LNTH - Earnings call transcript Q3 2019

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Operator

Good morning ladies and gentlemen. Welcome to the Lantheus Holdings Third Quarter 2019 Earnings Conference Call. This is your operator for today's call. [Operator Instructions]

A replay of the audio webcast will be available in the Investors section of the company's website approximately 2 hours after the completion of the call and will be archived for 30 days.

call of your Investor the Mark for turn Director Kinarney, Relations. now over host to today I'll Mark?

Mark Kinarney

Thank you and third quarter good morning. Welcome earnings call. to conference XXXX Lantheus Holdings'

Heino; President Joining our is a third X-K and press furnished results. This and Exchange and was issued our which quarter the CEO morning me XXXX we CFO our reporting Mary to today release Commission Marshall. Bob Form Anne Securities under

our find the the website release at of can You Investors lantheus.com. in section

I'd started change actual during include non-GAAP financial measures risks of statements. materially law except Please most GAAP statements materially. get to measures Before refer variety future remind comments Please to section uncertainties. discussion directly included and Actual by the of forward-looking to even to required differ call as of we is and include Investors that or our by uncertainties. obligation a Also, this if update note website. SEC like this these you may due indicated detailed our call of in these applicable forward-looking comparable to that these forward-looking for from risks measures. during Reconciliation no will statements results a we expectations will those results the filings also our financial discussions assume certain

With that Anne. I'll now turn Anne? over Mary the call Mary to

Mary Anne Heino

everyone. morning or for quarter third molybdenum-XX strong and environment. results nearly delivered a Mark, better-than-expected and DEFINITY growth We TechneLite XX% supply by you, sales good performance Thank moly challenging driven despite

Progenics products therapeutic cancer. on made our and follow I'll announcement strong portfolio company the quarter speak first find and to proposed Pharmaceuticals earlier solutions focused performance AI with oncology month we fight radiopharmaceutical for a this our and detailing an of of diagnostic to earnings acquisition of Before the third

for exciting value and in stockholders key an create we through and it transaction the combination the of rationale to walk financial companies. like strongly and strategic some will is I'd of why both This the believe

As of the with announcement conversations Progenics acquisition team transaction the valuation the is careful of our this opportunities evaluation a benefits the the on of early result and XXXX. started with and mentioned and that initial a long in combination

more nine especially during Lantheus' and innovative extensive business portfolio As and due months the our their we incredibly that professional of between benefit past strong became advisers from that increasingly the diligence over Progenics Progenics will about with companies learn the fit and operations is clear strengths. it

XXX%. our proven of as shareholder XXXX in has of excellence track this through backed by our and commercial IPO record long-term creating We've value returns shareholder demonstrated financial Lantheus accomplished since a total discipline. by operational

portfolios. and companies' complex these capabilities our in combined we uniquely the isotope believe to value optimize maximize supply of Lantheus expertise the Progenics' managing radiopharmaceutical global is and operations With chains, positioned

of areas: anchored ultrasound Lantheus life history today innovation. is long strong in position built leadership in leader have in recognized two our management We investing DEFINITY; uses by as product of and imaging and we microbubbles. microbubbles revenue nuclear medical a and contrast are maintain a emerging growth to cycle sustained with

positive of remain future We business. the about this

These the Regarding PET X this and represent We market. Flurpiridaz XXXX F candidates the generation precision in for a first pipeline: radiopharmaceuticals, then next of has of XX; field neuronal management products to neuroendocrine and been the in our the always diagnostics. planar had agent pioneer diagnostic Lantheus our SPECT introducing LMI tumors.

our Progenics the radiopharmaceutical enhances acquisition oncology The of space. in offerings

paraganglioma. Progenics' first product our ways of one AZEDRA pheochromocytoma transaction is specifically Specifically most neuroendocrine tumors treat FDA-approved with only the strengths used this to and directly the certain plays and important to rare

manufacturing growth. maximize and at enhance manufacturing revenue part spending best at We its AZEDRA's launch deliver of core facilities. including positioned distribution capabilities diligence robust process available Progenics' time of for to and due Lantheus' to are substantial our as radiopharmaceuticals supply customers Progenics infrastructure look With just-in-time extensively in we

our manufacturing capabilities practices that best can new existing radiopharmaceutical apply and manufacturing scaling up for we as confident our launches. well are We from experience as launching leverage

with excellence, long-term will we of we our believe AZEDRA for to able position commercial demonstrated success. addition In history enhanced be

Additionally platform a provide more brings cancer acquisition that management offering clinicians of suite this products an a patients. oncology integrated complete prostate the for including of

to market for prostate-specific significant including unmet Products cancer an diagnosis range patient membrane an prostate therapeutic is diagnostic area of target today. and antigen most in radiopharmaceuticals initial in critical promising interpreting areas from or through assist the and -- treatment marker AI The images. PSMA with need one algorithm a

now company burn cash That said will Lantheus transaction this a biotech typical profile. transform into with with a

First and brings FDA-approved products. X commercialized the acquisition

are Second pipeline will products already robust who to licensed development advance cost product several market. while candidates bear a Progenics to to partners comes the those those of necessary with

development. platform apply Finally, for assets approach advance and efficient market financial will disciplined Lantheus' the to Earlier the oncology we referenced projects within of Progenics' I across we pipeline. the integrated execute portfolio will to prioritize R&D products to

that metastatic driver is that be as and/or or the and Lantheus' prostate prostate cancer PSMA XX to portfolio it to squarely presence expertise. cells specific diagnostic visualization of inflammatory degenerative not locally the soft meaningful enables highly of cancer. platform both represents absence tissue Within for the has a growth a advanced core conditions. and confounded or We as agent is prostate radiopharmaceutical determine PyL potential it advancement a near-term by market fit oncology in metastases recurrent believe agent to diagnostic bone PyL F and and an

PyL demonstrated PSMA be to low of have a in could of very with overall. has represent of impressive including as a the recurrent studies with men PyL the prostate cancer includes clarity advancement as the patients a important opportunity detection levels. and patients of an importantly detail also disease therapeutic tool illustrated and PyL image early the biochemically XXX pipeline in Progenics prostate XXXX. cancer management I management cancer significant in prostate well

interim Phase further will decisions trial guide its clinical designed study II patients the data ARROW in to which ARROW The development important began enrolling product. of This product study. recently this yield is

integrated development a products and late-stage an which with suite be is PSMA-based is of in this Finally, imaging rounded technology. will artificial prostate product out intelligence

continue As to near-term together is to the in vision portfolio even work years walked one just ideal both near through. success next product we by long confident term. that drive within are for companies an Progenics' growth and that to see immediately opportunity the Lantheus' I bring X fit these and opportunities half the we over great capturing We more

forward of select contain pro financial filing forma the additional other for our of about the Form of information include the with process Part data the going This will the materials will for transaction among SEC. rationale our combined filing turn deal S-X With move strategic Bob walk and the to operating for the third that strategy who of will company Lantheus' to I'll quarter then financial over aspects company. the some results. and the through call

third more and Later highlights from the about quarter. Bob? our performance I'll speak

Robert Marshall

good Mary the is you, accountability Progenics discipline at morning consistent we with the the model and The operate combined business Beginning we in Anne, way company everyone. and acquisition. Thank grounded financial with envisioned for Lantheus.

clear for their revenue enhanced from bolster pipeline XX the we commercialization. developmental a companies' well-defined next to over commercial that these products of be ramp strong cash certain investments Near-term result of will ahead flows. to clinical manufacturing dilution to generate free see We pathways months and the as accretion the growth needed the of we and combined path expect

in of in and we stockholders. value realizing plan this We for be accretion pursuit transaction to then diligent the our see

by by to For as we expand revenue diversified of combined expect focus year efficiencies points product the a margins stream favorable end on example manufacturing the with gross with rate basis three. legacy over mix nearly run capturing as well a Lantheus growing XXX

the Further, appears $XX between expense integration models the from and of as it management. baseline Also $XX in as million and third-party under project to Lantheus' have will than CapEx call we million much G&A I office synergies effort would to an dedicated a mentioned Progenics profile study announcement we employ fully on the a Progenics XXXX higher capture expenses. management

service future a have the significant to Our Progenics would standalone a allow to combined customer periods expenses will that as notably perspective commercial existing operations had and entity operating in company infrastructure build. avoid assumed from

as going will our Finally, and and in capital as to of the and both mentioned the our announcement This to the with future maintain at provide all-stock the create to company flexibility return to protect the we ability to stockholders. disciplined deal an structured preserve access we strategies financial forward. time value transaction transaction evaluate

to now third our Turning quarter financial results.

from prior totaled as focus Reported updated the the and in revenue material I'll noted strong DEFINITY compared then a $XX.X from Revenue quarter. million currency of Impact year. the at prior continued was sales not year its or third adjusted million XX.X% higher results decrease for foreign $XX.X growth otherwise provide to on quarter. of XXXX unless quarter earnings year the full guidance. and X.X%

quarter were Further of it a due ANSTO ANSTO. revenues revenue the year's also nuclear of TechneLite results. communicated million decrease XX% exclude included comparable and from of generator $X.X million mainly year previously $XX.X Other to in shortage supply performance was not the decrease sales $XX.X that million this at prior NTP repeated prior XX.X%. noting year worth is a which TechneLite

profit of XXX was XXXX Total revenue the was a a third allowances XX.X% quarter margin on decrease of rebates the million. for basis. Adjusted basis similar from $X.X net and quarter gross offset of by revenue third points

product moly-XX supplier unfavorable in by led mix quarter's forecast for DEFINITY's reflective are This favorable of results offset part line and our a in with delivery with day outperformance. mix

were development or operating ejection by our Adjusted revenue offset ventricular of at incremental revenue at of favorable to and studies. year the which driven left investment favorability SG&A net X.X% points clinical drove in the primarily basis planned support of research quarter phasing net XX expenses fraction LVEF by in expenses prior of XX.X% certain

the acquisition to but amount, the quarter relates million of for incentive associated in in balance decrease of expenses the plans. recorded is intangible same Of $XX.X a Also Progenics stock before we and totaled was million $X.X to profit the taxes. quarter adjustments the the over related this Total year. prior million announced Operating XX.X% with quarter $X.X amortization. period noncash $X acquired million

tax other interest the and quarter to reported million. rate was Net The amounted expense in income X.X%. $X.X effective

Our was tax rate adjusted XX.X%. effective

was quarter decrease state net company an reserves of liability. The XX.X%. a third tax of or quarter the to released During the GAAP million $X.X indemnified certain its for income the related resulting

$X.XX prior same a a per GAAP from per of were of same $XX.X net period Adjusted of share last from decrease earnings XX.X% diluted income fully decrease adjusted the the diluted million or earnings year were quarter a was X.X% year. while X.X%. share decrease $X.XX fully

with quarter own Lastly investment strategic cash third Capital $XX.X third to year manufacturing was compared million expenditures $XX.X flow the ongoing largely prior our XXXX. campus. million line in in in of our Billerica totaled capabilities which $X.X and totaled the quarter operating as million includes on

was expenditures $XX.X capital flow million quarter. quarter's cash less cash $XX.X Free we cash define end. equivalents as operating and million totaled cash for which at the flow Accordingly,

Turning year. now to our the guidance for of balance the

of We narrowing target our in range $XXX expected are be revenue full $XXX million. to million to year the

QX therefore $XX million. to meet to for continues to a to Moly service. our production to Revenue range return while continues guidance NTP is sufficient $XX million of work now demand returned ANSTO toward supply make levels progress with to

As ability return an and we customer normalcy to in look meet year to supply a confident for to we procedures. demand XXXX to remain satisfy patient the full

Moving earnings. now to

a $X.XX We $X.XX per share had are range $X.XX. to be our projected we of of earnings $X.XX. fully year in Previously to full guidance diluted adjusted raising the to range

guidance QX to $X.XX of $X.XX. range is a Our therefore

Anne? turn me let the to that Anne. Mary back With over Mary call

Mary Anne Heino

you Bob. Thank

on Now let progress some performance our additional our color on business me programs. provide strategic and

use Let's suboptimal strong is to as of growth well ability franchise. in increasing the a grow of DEFINITY DEFINITY's to result of appreciation echocardiograms. with our of our continue an as appropriate echocardiography start continued the microbubble benefits

support the This initiatives our as and long-term our growth growth profitability our which as commitment in the the to pipeline strength and believe microbubble fuels will we franchise. confidence well of key of existing sustained business infrastructure

X patient this of on BENEFIT We is LVEF X later X our first initiatives for enrollment Phase the program. studies The with in X these with complete year. and enrollment over for completion track BENEFIT parallel clinical our for set total and III DEFINITY BENEFIT XX% with remain investment two our

of thereafter. supplemental will NDA that use if completion the commercialize successful file Upon soon trials, the results approved we would to enable a to us

Our and DEFINITY sterile on-campus products remains project time and budget. other vial manufacturing on for on

on this on had commercial the product construction keep earlier to by having we completed us validation. produce early summer steps After moved These track to XXXX. phase

to filer ANDA status notice the not potential regarding remain have application. Finally of generic We received a confident DEFINITY's date, in future. we of

the of what business the quarter Moving and provide on like an we to and supply balance the third our for our nuclear update I'd year to for expect on moly XXXX.

able While we that they have been throughout NTP we to partner third the of by quarter supply moly. increase have production supply informed experienced limited been our

and supply provides positive requirements. news will our meet increased allow us This flexibility that to

experience their their another However Medicine ANM. our to Nuclear continues new moly related or to facility of processing suppliers issues ANSTO Australia transition to

the experienced a approval to production it issue time causing During mid-November ANM expects issue ANSTO the regulatory that production. generator own that If track third is its ANSTO mechanical in the at moly line on to support line quarter to granted address could necessary shut on production mechanical and resume down. stays

IRE supplier has and chain. importance been ANSTO for strategic a the of shortages year NTP a having partially consistent diversified moly entire the highlighting from offsetting supply

IRE offering uninterrupted note conversion from moly me Let low will its operations to that or derived enriched continue also planned uranium during and LEU. ongoing

channel Cardinal our we that contracts U.S. place in radiopharmacy and announce supply with Health I all supply contracts partners chains XXXX. have now am with our X radiopharmaceutical to through major pleased and UPPI extended

radiopharmaceutical the to agent pathway. LMI our our to diagnostic XXXX Turning and molecular pipeline PET-based norepinephrine for

respectively. on we designing are tumors adult mentioned pediatric last for trials and call populations and in As X our of III neuroendocrine we management the diagnosis Phase clinical

drug of neuroendocrine the the XXXX designation tumors. use granted orphan In of FDA the LMI August management for in

disease have the LMI accordance should human by eligibility priority disease pediatric subsequent FDA received be also application in with XXXX the for voucher rare approved indication a pediatric requirements. for notice We of rare a program's its for drug review

biomarker patients agents most may be trial immuno-oncology for from announced cancer privately company stage clinical agreement Under of tumors to licensing which Last development the to used these of license development quarter NM-XX radiopharmaceuticals Lantheus by on NanoMab's early Technology likely Limited our medicine. imaging PD-LX. identifies a biopharmaceutical stage next-generation we the expressing NM-XX agreement therapies. diagnostic optimize precision with a benefit design NanoMab held collaboration focusing PDL-X identifying developmental oncology

PD-LX that we in We imaging especially stratification development are as excited ongoing selection patient predicting believe could analytics opportunity based uniquely in as drug drug molecular current of needs by address the and unmet as well therapies response.

us our NanoMab allow Our core and nuclear Progenics commercialization to agreements our in mainly with leverage capabilities isotopes. competencies

delivering the business. quarter reflect across future Overall results strength and achievements operational and years and on about remain to the in strategic third optimistic I our come. quarters our our vision

and another in the of encouraged by are close business we of year for our the Progenics results performance close We financial the strong and the quarter of XXXX. as move transaction Lantheus towards first

take Bob With ahead. your and I please are ready questions. Operator go to that now

Operator

your Instructions] CJS first Solow question [Operator question. Our comes Larry from with Securities. Please proceed with

Larry Solow

you. Good morning. Thank

the rapid. Just DEFINITY. a continues growth XX% couple of on really Obviously questions strong

most is that rate -- there? it time I growing a sort low to growth years? to that rapid it's models why think out over just wouldn't why can we of are we speak perhaps all But the out at last reason too the you rate. mid-teens being bring little our conservative this three our Is models continue of to grow we down to

Mark Kinarney

Mary question. where at it's from a When question. that's think don't it I -- fair is think contrast I a when coming Anne rate. This look we Bob. fair -- continued and Larry So the it's from see -- where coming penetration growth not really I is we obviously

is it contrast the within in appreciation really as studies. So my said I for of use continued remarks increased

at we use echos to are underlying effort point reflects growth the exams. our education into recognize because would that their And as sales of to put efforts what market on just of performing commercial medical how need overall the of market all not so that it's depend is really suboptimal That growth is upon and from we sonographers the echocardiography. we that

point medical technician physicians. to with that our the with do but not that's education where we We only

point is say our our sonographers efforts at the So with result at I the both then we of and that it really would the where levels interactions to at physicians. and society with levels day-to-day

I your that can't It we somewhat run may how you to tell models. conservative. be are

sit. and There's XX% it of to all you where know that that contrast literature can contrast compare suggest would be a left it lot plan should medical contrast headroom forward agent. be would to done if where studies of up market we using we still As in a should suggest

study heard mention also year. by put enrollment together also patient say that complete looking forward file We'll sNDA the then should I would this LVEF end you me that of our our NDA.

population the PDUFA date that patient date expands going the the contrast. addressing. also timing that With that We're be that -- into use are same shortly. would that of PDUFA already PDUFA the bring could And us addressable market then with the back fairly into market we

market. driver same right that another into growth So back

Larry Solow

to -- not So and there? whatever What's if enrollment Absolutely. And line reason enhance its time more to can -- a terms trial give ventricular that within of just growth. certainly left of months. completes the in of course the continue maintain couple increase the would potentially the it

come And visit onetime no right? once then assume that I patients a through So enrollment follow-up. and there's that it's

is data be -- we you how itself if that the or after will So of share out a any will get is know So done we trial right? those there basically hear details? or notification analyzed or pretty will any happen much play you filed the can that that of to just

Mary Anne Heino

the their study then study the study patient is But that truth any I X study without and shared trial details haven't for trial. the different on are just standard part MR design -- contrast the contrast echo without with I -- are will reads there because the there's as the based the there's done study the say of contrast those which each of yet.

reads reasons. other follow-on right. see you're of at each where in trials three kind -- file in pharma the studies for trial. There's patient looking But no in there these for you'd of as So are one you're

out decided last or to that. announce sNDA sure locks with with announce whether announcements kind haven't the filing the what related reg but far we as will be patient yet I'll will can you I as data be there So pathway of

Larry Solow

lastly call was anything joined manufacturing a couple a of than one-timers in But than little there else the other But other higher ones. expense? Was late ramp I bit less expected? than there guess then And -- I in there the are little a margin Okay. anything the that I gross Or... announcements between just the in thought. --

Robert Marshall

it's bit with in more expected. we Well line little had a actually what

mention did a first witnessing the which in I call way think be we things to when shortages around we radiopharmaceutical run in gross XX.X%. market. if That's -- we back recall what actually do terms we of half we do you rate the margin because our I saw couple through that that complex right would July of you our that supply was managing if into get best these below around a is will what

And way make that that of of bit a an is does necessarily it. are to moly buying opportunity week creating so the in optimal not to the which demand. what hedge with doing a is sure take we doing that you're do we And what always most do advantage effectively is throughout to

So It decay. excess does more. bit cost And mix course, this some little a what the is year. you do get margin of then,

sell. than last quarter the third the you was year higher a typically margin were Australia we selling If what to at in we remember TechneLite

Mary Anne Heino

generator. The

Robert Marshall

Of the generators the States. here in United

mainly bit the it really was a again by that But driven of mix TechneLite. little outperformance. but again a by an DEFINITY's little bit was unfavorable product offset So

Larry Solow

I know missed And just then of on some I'll I circle I'll Excellent. review Progenics the have back. part additional shared questions that certainly Great. that. I Okay. And so stuff. if you any stuff

Operator

Thank you concludes Thank you today's for conference. gentlemen. ladies This participating. and

Lantheus (LNTH) 31 Oct 192019 Q3 Earnings call transcript