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Truth never damages a cause that is just.”― Mahatma Gandhi
Today, we put Lantheus Holdings, Inc. (NASDAQ:LNTH) in the spotlight. This mid-cap radiopharmaceutical firm reported quarterly and fiscal year end results last week. We last took at a look at this company in May of last year. What is ahead for Lantheus in 2024? A post earnings analysis follows below.
Seeking Alpha 
Lantheus Holdings, Inc. is headquartered just outside of Boston in Bedford, MA. The company is focused on developing and marketing diagnostic and therapeutic products that assist clinicians in the diagnosis and treatment of heart, cancer, and other diseases worldwide. The stock currently trades around $67 a share and sports an approximate market capitalization of just north of $4.5 billion.
November Company Presentation
The company's core asset is a radioactive diagnostic agent used for positron emission tomography or PET imaging and is given via intravenous injection called Pylarify. An ultrasound enhancing agent called DEFINITY provides the bulk of the rest of the company's revenue stream. The company also has a promising PSMA-targeted radio therapeutic in Phase 3 development called PNT2002 for the treatment of patients with metastatic castration-resistant prostate cancer, or mCRPC.
Fourth Quarter Results:
Lantheus Holdings reported it Q4 numbers on February 22nd. The company delivered non-GAAP earnings or $1.75 a share as revenues rose 34% on a year-over-year basis to $354 million. Revenues did include a non-recurring milestone payment of $15 million. The consensus estimate for Q4 results was a $1.44 a share of earnings on $341.3 million in sales it should be noted. PYLARIFY sales rose 40% from 4Q2022 to $230 million. Revenues from DEFINITY rose nearly 15% on a year-over-year basis to $73.1 million.
As can be seen below, sales from Pylarify grew just over 60% in FY2023 on a year-over-year basis to north of $850 million. Revenues from DEFINITY rose just over 14% to just under $280 million. Sales overall grew 39% in FY2023 to $1.3 billion. Management gave initial FY2024 sales guidance of between $1.41 billion to $1.445 billion.
LNTH 10-K for FY2023
The company is enjoying widespread support in the analyst community at this time. Since fourth quarter results posted late last week, seven analyst firms including TD Cowen, Truist Financial and Leerink Partners have reissued Buy/Outperform ratings on the stock. Price targets proffered range from $83 to $128 a share.
Just over nine percent of the float outstanding in the shares are currently held short. Several insiders were frequent sellers of the shares in 2023. In the fourth quarter of last year, insiders disposed of just over $1.5 million worth of shares collectively. So far in 2024, just less than $40,000 worth of equity has been sold by insiders. Lantheus Holdings exited the 2023 fiscal year with just over $710 million worth of cash and marketable securities on its balance sheet against just over $560 million of long-term debt. Lantheus also has $350 million undrawn bank revolver, The company had free cash flow of $100.2 million in the fourth quarter of 2023 and produced free cash flow of just under $260 million for the entire fiscal year.
Lantheus Holdings made $6.23 a share of profit (non-GAAP) on $1.3 billion of revenue. The current analyst firm consensus has the firm's profits rising to $6.58 a share in FY2024 on sales of $1.42 billion. They project earnings of $6.65 a share in FY2025 on revenue growth in the high single-digits.
A recent report pegged growth of the radiopharmaceutical market at just over 10% CAGR from 2023-2032 to over $13.5 billion. Management at Lantheus sees the U.S. PET imaging market growing impressively over the next few years as well, which bodes well for Pylarify on a continuing longer-term basis.
November Company Presentation
The stock trades at just over 10 times forward earnings, approximately half the overall earnings multiple of the S&P 500. Earnings growth over the next two fiscal years is projected to be marginal. With the company's cash flow and balance sheet, LNTH is offering a decent risk/reward profile here and the stock trades significantly under analyst firms' price targets. I like LNTH as a covered call candidate at current trading levels and have established a small holding in the shares via covered call orders this week.
Sunlight is the best disinfectant.”― William O Douglas