Radiopharmaceutical company Lantheus Holdings (NASDAQ:LNTH) missed Wall Street’s revenue expectations in Q1 CY2025, with sales flat year on year at $372.8 million. The company’s full-year revenue guidance of $1.57 billion at the midpoint came in 1.8% below analysts’ estimates. Its non-GAAP profit of $1.53 per share was 7.5% below analysts’ consensus estimates.
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Lantheus (LNTH) Q1 CY2025 Highlights:
- Revenue: $372.8 million vs analyst estimates of $378.8 million (flat year on year, 1.6% miss)
- Adjusted EPS: $1.53 vs analyst expectations of $1.65 (7.5% miss)
- Adjusted EBITDA: $149.6 million vs analyst estimates of $172.9 million (40.1% margin, 13.4% miss)
- The company dropped its revenue guidance for the full year to $1.57 billion at the midpoint from $1.58 billion, a 0.6% decrease
- Management lowered its full-year Adjusted EPS guidance to $6.65 at the midpoint, a 6.3% decrease
- Operating Margin: 27.4%, down from 28.8% in the same quarter last year
- Free Cash Flow Margin: 26.5%, down from 32.2% in the same quarter last year
- Market Capitalization: $5.57 billion
StockStory’s Take
Lantheus Holdings’ first quarter results were driven by a combination of steady performance from its core imaging agents and significant business transformation initiatives. Management attributed the quarter’s results to the impact of contracting strategies in its radiopharmaceutical segment, ongoing competitive dynamics in its PYLARIFY product, and the divestiture of its SPECT business. CEO Brian Markison emphasized, “We are laying the foundation for the next chapter of our business,” highlighting the importance of recent acquisitions and a focus on PET radiodiagnostics and radiotherapeutics.
Looking ahead, Lantheus’ downward adjustment of full-year guidance was shaped by a more cautious view on PYLARIFY’s growth trajectory and anticipated integration costs from new acquisitions. Management remains focused on streamlining its portfolio, expanding its Alzheimer’s disease diagnostics via the Life Molecular Imaging acquisition, and investing in early- and late-stage pipeline assets. Markison noted that these moves are designed to “diversify our revenue streams and unlock additional value,” though leadership acknowledged ongoing headwinds in reimbursement and market competition.
Key Insights from Management’s Remarks
Lantheus’ leadership pointed to ongoing portfolio realignment and competitive pressure as key influences on first quarter outcomes. The company’s business update centered around the strategic sale of its SPECT business, acquisitions targeting growth in PET imaging, and the positioning of its pipeline for future expansion.
- Portfolio transformation underway: Management is actively shifting away from legacy SPECT imaging, opting to divest this segment to SHINE Technologies. This streamlining move is intended to focus the company on higher-margin PET diagnostics and radiotherapeutics.
- Acquisition-driven pipeline expansion: The completed Evergreen Theragnostics acquisition and pending Life Molecular Imaging (LMI) deal are expected to add commercial products and expand the pipeline, particularly in neuroendocrine tumor imaging and Alzheimer’s diagnostics. Evergreen brings manufacturing capabilities and a pipeline that includes OCTEVY, while LMI adds NEURACEQ, a PET imaging agent for Alzheimer’s disease.
- PYLARIFY market dynamics: PYLARIFY, Lantheus’ PSMA PET imaging agent, saw continued volume growth offset by a low-single-digit decline in net price. Management cited increased competitive disruption among smaller, non-contracted imaging centers due to reimbursement changes, but believes expanded contracting and product availability will help regain momentum.
- Alzheimer’s diagnostics opportunity: The company anticipates significant growth in the Alzheimer’s PET imaging market, citing over 100 therapeutic candidates in development. Management expects its combined Alzheimer’s diagnostics platform to be positioned for leadership as the market expands.
- Margin pressures and cost allocation: Operating margins declined in part due to increased R&D spend supporting a broader pipeline and non-recurring transaction expenses. The company expects divesting lower-margin businesses and integrating acquisitions to support future margin improvement.
Drivers of Future Performance
Management’s outlook for the remainder of the year is shaped by the integration of new acquisitions, ongoing reimbursement headwinds in core imaging agents, and anticipated growth in the Alzheimer’s diagnostics market.
- Integration of new acquisitions: Lantheus expects the addition of Evergreen and LMI to diversify its revenue base and provide new growth avenues, though near-term earnings will be diluted by integration costs and increased R&D investment.
- Reimbursement environment and competition: Ongoing changes in Medicare reimbursement and heightened competition, especially for PYLARIFY, are expected to impact near-term growth and pricing power. Management is focused on expanding contracting efforts to smaller imaging centers to mitigate these effects.
- Alzheimer’s diagnostics and pipeline launches: The company believes growth in Alzheimer’s disease PET imaging will accelerate with the launch of new diagnostic agents and continued development of therapeutic partnerships, positioning Lantheus to benefit from increasing demand in this area.
Top Analyst Questions
- Anthony Petrone (Mizuho Financial Group): Asked about PYLARIFY’s competitive dynamics and the rationale for divesting the SPECT business; management described short-term disruptions among smaller centers and emphasized a focus on growth platforms.
- Roanna Ruiz (Leerink Partners): Queried about drivers for the narrowed guidance range and how resources from the SPECT sale would be redeployed; management cited more cautious PYLARIFY assumptions and a focus on PET diagnostics and radiotherapeutics.
- Richard Newitter (Truist Securities): Sought clarity on expected dilution from acquisitions and whether double-digit revenue growth in 2026 remains likely; management reiterated low-single-digit dilution and stated that double-digit growth is still anticipated with full-year contributions from acquisitions.
- Matt Taylor (Jefferies): Asked how the acquisitions would affect growth rates in 2026 and beyond; management pointed to launches of OCTEVY, PNT2003, and Alzheimer’s agents as potential drivers for sustained double-digit growth.
- Paul Choi (Goldman Sachs): Inquired about PYLARIFY pricing trends and the outlook for Alzheimer’s PET scan market growth post-acquisition; leadership highlighted ongoing payer discussions and robust growth in Alzheimer’s imaging claims.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will watch (1) the pace and success of Evergreen and Life Molecular Imaging integration, (2) stabilization and potential recovery in PYLARIFY’s pricing and volume trends as new contracting strategies are implemented, and (3) early signs of expansion in the Alzheimer’s PET imaging segment following NEURACEQ’s addition. The timing of key regulatory filings and product launches will also be critical markers for the company’s evolving growth trajectory.
Lantheus currently trades at a forward P/E ratio of 11.2×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report.
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