On Monday, Truist Securities maintained a positive outlook on Lantheus Holdings (NASDAQ:LNTH), reiterating a Buy rating and a $135.00 price target for the company's stock. The endorsement follows the recent announcement from GE HealthCare (NASDAQ:GEHC) concerning the FDA approval of Flyrcado (Flurpiridaz F-18) for diagnosing coronary artery disease (CAD).
Lantheus, which partnered with GE HealthCare for the commercialization of Flurpiridaz, stands to gain financially from this development. The company is set to receive tiered double-digit royalties on U.S. sales and mid-single digit royalties on sales outside of the United States. Additionally, there are up to $60 million in potential regulatory and sales milestones that Lantheus could achieve.
Flurpiridaz is utilized in PET Myocardial Perfusion Imaging (MPI) to diagnose and evaluate CAD in patients. The agent operates by binding pyridaben to cardiac muscle cells, which is then radiolabeled with F-18 for PET scanner imaging.
The approval of Flyrcado is significant for Lantheus as it represents a substantial royalty revenue opportunity. According to Truist Securities, the commercialization of Flurpiridaz could mean an annual royalty revenue of approximately $20-30 million or more for Lantheus. This financial prospect is based on the agent's use case in detecting CAD, a common and potentially serious heart condition.
In other recent news, Lantheus Holdings reported a strong second quarter in 2024, with consolidated net revenue reaching $394.1 million, a 22.5% increase year-over-year. This growth was driven by robust sales of Pylarify, Definity, and TechneLite, with Pylarify net sales surpassing $273 million. In line with these developments, TD Cowen maintained its Buy rating on Lantheus shares, following a review of Phase III SPLASH data for PNT2002, a product in development for use in metastatic castration-resistant prostate cancer. The firm highlighted the product's benefits across all endpoints for high-need patients.
Redburn-Atlantic also initiated coverage on Lantheus Holdings with a Buy rating and a 12-month price target of $175, indicating a potential 60% upside. The firm recognized Lantheus's significant presence in the rapidly growing radiopharmaceutical market, with 78% of its revenues stemming from this sector. Lantheus's flagship product, Pylarify, holds a commanding market share of over 60% in the United States and is expected to exceed $1 billion in revenue in 2024.
InvestingPro Insights
Lantheus Holdings' (NASDAQ:LNTH) strong market position and financial performance are reflected in recent InvestingPro data. The company's revenue growth of 27.83% over the last twelve months as of Q2 2024 aligns with the positive outlook from Truist Securities. This growth trajectory supports the potential for significant royalty revenue from Flurpiridaz.
InvestingPro Tips highlight Lantheus' financial strength, noting that "cash flows can sufficiently cover interest payments" and the company "operates with a moderate level of debt." These factors position Lantheus well to capitalize on the Flurpiridaz opportunity without financial strain.
The company's profitability is also noteworthy, with InvestingPro data showing a gross profit margin of 64.08% for the last twelve months as of Q2 2024. This robust profitability could be further enhanced by the incoming royalties from Flurpiridaz sales.
For investors seeking a deeper understanding of Lantheus' potential, InvestingPro offers 12 additional tips, providing a comprehensive view of the company's financial health and market position.
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