Lantheus Holdings Inc Acquisition of Life Molecular Imaging Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Roanna Ruiz - Leerink Partners - Analyst : Hey morning, everyone. So I was curious, could you elaborate a bit on how Neuraceq helps you quickly entrench yourselves into the Alzheimer's market? And what are some of the top assumptions that drive your $1.5 billion TAM assumption for Alzheimer's radiodiagnostics, which I think you mentioned could grow to $2.5 billion by mid-2030? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 13, 2025 / 1:30PM, LNTH.OQ - Lantheus Holdings Inc Acquisition of Life Molecular Imaging Conference Call

Question: Roanna Ruiz - Leerink Partners - Analyst : Super helpful. And if I could squeeze in one extra question. I was curious, thinking about the PI-2620 tau agent relative to MK-6240, do you have any thoughts about how both might be used in the future in clinical practice and some of the decisions between using one over the other?

Question: Roanna Ruiz - Leerink Partners - Analyst : Got it. Thanks, super helpful.

Question: Richard Newitter - Truist Securities - Analyst : Hi, thanks for taking the questions and congrats on the announcement of the deal. I wanted to just start off on the 200 basis points to 300 basis points anticipated organic growth accretion that you mentioned. It sounds like that obviously, this is going to turn organic in the second half of 2026. Is it right -- I mean we can get the 200 basis points of organic growth contribution just from Neuraceq alone, is it right that, that 200 basis points, 300 basis points over 3 years is just for products commercialized already? Or does that include other items? And then I have a follow-up.

Question: Richard Newitter - Truist Securities - Analyst : Okay. And then if you could just talk us a little -- to us a little bit about the margin contribution? And what the -- so year one, I appreciate it's accretive to earnings, but talk to us about what this does to margins. And then in 2025, what should we be thinking about in terms of dilution, if any?

Question: Richard Newitter - Truist Securities - Analyst : Okay. That's helpful. If I could just squeeze in one more. Just thinking about Neuraceq revenue, that was the majority of LMI's revenue. We're getting to about, I think it was USD60 million. Is that ballpark correct? And should we be thinking of this as 40%, 50% type growth? Or would you just give us a sense on the growth trajectory there? And if any of that's wrong, please correct me.

Question: Richard Newitter - Truist Securities - Analyst : And their fiscal year end September though, right? So that doesn't even include maybe some of the benefits of the change in CMS on a go-forward basis, which it sounds like you saw some nice uptick in the more recent months, closing out '24. Is that -- should I -- am I reading that correct?

Question: Anthony Petrone - Mizuho Securities USA - Analyst : Thank you. Happy New year to everyone and congratulations on the deal. Maybe one on -- a follow-up on the $2.5 billion TAM question. A lot is focused on staging of Alzheimer's patients, but kind of curious when you think out, certainly even to the mid-2030s, how do you think these agents will be used as diagnostic agents more for drug monitoring capabilities? So in an instance where, for example, a patient's on LEQEMBI, they may be getting dosed for several years, how do these stack up for drug disease monitoring? And then I'll have a quick follow-up.

Question: Anthony Petrone - Mizuho Securities USA - Analyst : That's helpful. And then when we think about MK and NAV just in the clinical trial phase of their development. I think, for instance, MK is used in like 90 clinical trials. Bringing in Neuraceq, is that going to change any of those development pathways? Will -- can Neuraceq be used in other clinical trials alongside drugs that are under development? How is that going to work? Will that be accelerated? Or will there be some cannibalization there? Thanks again and congrats on the deal.

Question: Anthony Petrone - Mizuho Securities USA - Analyst : Thanks again, I'll hop back in.

Question: Matt Taylor - Jefferies - Analyst : Hey, good morning. Thanks for taking the question. I guess in the LMI material, they talk about their potential for garnering 20% to 40% market share. And so I was wondering if you could comment on that? Do you agree with that? Do you think you could do better with more agents and your size? And then also just had a question on the decision not to preannounce today, you have in the past. Can you just talk about why you didn't?

Question: Yuan Zhi - B. Riley Securities, Inc. - Analyst : Good morning. Thank you for taking our questions and congrats on this commercial expansion outside of prostate cancer. Maybe one quick question. Brian or Paul, what were the factors driving you to buy this asset, this Neuraceq from Life Molecular Imaging? Was it updated CMS reimbursement rule or the rapid growth of Neuraceq in 2024? Or are you just looking for a new growth driver in the near term? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 13, 2025 / 1:30PM, LNTH.OQ - Lantheus Holdings Inc Acquisition of Life Molecular Imaging Conference Call

Question: Yuan Zhi - B. Riley Securities, Inc. - Analyst : Got it. And maybe a quick follow-up there. For the Neuraceq, can you quickly comment on the current market share of Neuraceq in Alzheimer's imaging and your strategy to grow and compete with two other approved agents out there?

Question: Yuan Zhi - B. Riley Securities, Inc. - Analyst : Got it. Thanks for the helpful call.

Question: Paul Choi - Goldman Sachs - Analyst : Hi, thank you. Good morning and happy new year. Everyone. My question is in regards to business development strategy. Can you maybe just comment on the rationalization for prioritizing Alzheimer's disease versus a potential oncology therapeutic or something in that area. And then my second question is, can you maybe just comment on what your counsel has advised with regard to antitrust considerations here given the late-stage clinical pipeline as well as other competing commercial stage assets in the Alzheimer's diagnostic market. Thank you very much for taking our questions.

Question: Tara Bancroft - TD Cowen (Research) - Analyst : Hi, good morning and thanks for taking the questions. So I think we got through most of the market questions. So I guess mine is more of a strategy question. So I wonder how much of this acquisition decision was driven by, of course, the accretive impact on EPS versus the expertise of the commercial and development team to support the growing franchise or franchises even outside of Alzheimer's? Like specifically, can this team help support growth of PYLARIFY and DEFINITY too?

Question: Tara Bancroft - TD Cowen (Research) - Analyst : Okay. Thank you.

Question: Kemp Dolliver - Brookline Capital Markets - Analyst : Great, thanks and good morning. You touched on the commercial infrastructure briefly earlier and Life has this data in their presentation. So looking forward, how do you see the pacing of the build-out? Is it something where it might be -- you might make some near-term investment shortly after closing? Or do you think it's just going to be more gradual from here?

Question: Kemp Dolliver - Brookline Capital Markets - Analyst : Great. And the second question is, since this is going to require shareholder vote by Life Healthcare Group's shareholders, are there any wrinkles in that voting process we should understand? Or is it just a straight majority vote?

Question: Kemp Dolliver - Brookline Capital Markets - Analyst : Great. Thank you.

Question: Ed Ridley-Day - Redburn Atlantic - Analyst : Good morning. Thank you. A couple of follow-ups, please. First of all, on the Neuraceq revenue, I don't know if you can give us any color on the proportion that is clinical trial related as with you, clearly, a lot of work being done and that is an important driver. So if you can give us a breakdown of the Neuraceq revenues, that would be helpful. And then on the R&D service revenue that they disclosed, how should we see that going forward? I mean, clearly, a very stable business, a very well set business. But can you speak a bit to your ability to grow that business?

Question: Ed Ridley-Day - Redburn Atlantic - Analyst : No, specifically the R&D service revenue, I think it's about $20 million a year where they -- certainly where they have that service business? And how should we think about growth in that business going forward as compared to your service business?

Question: John Vandermosten - Zacks Investment Research - Analyst : Good morning. Given that this is a global product and there are both business and nuclear material considerations, what regulatory clearances do you need?

Question: John Vandermosten - Zacks Investment Research - Analyst : Okay. And in a few years, you may have two beta amyloid and two tau agents. And how will be the Life Molecular commercialization team change to kind of accommodate that?

Question: Andy Hsieh - William Blair & Company, L.L.C. (Research) - Analyst : good morning. Thanks for taking our question. One is (inaudible), it allows patients the flexibility of having a drug holiday. So I'm just wondering, Paul's commentary before about this longitudinal tracking. Is that a part of that assumption already? Or this could present as upside going forward? And the second question has to do with R&D. I'm curious about LMI's R&D capability and how would that help you in terms of generating the next wave of radio-ligands? Just maybe highlight some of the differentiation that they can provide with your pipeline.