Lantheus Holdings, Inc. [LNTH] Filings

10-Q 1 lnth-20240930.htm 10-Q lnth-20240930

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20. Subsequent Events

Expansion of Bedford Lease

On October 7, 2024, the Company executed the Second Amendment to Lease (the “Second Amendment”) to add additional space to the Bedford Lease. Pursuant to the terms of the Second Amendment, the Company added an additional 43,442 square feet to its premises. The term of the lease for the additional space added pursuant to the Second Amendment will run coterminous with the existing lease and expire on February 29, 2040. The added space will be used for administrative, research and development and manufacturing activities.

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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 30, 2024


☐			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.)

201 Burlington Road, South Building		01730
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 69,526,841 shares of common stock, $0.01 par value, outstanding as of October 30, 2024.

Table of Contents

LANTHEUS HOLDINGS, INC.

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements			1
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			25
Item 3. Quantitative and Qualitative Disclosures About Market Risk			40
Item 4. Controls and Procedures			40
PART II. OTHER INFORMATION			41
Item 1. Legal Proceedings			41
Item 1A. Risk Factors			42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			49
Item 3. Defaults Upon Senior Securities			49
Item 4. Mine Safety Disclosures			49
Item 5. Other Information			49
Item 6. Exhibits			50
SIGNATURES			51

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Lantheus Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except par value)


	September 30, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	866,386	$	713,656
Accounts receivable, net	329,336		284,292
Inventory	70,835		64,029
Other current assets	21,998		16,683
Assets held for sale	7,159		7,159
Total current assets	1,295,714		1,085,819
Investment in equity securities	158,791		—
Property, plant and equipment, net	169,512		146,697
Intangibles, net	173,606		151,985
Goodwill	61,189		61,189
Deferred tax assets, net	144,641		150,198
Other long-term assets	46,177		55,261
Total assets	$	2,049,630	$	1,651,149
Liabilities and stockholders’ equity
Current liabilities
Current portion of long-term debt and other borrowings	$	564,713	$	823

Accounts payable	44,914		41,189

Accrued expenses and other liabilities	174,452		145,338

Total current liabilities	784,079		187,350
Asset retirement obligations	23,237		22,916
Long-term debt, net and other borrowings	613		561,670
Other long-term liabilities	61,993		63,321
Total liabilities	869,922		835,257
Commitments and contingencies (See Note 18)
Stockholders’ equity
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; 70,854 and 69,863 shares issued as of September 30, 2024 and December 31, 2023, respectively)	709		699
Additional paid-in capital	797,430		757,727
Treasury Stock at cost - 1,339 shares as of September 30, 2024 and December 31, 2023	(75,000)		(75,000)
Retained earnings	457,735		133,503
Accumulated other comprehensive loss	(1,166)		(1,037)
Total stockholders’ equity	1,179,708		815,892
Total liabilities and stockholders’ equity	$	2,049,630	$	1,651,149

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,
	2024		2023		2024		2023
Revenues	$	378,734	$	319,946	$	1,142,800	$	942,430
Cost of goods sold	136,608		119,995		403,054		462,756
Gross profit	242,126		199,951		739,746		479,674
Operating expenses
Sales and marketing	43,719		37,399		134,300		106,472
General and administrative	40,516		35,741		135,820		85,163
Research and development	24,148		14,450		132,773		60,883
Total operating expenses	108,383		87,590		402,893		252,518
Gain on sale of assets	—		—		6,254		—
Operating income	133,743		112,361		343,107		227,156
Interest expense	4,903		5,054		14,624		14,978
Investment in equity securities - unrealized gain	(37,325)		—		(75,492)		—
Other income	(9,953)		(52,649)		(27,785)		(60,362)
Income before income taxes	176,118		159,956		431,760		272,540
Income tax expense	45,025		27,999		107,528		49,259
Net income	$	131,093	$	131,957	$	324,232	$	223,281
Net income per common share:
Basic	$	1.89	$	1.93	$	4.69	$	3.27
Diluted	$	1.79	$	1.88	$	4.55	$	3.18
Weighted-average common shares outstanding:
Basic	69,464		68,436		69,193		68,188
Diluted	73,065		70,046		71,331		70,268

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

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Lantheus Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	131,093	$	131,957	$	324,232	$	223,281
Other comprehensive income (loss):

Foreign currency translation	44		(83)		(129)		224


Comprehensive income	$	131,137	$	131,874	$	324,103	$	223,505

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

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Lantheus Holdings, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(in thousands)


	Nine Months Ended September 30, 2024
	Common Stock			Treasury Stock			Additional Paid-In Capital		Retained earnings		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount			Shares										Amount
Balance, January 1, 2024	69,863	$	699		1,339		$	(75,000)	$	757,727	$	133,503	$	(1,037)		$	815,892
Net income	—	—			—		—		—		131,066		—			131,066

Other comprehensive loss	—	—			—		—		—		—		(141)			(141)
Stock option exercises and employee stock plan purchases	86	1			—		—		2,756		—		—			2,757
Vesting of restricted stock awards and units	988	9			—		—		(9)		—		—			—
Shares withheld to cover taxes	(302)	(3)			—		—		(19,415)		—		—			(19,418)
Stock-based compensation	—	—			—		—		15,384		—		—			15,384
Balance, March 31, 2024	70,635	$	706		1,339		$	(75,000)	$	756,443	$	264,569	$	(1,178)		$	945,540
Net income	—	—			—		—		—		62,073		—			62,073

Other comprehensive loss	—	—			—		—		—		—		(32)			(32)
Stock option exercises and employee stock plan purchases	68	1			—		—		1,548		—		—			1,549
Vesting of restricted stock awards and units	58	1			—		—		(1)		—		—			—
Shares withheld to cover taxes	(11)	—			—		—		(924)		—		—			(924)
Stock-based compensation	—	—			—		—		18,479		—		—			18,479
Balance, June 30, 2024	70,750	$	708		1,339		(75,000)		$	775,545	$	326,642	$	(1,210)		$	1,026,685
Net income	—	—			—	—	—		—		131,093		—			131,093
Other comprehensive income	—	—			—		—		—		—		44			44
Stock option exercises and employee stock plan purchases	76	1			—		—		2,831		—		—			2,832
Vesting of restricted stock awards and units	40	—			—		—		—		—		—			—
Shares withheld to cover taxes	(12)	—			—		—		(1,312)		—		—			(1,312)
Stock-based compensation	—	—			—		—		20,366		—		—			20,366
Balance, September 30, 2024	70,854	$	709		1,339		$	(75,000)	$	797,430	$	457,735	$	(1,166)		$	1,179,708

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	Nine Months Ended September 30, 2023
	Common Stock			Treasury Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount			Shares									Amount
Balance, January 1, 2023	68,851	$	689		1,339	$	(75,000)	$	715,875	$	(193,158)	$	(1,259)		$	447,147
Net loss	—	—			—	—		—		(2,807)		—			(2,807)

Other comprehensive loss	—	—			—	—		—		—		(119)			(119)
Stock option exercises and employee stock plan purchases	120	1			—	—		2,781		—		—			2,782
Vesting of restricted stock awards and units	813	8			—	—		(8)		—		—			—
Shares withheld to cover taxes	(154)	(2)			—	—		(11,152)		—		—			(11,154)
Stock-based compensation	—	—			—	—		9,667		—		—			9,667
Balance, March 31, 2023	69,630	$	696		1,339	$	(75,000)	$	717,163	$	(195,965)	$	(1,378)		$	445,516
Net income	—	—			—	—		—		94,131		—			94,131
Other comprehensive income	—	—			—	—		—		—		426			426
Stock option exercises and employee stock plan purchases	73	1			—	—		1,346		—		—			1,347
Vesting of restricted stock awards and units	68	1			—	—		(1)		—		—			—
Shares withheld to cover taxes	(16)	—			—	—		(1,467)		—		—			(1,467)
Stock-based compensation	—	—			—	—		12,692		—		—			12,692
Balance, June 30, 2023	69,755	$	698		1,339	$	(75,000)	$	729,733	$	(101,834)	$	(952)		$	552,645
Net income	—	—			—	—		—		131,957		—			131,957
Other comprehensive loss	—	—			—	—		—		—		(83)			(83)
Stock option exercises and employee stock plan purchases	25	—			—	—		1,265		—		—			1,265
Vesting of restricted stock awards and units	39	—			—	—		(1)		—		—			(1)
Shares withheld to cover taxes	(11)	—			—	—		(1,000)		—		—			(1,000)
Stock-based compensation	—	—			—	—		13,976		—		—			13,976
Balance, September 30, 2023	69,808	$	698		1,339	$	(75,000)	$	743,973	$	30,123	$	(1,035)		$	698,759

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

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Lantheus Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net income	$	324,232	$	223,281
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation, amortization and accretion	47,339		45,028
Impairment of long-lived assets	—		138,050

Amortization of debt related costs	3,217		3,227
Changes in fair value of contingent assets and liabilities	(1,405)		(9,475)



Inventory adjustments	738		5,251
Stock-based compensation	54,229		36,335
Gain on disposal of assets	(6,254)		—
Gain on sale of RELISTOR licensed intangible asset associated with net sales royalties	—		(51,789)

Unrealized gain on investment in equity securities	(75,492)		—
Charges incurred in connection with acquired IPR&D	66,000		—
Deferred taxes	(4,402)		(57,649)
Long-term indemnification receivable	—		3,929
Long-term income tax payable and other long-term liabilities	2,619		(2,744)
Other	7,172		3,118
Changes in assets and liabilities which provided (used) cash:
Accounts receivable	(44,887)		(43,044)
Inventory	(7,101)		(25,995)
Other current assets	1,335		2,496

Accounts payable	1,151		12,150
Accrued expenses and other liabilities	18,529		(89,196)
Net cash provided by operating activities	387,020		192,973
Cash flows from investing activities:
Capital expenditures	(35,256)		(34,486)
Acquisition of assets, net	(80,911)		(45,345)
Proceeds from sale of assets	8,000		97,839
Purchases of investment in equity securities	(83,246)		—
Acquisition of exclusive license option	(28,000)		—
Net cash (used in) provided by investing activities	(219,413)		18,008
Cash flows from financing activities:

Payments on long-term debt and other borrowings	(376)		(685)



Contingent value rights settlement	—		(3,700)
Proceeds from stock option exercises	3,772		3,462
Proceeds from issuance of common stock	3,450		1,933
Payments for minimum statutory tax withholding related to net share settlement of equity awards	(21,723)		(13,621)
Net cash used in financing activities	(14,877)		(12,612)
Effect of foreign exchange rates on cash, cash equivalents and restricted cash	34		139
Net increase in cash, cash equivalents and restricted cash	152,764		198,508
Cash, cash equivalents and restricted cash, beginning of period	715,285		417,241
Cash, cash equivalents and restricted cash, end of period	$	868,049	$	615,749

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Lantheus Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (Continued)

(Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2024		2023
Reconciliation to amounts within the condensed consolidated balance sheets
Cash and cash equivalents	$	866,386	$	614,131
Restricted cash included in other long-term assets	1,663		1,618
Cash, cash equivalents and restricted cash at end of period	$	868,049	$	615,749


	Nine Months Ended September 30,
	2024		2023
Schedule of non-cash investing and financing activities
Additions of property, plant and equipment included in liabilities	$	8,502	$	8,573

Lease liability settled through transfer of lease	$	762	$	—
Right-of-use asset obtained in exchange for operating lease liabilities	$	63	$	29,625

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

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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; references to “Lantheus Holdings” refer to Lantheus Holdings, Inc. and not to any of its subsidiaries; references to “LMI” refer to Lantheus Medical Imaging, Inc., the direct subsidiary of Lantheus Holdings; references to “Lantheus Alpha” and “Meilleur” refer to Lantheus Alpha Therapy, LLC and Meilleur Technologies, Inc., respectively, each a direct subsidiary of 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 Lantheus and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Quarterly Reports on 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 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 months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any future period.

The condensed consolidated balance sheet at December 31, 2023 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, 2023 filed with the Securities Exchange Commission (“SEC”) on February 22, 2024.

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 becoming an indirect subsidiary of Lantheus Holdings following the completion of such merger (the “Progenics Acquisition”).

In connection with the Progenics Acquisition, Lantheus Holdings issued 26,844,877 shares of Lantheus Holdings common stock and 86,630,633 contingent value rights (each a “CVR”) tied to the financial performance of PYLARIFY to former Progenics stockholders and option holders. Each CVR 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. 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, was capped at 19.9% of the total consideration the Company paid in the Progenics Acquisition. Based on the Company’s 2022 PYLARIFY net sales, the Company determined that the aggregate payment obligation under the CVRs was $99.6 million, which was the maximum amount payable. The Company paid out this amount in May 2023 in full satisfaction of the CVRs.

2. Summary of Significant Accounting Policies

Investments

Equity investments with readily determinable fair values for which the Company does not have significant influence over the investee are measured at fair value on a recurring basis. Equity investments without readily determinable fair values for which the Company does not have significant influence over the investee are measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). For equity investments for which the Company does not have significant influence over the investee, changes in the value of unsold equity investments are recorded in investment in equity securities – unrealized gain. Equity investments for which the Company has significant influence over the investee are measured using the equity method unless the Company elects to apply the fair value option to account for the investment.

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Recent Accounting Pronouncements

The Company has considered all new accounting standards issued by the Financial Accounting Standards Board (“FASB”). The Company has not yet adopted the following standards:

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures. The guidance in this update is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024. The Company is currently in the process of evaluating the effects of this pronouncement on our related disclosures.

In December 2023, the FASB also issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.

3. Revenue from Contracts with Customers

The following table summarizes revenue by source as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
Major Products/Service Lines (in thousands)	2024		2023		2024		2023
Product revenue, net(1)	$	374,601	$	319,508	$	1,136,670	$	925,848
License and royalty revenues	4,133		438		6,130		16,582
Total revenues	$	378,734	$	319,946	$	1,142,800	$	942,430

________________________________

(1)The Company’s product revenue 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.

The Company classifies its revenues into three product categories: Radiopharmaceutical Oncology, Precision Diagnostics, and Strategic Partnerships and Other Revenue. Radiopharmaceutical Oncology includes PYLARIFY and AZEDRA. In the first quarter of 2024, the Company discontinued the production of AZEDRA. Precision Diagnostics includes DEFINITY, TechneLite and other diagnostic imaging products. Strategic Partnerships and Other Revenue primarily includes out-licensing arrangements and partnerships for the Company’s biomarker solutions, digital solutions, and radiotherapeutic platforms, inclusive of two investigational stage diagnostic agents, MK-6240 and NAV-4694. On August 2, 2023, the Company sold its rights to the RELISTOR net sales royalty asset (the “RELISTOR royalty asset”) under its license agreement with Bausch Health Companies, Inc. (“Bausch”); the Company retained the rights to future sales-based milestone payments.

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

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	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
PYLARIFY	$	259,756	$	215,428	$	791,881	$	621,419
Other radiopharmaceutical oncology	—		848		384		2,383
Total radiopharmaceutical oncology	259,756		216,276		792,265		623,802
DEFINITY	76,965		67,336		231,629		206,688
TechneLite	20,480		23,272		70,380		65,853
Other precision diagnostics	6,282		5,740		18,039		17,002
Total precision diagnostics	103,727		96,348		320,048		289,543
Strategic partnerships and other revenue	15,251		7,322		30,487		29,085
Total revenues	$	378,734	$	319,946	$	1,142,800	$	942,430

The Company is 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.

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.

Financial assets and liabilities measured at fair value on a recurring basis consist of money market funds, contingent consideration liabilities, and equity investments. 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. Investment in equity securities resulting from the Perspective Therapeutics, Inc. (“Perspective”) strategic agreements were recorded at fair value by the Company and are adjusted for price changes observable in the market each quarter. The Company recorded the contingent consideration liabilities resulting from the Progenics Acquisition at fair value based on inputs that are not observable in the market.

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


	September 30, 2024
(in thousands)	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	669,158	$	669,158	$	—	$	—
Investment securities	158,791		158,791		—		—

Total assets	$	827,949	$	827,949	$	—	$	—
Liabilities:
Contingent consideration liabilities	$	1,294	$	—	$	—	$	1,294
Total liabilities	$	1,294	$	—	$	—	$	1,294


	December 31, 2023
(in thousands)	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	574,131	$	574,131	$	—	$	—


Total assets	$	574,131	$	574,131	$	—	$	—
Liabilities:
Contingent consideration liabilities	$	2,700	$	—	$	—	$	2,700
Total liabilities	$	2,700	$	—	$	—	$	2,700

During the three and nine months ended September 30, 2024, there were no transfers into or out of Level 3.

Perspective Therapeutics Inc. Equity Securities

At September 30, 2024, the Company held 11,677,339 shares of Perspective common stock (“Perspective Shares”). The Company accounts for its investment in Perspective Shares as an equity investment with a readily determinable fair value, as the securities are publicly traded on the New York Stock Exchange (“NYSE”). The fair value of the equity securities is based on its closing price on the NYSE at the end of the fiscal period and is classified within Level 1 of the fair value hierarchy because the equity securities are valued using quoted market prices. The fair value of the Perspective Shares as of September 30, 2024 was approximately $155.9 million based on a closing market price of $13.35 per share on September 30, 2024, resulting in an unrealized gain of $39.5 million and $77.6 million for the three and nine months ended September 30, 2024, respectively. See Note 19, "Acquisition of Assets" for further discussion of the Perspective transaction.

Radiopharm Theranostics Limited Equity Securities

At September 30, 2024, the Company held 149,625,180 shares of Radiopharm Theranostics Limited (“Radiopharm”) common stock (“Radiopharm Shares”). The Company accounts for its investment in Radiopharm Shares as an equity investment with a readily determinable fair value, as the securities are publicly traded on the Australian Stock Exchange (“ASX”). The fair value of the equity securities is based on the closing price on the ASX at the end of the fiscal period and is classified within Level 1 of the fair value hierarchy because the equity securities are valued using quoted market prices. The fair value of the Radiopharm Shares as of September 30, 2024 was approximately $2.9 million based on the converted closing market price of approximately $0.02 per share on September 30, 2024, resulting in an unrealized loss on equity securities of $2.1 million for the three and nine months ended September 30, 2024. See Note 19, "Acquisition of Assets" for further discussion of the Radiopharm transaction.

Contingent Consideration

The Company 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 for a commercialization milestone related to a prostate cancer product candidate the Company refers to as “1404” that was out-licensed to ROTOP Pharmaka GmbH. 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

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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 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, 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 liabilities using Level 3 inputs at September 30, 2024.


	Fair Value at						Assumptions
(in thousands)	September 30, 2024		December 31, 2023		Valuation Technique	Unobservable Input	September 30, 2024		December 31, 2023
Contingent consideration liability:



1095 commercialization milestone	1,800		1,800		Probability adjusted discounted cash flow model
						Period of expected milestone achievement	2026		2026
						Probability of success	40	%	40	%
						Discount rate	3.5	%	4.1	%



Net sales targets - AZEDRA and 1095	1,000		900		Monte Carlo simulation
						Probability of success and sales targets	0% - 40%		0% - 40%
						Discount rate	15%		15%
Reduction due to partial settlement of 2013 Milestone Rights	(1,506)		—
Total	$	1,294	$	2,700

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


	Financial Liabilities
(in thousands)	Nine Months Ended September 30,
		2024		2023
Fair value, beginning of period		$	2,700	$	111,600

Changes in fair value included in net income		100		(9,475)
Gain on partial buyout of 2013 Milestone Rights		(1,505)		—
Cash payments		(1)		(99,625)
Fair value, end of period		$	1,294	$	2,500

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The change in fair value of the contingent financial liabilities resulted in an increase of general and administrative expense of $0.1 million for the nine months ended September 30, 2024 and was primarily due to the passage of time. In August 2024, the Company entered into a bill of sale with the holder of a significant portion of the contingent milestone rights related to the 2013 Acquisition (the “2013 Milestone Rights”) to transfer their portion of the 2013 Milestone Rights back to the Company for $1,000. This buyout resulted in a $1.5 million decrease in general and administrative expense during the three months ended September 30, 2024 due to the reduction in outstanding 2013 Milestone Rights.

As of September 30, 2024, the carrying value of the Company’s convertible debt was $575.0 million and the fair value of the Company’s convertible debt was estimated to be approximately $892.4 million based on quoted market prices of the instrument and was classified as a Level 1 measurement within the fair value hierarchy.

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


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2024			2023			2024			2023
Income tax expense	$	45,025		$	27,999		$	107,528		$	49,259
Effective tax rate	25.6		%	17.5		%	24.9		%	18.1		%

The increase in the effective income tax rate for the three and nine months ended September 30, 2024 is primarily due to a benefit recorded in the third quarter of 2023 related to the sale of the Company’s RELISTOR royalty asset, which resulted in additional net operating losses becoming available for utilization under Internal Revenue Code Section 382. There was no such comparable amount recorded in 2024.

6. Inventory

Inventory consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	28,729	$	31,259
Work in process	21,178		13,807
Finished goods	20,928		18,963
Total inventory	$	70,835	$	64,029

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 product is not probable, then inventory costs associated with such product are expensed during the period the costs are incurred. The Company has no inventory pending regulatory approval as of September 30, 2024. The majority of inventory on hand relates to in-house manufacturing of DEFINITY at the Company’s North Billerica campus. With respect to the Company’s products that are radiopharmaceuticals, due to the limited shelf life of such products, they are generally not held as finished goods.

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7. Property, Plant and Equipment, Net

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


(in thousands)	September 30, 2024		December 31, 2023
Land	$	9,480	$	9,480
Buildings	81,940		73,441
Machinery, equipment and fixtures	105,900		102,576
Computer software	54,182		27,259
Construction in progress	35,177		40,964
	286,679		253,720
Less: accumulated depreciation and amortization	(117,167)		(107,023)
Total property, plant and equipment, net	$	169,512	$	146,697

Depreciation and amortization expense related to property, plant and equipment, net, was $5.1 million and $2.9 million for the three months ended September 30, 2024 and 2023, respectively, and $15.1 million and $9.6 million for the nine months ended September 30, 2024 and 2023, respectively.

During the nine months ended September 30, 2023, as a result of a decline in expected future cash flows related to the AZEDRA marketed intangible asset, 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 as a result, the Company recorded a noncash impairment of $6.0 million for the nine months ended September 30, 2023 in cost of goods sold in the condensed consolidated statements of operations.

On January 8, 2024, the Company entered into an agreement with Perspective to transfer the sublease for the property at 110 Clyde Rd, Somerset, New Jersey (the “Somerset Facility”) and sell the associated assets at the Somerset Facility for $8.0 million. The transfer of the sublease and completion of the asset sale occurred on March 1, 2024. The sale of assets resulted in a derecognition to the right-of-use asset of $0.4 million, the lease liability of $0.4 million and remaining property, plant and equipment of $0.8 million. The Company also incurred commission expense of $1.0 million related to the transaction. The Company recorded a gain of $6.3 million for the nine months ended September 30, 2024 within operating income.

See Note 19, "Acquisition of Assets" for further discussion of the Perspective transaction.

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 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 September 30, 2024. The purchase price for the campus sale is $10.0 million in cash. The transaction is expected to close in 2024.

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

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


(in thousands)	September 30, 2024		December 31, 2023
Compensation and benefits	$	35,740	$	36,331
Freight, distribution and operations	83,735		67,529
Accrued rebates, discounts and chargebacks	21,924		16,070
Accrued professional fees	11,177		10,244
Accrued research and development expenses	7,048		3,258
Other	14,828		11,906
Total accrued expenses and other liabilities	$	174,452	$	145,338

Operating lease liabilities (Note 15)	$	53,915	$	54,453
Long-term contingent liabilities (Note 4)	1,294		2,700
Other long-term liabilities	6,784		6,168
Total other long-term liabilities	$	61,993	$	63,321

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 a production facility that manufactures and processes radioactive materials at its North Billerica, Massachusetts site. As of September 30, 2024, the asset retirement liability is measured at the present value of the asset retirement liability expected to be incurred and is approximately $25.1 million.

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


(in thousands)	Amount
Balance at January 1, 2024	$	22,916
Accretion expense	321

Balance at September 30, 2024	$	23,237

The Company is required to provide the Massachusetts Department of Public Health financial assurance demonstrating the Company’s ability to fund any decommissioning of its North Billerica, Massachusetts production facility in the event of any closure. The Company has provided this financial assurance in the form of a $30.3 million surety bond.

10. Intangibles, Net

Intangibles, net, consisted of the following:


	September 30, 2024
(in thousands)	Useful Lives (in years)	Amortization Method	Cost		Accumulated Amortization		Net
Trademarks	15 - 25	Straight-Line	$	13,540	$	(12,326)	$	1,214
Customer relationships	15 - 25	Accelerated	157,950		(132,025)		25,925

Currently marketed products	9 - 15	Straight-Line	132,800		(49,344)		83,456
Licenses	11 - 16	Straight-Line	22,233		(11,895)		10,338
Developed technology	7 - 9	Straight-Line	55,982		(3,309)		52,673

Total			$	382,505	$	(208,899)	$	173,606

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	December 31, 2023
(in thousands)	Useful Lives (in years)	Amortization Method	Cost		Accumulated Amortization		Net
Trademarks	15 - 25	Straight-Line	$	13,540	$	(12,216)	$	1,324
Customer relationships	15 - 25	Accelerated	157,995		(117,574)		40,421
Currently marketed products	9 - 15	Straight-Line	132,800		(38,277)		94,523
Licenses	11 - 16	Straight-Line	22,233		(7,972)		14,261
Developed technology	9	Straight-Line	2,400		(944)		1,456

Total			$	328,968	$	(176,983)	$	151,985

The Company recorded amortization expense for its intangible assets of $11.9 million and $11.7 million for the three months ended September 30, 2024 and 2023, respectively and $32.0 million and $35.1 million for the nine months ended September 30, 2024 and 2023, respectively.

In March 2023, the Company stopped all development activities in relation to a future indication associated with AZEDRA, which was classified as an in-process research and development (“IPR&D”) intangible asset. The asset group, which consisted of the IPR&D asset and a currently marketed product (the “AZEDRA intangible asset group”), was assessed for impairment. The Company considered several factors in estimating the future projections of revenues and cash flows of the AZEDRA intangible asset group as part of the impairment testing. The Company concluded that the carrying amount exceeded the fair value of the AZEDRA intangible asset group, which had no value. The Company recorded a non-cash impairment charge of $15.6 million in research and development expenses relating to the IPR&D asset and $116.4 million in cost of goods sold relating to the currently marketed indication of AZEDRA in the consolidated statement of operations for the quarter ended March 31, 2023.

On August 2, 2023, the Company sold the right to its RELISTOR royalty asset under its license agreement with Bausch; the Company retained the rights to future sales-based milestone payments. 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. The additional payment would be recognized upon achievement of the specified threshold. Decreases of $63.6 million of license assets and $17.5 million of associated accumulated amortization, as well as a gain of $51.8 million were recorded as a result of the sale.

On August 15, 2023, the Company announced that it would discontinue the production and promotion of AZEDRA and would be winding down its Somerset Facility. The Company continued manufacturing AZEDRA until the first quarter of 2024 to provide doses of AZEDRA to then-current patients so they could complete their treatment regimen. No AZEDRA was manufactured after March 1, 2024, when the Company transferred the tangible assets and associated lease of its Somerset Facility to Perspective. See Note 7, "Property, Plant and Equipment, Net" for impairment analysis.

In February 2023, the Company entered into an agreement with the stockholders of Cerveau (the “Cerveau Stockholders”) to purchase all of the outstanding capital stock of Cerveau (which holds the rights under a license agreement to develop and commercialize MK-6240) for approximately $35.3 million. In May 2023, upon successful completion of a technology transfer, the Company paid $10.0 million to the Cerveau Stockholders. This additional contingent payment was capitalized as part of the asset cost and increased the total value of the Company’s customer relationship intangible assets. See Note 19, "Acquisition of Assets" for further discussion of the Cerveau acquisition.

In June 2024, the Company entered into an agreement with the stockholders of Meilleur (“Meilleur Stockholders”) to purchase all of the outstanding capital stock of Meilleur (which holds the rights under a license agreement to develop and commercialize NAV-4694) for approximately $32.9 million. The Company recorded a developed technology intangible asset of $40.3 million as a result of the purchase price and the specific assets and liabilities of Meilleur that were acquired as part of the asset acquisition based on their value at the agreed upon closing date. In August 2024, upon successful completion of a technology transfer, the Company paid $10.0 million to the Meilleur Stockholders. This additional contingent payment was capitalized as part of the asset cost and

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increased the total value of the Company’s developed technology intangible assets. See Note 19, "Acquisition of Assets" for further discussion of the Meilleur acquisition.

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


(in thousands)	Amount
Remainder of 2024	$	11,843
2025	32,064
2026	32,861
2027	27,335
2028	23,850
2029 and thereafter	45,653
Total	$	173,606

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

The carrying value of the Company’s long-term debt, net and other borrowings is as follows:


(in thousands)	September 30, 2024		December 31, 2023
Principal amount 2.625% Convertible Senior Notes due 2027	$	575,000	$	575,000

Unamortized debt issuance costs	(11,283)		(13,955)

Finance lease liabilities	1,609		1,448

Total	565,326		562,493
Less: current portion of long-term debt and other borrowings(1)	(564,713)		(823)
Total long-term debt, net and other borrowings	$	613	$	561,670

(1)During the three months ended September 30, 2024, as discussed below, criteria were met for conversion of the 2.625% Convertible Senior Notes due 2027 (the “Notes”) at the option of the holders of the Notes. As a result, under ASC 470, “Debt”, the Company is required to classify the carrying value as current on the Company’s condensed consolidated balance sheet at September 30, 2024. The maturity date of the Notes remains December 15, 2027.

2022 Revolving Facility

In December 2022, the Company entered into a $350.0 million five-year revolving credit facility (the “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 Revolving Loans, Letters of Credit, and the Swingline 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. Interest associated with the unused commitment is recorded to accrued expenses and other liabilities on the condensed consolidated balance sheet and paid out on a quarterly basis.

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 September 30, 2024, 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 earnings before interest, taxes, depreciation and amortization for the four consecutive fiscal

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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 Revolving 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 must be at least 3.00 to 1.00. The maximum total net leverage ratio permitted by the financial covenant is 3.50 to 1.00.

The 2022 Revolving 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 Revolving Facility immediately due and payable and all commitments immediately terminated.

The 2022 Revolving Facility is guaranteed by Lantheus Holdings, and certain subsidiaries of LMI, including Progenics and Lantheus Real Estate, and obligations under the 2022 Revolving 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.

2.625% Convertible Senior Notes due 2027

On December 8, 2022, the Company issued $575.0 million in aggregate principal amount of 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”), a wholly owned subsidiary of the Company, 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 the 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.

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•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 Company affiliates or holders that were Company 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, 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.

Holders of the Notes may require the Company to repurchase their Notes upon the occurrence of a fundamental change prior to the maturity at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase. In connection with certain triggering events, the Company will, under certain circumstances, increase the conversion rate for holders of the Notes who elect to convert their Notes in connection with such corporate events.

During the third quarter of 2024, the closing price of the Company’s common stock exceeded 130% of the conversion price of the Notes for more than 20 trading days of the last 30 consecutive trading days of the quarter. As a result, the Notes are convertible at the option of the holders of the Notes during the fourth quarter of 2024, the quarter immediately following the quarter when the conditions are met, as stated in the terms of the Notes. In accordance with ASC 470-10, because the Notes are convertible, the Company reclassified the carrying value of the Notes from long-term debt, net and other borrowings to current portion of long-term debt, net and other borrowings on the Company’s condensed consolidated balance sheet as of September 30, 2024.

As of September 30, 2024, the carrying value of the Notes was $575.0 million, the Notes had an unamortized discount of zero, and the fair value of the liability was $892.4 million. The Company recorded interest expense of approximately $3.8 million and $11.3 million related to the Notes for the three and nine months ended September 30, 2024, respectively. There were no conversions of Notes during the nine months ended September 30, 2024.

12. Derivative Instruments

The Company has used, but does not currently use, interest rate swaps to reduce the variability in cash flows associated with portions of the Company’s interest payments on variable rate debt.

13. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax of zero for the nine months ended September 30, 2024 and 2023 consisted of the following:


(in thousands)	Foreign Currency Translation		Accumulated Other Comprehensive (Loss) Income
Balance at January 1, 2024	$	(1,037)	$	(1,037)
Other comprehensive loss before reclassifications	(129)		(129)

Balance at September 30, 2024	$	(1,166)	$	(1,166)

Balance at January 1, 2023	$	(1,259)	$	(1,259)
Other comprehensive income before reclassifications	224		224

Balance at September 30, 2023	$	(1,035)	$	(1,035)

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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,
(in thousands)	2024		2023		2024		2023
Cost of goods sold	$	3,614	$	2,508	$	9,116	$	6,381
Sales and marketing	3,813		2,823		9,681		7,044
General and administrative	9,926		6,741		27,457		17,813
Research and development	3,013		1,904		7,975		5,097
Total stock-based compensation expense	$	20,366	$	13,976	$	54,229	$	36,335

15. Leases

Operating and finance lease assets and liabilities are as follows:


(in thousands)	Classification	September 30, 2024		December 31, 2023
Assets
Operating	Other long-term assets	$	39,346	$	45,325
Finance	Property, plant and equipment, net	1,235		1,438
Total leased assets		$	40,581	$	46,763
Liabilities
Current
Operating	Accrued expenses and other liabilities	$	2,062	$	1,904
Finance	Current portion of long-term debt and other borrowings	996		823
Noncurrent
Operating	Other long-term liabilities	53,915		54,453
Finance	Long-term debt, net and other borrowings	613		625
Total leased liabilities		$	57,586	$	57,805

On May 4, 2023, the Company entered into a modification to the operating lease (the “Bedford Lease”) for office space in Bedford, Massachusetts (the “Existing Premises”) that was executed in February 2022. The Bedford 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 included 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 in May 2023. 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. In September 2023, the landlord provided notice to the Company that its renovations of the Additional Premises were completed. As a result of the notice, the Company recorded an additional right-of-use asset and liability of $23.5 million as of September 1, 2023. To determine the value of the additional right-of-use asset and liability, the Company was required to calculate the discount rate of the lease modification. The discount rate was determined based on the expected lease term and by comparing interest rates in the market for similar borrowings with comparable credit quality of the Company. The lease for the Additional Premises allows for the extension of five years to begin immediately upon the expiration of the original term. On October 7, 2024, the Company executed a second amendment to the Bedford Lease for additional space.

On March 1, 2024, the Company transferred the sublease and completed the asset sale of the Somerset Facility. See Note 7, "Property, Plant and Equipment, Net" for further discussion on the sublease transfer.

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Other information related to leases were as follows:

September 30,
2024

December 31,
2023

Weighted-average remaining lease term (Years):

Lantheus Holdings, Inc. [LNTH] Filings
10-Q	[2024-11]
10-Q	[2024-07]
10-Q	[2024-05-02]
10-K	[2024-02-22]
10-Q	[2023-11-02]
10-Q	[2023-08-03]
10-Q	[2023-05-04]
10-K	[2023-02-23]
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-04-29]
10-K	[2022-02-24]
10-Q	[2021-11-04]
10-Q	[2021-07-28]
10-Q	[2021-05-04]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-07-31]
10-Q	[2020-04-30]
10-K	[2020-02-25]
10-Q	[2019-10-31]
10-Q	[2019-07-25]
10-Q	[2019-04-30]
10-K	[2019-02-20]
10-Q	[2018-10-30]
10-Q	[2018-08-01]
10-Q	[2018-05-02]
10-K	[2018-02-26]
10-Q	[2017-11-02]
10-Q	[2017-08-01]
10-Q	[2017-05-02]
10-K	[2017-02-23]
10-Q	[2016-11-01]
10-Q	[2016-08-04]
10-Q	[2016-05-03]
10-K	[2016-03-02]
10-Q	[2015-11-04]
10-Q	[2015-08-05]
S-1	[2014-06-24]