Welcome, everyone. Good morning. We're back at our Global BioPharma Conference here at Leerink. My name is Roanna Ruiz. I'm one of the senior biotech analysts here. It's my pleasure to welcome Paul Blanchfield, President of Lantheus here. We're going to have a great discussion. Thanks for coming.
Thanks for having us, Roanna.
Yeah. And so maybe I'll start with a bigger picture question for anyone who's newer to the story. So let's talk about could you give just a recap of the company, some of your major commercial programs, and your main focus in the radiopharmaceutical space?
Yeah, happy to. Before I do that, just a note that I may make forward-looking statements. During today's presentation, I refer you to our SEC filings specifically on forward risks and disclosures. So have a look. Lantheus is a 65-year-young, leading radiopharmaceutical-focused company in this space. We have had tremendous success in our radiopharmaceutical diagnostic portfolio, naturally led by PYLARIFY, which has the potential to deliver $1 billion in sales this year, which we believe would be a first for a radiopharmaceutical PET product, and significant capabilities as an organization in commercial, in regulatory, in market access, as well as specifically supply chain and logistics. And we believe those differentiated capabilities have set us up incredibly well to continue to lead in this exciting field and, indeed, what's a renaissance in the space.
So we've been able to use our operational expertise, our strong capabilities, and our significant cash flow to be able to continue to expand our portfolio, including into therapeutics, whether it was the POINT deal that brought PNT2002, where we expect top-line data I should say more mature top-line data later this year, PNT2003, where we're the first to file an ANDA against Lutathera, as well as recent transactions with Perspective that bring us some additional optionality, while continuing to augment and reinforce our diagnostics business, including in Alzheimer's as well as potentially FAP. So we think we're a leader in the space and continue to do so based on those capabilities, operational excellence, and financial flexibility for many years to come.
Got it. Great. So I just want to dig in a little bit more. So you mentioned PYLARIFY, one of your leading PSMA PET imaging agents. Just could you walk us through how the commercial launch has gone so far over the past year and what you're looking forward to in the next year ahead?
Yes. So PYLARIFY has been on the market for almost three years. We received priority review and launched the product in May of 2021. And so about two and a half, almost three years on the market. The launch has gone incredibly well. We like to think of this as a significant unmet need in imaging that is specific and sensitive for prostate cancer. There's been a huge unmet need there. We think PYLARIFY is a tremendous innovation in PSMA PET as well, but PYLARIFY specifically, and then really the operational excellence to be able to deliver this. And so I think what's driven the success is naturally that unmet need and the innovation that PYLARIFY brings, specifically in the specificity and sensitivity for prostate cancer.
But then really, we've been focused on the operational excellence of being able to manufacture an F-18 product at now 55 sites around the country to ensure that over 90% of covered lives have access to PYLARIFY, to work with customers on payment and reimbursement, and to go out and to really educate the marketplace. And I think we've been incredibly rewarded, first and foremost, that over 300,000 men have been scanned with PYLARIFY since launch. I think that's just an incredible number when you think of three million men living with prostate cancer. And we believe we're just getting started. So it's been a very solid launch. At the same time, we're very excited for what we still have yet to do. We believe the overall PSMA PET imaging market will continue to grow.
We estimate the addressable market this year is about $2 billion or 445,000 scans, potentially growing to $3 billion or 700,000 scans towards the end of the decade. And so we're still in the very early innings of the overall growth in the marketplace. We still need to go out and raise awareness, specifically among referring physicians. And we split our sales team last year to have a team focus specifically on imaging centers and hospitals where the procedure is done, and then another team that's out specifically calling on radiation oncologists, medical oncologists, and urologists to raise awareness. And so there's still a lot of awareness yet to be raised.
And so we're very much focused on that while naturally managing some of the competitive dynamics there are now for commercially approved agents on the market and handling things like upcoming mitigation strategies for Transitional Pass-Through Payment, which I'm sure we'll talk about.
Yep. Got it. Great. So before I dig into more product-specific questions, I did want to ask a question I've been getting a lot. So what drove the recent CEO transition for Lantheus? And would anything strategically change going forward for the company?
It's a great question. So Mary Anne Heino had had a tremendous leadership of the organization over a nine-year period. The shareholder, the patient, the employee value that she helped spearhead and lead, I think we've all been incredibly pleased to work under her. And at the same time, as she would say, she's been working for close to 50 years, and she has a lot of opportunities outside of the office. And so she's passionate about horse riding. She's probably doing that right now. And so after nine years, which is obviously quite a long run but also a very successful run, this is a long-planned transition.
I think the key to this transition is that Brian Markison, our new CEO, had been the chairman of the board for 11 years, is an established leader in this space, understands oncology deeply, both therapeutics and diagnostics, grew up as a sales rep, and has been in this industry for decades. And so it really is a reinforcement of the strategy and the journey that we've been on with Mary Anne becoming chair of the board and Brian becoming CEO. Now, naturally, with new leadership, we'll have slight tweaks here and there. But I think overall, Brian's very focused on, for us, continuing to lead in radiopharmaceutical, to continue to add therapeutic capabilities and assets. And I think you'd expect us to continue to do more of that going forward.
We're really excited for Brian to stay on board and for Mary Anne to continue to overall steer the ship, if you will, as the Chair of the Board.
Got it. Great. So digging in more on PYLARIFY. So could we talk about some of the potential tailwinds that could support continued growth for PYLARIFY and what gives you confidence that it can maintain a leadership role in the PSMA PET space?
Yeah. A great question. So first, we do think PYLARIFY continues to be differentiated, both clinically and commercially. From a leadership perspective, clinically, we believe our positive predictive value, not just detecting prostate cancer but having a positive predictive value, so when you see prostate cancer, assurances that it is, is a differentiator in the marketplace. I would say the second piece is inter-reader interpretation. And so recognizing that you'll have multiple readers out there understanding and interpreting scans, the ability to have a high reader interpretation, meaning if a different reader sees it, they're going to see the same result. We think our clinical trials demonstrate that PYLARIFY is straightforward to read, and therefore, you can get a consistent read. And then third, from a clinical perspective, is really the intended change in management. A diagnostic is only as valuable as it informs clinical practice.
With two-thirds of patients having a change in intended management in our clinical trials, including the vast majority of those patients in the denominator, we think that's a differentiator that shows that PYLARIFY continues to be clinically differentiated. Commercially, we have the only multi-channel F-18 national network in the marketplace. And so we've been very purposeful on that to ensure that PYLARIFY remains accessible. We continue to expand out-the-door time so that patients and physicians can have this when needed. We believe that, in addition to our best-in-class commercial teams and broad market access, will continue to be differentiators. With regards to the overall market, I referred earlier that we estimate it could be a $2 billion potential market this year growing to $3 billion by the end of the year. Those could prove to be conservative estimates.
In the last couple of weeks at different conferences, we've talked about the total addressable market. It wasn't that long ago when we first estimated this was shy of $1 billion, $700-$800 million, and people said it can't possibly be that big. A few months later, we raised it to $1.3 billion, and they said, "Well, is it only 1.3? This market still has a long way to go." So we think we're still in the very early stages. While we talk about PSMA PET imaging with PYLARIFY every day of the week, there are still physicians, and we can see prescribing patterns that haven't yet necessarily prescribed a PSMA PET agent. So there's still significant growth. We believe lifecycle management, including going earlier in the staging area, will continue to expand. Right now, guidelines are only down to intermediate, unfavorable, high, and very high.
Yet, our label is incredibly broad. So we think there's an opportunity to expand there. We think clinical practice will continue to evolve on the frequency and the type of patients that are going to be scanned. Then we also think the continued emergence of additional therapeutics, both radiopharmaceutical PSMA as well as non-radiopharmaceutical PSMA, will continue to increase the need for PSMA imaging, including PYLARIFY. So we think we're still very much in the early innings of this overall growth trajectory for the market.
Got it. Great. Kind of preempted my next question about the future term. That's all good. So thinking about the future of PYLARIFY, maybe let's talk about pass-through status, which is a big debate that we've been talking about with other investors too. So expiry, potentially end of 2024. How are you thinking about what segments of PYLARIFY's overall business might be impacted by pass-through expiry? And are there strategies that you're thinking about going forward?
A great question. So obviously, one of the top questions we get. Transitional Pass-Through Payment, first and foremost, is a class challenge. It is not a PYLARIFY-specific issue. And I say that because 90%-95% plus of the market will face pass-through expiry within the first nine months of 2025. Ourselves would lose it at the end of this year. Two of the gallium agents, one would lose it June 30th of next year and the other September 30th of next year. And so this really isn't just a PYLARIFY challenge, if you will. It's a challenge for the industry. We are naturally focused and have been for a number of years on mitigating the potential impact.
So first and foremost, brand awareness and continuing to ensure that people understand the differentiated clinical and commercial value that I shared earlier is paramount to recognizing that these agents are different. And we believe that customers increasingly understand those dynamics. The second piece that's very much in our control that we shared at our fourth-quarter earnings was that we began last year to put in place a number of strategic partnerships with key customers to help mitigate the impact of pass-through expiry on those key customers and to ensure that PYLARIFY remains accessible and the leading PSMA agent in the marketplace. And then lastly, from a mitigation piece, we certainly continue to work with regulatory bodies, both CMS as well as Congress, for a potential fix to pass-through. And this is in addition to broader lifecycle management opportunities to continue to expand and support future PYLARIFY growth.
Now, you asked initially, what does pass-through actually apply to? Pass-through applies to the intersection of site of care and payment type, payer type. And so from a site of care perspective, it only applies to the hospital outpatient setting, which is approximately 60%-65%, we would estimate, of overall PSMA PET imaging. And it only applies to traditional Medicare fee-for-service, not commercial, not government, and not Medicaid. And so that's about a third-ish. And so when you take those combinations of site and care, you're literally looking at about 20-ish% of overall patients. And that number has the potential to go down as freestanding imaging centers continue to expand and Medicare Advantage continues to be a larger proportion. And so we think we're well positioned. This is something that we take very seriously, have been planning for some time. Naturally, there's some competitive dynamics going on.
We want to be careful of what we share publicly. We are fiercely focused on ensuring that PYLARIFY remains the market leader and continues to grow.
Great. Sounds good. So we also heard that among investors, there's a theory that in the marketplace, you could create a next-gen version of a product and still be eligible for TPT or pass-through status. How is Lantheus addressing this?
It's a great question and one we've certainly heard more and more over the last couple of weeks. So first and foremost, we are focused on being able to deliver a potential $1 billion for PYLARIFY this year, which would be the first PET agent to do that through continued brand awareness, through continued flexibility and increasing door-to-door times, as well as through strategic partnerships with key customers. And then naturally, as I mentioned, some of the longer-term pieces like supporting CMS as well as Congress in a long-term fix while naturally continuing to do lifecycle management, which we have announced some and naturally continue to pursue. To be eligible for an additional or, I should say, extension of new TPT, you need a new NDA. And that's our belief based on FDA as well as CMS guidelines. And so you would need a new drug application.
Naturally, as a company, we continue to look at all options, some of which we have shared publicly, some of which we have not. Suffice it to say, we take it seriously. Our team has always been focused on all the options that are available to us. At this point, that's what we're comfortable saying. In the future, there may be a point where we may want to share more specifically what those opportunities are. Suffice it to say, in the near term, we're focused on continuing to grow and have PYLARIFY continue to lead.
Got it. Great. And so supply and distribution of PYLARIFY, you touched on this a little bit, but I was curious, what gives you confidence you can meet growing demand in the future, especially with more radioligand therapies becoming available that may require PYLARIFY for eligibility for patients?
Yeah, this is a great question and something that we've been really focused on from the beginning. And it goes back to what I said earlier of having a multi-channel, national, diverse F-18 cyclotron network. The huge benefits, if you will, of F-18, in addition to some of the clinical differentiators that I mentioned on PYLARIFY, is the scale. FDG is still the workhorse of a PET imaging facility with around 2 million doses. All of those are made at cyclotrons across the country. While PYLARIFY has been hugely successful, we've still done 300,000 scans since launch in the last two and a half years. And so there's ample capacity in the F-18 cyclotron network to continue to not only expand doses, improve efficiencies, but potentially to continue to expand those out-the-door times in manufacturing scale. And so we've set this up with now 55 PMF sites around the country.
We have now served patients in all 48 contiguous states as well as Washington, D.C., and Puerto Rico. And so we've been very focused on being able to supply what we think is a very large market. And we continue to work with our PMF partners to continue to do so. And so we believe we have sufficient capacity. We continue to expand that. I would say the bigger focus as of late from a manufacturing perspective is to continue to adjust those out-the-door times, recognizing that the use of PYLARIFY continues to expand both earlier in the morning and late in the day. And given the nature of a radiopharmaceutical, the need to be able to manufacture the quantity is not the question. Ultimately, being able to manufacture to meet demand.
We're very close with our imaging and hospital customers as well as our PMF partners to continue to work with them to be able to do so.
Interesting. Thanks. So I want to switch gears a little bit to the POINT assets, PNT2002 and PNT2003. So starting with PNT2002, much of late last year was a focus on the phase III SPLASH trial. I know investors have gone over this and talked about this a lot but wanted to also get your take on some of the takeaways from that trial and some of the next steps that management is prioritizing for the PNT2002 asset.
So PNT2002, we released top-line data in mid-December of last year with about 45% maturity on the overall survival data. I think first and foremost, we had positive top-line data. We met our primary endpoint. We believe the product is safe and tolerated. And so that's obviously a huge win from the primary endpoint from an rPFS perspective with about 9.5 months in the treatment arm compared to about six months, which is statistically in the control arm, which is statistically significant and roughly a 29% hazard ratio regarding the treatment in the control arm in rPFS. And so I think from that perspective, that's a positive to have a phase III positive trial in oncology therapeutics. I think the challenging piece is really around the overall survival.
Given some of that data immaturity I mentioned in the mid-40 percentile, our hazard ratio, which is a measure of kind of the improvement in the treatment arm versus the control arm, was 1.11. We would expect that we would need to get that down to approximately 1 to engage the agency and to go forward. Now, the good thing is, this isn't necessarily, I would say, an efficacy pure question. It's ultimately a trial design question. Given a high crossover rate in the mid-80%, and this is not something just for PNT2002, we would note that in the PSMAfore study from Novartis, they saw similar results. They had a positive rPFS. They had a hazard ratio on OS of about 1.16. And so they too have noted that they need to wait for data to mature.
Fundamentally, we have a safe and well-tolerated asset with a positive primary endpoint. That said, we do need to wait for overall survival data to mature more. We would expect to have additional data in the second half of this year to then inform the regulatory pathway going forward.
Great. Super helpful. So given Lilly's recent acquisition of POINT, could you remind us where do things stand with the agreements? And are there any important decision points that you have on your radar as you wait for more mature overall survival data, et cetera?
So Lilly continues. Lilly announced and I should say closed their acquisition of POINT in December of last year. When we constructed our relationships and agreements, we certainly foresaw that there could be continued consolidation in the radiopharmaceutical space. And so there's nothing really that changes now that Lilly is, if you will, of the parent company of POINT. We continue to work with POINT colleagues who are now under the Lilly umbrella as well as additional Lilly colleagues. And so nothing has changed there. We're excited about the expanded partnership and the resources and the expertise that Lilly and POINT can bring together as effectively our partners on both 02 and 03. And so I think we're looking forward to continue to partner with them.
On 03, we announced a few weeks ago that we were the first to file for a radio equivalent for Lutathera, which we think is an exciting opportunity with non-carrier added lutetium, especially given the readouts of the Lutathera trials in the fall and recent pronouncements that Lutathera could be $1 billion for Novartis. We believe, based on publicly available information, we're the first to file. And then with a 30-month stay, we'd plan to commercialize that in mid-2026. So still a great partnership with POINT. Look forward to more continued data as it matures on the 02 trial and the continued pathway from a regulatory perspective on 03.
Yep. So maybe just tagging onto that with for 03, could you talk a little bit about the next steps for that and the market opportunity that you see for that?
Yep. So overall, we have submitted, we have a file that's been accepted by the FDA. Now, naturally, with a 30-month stay and the Paragraph IV approach for an ANDA, there would be expected litigation around that. And so we would expect that 30-month stay to expire and a commercial launch to potentially take place in mid-2026. It's a large opportunity out there in the marketplace. When you look at Lutathera potentially being a billion-dollar product, as Novartis had said, we think there's ample opportunity for multiple radiopharmaceuticals in the market. We haven't given a peak sales forecast, if you will, for 03. We'll be talking more about that as we get to commercialization.
But needless to say, we have begun and it's been going for some time on how we can differentiate 03 in the marketplace to ensure that patients continue to have access and we have a strong commercial opportunity.
Got it. Great. So I wanted to think about the pipeline a little bit too. So you have MK-6240, which is an imaging agent for Alzheimer's disease. So could you just give a recap of what the value proposition is for this product and what are possible next steps that investors should keep an eye out for?
Yeah, I think this is one of the more underappreciated and exciting opportunities in our pipeline. MK-6240, we acquired just over a year ago from Cerveau. It is a next-generation F-18 targeting tau tangles in Alzheimer's disease, which is increasingly a focus point as a target for therapeutics. So I think the exciting piece here is that we are already in over 90 clinical trials. We added four more agreements in the last couple of months. So pharmaceutical therapeutic partners are increasingly looking at MK-6240 to ensure that they select the right patients for their trials and then potentially follow them and ensure that they're still appropriate for treatment going forward. We believe this is a significant opportunity from a market perspective. I believe we've said that total addressable market is over $1 billion for this asset.
I think the value proposition here is not that dissimilar to what we see in PSMA therapeutics, where for Alzheimer's, the expectation, not sure exactly which of these 90 trials are going to be successful, but there's clearly been a step change in development and success with Alzheimer's. Our thesis fundamentally is that if we have a better tau imaging agent, which we believe we do for patient selection and monitoring, then payers, specifically CMS, given the average age of an Alzheimer's patient, are going to require some type of imaging to determine which patients are most likely to respond and to potentially track progress over time before payers spend potentially tens of thousands of dollars a year on chronic therapy.
A $4,500 or a $5,000 PET scan looks like a pretty good deal to make sure that you're selecting the right patients, given the size of this patient population of 6 million. There has been a lack of efficacious therapeutic options out there. So we believe there's going to be significant demand for the therapeutics, which will in turn drive significant demand for the diagnostics. Given we're already in 90+ clinical trials and continuing to increase, we think there's going to be a significant value for MK-6240. Next steps for us, we'll be sharing more on our regulatory pathway sometime later this year. So large opportunity, we're excited to leverage the F-18 capabilities we've already built and to continue to make an impact in unmet needs, specifically in this case, Alzheimer's patients.
Yep. I've gotten this question from investors before. So this is a tau imaging agent. And some of the Alzheimer's therapies out there target A-beta, and there's A-beta imaging as well. How are you thinking about the dynamic there and are both important for diagnosing patients?
I think there's a role for both, I would say, tau and amyloid. I think both are strong markers for the presence of Alzheimer's disease. We see our agent being used in both therapeutic trials specifically targeting tau as well as those targeting amyloid. And so I don't want to say they're interchangeable, but there is a role for both. I think what we believe is that speaks strongly is what we've seen in our own data from a sensitivity and specificity perspective, as well as therapeutic companies continuing to choose MK-6240 as a viable option. And so we'll certainly be sharing more over time, specifically as we talk about our regulatory pathway. But we think it's an exciting opportunity that leverages our capabilities and is already being chosen, if you will, as a leading potential option for those therapeutic trials.
Got it. Great. And you also recently announced a new partnership with a radiopharma-focused biotech called Perspective Therapeutics. So could you just give us a recap of what excited you about working with them and some of their programs and how do you see it complementing your current portfolio?
So this is another exciting announcement we made a couple of weeks ago. We've been somewhat busy, as is the entire radiopharmaceutical space. We really like a number of things about Perspective's assets and indeed the company overall. And so overall, just from a structure perspective, we took an option on their lead neuroendocrine asset. We took an option to co-develop and commercialize their prostate cancer asset, both of which leverage Pb-212, which is an alpha target. And then we took an equity stake in the organization because we believe in the technology and the company so much. And then we also sold our radiopharmaceutical manufacturing facility to them to be able to help them even accelerate their manufacturing readiness. I think there's a number of things that we get excited about in this technology.
And I don't want to be overly simplistic because as we've worked with them, I think we're excited about the targets that they're looking at, as well as the, I will call it the comprehensive technology of the linkers used, of the chelator, and then lead overall as an isotope. One of the benefits, and there's been a lot of talk around overall isotopes and what is the right isotope long-term as we think about moving from betas and adding alphas, betas being single-strand breaks and alphas being double-strand breaks. There's certainly going to be a role for both. And indeed, we've seen significant success in the betas, specifically in lutetium. But there's certainly going to be a role for alphas, and we're excited about that.
One of the key pieces that I would highlight on the Perspective technology is the availability of lead-212 and specifically the half-life of the parent isotope. The parent isotope there has, one, it's in vast quantities. There's a number of different ways to source it and to manufacture it. You could use a generator. You could develop raw materials. There's a number of other approaches. But the parent isotope half-life is approximately two years. And so while we talk about supply chain challenges, you can actually build up inventory of the raw material to be able to ensure that you still have significant capacity. Given the half-life of lead-212, you can also manufacture it regionally or potentially centrally, in contrast to, say, an F-18 isotope where given the 110-minute half-life, you have to make it at 50+ sites around the country.
But then the specific piece I think we like from an alpha is the decay chain of what that looks like, of going from a beta to then an alpha. And as you go down the chain, we think it has an appropriate therapeutic index, which really keeps the radiation on target. I'll call the radiation on target. And that's a combination of both the isotope as well as the chelator and the linker and the target. And people talk a lot just about individual isotopes, but we think holistically about the target, targeting moiety in this case, the linker, the chelator, and the isotope.
I think Perspective's proprietary chelator also keeps more of the Pb-212 and its progeny on target, which potentially allows for better efficacy because you're getting more radiation to the tumor, but also potentially less toxicity, not only because less is going off target, but you may need less radiation and less overall dose if more of it gets to the tumor. So we're looking forward to continuing to work with Perspective and to seeing more data later this year and then discussing our option on their neuroendocrine asset, which could be a complementary asset to PNT2003, as well as their prostate cancer alpha asset, which would be complementary not only to 02, but also our strong PSMA imaging role with PYLARIFY.
Okay. Got it. And maybe zooming out a little bit, I know Lantheus has mentioned a few times want to be a partner of choice in radiopharmaceuticals. So how could that lead to more BD or partnerships in the future? And are there certain types of deals or products that might attract you more than others?
It's a great question. So we do aspire, we believe we are a partner of choice. I think if we look over the last couple of years, POINT saw us naturally as much as we saw POINT as a great partner to manage the commercialization, the launch, and the supply chain components of PNT2002 and PNT2003. And they certainly have other options. We look at being able to bring in-house Cerveau, the MK-6240 asset. And then we look at the partnership with Perspective. And so being successful in radiopharmaceuticals is a different skill set and any, perhaps a more advanced skill set than just traditional pharmaceuticals. We think we bring some of those differentiated capabilities, both commercially, regulatory, market access, as well as supply chain.
We think there's a continued role for the pharmaceutical space to continue to partner with us in developing that of understanding radiochemistry, of being able to do that going forward. We're going to remain opportunistic, whether it's BD and M&A, whether it's licensing, whether it's other options. I think we have a fantastic corporate development and finance teams. It continues to be opportunistic for how we can bring in the best assets possible with the best companies to partner with, but to also keep our options open to continue to deliver value to patients and to shareholders.
Got it. Great. I think with that, we're at time. So thanks again, Paul, for showing up and talking about your programs.
Thanks so much, Roanna. Appreciate it.
Thanks.