LNTH - Earnings call transcript Q4 2017

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Operator

Good afternoon, ladies and gentlemen. I would like to welcome everyone to the Lantheus Holdings Fourth Quarter and Full Year 2017 Earnings Conference Call. This is your operator for today's call. [Operator Instructions] This call is being recorded for replay purposes. A replay of the audio webcast will be available in the Investors section of the company's website approximately two hours after completion of the call and will be archived for 30 days. to Meara call and Murphy, like host to Corporate now today, for Director would turn over the your Communications. I Investor Relations

Meara Murphy

for issued Please are a Holdings Securities Officer; anticipate we our results. release, XX, Valerie. also under that X-K, us call. year the the afternoon, Chief earlier With you, Good afternoon, Executive the everyone, and fourth filing XXXX note Heino, press conference filed with thank XX-K December Thank with Chief XXXX. full call our on SEC and Form today we this Form and afternoon, Later XXXX this earnings year Crowley, Commission for Anne Financial quarter for Exchange fourth our ended you Lantheus me quarter the and Mary Officer. reporting full Jack our and and joining President quarter

well in any Factors be materially statements Remarks Risk of replay and these Litigation prospects views You a of relied differ today forward-looking factors, section by result Securities of date. constitute as views for find make any of which We not from the we of of a Forms you detail provisions these that our representing important that website the Act Actual may those our upon call indicated of this our as we more expectations, should various XXXX. our for harbor forward-looking as statements as in the disclosed regarding company under remind represent in as of today documents plans subsequent can XX-K. the purposes statements Reform future Private and section Investors at as forward-looking results the safe lantheus.com.

any to so While such specifically applicable any the as disclaim statements obligation we law. except otherwise do by forward-looking we in required future, update may

which, a relevant particularly by activities our of review operational income, diluted reference these certain as decision tables income measures indicators metric earnings for adjusted XXXX, at for her our for transfer we financial call, set Jack with time, high-level corporate per our to and to EBITDA, that, I use adjusted detailed followed growth EBITDA, operating evaluate Reconciliations Mary We strategy, the Of share, non-GAAP of metrics of as to XXXX financial non-GAAP review will variability income to these a performance. after the our will means GAAP a we GAAP note, XXXX, financial be Finally, performance. well Mary on as reconciliation call will guidance financial closing forth making today’s income, to free comments will costs. adjusted discussion Anne's net comments. of net followed our flow related to more due adjusted of Mary Anne. provide respect EBITDA, and this turn by adjusted are with particular the in a over With now performance, Anne include begin our technology press cash consider net release. and today common and our to

Mary Anne Heino

corporate and of for for of and to and key corporate built leverage were We them. and The our our debt and revenue ratio core cost sheet pleased and pillars Thank balance delivered for and success and positioned sustainable company. million. exited our having high all adjusted XXXX both welcome cash our on sustainable our another franchise; to performance our the XXXX have with And successful year end in of and augment on guidance follows; invest finally pursue company. further pleased outline deliver objective pillars and invest of growth call. execute was three strong on plan you, growth conference we XXXX to $XX our profitability. debt. lowered fit microbubble EBITDA, strong approximately strategy exceeded of focus performance in available are goals position have a the and that growth here opportunities you for profitability of to are you our joining XXXX on the to These everyone growth pipeline with The two, for us our to beyond. strong our in our I'm to the and and One, our Meara. XXXX the that to important continued And the emerging discuss for as today enhance technologies, growth external strategy deliver corporate key importantly us trajectory today be of

addressing me Let the global underway agent. basis, leading echo On a franchise. microbubble remains contrast start our with programs already DEFINITY

X actively we important been pursuing been clinical strengthening pleased protection for or new and developing to ventricle conducted of I formulation. an of expanding are two critical Phase contraction. highly have EF DEFINITY's alternative an IP plan is variable. measurement Currently, in to also measures for EF we have is without as an each management initiate and blood of fraction indication contrast with echocardiography trials and Today measurement and am the half second We ejection leaving DEFINITY announce function in EF left the percentage patient XXXX. it decisions heart the studies

the be compared and ventricular echocardiography which We as designed in reproducibility Our the EF accuracy in patient DEFINITY echocardiography. could addressable for of to EF improved left demonstrate unenhanced superior with would to are believe contrast indication approval DEFINITY double echo approximately used. an population clinical enhanced measuring trials

opportunities. who program pillar the medicine. may investment, we assess to advancement in we competitive nerve X risk a an scheduled creating sympathetic pleased Collaborations data now targets continuing a advantage only tool North supply XXXX This corporate be our anticipate our indication. FDA NDA Billerica ICD a pipeline flexibility key savings the molecule Transitioning that external a exclusivity pleased headquarters. This ischemic patients Massachusetts Europe trial and focused are to target also capabilities IP adding clinical to manufacturing. adequate to single their on LMI to specialized by in specialized cardiac our with that am increased in support our PET are report We microbubble clinical of of not death. this small cardiac, to that to redundancy EF internal trial in addressing at will an because centers ischemic announce add trial program consider Canada, for our implantation Phase deemed failure undergo decision with second In growth in but heart DEFINITY of U.S., in the in The believe heart We sudden sudden I Fluorine-XX risk current first of LMI franchise, yielded imaging provide we cost us believe serves initiating this XXXX submission. I'm the and technology assessment useful with designed academic at the to strategy of chain regulatory internally delivers program manufacturing This advancing to work, addition support a death. portfolio years affords Also based to of our cardiac as class could emerging become discovered patients radiopharmaceutical agent failure indication XXXX. of new diagnostic function. nuclear capacity would for three larger

the to be affects U.S. agent NDA anticipate by million is million successful, we these demonstrate for Heart for evaluation filing failure trial approximately of stratification ICD this improves this patients and of patients approximately is LMI XXXX XXXX. patients. designed in X an today may Our X.X risk trial If implantation. the eligible

agent of for PET represents emerging modality we're opportunity XXXX represents LMI excited for the about the management the patient in such, As opportunity as as this well growth improved Lantheus.

to capabilities. we external development to current pillar turning are third opportunities the and our growth complement business of that Now portfolio our strategy, pursuing committed thoughtful

our our and and will growth, cash excited opportunities reliable delivering improved for generation, that in pursuing our success enhance facilitated flow are value efficiency, by now sustainable growth revenue about and ready shareholders. on agenda Following we drive and operational

are our We disciplined fit, opportunities that to we pursue be in the are effort. evaluating and Rest created represent investors additional approach of company. and long-term priced and actively a assured, committee value will our deals success create that in strategic have strong aid board ensure appropriately, an recently such for only

new we closing review positively of three our board. now for to skills bring complement turn I his effective our the Finally, our they am We the financial added XXXX, that I'll believe board. tomorrow also guidance for announce current pleased for to directors Jack returning call have and before comments. to over XXXX Jack?

Jack Crowley

Mary and afternoon everyone. Thanks, good Anne,

of the GAAP In the year adjusted full our begin the in I a in of XXXX. of As I'll an as non-GAAP with by $XX.X financial be the worldwide followed press our as today. as finally, I'll fourth tables of quarter covering quarter results guidance. reconciliation delivered a fourth on reminder first quarter XXXX results focusing XXXX my our to fourth will release today's compared comments you include the X.X% quarter, compared to included to revenue increase results. million provide And we by fourth performance

strong XX.X% quarter year. over increase fourth We fourth Xenon an of over an in X% was was an prior DEFINITY revenue the last totaling quarter while our improvement $XX.X for revenue million year the of performance worldwide quarter, increase the million with for continued of million the revenues TechneLite $X.X $XX.X X.X%. approximately

was approximately Hurricane fourth our a that million business. other a of Maria on our Rico from from revenue the impact ago, down of million in year category of quarter, $X.X was $X.X Finally difference the product result one third Puerto

XX%, revenue was as the assumption cost activities our totaled the by new margin improvement approximately refer generated over year. excluding below adjusted transfer impact fourth gross manufacturing of once of to expenses savings Xenon XXXX largely Adjusted of profit products, line, million to finishing prior fourth higher the our points which XXXX, basis quarter last of of for our XXXX reconciliations related Moving well fourth of ago. key in as as capabilities well as again million were to increased and $XX.X margin quarter late facility contribution we technology income of million our last Adjusted XXX This higher the year. an compared attributable attributable in the is costs, increase an one increased $XX.X $XX.X employee This year increase operating in expenses expenses processing areas. at operating from to $X.X and sales marketing year. million the was Billerica the as quarter

over improvement million, throughout our of ago debt XX.X% reflecting quarter our the interest Moving the below interest activities same XXXX. income, operating $X.X totaled rate refinancing lower year expense following a period a completed fourth

analysis operating released Accordingly, losses had fourth we several $XXX.X in we to the previously million. four realizable over positive tax likely cash valuation are reported evidence expect to GAAP sufficient more the our and federal as assets quarter Accordingly, benefit than not liabilities. based there do was on XX, primarily taxpayer XXXX. will resulting for of net our deferred we XXXX, utilize we determined that past state December assets that the tax of years. During in-depth income of allowance that the years we a income tax of future five next These be consist reduce not years to that an

the corporate $X.XX utilize was to Net per our $X.X per quarter this described cash for of or or to in of corporate source diluted savings the $XX.X growth million XXXX. $X.XX be expected quarter to million for for by significant share share funding income Anne. the benefits the with together a diluted fourth XXXX We Mary compared investments of fourth being XX% rate will reduced federal of tax strategy

driven of enacted assets fourth to impact $XX.X offset $XX million of the income million benefit which the XXXX. under tax a net release Act was Tax of against by quarter changes of deferred allowance the of for Our was tax XXXX the million $XXX by the related which reflects valuation provision income

end increase more was making sheet, million This not under of on cash Moving totaling credit million million importantly quarter Anne $XX.X cash million liquidity our investment had operating capabilities our a corporate of quarter was support that million, to XXXX $XX.X of will facility cash support our revolving but cash as primarily strategy. XXXX in a source to This last the XX, million. balance were $XX.X quarter during cash our and fourth including flow a Borrowing the year. of described result total needs manufacturing will to our December growth and only Mary on earlier. specialized quarter hand of investing Capital to be liquidity operational we expenditures million. equivalents flow fourth $XXX.X capacity compared $XX compared totaled day-to-day capital in $X Fourth XXXX. $X.X

totaled for Turning I $XXX.X the for our million reiterate year XXXX. now and like to that would to revenues increase XXXX exceeded Worldwide comment both year. EBITDA XX% results. guidance our Anne’s success Mary adjusted over full regarding representing our and revenue we prior earlier a

increase amount million F collaboration improvements year in expense. $XX.X over quarter full representing the of under million, to income $XXX.X million payment received totaled XXXX, decreased Excluding XXXX in compared in reported and as flurpiridaz an primarily operational to is compared as year This $XX.X the the as GE second improvement upfront year, of the of company million. a $XX.X million, the million basis, year. XXXX, $X Healthcare interest well agreement, an from the Adjusted of impact during revenue On revenues, the before of GAAP license $XX.X million X% XXXX. prior DEFINITY EBITDA prior to increased was $XX.X taxes XX attributable

This EBITDA revenues. totaled in exceeded of Excluding XXXX the million the second to from quarter $XX guidance Healthcare, XX.X% adjusted $XX full at GE our or payment impact million. upfront of of year $XX.X million XXXX the $X received million

flow free $XX.X we XXXX. cash we've Both platform the launched delivered million. million of into $XX.X flow also indicative We strong and created operating of cash financial of as

Turning for to guidance of to in our $XXX million. XXXX. press year the financial revenue release, for full in anticipate million the we XXXX range today's of total stated $XXX I

revenue of first XXXX, to million we of million. range expect in the to $XX the see For $XX quarter

products parent NTP. year full process we process and quarter supply shutdown company resolved from of receiving our NTP, first announced product that has again of has the The of suppliers of impact temporary issue. reflects and this nuclear issue revenue XXXX the one are NECSA a to been NTP due guidance a

EBITDA our incorporates Our performance improving XXXX growth operating as corporate strategy. our well as guidance adjusted

anticipate $XX million XX.X% adjusted representing For in full $XX we to of XX.X% EBITDA range XXXX, revenue. year the of million to anticipated

remain expect see of we For that, in performance the full driving to Overall, million pleased call both with financial XXXX over very results and the $XX strong turn and now to XXXX, I EBITDA range Mary year on QX first back in will of focused our we to we’re adjusted Anne. quarter With the financial million. XXXX. $XX

Mary Anne Heino

Thank you, Jack.

see one, excited reiterate are you As includes microbubble three deliver the fit profitability. enhance initiatives and drive the about XXXX strong our and core on and franchise. growth trajectory profitability growth delivered focus three place strategy. in and opportunities growth that key technologies we our corporate in in To augment now that Two pillars emerging objectives external of with following pipeline our the and can to to strategy sustainable results our invest pursue we

profile With We’re the long-term to move prospects I committed current investing would emphasize, and shareholders. for excited Operator? company to believe we year. about updating like and the forward we questions. of will call value strong our and our on our excellence you remain the throughout optimization are continually for progress a our look comments operational I the my as we success healthy to our that, we conclude ensure in today maximize will growth right I business. open to strategic for and that and priorities

Operator

Our from of Anthony first comes Instructions] Jefferies. Petrone question [Operator

Your open. line is

Anthony Petrone

little then mix a margin time give on and just you But you maybe moving be impact will radiopharma. bit bit outside long from from place over believe DEFINITY then over and shift internal I more about have spoke margin then maybe then of one shift could how Couple manufacturing on on gross vendors will and over and a How follow-up? toward direct what a versus little on away DEFINITY the that maybe that take long having a us a manufacturing manufacturing. time, JHS questions I sense,

Mary Anne Heino

it’s let at speak our Jack own decisions Mary capabilities here putting margin to gross campus I’ll of play our implications. I’ll the Anne in speak afternoon good and the for Anthony our to first kind

can As sense redundancy imagine makes of have just corporate good you supply. to it

over at so, And few that. hard the past years, worked we've

underway where may formulation. as or but a you at alternative we an that to We've remember, for had we Pharmalucence natural at about As reasons. several arrangement close alternative brought had SBL, program also talked supplier, also an we've program good

us on the here have, right that we at next looked make of we campus. seemed added our to level we capabilities As that sense it expertise the to

micro-bubbles very blocks very in expert have are in We to of necessary type are that material. reproducible all facets manufacturing and complex the of that and

assess And our outside decision or the right it whether right to inside bring we our came decision campus, be on go our so as we that capabilities is should believe to next to the we to here on and add campus.

said I’ll I As margin implications. to Jack speak gross let

Jack Crowley

margin cost external Thanks a we Jack. this initiative. do we benefit on improved cost is in-house it Anthony from evaluated under and the through gross versus Yes, as feedback. the CMOs, this see of and of Mary, Thanks the margin an prospects bringing working perspective, stuff gross for

Anthony Petrone

a size the little indication. color trials bit Mary long would Anne you follow-up more get the Maybe be on indication trials I’ll back uptick again maybe and And will could more expected how announcing in Thanks on EF and EF R&D the specifically DEFINITY in then two just and take queue? the here, a then these

Mary Anne Heino

Anthony, reasons program our I’ll it it and where where of most the serve, seemed but speak speak to were we and we we with procedures Jack sheet, looked We means again for in measurement measure really is that they’re chemotherapy, recognized ejection with assessing cardiac assessing and cetera. is pre-surgically, but when disease them importantly, cardiac echocardiography. in is the of not et medical only that natural us patients to look course balance undertaking considered as which we critical as to EF other types a such looked at again at used what more community in expanding strategic DEFINITY as So of DEFINITY applications the for to to successful will and measurement fraction cardiac being

is penetration being medical measure often sought we current database the at reasons. And to claim and at then there I for patient think that examples we double looked several was of currently is those our when with estimation see with addressable we how looked where that there our pursuing for derived essentially that level use population this suboptimal contrast see that's would and we echo. calculation the indication –

and of remind what market, million talk approximately say we market done I'll echocardiography So it studies as U.S. annually, are XX here math about you’ve talking recognize contrast to supports literature proximately we XX medical are studies of suboptimal the it's that is can to of agent, XX% we it’s the addition and previously, are difficult me a without that million you certainty the XX% When is. you million. about heard of U.S. that studies echocardiography diagnostic up those diagnostic certainty in reach in X.X it clear say that and

who at benefit looked we showed for heard what contrast would from would the measurement EF that equal us, based data patient for doubles potentially why that an of the it use considered it who saying suggested and be that's contrast use. was me you medical claims population the for population essentially As approximate that

Anthony Petrone

Very helpful.

Jack Crowley

specific a maybe financial R&D, just as frame back, but question your the and step the on picture. let guidance Anthony we know me so you larger to expense take don't provide

as investment and frame gross leverage about to XXXX profile. kind a reinvestment expect that margin the the to XXXX. our of achieved we've through future through you similar in of strong profile company, we we margins, corporate to to reinvest drive growth we gross this and When additional maintain performance think operational our So in XXXX expect similar perspective XXXX help strategy look see growth we at expect our to really

pieces you by expense without if financial see that put the line line you kind to think together guidance giving enable picture specific those should I So me larger of

Operator

of comes Wells question Lei Fargo. next Huang Our from

Your line is open.

Lei Huang

you've It's the question. taking tell for back - when XXXX. manufacturing in go And to shutdown products said Thanks when Larry you resumed us disruption supply? just calling your want to your for Biegelsen. about occurred? Huang NTP Can the it in the for my what Lei I

Mary Anne Heino

NTP suspend it good due is Mary were asked their facility the We mid-November and to Anne. Lei, had afternoon was this in to operations that the reactor notified process in processing been a issue. the

to well-defined all is guidances information process supply this recently there as come last in as safety agency again. informed And can referred and a Jack with was imagine and were were were That to the was fact decisions. have sensitive we that being you it had NECSA was oversight which operational met. used started to safe operations because to and process the a lasted that we be governmental resumed, that that other week decision - ensure governmental and until the receiving As oversight deals

as we requires in of As us lot all we any do in the of XXXX, supply follow of Lei, rest a understand looked as general well this chain oversight. the a as is you who that folks time

do that, is impact what our we it XXXX seeing. for why that's especially to hard we did then were total you us very financially and to materially week it look to about not And we best as worked We already sources didn't were us through able to the complement certainly XXXX, of so finished it of not was that but we And into publicly. performance hear apparent were. balance throughout each always XXXX, what us needs did now alternative the supply speak given

Lei Huang

any the So interruption. year? you Can or that full for there's way for QX quantify supply in

Mary Anne Heino

instead different combination say in That's in, from for but think from every of NTP our Belgium supply. three Lei in representing basis. fair supply a them each third equal And - different supplier true or will supply to receive Australia. essentially essentially to are reactor IRE that that a ANSTO it's I put it's on suppliers, not in into I’ll in to perspective contributors comes days processor and South supply you. weekly fair NTP is they We as approximately and speak our Africa, because total about day quantify

filling changes on we second What supply kind move that's type into us. which is when our there going where to to in shifts any of question, magnitude right slight is happens for is potential your natural slight – asking to answer a the believe I that’s delivery So motion of basis. supply in delay and

possible any need into we change small channel can customers. satisfy best we down So to in – as make our as our what that

Lei Huang

guidance, I the for expect all i.e. we that that's on margin reinvestment ask that there in about there? weaker well a EBITDA about? Or also issue some of Is can little or talked the obviously supply other are If you than talked as DEFINITY XXXX. just just we due factors to

Jack Crowley

Yes.

Mary Anne Heino

First we supply The to is issue supply nuclear spoke let’s was just and late that DEFINITY week of think ago supplier a course we issue. clarify, Jeff only XXXX. interruptions didn’t I which approximately and that don’t in until a NTP - referenced a was the from XXXX Jack?

Jack Crowley

So Lei, the way Anthony to think about that it - gross comments maintaining itself. my margin take the into to consideration about

when so investments infer EBITDA the margin year-over-year And the between that and result the I growth support is you margin the gross think you adjusted corporate strategy. a think about EBITDA can the adjusted that difference of margin

Lei Huang

can please. if squeeze in more And I one just

thank DEFINITY for provide very Can for you the very size much. any Thanks next study studies? your on generation of update, of you the sense and filing the timing and Just helpful. completion perhaps

Mary Anne Heino

welcome. You’re

going just here clarify to before answer, Lei. again so I I’m And

the Phase that be. endpoint they our of we’ve are did be already in currently an that should available conduct that with They meetings for not what that would generations current should being about the I indication what be clinical would had have formulation be those for clinical and our size be, that that two and FDA. to studies trials clinic the submission they or trials, used FDA the EF we’re to say will will We was was conducted using And DEFINITY. the alternative DEFINITY, used the we for developing but discuss that X That indication. part agent the

special like We calls, to has are as done mentioned spot in as mention didn’t, to also we XXXX FDA enrollment additional submitting or that we beginning to we program. the patient now, for protocol there. - for what anticipate agreement - clarity needs a in a with happy look the fully the I’m And

Operator

[Operator this Thank gentlemen, ladies today's conference. concludes your you Thank you participation. Instructions] and for

Lantheus (LNTH) 26 Feb 182017 Q4 Earnings call transcript