Earnings Call: Q2 2020

Jul 30, 2020

Good morning, ladies and gentlemen. Welcome to the Lantheus Holdings Second Quarter 2020 Earnings Conference Call. This is your operator for today's call. Please note that all lines have been placed on mute to prevent any background noise. This call is being recorded for replay purposes. A replay of the audio webcast will be available in the Investors section of the company's website approximately 2 hours after the completion of the call and will be archived for 30 days. I will now turn the call over to your host today, Mr. Mark Kinarney, Senior Director of Investor Relations. Mark? Thank you, and good morning. Welcome to the Lantheus Holdings' 2nd quarter 2020 earnings conference call. Joining me today is our President and CEO, Mary Anne Hayno and our CFO, Bob Marshall. This morning, we issued a press release, which was furnished to the Securities and Exchange Commission under Form 8 ks reporting our Q2 2020 results. You can find the release in the Investors section of our website atlantheus.com. Before we get started, I'd like to remind you that our comments during this call will include forward looking statements. Actual results may differ materially from those indicated by forward looking statements due to a variety of risks and uncertainties. In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-nineteen pandemic. This means that results could change at any time and the contemplated impact of COVID-nineteen on the company's business results and outlook is a best estimate based on information available as of today's date. Please note that we assume no obligation to update these forward looking statements, except as required by applicable law, even if actual results or future expectations change materially. Please refer to our SEC filings for a detailed discussion of these risks and uncertainties. Also, discussions during this call will include certain non GAAP financial measures. Reconciliation of these measures to the most directly comparable GAAP financial measures is also included in the Investors section of our website. With that, I'll now turn over the call to Mary Anne. Mary Anne? Thank you, Mark, and good morning, everyone. I hope this finds each of you and your families safe and well as you listen to this call. As we continue to navigate through the COVID-nineteen pandemic, the health and safety of our employees, patients and other partners in the health care community remain our top priority. We have strict safety protocols in place across our sites and have been vigilant in monitoring these protocols as well as emerging information around virus transmission prevention. Since the start of pandemic, we have managed our business operations effectively. Our essential workers have remained on campus as we continuously manufactured and shipped our products to our customers. Our other employees continue to work remotely and we have a return to office plan in place that ensures the safe and thoughtful return of our employees to our different campuses. We are pleased to begin our next chapter at Lantheus with the closing of the Progenics acquisition. At the beginning of this process, we didn't imagine our integration would be virtual, but I have been so impressed with the dedication to this effort by team members from both Lantheus and Progenics. Since the outset, my commitment has been to ensure the new Lantheus represents the complementary strengths of both companies with the intent to be a best in class organization in the markets we serve. That goal has not changed, and we believe our milestones and strategic plans will deliver that vision. In the near term, milestones include the acceleration of product awareness and patient demand for AZEDRA and the build out of additional manufacturing to ensure we can meet demand, the PyL NDA submission and opportunities in our microbubble franchise. We believe our capabilities and portfolios complement each other and will ensure we serve our target markets of precision diagnostics, oncology radiopharmaceuticals and specialty offerings in artificial intelligence or AI analytics and pharma services. Now that we have moved beyond deal close to integration, we are excited to capitalize on opportunities for value creation. The life science sector continues to evolve with the use of isotopes in both diagnostic applications and we intend to be a leading company in this emerging field. More importantly, with the completion of this acquisition, we believe we are well positioned to serve the healthcare community with a more important goal, the marriage of diagnosis and treatment. Our goal is to lead in this developing landscape of therapeutic radioisotopes and companion diagnostics as well as radioisotope related AI analytics and pharma services. We believe the Theranostic principle represented by companion diagnostics paired with therapeutics improves patient management and outcomes and will be a valued offering to physicians, patients and payers. Now I will discuss business trends in our commercialized portfolio before discussing our pipeline. In early April, we announced that as a result of the impact of the COVID-nineteen pandemic, we recognized declining demand for our products starting in the latter half of March as hospitals restricted access to limit spread of infection and focused on the treatment of COVID-nineteen infected patients instead of elective procedures that are typically performed for outpatients. At the time, we correctly anticipated the 2nd quarter impact of the COVID-nineteen pandemic on our business would be more significant than that seen in the latter part of the Q1. Accordingly, we suspended our guidance and announced a number of cost saving measures intended to mitigate the economic impact to our business. As the Q2 progressed, we experienced steady recovery of our business. This recovery has been most shaped by regional disease trends, which impacted the restoration of access to hospitals and willingness to patients to enter hospitals for outpatient services. Noteworthy, however, has been the trend of increased use of ultrasound, including the use of DEFINITY in the inpatient setting during this time. Anecdotal feedback suggests that the ultrasound diagnostic modality may have been chosen for applicable diagnostic procedures because of the convenience and safety of having the diagnostic procedure performed at the patient's bedside rather than the need to transport potentially infectious and very ill patients within hospitals to areas where stationary diagnostic equipment is located. While our sales team has been working remotely during this period, we have regularly engaged our customers and provided additional information and training through virtual programs. The relative strength of DEFINITY sales in this period, we believe, was driven by this increased use of ultrasound and where appropriate, the use of an ultrasound enhancing agent such as DEFINITY. Our commercialized products demonstrated healthy trends in 2020 prior to the onset of the pandemic. DEFINITY delivered a strong start to the year for our microbubble franchise. Because we sell our products directly to hospitals, we have access to individual customer sales data. Therefore, throughout the pandemic, we have had direct line of sight to the use of DEFINITY at the hospital level. These data give us greater insight about the return of DEFINITY related diagnostic procedures than does the broader metric of elective procedures commonly cited in market analyses during the pandemic. Having this insight has been a great benefit for our business planning normally and even more so in the current environment. I think it is also noteworthy to share that we did not furlough any of our DEFINITY or nuclear field based employees at any point during the pandemic to ensure they were available to assist our customers in understanding safe use of our products in the hospital and other settings. As such, we have been in regular contact with our customers and have been able to continuously assess their needs. This information has also guided our preparation as hospitals return to offering additional in and outpatient services that have been paused during the most acute period of the pandemic for particular regions. While prior to the completion of our merger with Progenics, the AZEDRA field based employees had been furloughed, we reinstated those employees and their customer related activities as soon as the merger was completed. We are committed to supporting patients, physicians and our other health care stakeholders with their needs as we collectively fight the pandemic facing us. With respect to other developments in our business, on our Q1 earnings call, I shared that we filed an import drug license application in China with the National Medical Products Administration or NMPA for the DEFINITY echocardiography indication. I am pleased to report that our application was accepted by the NMPA and is now being reviewed. We believe this is an important milestone in our efforts to commercialize DEFINITY in China. Regarding the status of potential generic filer in the U. S. Market to DEFINITY, to date, we have not received notice of an ANDA application. As I have noted before, we remain confident in our plans to defend the DEFINITY intellectual property estate and believe we have continued growth prospects for our micro global franchise. Our TechneLite business also performed relatively well during the quarter. We were able to receive Moly supply from our suppliers despite complications with airline logistics that were pandemic related, most notably early in Q2. These challenges required flexibility in our manufacturing schedules, one of our core competencies at Lantheus. Our manufacturing and logistics teams did a fantastic job to ensure that customers were minimally impacted. Relating to AZEDRA, I would note that it has been our intent since we first announced the Progenics acquisition to undertake an assessment of the field based stakeholder facing structure for opportunities to optimize demand generation and patient pull through. While field based demand creating efforts by Progenics were paused, as I previously noted, we reinstated those employees on day 1 of the newly merged company. As we feel safe and medical teams reengage with these customers, we will be implementing certain strategies to address our commercial and medical footprint over the next several quarters. We believe market opportunity exists for the only FDA approved therapy for pheochromocytoma and paragangloma or PPGL, and we are committed to ensuring patients and other patient related stakeholders are aware of and have access to this important treatment. Moving on to our pipeline. With our Progenics merger completed, we have added 2 new product candidates, PyL and 1095, our prostate cancer diagnostic and therapeutic agents as our nearest term opportunities in our own internal pipeline. Today, I will discuss PyL and our progress towards NDA submission. PyL is a PSMA targeted PET imaging agent that enables clinicians to visualize both bone and soft tissue metastases in patients with locally advanced recurrent and or metastatic prostate cancer. The positive results from our pivotal registrational Phase 3 CONDOR trial in men with biochemical recurrent prostate cancer were recently presented at 2 important meetings: the American Society of Clinical Oncology or ASCO as well as the Society of Nuclear Medicine and Molecular Imaging or SNMMI. The primary endpoint of the COMDOR trial measures the diagnostic performance of PyL in men with biochemical recurrence of prostate cancer and uninformative baseline imaging based on conventional modalities. Importantly, in addition presented for the primary endpoint in the COMDUR trial, data was also presented for a key secondary endpoint, the physicians' intent to change the disease management plan for patients. In the CONDOR trial, physicians indicated they would modify the disease management plan in 63.9% of the patients based on PyL imaging results. These data, which were presented at both ASTHO and FMMI, highlight the potential of PyL to detect prostate cancer non invasively and reliably and may better inform physicians during treatment planning with the ultimate goal of improving disease management in one of the most prevalent and growing forms of cancer in the U. S. In men. Our PyL team has been working diligently on the NDA with the FDA. We were informed early in July of a potential equipment related issue, which could impact the production of the PyL drug product at our channel partner, Pet Manufacturing Facilities or PMF. This issue is related to the pumps in the manufacturing equipment and not related to any of the data in the clinical trial. We have assessed and are already addressing the potential issue and believe this remediation moved our NDA filing target date to no later than in the middle of Q4. The NDA filing remains a top priority, and we are continually assessing our time line for efficiencies that can accelerate the time to filing. Simultaneously, we are building out the team that will support PyL's launch. Turning now to prepared FS-eighteen, our novel PET cardiac imaging agent, our development and commercialization partner, GE Healthcare, has informed us that its second Phase 3 trial continues. However, new patient enrollment has been delayed due to the impact of the pandemic. GE Healthcare intends to resume enrollment in this quarter and expects to complete enrollment by mid-twenty 21 and assuming regulatory approval, begin commercialization in early 2023. With that, I will conclude my update on key commercial and strategic programs and turn the call over to Bob. Bob? Thank you, Mary Anne, and good morning, everyone. I will provide highlights of the Q2 financials focusing on adjusted results unless otherwise noted. Revenue for the Q2 was $66,000,000 a decrease of 23% from the prior year quarter. Revenue during the quarter demonstrated a clear progression of recovery as states and localities moved through the initial stages of economic reopening with variation across geographies. In April, the company's revenues decreased by 44.3% versus prior year. However, by June, they were down only 2.8 percent on a similar basis, which does not include the contribution from Progenics. 2nd quarter revenues include 11 days of contribution from the Progenics portfolio, adding 1.2% of sales growth to our quarterly consolidated results year over year. Sales of DEFINITY in the second quarter were $40,400,000 or 26.1 percent lower as compared to the prior year quarter. Notably, DEFINITY grew by 5.4% in June as compared to prior year month, in contrast to the 55.6% decrease experienced in April on a similar basis. TechneLite revenue was $18,900,000 down 6% from the prior year quarter. Similar to DEFINITY's sequential improvement throughout the quarter, TechneLite grew 2.7% in June versus the same month prior year. Other nuclear combined with contribution from Progenics assets decreased 32.6 percent to $10,300,000 due mainly to the ongoing impact of COVID-nineteen related issues on Xenon. Rebates and allowances totaled $3,500,000 Gross profit margin for the 2nd quarter was 41.7%, a decrease of 11.40 basis points from the Q2 of 2019 on a similar basis. The decrease is due to several factors related to COVID-nineteen, including a change in product mix with TechneLite's increased contribution to total sales relative to prior periods. We also experienced higher supply chain expenses during the quarter due to excess moly volume purchases to meet customer demand and higher logistics costs. Lastly, we incurred higher labor costs as a percentage of revenue in the quarter, leaving a conscious decision not to furlough employees in support of longer term continuity in what is a complex manufacturing environment. We do, however, expect that gross margin levels will return when related product revenues return to historic run rates, among other factors. Operating expenses were 168 basis points favorable to prior year at 29 0.7 percent of net revenue, driven primarily by delivering on our quarterly spend reduction goals in the quarter, offset in part by the inclusion of the Progenics operating expense post close for the last 11 days of the quarter. As a reminder, we reduced salaries and hours as appropriate for all team members, implemented a hiring freeze on planned additions and realized a reduction in promotional expenditure, travel and entertainment expenses, among other initiatives. Operating profit for the quarter was $7,900,000 or a decrease of 57.4% from the same period prior year. Adjustments in the quarter totaled $13,500,000 before taxes. Of this amount, dollars 3,400,000 is associated with noncash stocking incentive plans, along with $500,000 tied to our recent credit facility amendment. Also in the quarter, we recorded $8,700,000 of expenses, which were contingent on the closing of our acquisition with Progenics along with Lantheus' pre integration efforts prior to the close. The balance being made to acquired intangible amortization. Our effective tax rate was 33.1% in the quarter. The resulting reported net income for the 2nd quarter was a loss of $7,000,000 and a profit of $4,500,000 on an adjusted basis, a decrease of 58.3 percent. GAAP basic and fully diluted earnings per share were a loss of $0.16 and a profit of $0.10 on an adjusted basis, a decrease from the prior year of 61.3%. Now turning to cash flow. 2nd quarter operating cash flow was a use of $2,200,000 as compared to cash inflow of $21,100,000 in Q2 2019. Capital expenditures totaled $2,300,000 down from the prior year quarter. Free cash flow, which we define as operating cash flow less capital expenditures, was a use of $4,400,000 a decrease of $22,000,000 from the prior year period. Our quarterly cash flow contained several onetime expenses associated with the closing of the Progenics transaction as well as modest inventory build during the quarter. Cash and cash equivalents now stand at $90,300,000 Also to maintain liquidity, we elected to leave the existing Rela store related nonrecourse loan outstanding during the second half of twenty twenty. That said, we are comfortable with our strong liquidity position and as well as having continued access to our $200,000,000 revolver. As you know, we withdrew our revenue and adjusted earnings per share full year guidance for 2020 earlier this year. This action was precipitated by the meaningful impact on our business due to direct directly to patient and hospital actions associated with the stay at home orders and advisories in the United States in response to the COVID-nineteen pandemic. We have continued to monitor customer orders and order trends closely, looking to both regional and national data points to inform our internal forward looking sensitivity analyses. And while recent revenue trends have been encouraging, there remains sufficient uncertainty in the marketplace to warrant continued pause on providing formal guidance. That said, as expected and detailed in our public filings, the acquisition of Progenics will have a meaningful, suppressing impact on our existing over the next 12 months as we integrate, invest and capture synergies to drive and create value for stockholders. These investments will serve to create our building blocks for improved and sustainable sales growth, product diversity and margin improvement. For the second half of twenty 20, I can offer several integration and expense related milestones. The company has completed more than 900 tasks to date as part of our integration planning and day 1 execution plan. Additionally, we have mapped 90 tactical and strategic integration goals to be completed during the balance of 2020. We took advantage of the time between agreement and the close to expedite integration objectives. For instance, we have already integrated the Salesforce into many of our processes and systems such as salesforce.com as well as a unified customer contracting process. Additionally, we migrated the Progenics business onto the Lantheus T and E platform as well as our ERP system, which supports manufacturing, supply chain, order to cash, procure to pay and financial reporting going live on July 1. From a financial perspective, we are targeting to capture $4,600,000 of synergies in the second half of twenty twenty. These expense savings will largely be in G and A cost centers as we work towards the full $20,000,000 of savings originally targeted. Further, for modeling purposes, we expect to repurpose expenses and invest in the relaunch of AZEDRA, as noted by Mary Anne, as well as begin the preparation for the PyL commercial launch. R and D will also require additional investments in supporting the PyL NDA filing, including one time submission fees as well as needed expenditures to ensure our PMF manufacturing partnerships are prepared, approved and ready to achieve our PyL revenue forecast. Therefore, as you model the second half of operating expenses attributable to the Progenics portfolio net of synergies, SG and A and R and D together will be approximately equivalent to Progenics' 1st quarter expense run rate extrapolated. In the Q1, Progenics expenses for these two categories totaled approximately $21,000,000 Put another way, we are effectively replicating the Progenics operating expense run rate, but through synergies and repurchasing of expense, we are able to invest a greater amount near term to drive longer term value. Two last modeling points. Gross margin in the second half of the year should improve versus our Q2 result, but to do so incrementally and not reach more than historic levels, as I briefly noted, until we see the impacts of COVID-nineteen subside. Secondly, when calculating EPS, share count will be varied throughout the year. During each quarter in the second half, the weighted average diluted outstanding shares will approximate 67,000,000 shares and just over 54,000,000 on a full year basis, also fully diluted. Our goal remains to accelerate revenue growth and deliver on our accretion target, Accelerating revenue and improving longer term margins and cash flow requires near term investment. Run rate synergies will manifest more clearly once we get through the initial 12 month period as a combined company. From there, we expect to see rapid improvement in our financial performance as we realize the benefits of the merger. With that, let me turn the call back over to Maryann. Thank you, Bob. In closing, I would like to recognize all Lantheus employees, incumbent and you, for their commitment to patients and our customers. We have been in continuous operation of delivery of needed diagnostic and therapeutic products to the healthcare community and have done so with the commitment to quality and service, which defines our company. This is to both of those essential workers reporting to our manufacturing and distribution side daily as well as those diligently working from home as we do our part to serve patients and fight this virus. I am fortunate in my position to have such a dedicated employee group and I would like to recognize that collectively you continue to embody the very best of our company's values. Before turning to questions, I would also like to discuss the changes to our Board of Directors that were made with the completion of the transaction. Ken Prussell and Doctor. Darrin Schafer have stepped down from the Orlandius Board seat and we have added Doctor. Gerard Baer and Heinz Mowgli, members of the former Progenics Board to our reconstituted Board of Directors. I'm personally grateful to Ken and Baeris for their contribution to the LAMPYT Board and their support of my role. I welcome Heinz and Gerard to the Board and I'm so excited by the future we will create with this newly merged company. With that, Bob and I are now ready to take your questions. Operator, please go ahead. Thank you. First question comes from the line of Raj Denhoy from Jefferies. Your line is now open. You may ask your question. Hi, good morning. Good morning, Raj. Maybe I could just maybe I could start a little bit with the data or the detail you provided on the monthly run rate of revenue. And so a nice rebound as you move into June, both positive for DEFINITY and TechneLite. So I know you're not giving guidance for the back half, but I'm curious whether you think those positive growth rates you saw in the month of June should be considered sustainable as you move into the back half of the year? Raj, of course, any comments we make are assumptive of not seeing a large resurgence of virus or a need for return to the kind of lockdown conditions that most of the Canadians were in, in the first half of the year. But having said that, we do expect to see continued rebound and recovery of our product uses and with one exception and I'll note that now. As Bob referenced, in other revenue, the most significant negative contributing factor was the loss of revenue with Xenon. And that is related to how the Xenon modality diagnostic procedure is actually conducted. These studies are generally 2 parts, a ventilation scan a ventilation and then a perfusion scan of a patient's lung, many times looking to see if there are emboli in the lungs. There is strong hesitancy for any ventilation type procedure in today's market just because of the risk of contamination to other either healthcare workers in the room or to patients who might then enter the rooms afterwards. So across the board, any type of ventilation related procedures have been suppressed at this time until we figure out how to have them safely and reliably used in patients regardless of what their kind of infectious status might be. So we do not expect in the short term to see recovery of Xenon revenue, but across our other products, we do. Helpful. And maybe one for Bob. I know you gave some detail on the spending and your ability to realize synergies from Progenics. I guess you mentioned $21,000,000 of expenses that they had in the Q1 operating expenses. We should just assume that that continues given that you're going to reinvest any savings. And I suppose the question is when we might start to see some of that spending actually start to trend downward, when you might start to actually show those synergies on the P and L as opposed to reinvesting them? Well, Raj, I mean, I think that will have to do with as we build out the commercial infrastructure around PyL, of course, ramping, so the AZEDRA relaunch, if you will. Together with those two things. And once those are in place is where you would start to see leverage return to the P and L. But it goes beyond just the synergy savings. Those we have very clear paths forward in terms of what those synergy targets look and how and when we're going to be able to capture them. The other thing that's worth noting is that if you look at the operating expense from the Lantheus side of things, it wasn't just this isn't just about finding synergies within the combined company, but the run rate savings that we put into P and L, you see that on an absolute dollar basis, I said 168 basis points of favorability, but that translates into $7,300,000 of reduction, actual dollar savings that were put through the P and L in the second quarter. And that's inclusive of the bringing on the Progenics operating expenses in for those 11 days. So when you start to think through manifesting the savings on a go forward basis, I noted that it would be 12 months before we really started to see it, partly because we have some of the near term investments, but also timing of how we will capture additional synergies. And then when we give our 2021 guidance, assuming that things are a bit back more to normal, I think you'll be able to see it at that juncture. That's helpful. And then maybe just one last one, Maryann, on PyL. You noted the slight delay given, I guess, the issue with manufacturing. Anything more on that? You did mention it had been remediated, but is there any risk that the timelines on PyL will slip any further based upon this? We're confident that they won't, Rajan. I'd like to stress again, it is an equipment related issue. In fact, our channel partners, which are the pet manufacturing facilities or PMS, who have been incredibly responsive. We kind of identified it very quickly. It was part of a pump that's used in the process of synthesis and we were able to replace the pumps and we already have some encouraging data from those newly replaced pumps. So we do not expect a delay any more than what I already cited. Great. Thank you. Next question comes from the line of Larry Solow from CJS Securities. Your line is now open. You may ask your question. Hi. Good morning, guys. Good morning, Larry. Good morning, Larry. Good morning, Larry. Good morning, Larry. Good morning. Good morning. So, I apologize if you covered this. It sounds like the 2 AL, you just sort of discussed the modest delay there. And AZEDRA, it sounds like it's going to start to re ramp. Can you just discuss the rest of the Progenics product line? Obviously, I know RELISTOR not talked about too much, but you're the greatest revenue generating product currently for Progenics. What's the sort of outlook for that product? And then in terms of their on the pipeline, I guess the other product in the therapeutic side and the PSMA side, I guess those trials are still delayed? So yes, let me kind of break down that question because it had several parts. Yes, absolutely. I'll talk to firstly the other products. You're right. On an absolute basis, it's standalone Progenics. The RELISTOR revenue stream that is the royalty stream paid by Vouch Healthcare is the largest revenue creating item currently on the Progenics P and L. We don't speak to it because we're not controlling the commercialization of it. But as a product, it has remained steady in the marketplace. The patients who unfortunately need that product are not in any way pandemic related and they would continue to need the product on a monoclonal basis. For the other products in the that we inherited with the Progenics acquisition, the next nearest term one is 1095, which as you noted is a therapeutic and it will be for the treatment of prostate cancer. That trial has been paused only for new patients entering. Any patients who are already in the trial will continue to receive trial doses. But just on a safety basis and very consistent with what is happening across clinical trials in the U. S, we are not yet re enrolling new patients. I will say, from an AZEDRA perspective, you didn't ask specifically about that, but I'll note what we know for the Q1. There were 11 therapeutic doses administered in Q2. 9 of them were first doses for patients, 2 were second doses for patients, which usually come about 3 months later. And to date in 2020, we have a total of 21 total doses already delivered, which is a significant ramp up from what they had experienced in 2019. As you heard both Bob and I mentioned, our intent has been and remains to carefully look at what the field based structure is because we are confident that we can increase demand generation and patient pull through, which both will contribute positively to sales for that product. Okay, great. And I realize that you're not providing any updated guidance and obviously understood why in this environment. But just from a global perspective, and I'm not sure if you touched on it at the beginning of the call, but I know when you first acquired or announced the acquisition of Progenics, you sort of had timelines for accretion and ex COVID or if we assume COVID hopefully wanes over the next couple of years, do you still sort of maintain your general expectations for accretion as we look out 24, 36 months? I'll say yes and let Bob give some more details. Yes, Sandy, yes. And in fact, that was the point I tried to make on the toward the end of my commentary, which is that we remain committed to our financial goals and targets. As everybody knows that there are public filings out there that assumed a January 1 start. So if you were to think in terms of dialing things forward in terms of a mid-twenty 20 start, we're now underway and we are starting to execute. Our integration management office has done a fantastic job of preparing the company and each of the leaders within their own functions to be poised to capture both synergies as well as productivity gains to be able to execute over the near term and over the next months years to keep us on track along those timelines that we had previously discussed. But just sort of not don't focus on the year, but focus on the months of ownership, and we're still committed to those timelines. Got it. And Mary, I know you mentioned, with lack of, I guess, access to some echocardiograms, DEFINITY was being used a little more on the ultrasound modality. Is that something that, as you look out over the long term could eventually be a benefit for DEFINITY? Different modalities. I know obviously you're trying to get into different modalities. So does that sort of fit that potentially? I think it may, Larry, because I think the learning has been that in any situation, it may be safer and more convenient if you can bring diagnostic modalities to the patient rather than having to transport patients to those areas where stationary equipment are. And we have seen and I may have talked about this before, but we've seen an increasing portability with ultrasound before this, where the ultrasound equipment is actually getting smaller, easier to use in a portable setting. And that in fact is part of the reason that we drove forward with our DEFINITY room temperature program. It was our commitment to make sure that if ultrasound was going more portable, that DEFINITY could be more portable as well. And so having a room temperature formulation rather than one that requires refrigeration, we feel kind of adds to that dynamic that we're seeing in the marketplace. Okay, got you. And then just last question, I think on Q1, you had mentioned TechneLite, obviously, procedures down materially April, May and slowly coming back. But I think you had mentioned there was some inefficiencies or the greater pharmacies actually had to use more Moly or more TechneLite in their procedures, even though there were less procedures. So that sort of somewhat offset the sales declines in the beginning of the quarter. Did you see that sort of through the quarter? We did. And as Bob and I both noted, these are really regional variations and it really aligns very, very closely with the reopening of regions. And so with full reopening and kind of return of normal conduct within hospitals for in and outpatient procedures, we would expect to see their channel partners who are the radio pharmacies revert back at some point to their practice of having multiple deliveries to hospitals during the day instead of the one time delivery that they adopted during the acute phase of the pandemic. But again, it's such a regional kind of aspect that I can't make a general statement about it. Larry, if I could just add to that too. When you look at TechneLite, it didn't drop. That was what I was indicating about gross margin to the extent that I noted for DEFINITY. Right. And as such, it was for the reasons that Mary Anne and yourself actually just articulated. But that same ramp, even though you might have seen a change in the way the delivery into the system was occurring throughout the period, it was still a ramp of recovery. I mean, still landing at $18,900,000 which was a pretty good result given the circumstances of the quarter. But it still did follow that same sort of trajectory, but the affinity recovery was a very steeper recovery, but Tekta Lite still did experience an upward trajectory throughout the quarter. Okay, great. Okay, great. Thank you. I appreciate all the color. You're welcome. We show no further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may disconnect and have a wonderful day. Thank you, everyone. Stay safe.