Lantheus shareholders take short-term view of Progenics deal

Lantheus’s decision to acquire Progenics Pharmaceuticals is not necessarily a bad one: the all-stock deal, worth approximately $400m, allows Lantheus to diversify away from its core imaging tracer business. Lantheus is very reliant on Definity, the cardiovascular ultrasound contrast agent which makes up more than half its sales. It could therefore benefit from adding Progenics’ radiopharmaceuticals, including Azedra, approved last year for the rare cancers pheochromocytoma and paraganglioma, and the royalty stream from the constipation drug Relistor, licensed to Bausch Health Companies. But the acquisition is the largest in Lantheus’s history, prompting concerns about integration, and will change the buyer from a reliably profitable company to a loss-making one in the short term. This has prompted shareholders to desert, with Lantheus’s stock down 21% yesterday. After a couple of years of hardship the company insists it will be will be back in the black with the transaction adding to earnings by 2022. Perhaps this will lure new shareholders more willing to wait for returns – but Lantheus will have to do a decent job of execution.

Lantheus and Progenics - how their sales compare
      Annual WW sales ($m)    
Company Product Product type 2018 2020 2022 2024 CAGR WW phase
Lantheus Definity Ultrasound agent 183 228 282 335 +11% Marketed
  TechneLite MRI agent 99 96 99 103 +1% Marketed
  Xenon Radiodiagnostic 30 30 31 33 +2% Marketed
  Gallium Ga-67 Radiodiagnostic 7 7 7 7 0 Marketed
  Quadramet Radiopharmaceutical 7 7 7 7 0 Marketed
  Neurolite Radiodiagnostic 5 4 3 3 10% Marketed
  Thallium Tl 201 Radiodiagnostic 3 2 1 1 -15% Marketed
  Cardiolite Radiodiagnostic 5 3 1 1 -28% Marketed
    Total 339 377 433 489 +6%  
 
Progenics Pharmaceuticals Azedra Radiopharmaceutical - 31 82 115 N/A Marketed
  PyL PET agent - - 14 29 N/A Filed
  Relistor (royalties) Constipation drug 15 23 35 67 29% Marketed
    Total (incl. others) 16 62 143 221 55%  
Source: EvaluatePharma. 

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