outside of the U.S., we have and are currently pursuing additional PYLARIFY patents to obtain similar patent protection as in the U.S.conventional imaging.

In connection with the acquisition of Progenics ~~Acquisition~~ in June 2020, we issued CVRs tied to the ~~Progenics stockholders at the time the transaction was consummated CVRs entitling them~~financial performance of PYLARIFY. Each CVR entitled its holder to receive a pro rata share of aggregate cash payments equal to 40% of U.S. net sales

~~Table of Contents~~

generated by PYLARIFY in 2022 and 2023 in excess of $100.0 million and $150.0 million, ~~respectively. In no event will our~~respectively, but not to exceed, in the aggregate, ~~payment obligations in respect of the CVRs, together with any other non-stock consideration treated as paid in connection with the Progenics Acquisition, exceed~~ 19.9% of the total consideration we paid in the ~~Progenics Acquisition.~~acquisition of Progenics. Based on our 2022 PYLARIFY net sales, we ~~believe~~determined that ~~all~~the aggregate payment obligation under the CVRs was $99.6 million, which was the maximum amount payable under the CVRs. We paid $99.6 million to the CVR holders during May 2023 in full satisfaction of our ~~aggregate payment~~ obligations under the ~~CVRs (which we currently estimate will be approximately $99.7 million) will become payable in the first half of 2023.~~CVRs.

PYLARIFY AI ~~Clearance and~~ Use

During 2021, we ~~also~~ announced that ~~our subsidiary,~~ EXINI was granted 510(k) clearance by the FDA in the U.S. and received European Conformity Marking (“CE ~~marking~~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.

~~Anticipated~~ Continued Growth of DEFINITY ~~and Expansion~~

Table of ~~Our Ultrasound Microbubble Franchise~~Contents

We believe the market opportunity for our microbubble ultrasound enhancing agent, DEFINITY, continues to be significant and that DEFINITY sales will continue to grow in the future, subject to the challenges discussed in “COVID-19 Pandemic and Other Challenges” below. As we continue to educate the physician and healthcare provider community about the benefits and risks of DEFINITY, we believe we will be able to ~~continue to grow the appropriate~~increase use of DEFINITY through continued education of physicians and healthcare providers about the benefits of ultrasound enhancing agents in suboptimal echocardiograms. ~~In a~~The U.S. market ~~with~~currently has three echocardiography ultrasound enhancing agents approved by the ~~FDA,~~FDA; we estimate that DEFINITY ~~continues~~will continue to hold ~~over~~at least an 80% ~~of the market.~~market share.

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

•Patents - We continue to actively pursue additional patents in connection with DEFINITY and DEFINITY RT, both in the U.S. and internationally. In the U.S. for DEFINITY, we have ~~five~~six Orange Book-listed method of use patents, one of which expires in 2035 and ~~four~~five of which expire in 2037, as well as additional manufacturing patents that are not Orange Book-listed expiring in ~~2023 and~~ 2037. In the U.S. for DEFINITY RT, we have six Orange Book-listed patents, including a composition of matter patent which expires in 2035. Outside of the U.S., we have and are currently pursuing additional DEFINITY and DEFINITY RT patents to obtain similar patent protection as in the U.S. The Orange Book-listed patents include a patent on the use of VIALMIX RFID which expires in 2037; we have submitted additional VIALMIX RFID patent applications in major markets throughout the world.

~~Hatch-Waxman Act~~ - Even though our longest duration Orange Book-listed DEFINITY patent extends until March 2037, because our Orange Book-listed composition of matter patent expired in June 2019, we may face generic DEFINITY challengers in the near to intermediate term. Under the Hatch-Waxman Act, the FDA can approve Abbreviated New Drug Applications (“ANDAs”) for generic versions of drugs if the ANDA applicant demonstrates, among other things, that (i) its generic candidate is the same as the innovator product by establishing bioequivalence and providing relevant chemistry, manufacturing and product data, and (ii) either the marketing of that generic candidate does not infringe the Orange Book-listed patent(s) or the Orange Book-listed patent(s) is invalid. Similarly, the FDA can approve a Section 505(b)(2) New Drug Application (“505(b)(2)”) from an applicant that relies on some of the information required for marketing approval to come from studies which the applicant does not own or have a legal right of reference. With respect to the Orange Book-listed patent(s) covering an innovator product, the ANDA applicant or the Section 505(b)(2) applicant (if relying on studies related to the innovator product) (together, the “Applicant”) must give a notice (a “Notice”) to the innovator of its certification that its generic candidate will not infringe the innovator’s Orange Book-listed patent(s) or that the Orange Book-listed patent(s) is invalid. The innovator can then file suit against the Applicant within 45 days of receiving the Notice, and FDA approval to commercialize the generic candidate will be stayed (that is, delayed) for up to 30 months (measured from the date on which a Notice is received) while the patent dispute between the innovator and the Applicant is resolved in court. The 30-month stay could potentially expire sooner if the courts determine that no infringement had occurred or that the challenged Orange Book-listed patent is invalid or if the parties otherwise settle their dispute.

As of the date of filing of this Quarterly Report on Form 10-Q, we have not received any Notice from an Applicant. If we were to (i) receive any such Notice in the future, (ii) bring a patent infringement suit against the Applicant within 45 days of receiving that Notice, and (iii) successfully obtain the full 30-month stay, then the Applicant would be precluded from commercializing a generic version of DEFINITY prior to the expiration of that 30-month stay and, potentially, thereafter, depending on how the patent dispute is resolved. Solely by way of example and not based on any knowledge we currently have, if we received a Notice from an Applicant in November 2022 and the full 30-month stay were obtained, then the

~~Table of Contents~~

Applicant would be precluded from commercialization until at least May 2025. If we received a Notice some number of months in the future and the full 30-month stay were obtained, the commercialization date would roll forward in the future by the same number of months. In the event a 505(b)(2) applicant does not rely on studies related to the innovator product, the 30-month stay would not apply, but additional clinical studies may be required.

•DEFINITY RT - The formulation of DEFINITY that we have branded as DEFINITY RT became commercially available in the fourth quarter of 2021. ~~A modified formulation of~~ DEFINITY ~~that~~RT allows both storage and shipment at room temperature ~~DEFINITY RT~~and provides clinicians an additional choice and allows for greater utility of this formulation in broader clinical settings. Given its physical characteristics, we believe DEFINITY RT is also well-suited for inclusion in kits requiring microbubbles for other indications and applications (including in kits developed by third parties of the type described in the paragraph entitled MicrobubbleFranchise below).

•VIALMIX RFID – DEFINITY is activated through the use of medical devices branded as VIALMIX ~~RFID, our next-generation activation device designed specifically for both DEFINITY~~ and ~~DEFINITY RT, became commercially available in the fourth quarter of 2021.~~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 and DEFINITY RT.~~DEFINITY. The RFID tag, which is affixed to the vial label, enables the DEFINITY ~~or DEFINITY RT~~ vial to be appropriately activated with the VIALMIX RFID activation device.

Expansion of Strategic Partnerships and Other Revenue

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. In particular, we are focused on late-stage radiopharmaceutical diagnostic and therapeutic 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 Services and Digital 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 RELISTOR to Bausch and the commercialization rights for flurpiridaz fluorine-18 to GE Healthcare Limited.

•Pharma Services – We use our Pharma Services 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 Services 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. Our Biomarkers are intended to support patient selection and the monitoring of disease progression, primarily with respect to different oncological diseases. For example, piflufolastat F 18 is currently being used by Curium, Novartis, POINT and Regeneron in those companies’ prostate cancer therapeutic drug development programs. Our acquisition of Cerveau in February 2023 added MK-6240 to our biomarker portfolio. MK-6240 is currently being used in more than sixty academic and industry clinical trials for several Alzheimer’s disease therapeutic candidates being developed by more than sixteen pharmaceutical companies. Most recently, in collaboration with Ratio Therapeutics, we initiated a Phase I study for LNTH-1363S to evaluate the pharmokinetics, biodistribution and radiation dosimetry in adult health volunteers. LNTH-1363S is our novel fibroblast activation protein, alpha targeted, copper-64 labeled PET imaging agent candidate.

In addition, we continue to expand our Microbubble Platform. In December 2022, we announced a strategic collaboration with SonoThera, Inc. (“SonoThera”), which will use our microbubbles in combination with SonoThera’s ultrasound-guided, non-viral, gene therapy platform and treatments. We also have additional collaborations with other partners that are generally designed to include our microbubble as part of a kit used with our partner’s medical device for therapeutic applications. In these collaborations, our microbubble is intended to be used as a vehicle to deliver a therapeutic drug.

•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. Our digital solutions include aPROMISE and aBSI (as defined below). 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

Table of Contents

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

Global Mo-99 Supply

We currently have Mo-99 supply agreements with Institute for Radioelements (“IRE”), running through December 31, 2023, with auto-renewal provisions that are terminable upon notice of non-renewal, and with NTP Radioisotopes (“NTP”), acting for itself and on behalf of its subcontractor, the Australian Nuclear Science and Technology Organisation (“ANSTO”), running through December 31, 2024.

Although we have athe most globally diverse Mo-99 supply chain with IRE in Belgium, NTP in South Africa, and ANSTO in Australia, we still face supplier and logistical challenges in our Mo-99 supply chain. When one supplier experiences outages, we generally rely on Mo-99 supply from the other suppliers to limit the impact of the outages. We believe we effectively manage these various supply chain challenges, but depending on reactor and processor schedules and operations, at times we have not been able to fill some or all of the demand for our TechneLite generators on certain manufacturing days. A prolonged disruption of service from one of our three Mo-99 processing sites or one of their main Mo-99-producing reactors could have a ~~substantial~~ negative effect on our business, results of operations, financial condition and cash flows.

To augment our current supply of Mo-99, we have a strategic arrangement with SHINE Medical Technologies LLC (“SHINE”) for the future supply of Mo-99. Under the terms of the supply agreement, entered into in November 2014, SHINE will provide Mo-99 produced using its proprietary LEU-solution technology for use in our TechneLite generators once SHINE’s facility becomes operational and receives all necessary regulatory approvals, which SHINE now estimates will occur in 2024. The term of this arrangement provides for three years of supply of Mo-99. However, we cannot ~~assure you~~provide assurance that SHINE will be able to produce commercial quantities of Mo-99 for our business, or that SHINE, together with our current suppliers, will be able to deliver a sufficient quantity of Mo-99 to meet our needs.

Inventory Supply

We obtain a substantial portion of our ~~imaging agents~~Precision Diagnostics from a third party supplier. 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.~~select other products. On February 23, 2022, ~~our wholly-owned subsidiary,~~ LMI entered into a Manufacturing and Supply Agreement (the “MSA”) with JHS, effective as of February 23, 2022, pursuant to which JHS will manufacture, and LMI will purchase, DEFINITY ~~NEUROLITE, Cardiolite~~ and ~~evacuation vial~~select other products. The new MSA supersedes all of the prior agreements of the parties. The initial term of the MSA runs through December 31, 2027 and can be further extended by mutual agreement of the parties. The MSA requires LMI to purchase from JHS specified percentages of its total requirements for DEFINITY, as well as specified quantities of ~~NEUROLITE, Cardiolite and evacuation vial~~select other products, each year during the contract ~~term.~~term, except to the extent that LMI has the right to withhold payment for defective product and cancel orders for untimely delivery without penalty. Either party can terminate the MSA upon the occurrence of certain events, including the material breach or bankruptcy of the other party. In addition to JHS, we rely on Samsung BioLogics as our sole source manufacturer of DEFINITY RT.

In 2021, we completed the construction of a specialized in-house manufacturing facility at our North Billerica campus to produce ~~DEFINITY and, potentially, other sterile vial products.~~DEFINITY. On February 22, 2022, we received FDA approval of our supplemental new drug application authorizing commercial manufacturing of DEFINITY at our new ~~facility, and inventory that we had previously manufactured at this facility became commercially saleable.~~facility. We believe this facility will allow us to better manage DEFINITY manufacturing and inventory, reduce our costs in a potentially more price competitive environment, and provide us with supply chain redundancy.

Radiopharmaceuticals are decaying radioisotopes with half-lives ranging from a few hours to several days. Radiopharmaceutical finished goods, such as doses of PYLARIFY, AZEDRA and TechneLite generators cannot be kept in inventory because of their limited shelf lives and are subject to just-in-time manufacturing,

~~Table of Contents~~

processing and distribution, which takes place at our facilities in North Billerica, Massachusetts and Somerset, New Jersey, as well as at our PMF partner manufacturing facilities across the U.S.

~~COVID-19 Pandemic and Other Challenges~~

The global COVID-19 pandemic has had, and could still have, a future negative impact on our business, particularly if there are additional resurgences as a result of new variants of the virus that further increase its communicability or its impact on certain populations, geographic regions and the healthcare system, including elective procedures and hospital access. In addition, our business has been impacted by hospital staffing challenges and a decline in the volume of certain procedures and treatments using our products. For example, we believe sales of DEFINITY during the third quarter of 2022 were impacted by ongoing staffing challenges for nurses at U.S. healthcare institutions, as well as there being fewer in-person U.S. cardiology visits during the quarter as compared to the third quarter of 2021.

Research and Development Expenses

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

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

Table of Contents

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

•For ~~1095,~~PNT2002 and PNT2003, we ~~completed an interim analysis of the ARROW Phase 2 study~~were granted a license to exclusive worldwide rights (excluding certain countries) for $260.0 million in ~~mCRPC patients in~~upfront payments during the fourth quarter of ~~2021~~2022 and ~~continued that study without modifications. During the second quarter of 2022,~~will potentially make additional payments as described below.

•For 1095, our PSMA-targeted iodine-131-labeled small molecule product candidate, we enrolled the last patient in this study. In total, 120 patients have been randomized -- 80 in the 1095 plus enzalutamide combination group and 40 in the enzalutamide alone group. This study is a multicenter, randomized, open-label, controlledour ARROW Phase 2 ~~clinical~~ study ~~evaluating~~during the ~~efficacy and safety~~second quarter of 1095, our PSMA-targeted I-131 therapeutic, in combination with enzalutamide compared to enzalutamide alone in patients with metastatic castration resistant prostate cancer who are PSMA-avid, chemotherapy naïve, and have progressed on abiraterone. The primary endpoint in this study is PSA response rate. Key secondary endpoints include time to radiographic free progression, progression free survival, and overall survival.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.

•For LMI 1195, we have decided not to make any further investment at this time based on recent feedback from the FDA that we would not be granted a pediatric voucher upon successful approval of the product. We are currently exploring alternative options for this asset.

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

PNT2002

Under the terms of ~~our current products, including AZEDRA.~~the PNT2002 License Agreement, Lantheus Two, LLC paid POINT an upfront cash payment of $250.0 million, and could pay up to an additional $281.0 million in milestone payments upon the achievement of specified U.S. and ex-U.S. regulatory milestones related to PNT2002. POINT is also eligible to receive up to $1.3 billion in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2002. In addition, after Lantheus Two achieves $500.0 million in cumulative gross profit, POINT is eligible to receive royalty payments of twenty percent of net sales of PNT2002. Prior to achieving that financial recoupment threshold, POINT is eligible to receive royalty payments of twenty percent on that portion of annual net sales of PNT2002 that generate annual gross profit in excess of specified levels.

PNT2003

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. and ex-U.S. regulatory milestones related to PNT2003. POINT is also eligible to receive up to $275.0 million in sales milestone payments upon the achievement of specified annual sales thresholds of PNT2003. In addition, POINT is eligible to receive royalty payments of fifteen percent of net sales of PNT2003.

Our investments in these additional clinical activities and lifecycle management opportunities will increase our operating expenses and impact our results of operations and cash flow, and we can give no assurances as to whether any of our clinical development candidates or lifecycle management opportunities will be successful.

~~Strategic Partnerships, Collaborations, and other Initiatives~~

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

~~Oncology~~

~~As we continue to pursue expanding our strategic partnerships, our Pharma Services activities and strategic partnerships in oncology include:~~

•~~Prostate Cancer~~ ~~- We collaborate with pharmaceutical companies developing therapies and diagnostics in prostate cancer.~~

◦In March 2022, we announced a collaboration with Novartis to include PYLARIFY in prostate cancer trials with Pluvicto. As part of the agreement with Novartis, we will provide PYLARIFY for the selection of patients with prostate cancer for the trials, and Novartis will provide all PYLARIFY related clinical imaging data to us.

◦In January 2022, we announced a collaboration with the Prostate Cancer Clinical Trial Consortium (“PCCTC”), a premier multicenter clinical research organization that specializes in prostate cancer research. The intent of the strategic collaboration is to integrate our AI platform into PCCTC studies to advance the development and validation of novel AI-enabled biomarkers.

Table of Contents

◦In September 2021, we entered into a development and commercialization collaboration with RefleXion Medical, Inc. to evaluate the use of piflufolastat F 18 to enable real-time therapeutic guidance of biology-guided radiotherapy in prostate cancer using the RefleXion X1TM platform.

◦Prior to 2021, we also entered into several other separate agreements, including with POINT Biopharma US Inc. (“POINT Biopharma”) and Regeneron Pharmaceuticals, Inc., under which we supply piflufolastat F 18 in connection with their clinical studies, and Curium, under which we licensed exclusive rights to Curium to develop and commercialize piflufolastat F 18 in Europe. In June 2022, Curium announced that it had submitted its marketing authorization application to the European Medicines Agency seeking approval for piflufolastat F 18 in Europe. In addition, in 2022, we entered into an agreement with Curium to add PYLARIFY to its U.S. Eclipse trial, a multi-center, open-label, randomized Phase 3 trial comparing the safety and efficacy of Curium’s PSMA-targeted therapeutic versus hormone therapy in patients with metastatic castration-resistant prostate cancer. PYLARIFY will be used to determine PSMA-avidity as part of patient selection.

•~~Immuno-Oncology~~ ~~- In May 2019, we entered into a strategic collaboration and license agreement with NanoMab~~ ~~Technology Limited (“NanoMab”)~~, a privately-held biopharmaceutical company focused on the development of next generation radiopharmaceuticals for cancer precision medicine. In May 2022, we announced that the first patient had been dosed in a Phase 2 clinical trial of NM-01, a novel technetium-99m SPECT imaging agent that we are developing to assess PD-L1 expression in cancer cells. The Phase 2 clinical trial is an open-label, single-arm trial in non-small cell lung cancer patients. The primary endpoint is the assessment of PD-L1 expression in primary tumor and metastatic lesions by NM-01 compared to immunohistochemistry. Other objectives are aimed at quantifying intra- and inter-tumoral heterogeneity of PD-L1 expression by NM-01, as well as establishing correlations with other diagnostic procedures. The trial is being conducted by NanoMab at King’s College London and is expected to complete enrollment later in 2022.

•~~Pan-Oncology~~ - In March 2021, we acquired from Ratio Therapeutics LLC (previously Noria Therapeutics, Inc.) exclusive, worldwide rights to NTI-1309, an innovative imaging biomarker that targets fibroblast activation protein, an emerging target with broad potential imaging applicability and use in oncology. Upon further clinical development, we will assess options to bring NTI-1309 to market as a diagnostic or potentially a therapeutic product.

~~Microbubble Franchise~~

In addition, we continue to expand our microbubble franchise. In April 2021, we announced a strategic collaboration with Allegheny Health Network (“AHN”), which will use our microbubbles in combination with AHN’s ultrasound-assisted non-viral gene transfer technology for the development of a proposed treatment of xerostomia. Xerostomia is a lack of saliva production leading to dry mouth and has a variety of causes, including radiotherapy and chemotherapy, the chronic use of drugs and rheumatic and dysmetabolic diseases. Prior to 2021, we entered into microbubble collaborations with the following parties: (i) Cerevast Medical, Inc. (“Cerevast”), in which our microbubbles will be used in connection with Cerevast’s ocular ultrasound device to improve blood flow in occluded retinal veins in the eye; (ii) CarThera SAS, for the use of our microbubbles in combination with SonoCloud, a proprietary implantable device in development for the treatment of recurrent glioblastoma; and (iii) Insightec Ltd. (“Insightec”), which will use our microbubbles in connection with the development of Insightec’s transcranial guided focused ultrasound device for the treatment of glioblastoma as well as other neurodegenerative conditions.

~~Flurpiridaz F 18~~

In September 2022, we announced with our strategic partner GE Healthcare Limited (“GE Healthcare”) that the recent Phase III clinical trial of our investigational radiotracer, flurpiridaz F 18, had met its co-primary endpoints of exceeding a 60% threshold for both sensitivity and specificity for detecting coronary artery disease (“CAD”). The findings, shared at an American Society of Nuclear Cardiology conference, also demonstrated that cardiac PET imaging with flurpiridaz F 18 has higher diagnostic efficacy and image quality in patients with suspected CAD, compared with single photon emission computed tomography (“SPECT”) Myocardial Perfusion Imaging (“MPI”), the predominant procedure currently used in nuclear cardiology. We believe SPECT MPI represents approximately 6 million procedures per year in the U.S.

Under a Collaboration and License Agreement we entered into with GE Healthcare in 2017, GE Healthcare has led the funding and development of flurpiridaz F 18, and, if the imaging agent is approved, will have the global commercialization rights for it. We have collaborated on the development and will also collaborate on potential commercialization through a joint steering committee. If flurpiridaz F 18 receives regulatory approval and is commercially successful, we will receive:

~~• up to $60 million in regulatory and sales milestone payments,~~

~~• tiered double-digit royalties on U.S. sales., and~~

~~• mid-single digit royalties on sales outside of the U.S.~~

~~Table of Contents~~

Generally, our costs in connection with the strategic partnerships relate to the supply of drug and other ancillary expenses and the benefits can include possible supply, milestone and royalty payments, additional intellectual property rights and strategic relationships. For flurpiridaz F 18, under the Collaboration and License Agreement, we retained ownership of all of the licensed intellectual property and bear the cost of patent prosecution and maintenance. We can give no assurance as to if or when or if any of these collaborations and other new initiatives, including our collaboration for flurpiridaz F 18, will be successful or accretive to earnings.

Results of Operations

The following is a summary of our consolidated results of operations:


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		Change $		Change %		2022		2021		Change $		Change %		(in thousands)	2023		2022		Change $		Change %		2023		2022		Change $		Change %
Revenues	Revenues	$	239,292	$	102,073	$	137,219	134.4	%	$	671,895	$	295,646	$	376,249	127.3	%	Revenues	$	321,700	$	223,723	$	97,977	43.8	%	$	622,484	$	432,603	$	189,881	43.9	%
Cost of goods sold	Cost of goods sold	91,859		59,404		32,455		54.6	%	257,363		165,859		91,504		55.2	%	Cost of goods sold	119,053		85,694		33,359		38.9	%	342,761		165,504		177,257		107.1	%
Gross profit	Gross profit	147,433		42,669		104,764		245.5	%	414,532		129,787		284,745		219.4	%	Gross profit	202,647		138,029		64,618		46.8	%	279,723		267,099		12,624		4.7	%
Operating expenses	Operating expenses																	Operating expenses
Sales and marketing	Sales and marketing	25,414		17,195		8,219��		47.8	%	73,260		48,999		24,261		49.5	%	Sales and marketing	36,456		27,492		8,964		32.6	%	69,073		47,846		21,227		44.4	%
General and administrative	General and administrative	23,759		28,550		(4,791)		(16.8)	%	93,945		87,865		6,080		6.9	%	General and administrative	26,151		32,598		(6,447)		(19.8)	%	49,422		70,186		(20,764)		(29.6)	%
Research and development	Research and development	12,517		11,252		1,265		11.2	%	39,455		33,673		5,782		17.2	%	Research and development	15,901		14,735		1,166		7.9	%	46,433		26,938		19,495		72.4	%
Total operating expenses	Total operating expenses	61,690		56,997		4,693		8.2	%	206,660		170,537		36,123		21.2	%	Total operating expenses	78,508		74,825		3,683		4.9	%	164,928		144,970		19,958		13.8	%
Gain on sale of assets		—		—		—		N/A		—		15,263		(15,263)		N/A
Operating income (loss)		85,743		(14,328)		100,071		(698.4)	%	207,872		(25,487)		233,359		(915.6)	%

Operating income																		Operating income	124,139		63,204		60,935		96.4	%	114,795		122,129		(7,334)		(6.0)	%
Interest expense	Interest expense	1,626		1,569		57		3.6	%	4,604		6,224		(1,620)		(26.0)	%	Interest expense	4,933		1,469		3,464		235.8	%	9,924		2,978		6,946		233.2	%
Gain on extinguishment of debt		—		—		—		N/A		—		(889)		889		N/A

Other income	Other income	1,101		3,940		(2,839)		(72.1)	%	306		3,209		(2,903)		(90.5)	%	Other income	(4,482)		(310)		(4,172)		1345.8	%	(7,713)		(795)		(6,918)		870.2	%
Income (loss) before income taxes		83,016		(19,837)		102,853		(518.5)	%	202,962		(34,031)		236,993		(696.4)	%
Income tax expense (benefit)		21,784		(6,422)		28,206		(439.2)	%	55,710		(2,967)		58,677		(1,977.7)	%
Net income (loss)		$	61,232	$	(13,415)	$	74,647	(556.4)	%	$	147,252	$	(31,064)	$	178,316	(574.0)	%
Income before income taxes																		Income before income taxes	123,688		62,045		61,643		99.4	%	112,584		119,946		(7,362)		(6.1)	%
Income tax expense																		Income tax expense	29,557		18,987		10,570		55.7	%	21,260		33,926		(12,666)		(37.3)	%
Net income																		Net income	$	94,131	$	43,058	$	51,073	118.6	%	$	91,324	$	86,020	$	5,304	6.2	%

Table of Contents

Comparison of the Periods Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022

Revenues

We classify our revenues into three product categories: ~~precision diagnostics, radiopharmaceutical oncology,~~Radiopharmaceutical Oncology, Precision Diagnostics, and ~~strategic partnerships~~Strategic Partnerships and ~~other revenue.~~Other Revenue. Radiopharmaceutical Oncology includes PYLARIFY and AZEDRA. Precision ~~diagnostics~~Diagnostics includes DEFINITY, TechneLite and other diagnostic imaging products. ~~Radiopharmaceutical oncology consists primarily of PYLARIFY~~Strategic Partnerships and ~~AZEDRA. Strategic partnerships and other revenue~~Other Revenue includes out-licensing arrangements, ~~which includes $24.0 million of revenue recognized pursuant to the Novartis Agreement,~~ partnerships that focus on facilitating precision medicine through the use of biomarkers, digital solutions and radiotherapeutic platforms, and on our other products, such as RELISTOR.

~~Table of Contents~~

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


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		Change $		Change %		2022		2021		Change $		Change %		(in thousands)	2023		2022		Change $		Change %		2023		2022		Change $		Change %
PYLARIFY																		PYLARIFY	$	210,522	$	130,232	$	80,290	61.7	%	$	405,992	$	223,009	$	182,983	82.1	%
Other radiopharmaceutical oncology																		Other radiopharmaceutical oncology	818		928		(110)		(11.9)	%	1,535		2,255		(720)		(31.9)	%
Total radiopharmaceutical oncology																		Total radiopharmaceutical oncology	211,340		131,160		80,180		61.1	%	407,527		225,264		182,263		80.9	%
DEFINITY	DEFINITY	$	60,740	$	57,636	$	3,104	5.4	%	$	181,374	$	173,448	$	7,926	4.6	%	DEFINITY	70,529		62,306		8,223		13.2	%	139,353		120,634		18,719		15.5	%
TechneLite	TechneLite	22,094		22,680		(586)		(2.6)	%	64,139		69,252		(5,113)		(7.4)	%	TechneLite	21,594		19,440		2,154		11.1	%	42,580		42,045		535		1.3	%
Other precision diagnostics	Other precision diagnostics	6,175		7,563		(1,388)		(18.4)	%	16,803		21,289		(4,486)		(21.1)	%	Other precision diagnostics	5,454		5,363		91		1.7	%	11,261		10,628		633		6.0	%
Total precision diagnostics	Total precision diagnostics	89,009		87,879		1,130		1.3	%	262,316		263,989		(1,673)		(0.6)	%	Total precision diagnostics	97,577		87,109		10,468		12.0	%	193,194		173,307		19,887		11.5	%
PYLARIFY		143,754		7,724		136,030		N/A		366,763		7,997		358,766		N/A
Other radiopharmaceutical oncology		928		1,166		(238)		(20.4)	%	3,183		5,206		(2,023)		(38.9)	%
Total radiopharmaceutical oncology		144,682		8,890		135,792		1,527.5	%	369,946		13,203		356,743		2,702.0	%
Strategic partnerships and other revenue	Strategic partnerships and other revenue	5,601		5,304		297		5.6	%	39,633		18,454		21,179		114.8	%	Strategic partnerships and other revenue	12,783		5,454		7,329		134.4	%	21,763		34,032		(12,269)		(36.1)	%
Total revenues	Total revenues	$	239,292	$	102,073	$	137,219	134.4	%	$	671,895	$	295,646	$	376,249	127.3	%	Total revenues	$	321,700	$	223,723	$	97,977	43.8	%	$	622,484	$	432,603	$	189,881	43.9	%

The increase in revenues for the three months ended ~~September~~June 30, ~~2022, as compared to the prior year period,~~2023, is primarily driven by ~~the commercial launch of PYLARIFY,~~ an increase in PYLARIFY, DEFINITY and TechneLite sales volume, as well as revenue generated by Cerveau, as recorded in Strategic Partnerships and Other Revenue.

The increase in revenues for the six months ended June 30, 2023, is primarily driven by an increase in PYLARIFY and DEFINITY sales volume, as well as revenue generated by Cerveau, as recorded in Strategic Partnerships and ~~higher strategic partnership revenue from the RELISTOR royalty stream.~~Other Revenue. The increase is offset, in part, by ~~lower sales volumes~~a decrease in Strategic Partnerships and Other Revenue due to the revenue recognized from ~~TechneLite driven by opportunistic sales~~the Novartis licensing agreement in the prior ~~year and lower volumes of other precision diagnostics.~~

The increase in revenues for the nine months ended September 30, 2022, as compared to the prior year period, is primarily driven by the commercial launch of PYLARIFY and $24.0 million of revenue recognized pursuant to the Novartis Agreement, and an increase in DEFINITY sales volume. The increase is offset, in part, by lower sales volumes from TechneLite driven by the strategic decisions to exit a customer contract and opportunistic sales in the prior year, lower volumes of other precision diagnostics, lower volume of other radiopharmaceutical oncology products and lower strategic partnerships and other revenue due primarily to a sale of cREPO in the prior period.year.

Rebates and Allowances

Estimates for rebates and allowances represent our estimated obligations under contractual arrangements with customers and other third parties. Rebate accruals and allowances are recorded in the same period the related revenue is recognized, resulting in a reduction to revenue and the establishment of a liability which is included in accrued expenses. 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:


(in thousands)	Rebates and Allowances
Balance, January 1, ~~2022~~2023	$	~~10,977~~13,399
Provision related to current period revenues	~~20,334~~13,606
~~Adjustments relating to prior period revenues~~	70
Payments or credits made during the period	~~(18,134)~~(15,918)
Balance, ~~September~~June 30, ~~2022~~2023	$	~~13,247~~11,087

Gross Profit

The increase in gross profit for the three months ended ~~September~~June 30, ~~2022,~~2023, as compared to the prior year period, is primarily due to increased PYLARIFY ~~sales volume, as well as an increase in~~and DEFINITY sales ~~volume.~~volumes, partially offset by the impairment related to a certain asset group.

Table of Contents

The increase in gross profit for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, as compared to the prior year period, is primarily due to the increased PYLARIFY ~~sales volume, the $24.0 million pursuant to the Novartis Agreement,~~ and ~~an increase in~~ DEFINITY sales ~~volume, which is~~volumes, partially offset by the impairment of the AZEDRA currently marketed intangible asset, the Novartis licensing settlement in the prior year, amortization ~~expense~~ of ~~acquired~~Cerveau intangible assets inand the ~~Progenics Acquisition.~~impairment related to a certain asset group.

Sales and Marketing

Sales and marketing expenses consist primarily of salaries and other related costs for personnel in field sales, marketing and customer service functions. Other costs in sales and marketing expenses include the development and printing of advertising and promotional material, professional services, market research and sales meetings.

Sales and marketing expenses increased ~~$8.2~~$9.0 million and ~~$24.3~~$21.2 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023, respectively, as compared to the prior year period. This was primarily driven by the continued ~~commercialization~~promotion activities ~~following the launch~~ of PYLARIFY and increased employee-related costs (including the hiring of new employees throughout 2021 in connection with the commercialization activities for PYLARIFY), as well as an increase in the level of marketing promotional programs and travel during this period which was reduced during the prior year due to the impact of the COVID-19 pandemic.costs.

General and Administrative

General and administrative expenses consist of salaries and other related costs for personnel in executive, finance, legal, information technology and human resource functions. 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 decreased ~~$4.8~~$6.4 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to the prior period. This was primarily driven by a ~~$9.5 million sublease impairment charge in the prior year. In addition, there was a $1.5~~$16.0 million net reduction for the fair value adjustments to the contingent asset and liabilities in the ~~third~~second quarter of ~~2022 (a decrease of $4.1 million from the prior year period)~~2023 (refer to Note 4, “Fair Value of Financial Instruments”, for further details on contingent consideration liabilities, including CVRs). ~~These decreases are~~This decrease is partially offset by increased employee-related costs, professional fees and ~~professional fees.~~investment in technology.

General and administrative expenses ~~increased $6.1~~decreased $20.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to the prior period. This was primarily driven by ~~increased employee-related costs and professional fees. This amount was offset by~~ a ~~$3.1~~$35.8 million net reduction for the fair value adjustments to the contingent asset and ~~liabilities.~~liabilities in the first half of 2023 (refer to Note 4, “Fair Value of Financial Instruments”, for further details on contingent consideration liabilities, including CVRs). This decrease is partially offset by increased employee-related costs, professional fees and investment in technology.

Research and Development

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

Research and development expenses increased ~~$1.3~~$1.2 million for the three months ended ~~September~~June 30, ~~2022~~2023 as compared to the prior year period. This was primarily driven by higher overall headcount related costs and the investment in medical affairs related to PYLARIFY, offset, in part, by the expenses related to the preparation activities for the launch of PYLARIFY during the prior year period.increased employee-related costs.

Research and development expenses increased ~~$5.8~~$19.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to the prior year period. This was primarily driven by the ~~level~~AZEDRA IPR&D asset impairment loss of ~~activity of the~~$15.6 million and higher employee-related costs driven by an increased headcount. These increases were offset, in part, by lower clinical expenses related to our ARROW Phase 2 study of 1095, investment in medical affairs related to PYLARIFY and higher overall headcount related costs, offset by the expenses related to filing fees for the PYLARIFY New Drug Application and preparation activities for the launch of PYLARIFY during the prior year period.study.

Interest Expense

Interest expense ~~decreased~~increased by approximately ~~$1.6~~$6.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to the prior year period due to the ~~repayment~~issuance of the ~~Royalty-Backed Loan~~Notes on ~~March 31, 2021.~~December 8, 2022, which was partially offset by the interest rate swap agreements from the prior year.

Income Tax Expense

The income tax expense recorded for the three and nine months ended September 30, 2022 was primarily due to pre-tax profits reported during the period, partially offset by the benefit associated with stock compensation deductions.

We regularly assess our ability to realize our deferred tax assets. Assessing the realizability of deferred tax assets requires significant management judgment. In determining whether our deferred tax assets are more-likely-than-not realizable, we evaluate all

~~Table of Contents~~

available positive and negative evidence, and weigh the objective evidence and expected impact. We continue to record a valuation allowance against certain of our foreign net deferred tax assets and a small component of our domestic deferred tax assets.

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

Nine Months Ended
September 30,
2022 2021
Effective tax rate 27.4% 8.7%

Table of Contents


	Six Months Ended June 30,
	2023	2022
Effective tax rate	18.9%	28.3%

Our effective tax rate ~~in fiscal 2022~~for the six months ended June 30, 2023 differs from the U.S. statutory rate of 21% ~~principally~~primarily due to the ~~accrual of~~income tax benefit associated with stock compensation deductions, partially offset by state ~~taxes and the impact of non-deductible contingency reserve expense.~~income taxes.

The ~~increase~~decrease in the effective income tax rate for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 is primarily due to the decrease in non-deductible contingency reserve expense and the increase in our ~~increased pre-tax profits in high population states that generally have higher tax rates.~~stock compensation deductions.

Table of Contents

Liquidity and Capital Resources

Cash Flows

The following table provides information regarding our cash flows:


		Nine Months Ended September 30,					Six Months Ended June 30,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Net cash provided by operating activities	Net cash provided by operating activities	$	176,429	$	40,027	Net cash provided by operating activities	$	76,234	$	82,861
Net cash (used in) provided by investing activities		$	(11,823)	$	8,227
Net cash used in investing activities						Net cash used in investing activities	$	(65,210)	$	(5,733)
Net cash used in financing activities	Net cash used in financing activities	$	(6,149)	$	(37,232)	Net cash used in financing activities	$	(12,720)	$	(4,190)

Net Cash Provided by Operating Activities

Net cash provided by operating activities of ~~$176.4~~$76.2 million in the ~~nine~~six months ended ~~September~~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 provided by operating activities of $82.9 million in the six months ended June 30, 2022 was primarily comprised of net income adjusted for the net effect of non-cash items such as ~~depreciation, amortization and accretion expense,~~ the change in fair value of contingent assets and liabilities of ~~$25.4~~$26.9 million (refer to Note 4, “Fair Value of Financial Instruments”, for further details on contingent consideration liabilities, including CVRs)~~, and stock-based compensation expense.~~. The primary working capital sources of cash were ~~the increase in billings associated with PYLARIFY sales and~~ the timing of payments to large vendors. The primary working capital uses of cash were an increase in trade receivables associated primarily with the increase in PYLARIFY ~~revenues.~~

Net cash provided by operating activities of $40.0 million in the nine months ended September 30, 2021 was driven primarily by depreciation, amortization and accretion expense of $30.1 million, a change in fair value of contingent assets and liabilities of $28.5 million (refer to Note 4, “Fair Value of Financial Instruments”, for further details on contingent consideration liabilities, including CVRs), stock-based compensation expense of $11.8 million, impairment of long-lived assets of $9.5 million and a net increase of $2.4 million related to movements in our working capital accounts during the period. The overall increases in cash from our working capital accounts were primarily driven by an increase in sales collections,revenues as well as the timing of ~~payments to large vendors, and an increase in fees related to PYLARIFY sales. These net sources of cash were offset by a net loss of $31.1 million and a gain on sale of assets of $15.3 million.~~inventory purchases.

Net Cash ~~(Used in) Provided by~~Used in Investing Activities

Net cash used in investing activities during the ~~nine~~six months ended ~~September~~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 investing activities during the six months ended June 30, 2022 was primarily due to ~~$13.6~~$7.5 million of capital expenditures offset by cash proceeds of $1.8 million received from the sale of our Puerto Rico subsidiary.

Net cash provided by investing activities during the nine months ended September 30, 2021 was primarily due to cash proceeds of $15.8 million received from the sale of our Puerto Rico subsidiary, which was offset by $7.6 million of capital expenditures.

~~Net~~ Cash Used in Financing Activities

Net cash used in financing activities during the ~~nine~~six months ended ~~September~~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 six months ended June 30, 2022 is primarily attributable to the payments on long-term debt and other borrowings of ~~$7.9~~$5.2 million related to the 2019 Term Facility and payments for minimum statutory tax withholding related to net share settlement of equity awards of ~~$7.2~~$6.3 million offset by proceeds of ~~$7.5 million from stock option exercises.~~

Net cash used in financing activities during the nine months ended September 30, 2021 is primarily attributable to the payments on long-term debt and other borrowings of $40.8 million related to the 2019 Term Facility and Royalty-Backed Loan, including a voluntary repayment of the outstanding principal on the Royalty-Backed Loan and payments for minimum statutory tax withholding related to net share settlement of equity awards of $1.9 million offset by proceeds of $4.6$6.8 million from stock option exercises.

External Sources of Liquidity

In ~~June~~December 2022, we voluntarily repaid our 2019 ~~we refinanced our 2017 $275.0~~$200.0 million five-year term loan ~~facility with the 2019 Term Facility.~~facility. In addition, we replaced our ~~$75.0~~$200.0 million revolving facility with ~~our current five-year revolving credit facility (the “2019~~the 2022 Revolving ~~Facility” and together with the 2019 Term Facility, the “2019 Facility”).~~Facility. The terms of the ~~2019 Term~~2022 Revolving Facility are set forth in the Credit Agreement, dated as of ~~June 27, 2019,~~December 2, 2022, by and among us, the lenders from time to time party thereto and ~~Wells Fargo~~Citizens Bank, N.A., as administrative agent and collateral agent ~~which was amended on June 19, 2020 (as amended, the “2019~~(the “2022 Credit Agreement”). We have the right to request an increase to the ~~2019 Term~~2022 Revolver Facility or request the establishment of one or more new incremental term loan facilities, in an aggregate principal amount of up to ~~$100.0~~$335 million or consolidated EBITDA for the four consecutive fiscal quarters most recently ended, plus additional amounts, in certain circumstances.

~~Table of Contents~~

We are permitted to voluntarily repay the 2019 Term Loans, in whole or in part, without premium or penalty. The 2019 Term Facility requires us to make mandatory prepayments of the outstanding 2019 Term Loans in certain circumstances. The 2019 Term Facility amortizes at 5.0% per year through September 30, 2022 and 7.5% thereafter, until its June 27, 2024 maturity date.

Under the terms of the ~~2019~~2022 Revolving Facility, the lenders thereunder agreed to extend credit to us from time to time until ~~June 27, 2024~~December 2, 2027 consisting of revolving loans in an aggregate principal amount not to exceed ~~$200.0~~$350.0 million at any ~~time outstanding.~~time. The ~~2019~~2022 Revolving Facility includes a $20.0 million sub-facility for the issuance of ~~letters~~Letters of ~~credit (the “Letters of Credit”).~~Credit. The ~~2019~~2022 Revolving Facility includes a ~~$10.0~~

Table of Contents

$10.0 million sub-facility for ~~swingline loans (the “Swingline Loans”).~~Swingline Loans. The Letters of Credit, Swingline Loans and the borrowings under the ~~2019~~2022 Revolving Facility are expected to be used for working capital and other general corporate purposes.

~~Under~~Please refer to Note 13, “Long-Term Debt, Net, and Other Borrowings” for further details on the 2019 Credit Agreement, loans bear interest at LIBOR plus a spread that ranges from 1.50% to 3.00% or the Base Rate (as defined in the 2019 Credit Agreement) plus a spread that ranges from 0.50% to 2.00%, and the commitment fee ranges from 0.15% to 0.40%, in each case based on our Total Net Leverage Ratio (as defined in the 2019 Credit Agreement).

~~The maximum total net leverage ratio and interest coverage ratio permitted by the financial covenant in our 2019 Credit Agreement is displayed in the table below:~~


~~2019 Credit Agreement~~
~~Period~~			~~Total Net Leverage Ratio~~
~~Q3 2021 and thereafter~~			~~3.50 to 1.00~~

~~Period~~			~~Interest Coverage Ratio~~
~~Q2 2021 and thereafter~~			~~3.00 to 1.00~~

2022 Facility.

As of ~~September~~June 30, ~~2022,~~2023, we were in compliance with all financial and other covenants under the ~~2019 Credit Agreement.~~

~~Please refer to our Annual Report on Form 10-K for fiscal year ended December 31, 2021 for further details on the 2019 Facility and the 2019~~2022 Credit Agreement.

On ~~June 19, 2020, as a result~~December 8, 2022, we issued $575.0 million in aggregate principal amount of the ~~Progenics Acquisition, we assumed Progenics outstanding debt as of such date~~Notes, which includes $75.0 million in ~~the~~aggregate principal amount of ~~$40.2 million. On November 4, 2016, Progenics, through its wholly-owned subsidiary, MNTX Royalties Sub LLC, entered into~~Notes sold pursuant to the ~~Royalty-Backed Loan.~~full exercise of the initial purchasers’ option to purchase additional Notes. The ~~Royalty-Backed Loan bore interest at an annual rate~~Notes were issued under the Indenture. The net proceeds from the issuance of ~~9.5%~~the Notes were approximately $557.8 million, after deducting the initial purchasers’ discounts and ~~was scheduled to mature on June 30, 2025.~~

On March 31, 2021, we voluntarily repaid in full the entire outstanding principal on the Royalty-Backed Loan in the amount of $30.9 million, which included a prepayment amount of $0.5 million, and terminated the agreement.offering expenses payable by us.

Our ability to fund our future capital needs will be affected by our ability to continue to generate cash from operations and may be affected by our ability to access the capital markets, money markets or other sources of funding, as well as the capacity and terms of our financing arrangements.

We may from time to time repurchase or otherwise retire our debt and take other steps to reduce our debt or otherwise improve our balance sheet. These actions may include prepayments of our term loans or other retirements or refinancing of outstanding debt, privately negotiated transactions or otherwise. The amount of debt that may be retired, if any, could be material and would be decided at the sole discretion of our Board of Directors and will depend on market conditions, our cash position and other considerations.

Funding Requirements

Our future capital requirements will depend on many factors, including:

•The ~~amount and timing of the expected cash payment related to the CVRs;~~

•~~The~~ level of product sales and the pricing environment of our currently marketed products, particularly PYLARIFY and DEFINITY, as well as any additional products that we may market in the ~~future, including decreased product sales resulting from the COVID-19 pandemic;~~future;

•Revenue mix shifts and associated volume and selling price changes that could result from ~~contractual status~~additional competition or changes ~~with key customers, and additional competition;~~in customers’ product demand;

•The continued costs of the ongoing commercialization of PYLARIFY and PYLARIFY AI;

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

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

•~~Our investment in the further clinical development and commercialization of products and development candidates, including AZEDRA, 1095 and NM-01;~~

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

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

•Our ability to have products manufactured and released from manufacturing sites in a timely manner in the future, or to manufacture products at our in-house manufacturing facilities in amounts sufficient to meet our supply needs;

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

•~~The extent to which we choose to establish collaboration, co-promotion, distribution or other similar arrangements for our marketed products;~~

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

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

•The impact of sustained inflation on our costs of goods sold and operating expenses.

~~We are vulnerable to future supply chain shortages, disruptions or delays, especially for our single sourced products, raw materials and components.~~ Disruption in our financial performance could ~~also~~ occur if we experience significant adverse changes in product or customer mix, broad economic downturns, sustained inflation, adverse industry or company conditions or catastrophic external events, including pandemics such as COVID-19, natural disasters and political or military conflict. 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.

Table of Contents

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 ~~2019~~2022 Credit Agreement. Additional equity or debt financing, or other transactions, may not be available on acceptable terms, if at all. If any of these transactions require an amendment or waiver under the covenants in our ~~2019~~2022 Credit Agreement, which could result in additional expenses associated with obtaining the amendment or waiver, we will seek to obtain such a waiver to remain in compliance with those covenants. However, we cannot ~~be assured~~provide assurance that such an amendment or waiver would be granted, or that additional capital will be available on acceptable terms, if at all.

At ~~September~~June 30, ~~2022,~~2023, our only current committed external source of funds is our borrowing availability under our ~~2019~~2022 Revolving Facility. We had ~~$257.3~~$414.1 million of cash and cash equivalents ~~at September~~as of June 30, ~~2022.~~2023. Our ~~2019~~2022 Revolving Facility ~~as amended,~~ contains a number of affirmative, negative, reporting and financial covenants, in each case subject to certain exceptions and materiality thresholds. Incremental borrowings under the ~~2019~~2022 Revolving Facility ~~as amended,~~ may affect our ability to comply with the covenants ~~in the 2019 Facility, as amended,~~ including the financial covenants restricting consolidated net leverage and interest coverage. Accordingly, we may be limited in utilizing the full amount of our ~~2019~~2022 Revolving Facility ~~as amended,~~ as a source of liquidity.

The CVRs we issued in the Progenics Acquisition entitle holders thereof to future cash payments of 40% of PYLARIFY net sales over (i) $100.0 million in 2022 and (ii) $150.0 million in 2023, which we currently intend to fund from our then-available cash. In no event will our aggregate payments under the CVRs, together with any other non-stock consideration treated as paid in connection with the Progenics Acquisition, exceed 19.9% of the total consideration we pay in the Progenics Acquisition. Refer to Note 4, “Fair Value of Financial Instruments”, for further details on contingent consideration liabilities.

Based on our current operating plans, we believe our balance of cash and cash equivalents, which totaled ~~$257.3~~$414.1 million as of ~~September~~June 30, ~~2022,~~2023, along with cash generated by ongoing operations and continued access to our ~~2019~~2022 Revolving Facility, will be sufficient to satisfy our cash requirements over the next twelve months and beyond.

~~Table of Contents~~

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. GAAP. 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. Actual results may differ materially from these estimates under different assumptions and conditions. In addition, our reported financial condition and results of operations could vary due to a change in the application of a particular accounting standard.

There have been no significant changes to our critical accounting policies or in the underlying accounting assumptions and estimates used in such policies in the ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023. 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, ~~2021.~~2022.

Off-Balance Sheet Arrangements

We are required to provide the Massachusetts Department of Public Health and New Jersey Department of Environmental Protection financial assurance demonstrating our ability to fund the decommissioning of our North Billerica, Massachusetts and Somerset, New Jersey production facilities, respectively, upon ~~closure, though we do not intend to close the facilities.~~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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk, see Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. Our exposures to market risk have not changed materially since December 31, ~~2021.~~2022.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), its principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of the period covered by this report.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the ~~nine months~~quarter ended ~~September~~June 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

We are continually monitoring and assessing the pandemic status and geopolitical environment to determine any potential impact on the design and operating effectiveness of our internal controls over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information with respect to certain legal proceedings is included in Note ~~19,~~18, “Commitments and Contingencies”, to the condensed consolidated financial statements contained in Part I, Item 1. Financial Statements of this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Table of Contents

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2021, except as set forth below:~~

Our ability to continue to grow PYLARIFY as a commercial product is dependent on (A) our ability to obtain FDA approval for additional PMFs to manufacture PYLARIFY, (B) the ability of PMFs to manufacture PYLARIFY to meet product demand, (C) our ability to sell PYLARIFY to customers, (D) our ability to obtain and maintain adequate coding, coverage and payment for PYLARIFY, and (E) our ability to establish PYLARIFY as a leading PSMA PET imaging agent in an increasingly competitive environment in which other PSMA PET imaging agents have been approved and additional ones are in development.

The commercial launch of PYLARIFY has been complex and expensive. To manufacture PYLARIFY, we assembled and qualified a nationwide network of PMFs with radioisotope-producing cyclotrons that make F 18, which has a 110-minute half-life, so PYLARIFY is manufactured and distributed rapidly to end-users. Because each of the PMFs manufacturing these products is deemed by the FDA to be a separate manufacturing site, each has to be separately approved by the FDA. Although we successfully qualified 21 PMFs in 2021 and continue to seek qualification for additional PMFs in 2022, such that PYLARIFY is broadly available across the U.S., we can give no assurance that the FDA will continue to approve PMFs in accordance with our planned roll-out schedule. If FDA approval of manufacturing sites is delayed or withdrawn, our future business, results of operations, financial condition and cash flows could be adversely affected.

PYLARIFY is sold in the U.S. to hospitals, independent imaging centers and government facilities and sales are generated through a PYLARIFY direct sales team as well as a sales team at some of our PMF partners. We generally do not use group purchasing arrangements to sell PYLARIFY and require each customer to enter into a contract directly with us or our PMFs. Throughout 2021, we hired additional employees to assist us with this commercialization of PYLARIFY. Our ability to continue to successfully grow PYLARIFY depends, in part, on our ability to continue to enter into arrangements directly with the hospitals, independent imaging centers and government facilities that we serve. Any delay or inability to enter into these arrangements could have an adverse impact on our future business, results of operations, financial condition and cash flows.

Obtaining adequate coding, coverage and payment for PYLARIFY is critical, including not only coverage from Medicare, Medicaid and other government payors, as well as private payors, but also appropriate payment levels to adequately cover our customers’ costs of using PYLARIFY in PET/CT imaging procedures. We received notification that 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 for PYLARIFY, enabling traditional Medicare to provide an incremental payment for PET/CT scans performed with PYLARIFY in the hospital outpatient setting. TPT Status for PYLARIFY is expected to expire on December 31, 2024. After TPT Status expires, under current Medicare rules, PYLARIFY, similar to other diagnostic radiopharmaceuticals, would not be separately reimbursed in the hospital outpatient setting but rather would be included as part of the facility fee a hospital otherwise receives for a PET/CT imaging procedure, and the facility fee does not always adequately cover the total cost of the procedure. We can give no assurance that any CMS reimbursement in the hospital outpatient setting that follows the expiration of TPT Status will be adequate to cover the cost of a PYLARIFY PET/CT imaging procedure. In addition, if other government payors or private payors do not provide adequate reimbursement for the use of PYLARIFY, our future business, results of operations, financial condition and cash flows could be adversely affected.

The successful growth of PYLARIFY is also dependent on our ability to establish PYLARIFY as a leading PSMA PET imaging agent in an increasingly competitive environment in which other PSMA PET imaging agents have been approved and additional ones are in development. PYLARIFY currently competes with two commercially available gallium-68-based PSMA PET imaging agents from Telix Pharmaceuticals Limited and Novartis AG, as well as other non-PSMA PET imaging agents. We also face potential competition from an F 18 PSMA PET imaging agent for which Bracco is currently seeking FDA approval, which we believe could be granted by the FDA in 2023. To the extent we lose market share to existing or future competitors (including during any period of time in which our TPT Status has expired but TPT Status for a later-approved competitive product still exists), such loss of market share could have an adverse impact on our future business, results of operations, financial condition and cash flows. Moreover, because we are still early in the commercialization of PYLARIFY, we can give no assurance as to how clinical practice may evolve or our ultimate market penetration or market share.

Our success in growing PYLARIFY also depends, in part, on our successfully establishing the use of PYLARIFY for approved indications and potentially for additional indications, including for patient selection for PSMA-targeted therapeutics. For example, we believe the approval of Pluvicto for the treatment of adult patients with PSMA-positive mCRPC who have already been treated with other anticancer treatments (androgen receptor pathway inhibition and taxane-based chemotherapy) creates a new addressable market for the use of PSMA PET imaging in patient selection for PSMA-targeted therapy that increases the total addressable market in the U.S. by an additional 30,000 new scans per year for patients with mCRPC. However, the prescribing

~~Table of Contents~~

information for Pluvicto specifies that a PSMA-11 based PSMA PET imaging agent be used for patient selection, and PYLARIFY is not a PSMA-11 based imaging agent. In March 2022, we announced a strategic collaboration with Novartis to include PYLARIFY in prostate cancer trials with Pluvicto. While we note that FDA-approved labels for F 18 based and PSMA-11 based PSMA PET imaging agents have generally been treated as a class of drugs, including recently by the National Comprehensive Cancer Center in its guidelines and the Society for Nuclear Medicine and Molecular Imaging in its appropriate use criteria, we can give no assurances that the Novartis prostate cancer trials using PYLARIFY will be successful, that the Pluvicto prescribing information will be expanded to incorporate F 18 based PSMA PET imaging agents like PYLARIFY, or how clinical practice may evolve. To the extent we are unsuccessful in establishing the use of PYLARIFY for approved or new indications, such lack of success could have an adverse impact on our future business, results of operations, financial condition and cash flows.

~~We face significant competition in our business and may not be able to compete effectively.~~

The markets for our products are highly competitive and continually evolving. Our principal competitors for our current commercial products and leading clinical development candidates include large, global companies that are more diversified than we are and that have substantial financial, manufacturing, sales and marketing, distribution and other resources:

•For PYLARIFY, our competitors currently include approved imaging agents from Telix Pharmaceuticals Limited, Novartis AG and Bracco, and may in the future include an F 18 PSMA PET imaging agent that Bracco has in late stage clinical development, which we believe could be approved by the FDA for commercialization later in 2023. In addition, the University of California, San Francisco and the University of California, Los Angeles have approved NDAs for a gallium-68 PSMA-11 injection for PSMA PET imaging, which we believe will primarily be used within their hospital systems.

•~~For DEFINITY, our competitors currently include GE Healthcare and Bracco.~~

•For a number of our radiopharmaceutical commercial products, our competitors currently include Curium, GE Healthcare, Bracco and Jubilant Life Sciences, an affiliate of JHS and Jubilant Radiopharma, as well as other competitors, including NorthStar Medical Radioisotopes, LLC and potentially BWXT Medical Ltd.

•For RELISTOR, our principal competitors include Nektar Therapeutics, in collaboration with AstraZeneca PLC; Cubist Pharmaceuticals, a subsidiary of Merck & Co., Inc.; Mallinckrodt plc, in collaboration with Takeda Pharmaceutical Company Limited; and BioDelivery Sciences International, Inc.; together with other prescription, as well as over-the-counter, laxatives used as first line therapy for opioid-induced constipation.

•~~For AZEDRA, there are currently no FDA approved anticancer treatments in the U.S. for malignant, recurrent, and/or unresectable pheochromocytoma and paraganglioma.~~

•For 1095, our principal competitors in the field of radiopharmaceutical therapeutics for mCRPC include Novartis AG, which received FDA approval for its PSMA-targeted therapeutic earlier this year; and may include POINT Biopharma, Telix Pharmaceuticals Limited, and Bayer HealthCare Pharmaceuticals Inc., each of which have product candidates in development.

•~~For flurpiridaz, our principal competitors may include rubidium generators from Bracco and Jubilant Radiopharma.~~

We cannot anticipate the actions of our current or future competitors in the same or competing diagnostic modalities, such as significant price reductions on products that are comparable to our own, development of new products that are more cost-effective or have superior performance than our current products or the introduction of generic versions after our proprietary products lose their patent protection. In addition, distributors of our products could attempt to shift end-users to competing diagnostic modalities and products, or bundle the sale of a portfolio of products, in either case to the detriment of our specific products. Our current or future products could be rendered obsolete or uneconomical as a result of these activities.

Further, the radiopharmaceutical industry continues to evolve strategically, with several market participants either recently sold or for sale. In addition, the supply-demand dynamics of the industry are complex because of large market positions of some participants, legacy businesses, government subsidies (in particular, relating to the manufacture of radioisotopes), and group purchasing arrangements. We cannot predict what impact new owners and new operators may have on the strategic decision-making of our competitors, customers and suppliers, and such decision-making could have a material adverse effect on our business, results of operations, financial condition and cash flows.

~~We may be adversely affected by prevailing economic conditions and financial, business and other factors beyond our control.~~

Our ability to attract and retain customers, invest in and grow our business, maintain our desired levels of costs of goods sold and operating expenses and meet our financial obligations depends on our operating and financial performance, which, in turn, is

~~Table of Contents~~

subject to numerous factors, including the prevailing economic conditions and financial, business and other factors beyond our control, such as the rate of unemployment, the number of uninsured persons in the U.S. and inflationary pressures, including escalating energy prices. We cannot anticipate all the ways in which the current or future economic climate and financial market conditions could adversely impact our business. We are exposed to risks associated with reduced profitability and the potential financial instability of our customers, many of which may be adversely affected by volatile conditions in the financial markets. For example, unemployment and underemployment, and the resultant loss of insurance, may decrease the demand for healthcare services and pharmaceuticals. If fewer patients are seeking medical care because they do not have insurance coverage, our customers may experience reductions in revenues, profitability and/or cash flow that could lead them to modify, delay or cancel orders for our products. If customers are not successful in generating sufficient revenue or are precluded from securing financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to us. This, in turn, could adversely affect our financial condition and liquidity. To the extent prevailing economic conditions result in fewer procedures being performed, our business, results of operations, financial condition and cash flows could be adversely affected.

Similarly, we would expect our costs of goods sold and other operating expenses to change in the future in line with periodic inflationary changes in price levels. Because we intend to retain and continue to use our property and equipment, we believe that the incremental inflation related to the replacement costs of those items will not materially affect our operations. However, the rate of inflation affects our expenses, such as those for employee compensation, contract services, and transportation costs, which could increase our level of expenses and the rate at which we use our resources. While we generally believe that we will be able to offset the effect of price-level changes by adjusting our product prices and implementing operating efficiencies, any material unfavorable changes in price levels could have a material adverse effect on our financial condition, results of operations and cash flows.

Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases

The following table presents information with respect to purchases of common stock we made during the three months ended ~~September~~June 30, ~~2022. The Company does not currently have a share~~2023. In December 2022, in connection with the issuance of the Notes, our Board of Directors authorized the repurchase ~~program~~of up to $150.0 million in ~~effect.~~aggregate amount of our common stock under certain circumstances, of which $75.0 million were repurchased prior to the three months ended June 30, 2023. The 2015 Equity Incentive Plan, adopted by ~~the Company~~us on June 24, 2015, as amended on April 26, 2016 and as further amended on April 27, 2017, April 24, 2019, April 28, 2021 and April 28, 2022 (the “2015 Plan”), provides for the withholding of shares to satisfy minimum statutory tax withholding obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common stock withheld to satisfy minimum tax withholding obligations may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item 2.

Period Total Number of
Shares Purchased Average Price Paid
per Share Total Number of
Shares Purchased as
Part of Publicly
Announced Programs Approximate Dollar
Value of Shares that
May Yet Be Purchased Under
the Program
July 2022** 5,064 $ 70.65 * *
August 2022** 1,434 $ 82.58 * *
September 2022** 4,434 $ 82.67 * *
Total 10,932 *


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
April 2023*	11,215	$	89.16	0	$75.0 million
May 2023*	3,997	$	98.11	0	$75.0 million
June 2023*	1,272	$	89.81	0	$75.0 million
Total	16,484			0	$75.0 million

________________________________

* These amounts are not applicable as the Company does not have a share repurchase program in effect.

** Reflects shares withheld to satisfy minimum statutory tax withholding amounts due from employees related to the receipt of stock which resulted from the exercise or vesting of equity awards.

Dividend Policy

We did not declare or pay any dividends, and we do not currently intend to pay dividends in the foreseeable future. We currently expect to retain future earnings, if any, for the foreseeable future, to finance the growth and development of our business and to repay indebtedness. Our ability to pay dividends is restricted by our financing arrangements. See Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-External Sources of Liquidity” for further information.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~Rule 10b5-1 Trading Plans

On June 15, 2023, Brian Markison, a member of our Board of Directors, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (a “10b5-1 Plan”), providing for the potential sale of up to 10,000 shares of our common stock between September 25, 2023 and December 29, 2023.

On June 2, 2023, Gérard Ber, a member of our Board of Directors, entered into a 10b5-1 Plan providing for the potential sale of up to 15,500 shares of our common stock between September 5, 2023 and February 29, 2024.

On May 17, 2023, Gary Pruden, a member of our Board of Directors, entered into a 10b5-1 Plan providing for the potential sale of up to 12,530 shares of our common stock between August 16, 2023 and July 31, 2024.

On May 16, 2023, Heinz Mäusli, a member of our Board of Directors, entered into a 10b5-1 Plan providing for the potential sale of up to 21,549 shares of our common stock, including shares obtained from the exercise of vested stock options covered by the 10b5-1 Plan, between August 15, 2023 and December 29, 2023.

On May 9, 2023, Julie McHugh, a member of our Board of Directors, entered into a 10b5-1 Plan providing for the potential sale of up to 2,180 shares of our common stock between August 8, 2023 and December 29, 2023.

4038

Table of Contents

On May 8, 2023, Samuel Leno, a member of our Board of Directors, entered into a 10b5-1 Plan providing for the potential sale of up to 26,479 shares of our common stock, including shares obtained from the exercise of vested stock options covered by the 10b5-1 Plan, between August 9, 2023 and August 31. 2023.

On May 22, 2023, Paul Blanchfield, our President, entered into a 10b5-1 Plan providing for the potential sale of up to 1,908 shares of our common stock between August 21, 2023 and November 16, 2023, plus up to 33,820 shares of our common stock that may be issued pursuant to the vesting of an equity award on March 7, 2024. Pursuant to the 10b5-1 Plan, Mr. Blanchfield will also make a gift of 500 shares of common stock on March 7, 2024.

Table of Contents

Item 6. Exhibits

INCORPORATED BY REFERENCE

EXHIBIT
NUMBER

DESCRIPTION OF EXHIBITS

FORM

FILE
NUMBER

EXHIBIT

FILING
DATE

10.1*†

Office Lease by and between LMI and 201 Burlington Road Owner, LLC dated February 14, 2022 (the “Lease”); as amended by the First Amendment To Lease dated May 4, 2023

10.2+

Lantheus Holdings, Inc. 2023 Employee Stock Purchase Plan

8-K

001-36569

10.1

May 1, 2023

31.1*

Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a).

31.2*

Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a).

32.1**

Certification pursuant to 18 U.S.C. Section 1350.

101.INS*

Inline XBRL Instance Document

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*

Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

† Portions of this exhibit have been omitted for confidential treatment pursuant to Item 601(b)(10)(iv) of Regulation S-K.

+Indicates management contract or compensatory plan or ~~arrangements~~arrangements.

4140

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



LANTHEUS HOLDINGS, INC.

By:						/s/ MARY ANNE HEINO
Name:						Mary Anne Heino
Title:						~~President and~~ Chief Executive Officer (Principal Executive Officer)
Date:						~~November~~August 3, ~~2022~~2023

LANTHEUS HOLDINGS, INC.

By:						/s/ ROBERT J. MARSHALL, JR.
Name:						Robert J. Marshall, Jr.
Title:						Chief Financial Officer and Treasurer (Principal Financial Officer)
Date:						~~November~~August 3, ~~2022~~2023

4241


	Nine Months Ended September 30, 2021
	Common Stock			Additional Paid-In Capital	Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance, January 1, 2021	66,875	$	669		$	665,530	$	(149,946)	$	(2,048)	$	514,205
Net income	—	—			—		9,008		—		9,008

Other comprehensive income	—	—			—		—		808		808
Stock option exercises and employee stock plan purchases	155	1			2,379		—		—		2,380
Vesting of restricted stock awards and units	489	5			(5)		—		—		—
Shares withheld to cover taxes	(85)	(1)			(1,598)		—		—		(1,599)
Stock-based compensation	—	—			3,317		—		—		3,317
Balance, March 31, 2021	67,434	$	674		$	669,623	$	(140,938)	$	(1,240)	$	528,119
Net loss	—	—			—		(26,657)		—		(26,657)

Other comprehensive income	—	—			—		—		240		240
Stock option exercises and employee stock plan purchases	116	1			2,042		—		—		2,043
Vesting of restricted stock awards and units	51	1			(1)		—		—		—
Shares withheld to cover taxes	(9)	—			(193)		—		—		(193)
Stock-based compensation	—	—			4,588		—		—		4,588
Balance, June 30, 2021	67,592	$	676		$	676,059	$	(167,595)	$	(1,000)	$	508,140
Net loss	—	—			—		(13,415)		—		(13,415)
Other comprehensive loss	—	—			—		—		(142)		(142)
Stock option exercises and employee stock plan purchases	48	1			960		—		—		961
Vesting of restricted stock awards and units	23	—			—		—		—		—
Shares withheld to cover taxes	(4)	—			(67)		—		—		(67)
Stock-based compensation	—	—			3,867		—		—		3,867
Balance, September 30, 2021	67,659	$	677		$	680,819	$	(181,010)	$	(1,142)	$	499,344