Good morning, everyone. I'm Tara Bancroft, one of the Senior Biotech Analysts at TD Cowen. Thank you so much for joining TD Cowen's Second Annual Radiopharmaceutical Summit. So for our next session, we have a fireside chat with Lantheus, and it's my pleasure to introduce John Wiggins, who is the VP of Isotope Strategy. So John, it's a privilege to have you here, and thank you so much for joining us.
Thanks for having me, Tara.
Then for those who are tuning in in the audience, please feel free to email me at tara.bancroft@tdsecurities.com if you have any questions for the team. You could also use the link in your invite, to submit questions virtually. So I guess, John, to start out, can you provide a brief overview of Lantheus and its place in the radiopharmaceutical space?
Absolutely. So Lantheus is the leading radiopharmaceutical-focused company, and one of the key reasons for that is that we've been doing this for decades. We were started by one of the scientists on the Manhattan Project and have been making nuclear medicine products for over 65 years now. So we have done both diagnostic and therapeutic in that time. We have more of a diagnostic focus today, but also have therapeutic agents that are in the pipeline and that we're very excited about bringing to market. But I really wanna be sure that folks understand... You hear a lot of start-up and clinical stage companies that talk about the challenges that are ahead of them in terms of the just-in-time manufacturing and supply of radiopharmaceuticals.
In Lantheus, that's what we live and breathe every single day. We execute on that just-in-time supply chain day in, day out. We do that through a network of partners for our PYLARIFY product, which is the most successful radiopharmaceutical diagnostic in history. We do it ourselves. We make and ship our own radiopharmaceutical products out of our Boston-area campus four days a week. So we know in detail how that life goes and what it's necessary to succeed in that. These are things that we will start making on a Monday morning, for example, and patients will be injected with that product on a Tuesday, nationwide or even internationally. So we really know the ins and outs of supply chain there, as well as product development.
When we look at the range of products that we work across, and isotopes, and things like that, of course, PYLARIFY uses fluorine-18, which has a short two-hour half-life. And then we go up to products in the pipeline that have seven-day half-lives, which to us feels like a luxurious amount of time for centralized production and distribution, and getting it out to the patients for administration. And we've really shown our competence and our ability to do that across that full range of products.
Great, thanks. So with this fireside, we're gonna take a slightly different approach, and focus more on strategy, and supply, and really interesting, higher-level themes. So I was hoping maybe you could tell us more about your role, and, and what are the objectives of Isotope Strategy at Lantheus?
Yeah, absolutely. So we created this isotope strategy role a couple of years ago to look in more detail at all of the different factors that go into choosing an isotope for products, particularly products in development, maybe a life cycle management, and then supporting that choice throughout the life of the product. And there are a lot of different things that go into isotope selection. Of course, there's more than just the isotope that's important to the behavior of the product. There are, you know, a tremendous number of other factors. But the isotope is a significant one. And the first thing to look at in developing a new product is, well, what do we think the clinical effect of this isotope is gonna be?
For example, we talk a lot about this within the industry these days, about alpha emitters versus beta emitters, and do we think that alpha emitters are going to have a stronger effect clinically than the largely beta emitter-based products that we have today? We also look at things like half-life, and how might half-life affect clinical performance? If we have an isotope with a shorter half-life, and we administer the sort of adjusted amount of activity to deliver the same radiation dose to the tumor, with a shorter half-life, that dose is delivered in a shorter period of time, and that's a higher dose rate. Well, higher dose rate can, in some instances, have a stronger effect on the tumor, so maybe there's some advantages in terms of therapeutic effects to a shorter half-life.
On the other hand, a longer half-life makes it easier to supply, deliver, administer these products. So then the pendulum swings back the other way. Well, from waste handling standpoint, a shorter half-life is better because the waste decays away more quickly. So we have to be sure that we have a comprehensive look at how the product is going to be developed, all the way through clinical trials and into commercialization, and then how it's going to be adopted and used in order to make a smart decision there. Of course, beyond the sort of clinical aspects and the physics of it, we need to be able to couple it to a molecule. So the chemistry of the isotope is important to be sure that we have a good, robust way to attach it to the molecule.
If there are radioactive progeny from the original isotope, so that you have the potential for free radioactive atoms floating around in the body afterwards, then we need to know where those are gonna go, how long they're gonna last, and what they might do in the body. Overall, from a radiation safety and handling standpoint, we need to be conscious of the radiation dose that is going to be effectively taken up by staff who are administering these products, who are handling them, by the manufacturing team, by the patients' caregivers, by the general public, and ensure that it is a product that can fit well within the regulations, the radiation safety guidelines.
And related to that, that the regulators are going to be comfortable with it, whether that's the Nuclear Regulatory Commission, the equivalent state agencies, the FDA. There are a number of different regulators who get involved in radiopharmaceuticals, and we need to, we need to be conscious in our choice of isotopes, that we are, we're complying with not only where the regulations are today, but where regulators are talking about going in the future, so that we can, sort of, skate to where the puck is going instead of where it is.
... Okay, and so of those several considerations that you just mentioned, which of those do you think are the most important when you're selecting isotopes for therapeutics? And does this differ at all when you're thinking about a diagnostic?
You know, I think the most important actually is supply, which I didn't mention that in that short list, but, we have to know that the isotope is gonna be there. And that's important whether it's a diagnostic or a therapeutic. If you can't get the isotope there in time, then you don't have a product, and you can't get it there in the right quantity. So we have to know that supply is, by the time we need it, going to be robust enough, that we can have a successful product through the necessary volume for clinical trials and into commercialization.
Now, that can lead the industry to focus on only isotopes that are available, in the quantities that are needed today, and we might miss out on some good isotopes, if we do that. So it doesn't mean that we have to have that supply today, but we need to have a way to get it in place. So when we look at a lot of these alpha emitters that are interesting to folks, you know, actinium, lead, things like that, there have been some reports of actinium shortages delaying clinical trials now. So you know that clearly the supply decisions around actinium were tremendously important, even at the clinical trial stage, let alone getting into the commercial stage.
Lutetium went through that same sort of thing a couple of years ago when we, we heard reports of shortages of, lutetium itself or lutetium-based products, maybe for different reasons, not related to the isotope. But there, there is now a robust market for lutetium. There are a number of manufacturers out there. So I have confidence that when there's demand for these isotopes, there will be supply. But the question is: how do you, how do you step up that ratchet? How do you get there? How do you get supply and demand, to, to escalate in turn in a way that, doesn't result in oversupply and, and the producers going out of business, but also doesn't result in constraints that, impair or hinder clinical trials, and commercial manufacturing?
You know, when we look at new isotopes, we assess who out there is making that isotope, likely to make that isotope. Is it something that we need to either invest in or do directly ourselves? So potentially investing in, you know, a new infrastructure for ourselves or investing in suppliers of that isotope. What's the path to get there? How quickly can we get there? The other thing to say about that is it goes beyond the immediate supply of the isotope, and we need to look upstream at what else goes into that. Lutetium is a good example of that because it has a fairly complex supply chain, where you have to have an enriched, stable isotope in order to start most paths for lutetium manufacture that are used today.
You have to have a source of neutrons, like a nuclear reactor, and then you have to have a processing facility to separate out the lutetium that you produce. So understanding how all three of those elements are gonna come together, and there often, usually even, are different players in each of those segments, is a really important thing. When you get to pieces like enriched isotope supply, for a long time, the only supply for a lot of enriched isotopes, at least in quantities that were meaningful, was Russia. And having an enriched isotope sourced from Russia is a significant risk these days.
So we look for people who have their own supply of those types of things, contracts that are in lower risk regions, and we think have, you know, a high confidence in their ability to maintain that, regardless of what may happen with sanctions or other international situations. Similarly, on the reactor side, there are a lot of research reactors and even some power reactors now in the world that can be used for isotope production, but many of them, especially on the research reactor side, operate maybe 50% of the time or so. So you need to have a robust network of those to be sure that you can produce, and there may well be unplanned outages of these sort of things.
We look for partners and in our own supply chain, where people have that kind of backup-to-backup and really redundant supply for the just-in-time pieces of that chain so that we can be well assured we'll have the isotope there when we need it.
Okay, yeah, so you talked a lot about supply, supply chain, the challenges that are faced and what could actually result in somebody having a successful and sustainable route to a supply chain. But I was wondering if you could next go into what you consider to be the biggest challenges in producing and distributing a radiopharmaceutical and how those may be mitigated.
Yeah, you know, radiopharmaceuticals are an interesting combination of different challenges there. You have the sort of usual challenges of drug manufacturing, where it's an FDA-regulated environment, and of course, because it's being injected into patients, we need to assure ourselves of the highest levels of product quality here. You add on top of that radiation safety, and the challenge of protecting workers, healthcare providers, patients, and their families from unnecessary radiation dose. And then mix into all of that, the fact that it's a just-in-time supply chain, and you may have anywhere from a couple of hours to a few days to get the product produced, released, tested and released, delivered out to the patient, and administered. And that becomes extraordinarily challenging. And it is...
It's tough to find a mix of people who have all of those different backgrounds between the, we'll call it the FDA piece, the pharmaceutical quality piece, the radiation piece, and the ability to do all of that in a really constrained time environment. And that's the sort of thing where the long history that we have is tremendously helpful. We have built up a lot of that expertise internally. We have robust knowledge of those things within Lantheus, across Lantheus, and we can use that not only in our own manufacturing and supply chain, but also in our partnerships. So as we work with with-...
contract manufacturers, suppliers of our products, for example, the manufacturing network behind PYLARIFY, we get very close with them, and we ensure that we can help them to solve problems where they need challenges, that we're doing the development work that needs to be done on our own products, and that we can get through all of those steps in a way that assures delivery of the product ultimately to the patient.
Okay, so then, that leads me to my next question, which is about the actual administration of the drug to the patient. So what are the considerations for how the product should be handled once it's at the point where it's getting to a patient? And then one lesser-known aspect that, you know, is starting to become a trend that people are talking about is how waste is handled afterwards. Are these, do you think, gonna be limiting factors for future use of radiopharmaceuticals?
Those are really important questions. Absolutely, Tara. And, you know, I think to go through a few different elements there, one, when you know, when you think about a dose showing up to the hospital, healthcare provider, whatever the administration facility may be, there's a question of just how it gets there. And is it coming in a FedEx box from the manufacturer, where what they receive is a vial, and then they have to have the staff on hand to draw up the appropriate dose into a syringe, and handle that, and do that sort of extra step in there?
Or are they receiving a patient-ready dose, that that's already fully prepared, labeled for that, for the patient who's gonna receive it at the particular time, and maybe takes a little bit of the burden off of the healthcare provider, in doing that extra step? So that's, you know, that's step one that we look closely at, is how do healthcare providers want to receive the product? What format do they want it in, and then how do we best get it to them in that format? They have to be able to do things like dose measurement and making sure that they have the right amount of activity there.
They have to have properly trained and qualified staff, including authorized users, to prescribe and administer the radioactive pharmaceuticals to patients, and they have to have time to do that. So, you know, if you think about particularly short half-life products, like the PET imaging agents, things like PYLARIFY and its competitors, you're gonna have a dose show up and a patient show up sometime, hopefully about... Hopefully they'll both be there at, you know, at the right time when that dose is supposed to be administered. But you don't have a long window to vary on that.
You know, there's enough wiggle room to make it workable, but it's not the sort of thing where if the patient's a day late, that dose is fully decayed at that point and can't be used. You need a new one. So, likewise, if the drug isn't there, you can't wait for days for it. So you have to have an extraordinarily reliable supply chain to be sure that it is going to get there. And that's what we've demonstrated with PYLARIFY. We measure our on-time and full delivery and exceptionally high performance in getting the doses there on time.
So if the dose is there in the right format at the right time, it has to be administered to the patient, and the administration procedures vary a lot by product. There's some products, for example, that require co-administering other drugs in order to reduce radiation dose to organs like the kidneys, for example. So that, you know, that part of the procedure may need to be set up and occurring well in advance of the radiopharmaceutical administration. And then when the patient is done with the administration procedure, of course, you have a lot of waste left over that is contaminated, and you absolutely raised a good question of: How does that get handled? What do we do with that waste?
And that's, you know, that's where things like isotope half-life can play a big role in terms of how easy this thing is to handle throughout the system. Typically, the rule of thumb is that we let isotopes decay for 10 half-lives before disposal. And if, you know, if it's 10 half-lives of a two-hour half-life product, okay, by the next day, it's gone. And, you know, at that point, there's essentially no radioactivity left, and most of those items can be disposed of as normal waste. Likewise, the patient is not giving off any significant amounts of radiation after that. The patient is non-radioactive, as well, if you will.
However, if you have products that have longer half-lives or maybe give off higher amounts of radiation, then those things can become challenging. So for, you know, lutetium, for example, which has about a seven-day half-life, now you're talking a little over two months that you have to hold on to this waste before it's fully decayed. Who does that? Is it the healthcare provider that has to have a storage place and has to manage that waste stream? Is there another party involved there that collects and removes that waste? And those are all things that we have to be conscious of and have to be sure that the sites are ready for.
So when we do a, you know, a site start-up, to be sure that a new provider can administer our drugs, these are the type of things that we work through with them, in being sure that they have the right processes and procedures in place for that, and, that if we need to assist along the way, that we can do that, in an appropriate way.
Okay, so, you touched briefly on some metrics to compare PYLARIFY to its competitors. So, but before we get into more specifics on that, could, especially for those who are less familiar with radiopharmaceutical manufacturing, can you first, discuss the differences between cyclotron and generator-produced agents, to understand those dynamics that you just laid out?
Absolutely. And this is particularly relevant for PYLARIFY and many of its competitors that use gallium-68, which is typically produced on a generator today. But that also applies to other isotopes. There are often a number of different production routes for isotopes, and one of the big ones can be an accelerator, like a cyclotron, versus a generator. And with an accelerator, typically a cyclotron, typically, you're starting with a stable target material, and you're shooting really high-energy protons, maybe other types of particles at it. And then that reaction turns it into a radioactive substance. So in the case of fluorine-18, which is used with PYLARIFY, we start with a type of water.
So it's H2O, where the O part is enriched in oxygen-18, and that oxygen-18 is hit by a proton and gives off a neutron and becomes fluorine-18, which is the isotope we use for PYLARIFY. So an accelerator can produce large quantities of fluorine-18, and produces them effectively in a single batch, and then that whole target worth of oxygen-18, and, you know, that target is a few milliliters. So it's a really small quantity physically, but it has a lot of radioactivity in it. That whole target of now fluorine-18 will be used to synthesize a batch of PYLARIFY, and we can get a lot of doses out of one batch.
We can get up to 40 doses, typically out of a batch of PYLARIFY, so that's, you know, that's enough to serve a pretty broad area, especially considering that many sites could run multiple batches at a time or multiple batches in a day. So that, and we may well have multiple production sites within a metro area, for example. So that sort of robust supply gives us a big advantage over generators, particularly gallium generators, where typically you're getting, depending on how far you're taking that dose, like, a couple of doses out of a generator. And a generator has, instead of a stable isotope, it has a radioactive parent isotope. So in the case of gallium-68, the parent isotope is germanium-68.
Germanium has a long half-life, hundreds of days, and it will kind of sit on the shelf and slowly decay into gallium-68. You can elute that generator, so draw off the gallium-68 that's been produced, you know, about every couple of hours, every few hours, and get another dose or two, again, depending on how far you're going. You might get more if it's administration at the site where it's being produced. You can get a few doses of a gallium-68 product. Cyclotrons really have the advantage in terms of scale. The other thing to think about there is the difference in the environment in which they're produced. Gallium-68 generator-based products broadly are produced in a pharmacy.
So they're produced under practice of pharmacy, which is not necessarily the full Good Manufacturing Practice regulated type of environment. Now, FDA can inspect pharmacies, but it's a different set of regulations than govern pharmaceutical manufacturers. The kits, typically, that go into these products are made in a Good Manufacturing Practice, GMP facility. But the actual process of combining those things together with the gallium, producing a dose, is what they call practice of pharmacy. For PYLARIFY, PYLARIFY is FDA-regulated for PET manufacturing. So this is a, you know, more of a full-scale manufacturing site that is doing the batch production of these products and routinely inspected by FDA.
And then once that bulk product of PYLARIFY is produced, it goes over to the pharmacy side of that type of operation, and individual doses are drawn out of that, that vial. But the manufacturing process itself is FDA-regulated.
Okay, great. And then, for the cyclotron operation schedule, you know, can you tell us really why that's important? Like, how long does an FDG run take? PYLARIFY—how long does a PYLARIFY run take? And even some market context for that, like, why it might be important for PYLARIFY market share.
Yeah. You know, timing is really important in radiopharmaceuticals, and especially with most of the PET isotopes, F-18 and gallium-68, because they have such short half-lives. Gallium-68's about an hour, F-18 is easier at about two hours, but it's still a short half-life. And you really have to think about what time of day patients are gonna need those doses, and then when it can be produced. So you can't just run the cyclotron 24 hours a day necessarily, because there would be a lot of wasted time there. If you're running the cyclotron in the afternoon, to produce doses in the evening, but no one's gonna take a dose until the next morning, well, that product's all decayed away by then.
So typically, these production facilities will start running the cyclotrons in the late evening, early in the night, and they'll run overnight and produce several batches worth of F-18 in that time. And then the first batch is produced in the wee hours of the morning, will go out to patients who are gonna be dosed at, you know, say, 7 A.M., something like that. And the schedule there is that a run that occurs further before the production has to be longer. So you might run for four hours, say, if it's the very first run of the night, and then by the time that has been administered to patients, it will have decayed down a bit.
The later runs that are closer to the time of administration, you might only have to run for an hour or two. F-18 can be produced in tremendous quantities. You can get close to 20 curies now in an hour out of some of the new cyclotrons, which is, you know, just incredible. So that you can run a number of batches off that. And in those types of situations, when people have, especially multiple cyclotrons in that capacity, the constraint can quickly become the process of producing the batch, not producing the radioisotope. So you might be able to produce enough F-18, but now you have to have, because each of those targets is going into its own batch, you have to have multiple synthesis boxes.
Those are the machines located in a hot cell used to produce those, the finished pharmaceuticals. And essentially, you know, each synthesis box can do about one batch per day, typically, before, you know, it'd have to be changed over. So, you know, we have strategies with our partners to ensure that we have multiple boxes, you know, redundant boxes, redundant sites, again, throughout an area, to give us that surety of supply, and that we're gonna have enough there. When you look at gallium, again, the generator-based production is pretty limited in capacity. There is the potential to make gallium on a cyclotron.
It can only really be done in meaningful quantities using a type of target called a solid target, which is a less common technology, but there are ways to produce that now. The challenge still is, compared to F-18, it's a more efficient use of time on the cyclotron to make F-18, because you're gonna make more of it. Especially considering the longer half-life, that'll translate into more patient doses. So we even with cyclotron-based production of gallium-68, we still see a big advantage for F-18 in terms of the supply chain ability to produce it and the efficient use of those resources by the owners of the equipment, really.
Okay, great. So I have a little bit of a shift. You know, considering your expertise and your knowledge base, you know, we had some investors actually ask about this, and so I'm curious, what's your view on the market for Alzheimer's disease? What do you think would be the best isotopes, the best targets? Is there a place for amyloid or for tau, and in general, your thoughts on that?
Yeah, you know, as you know, we're very excited about neurology. We have this MK-6240 tau agent that we really think is best in class that's in development now, and we are actually providing that as part of our pharma services offering to companies who are developing treatments for Alzheimer's so that they can use that to provide information during their product development. So we're tremendously excited about that. Alzheimer's is an interesting one because you in neurology generally, you wanna be able to cross the blood-brain barrier, and if we go back to the chemistry aspect of how we pick isotopes for imaging agents, for the most part, metals are not gonna be able to do that.
They have to be in a chelator, attached to a molecule, and that's gonna make a molecule that's unlikely to cross the blood-brain barrier. So, you know, F-18 is really what you see used in those agents, because of the necessary structure of a molecule, that'll work in neurology. So, certainly the F-18 experience that we have, we think is gonna pay dividends there. The relationships that we have, both in the supply chain and at imaging centers, but we are tremendously excited about that. Watch very closely the trial results that are coming out, on various therapeutic agents and what things are important to measure there.
Of course, there are a number of agents now that require proof of amyloid positivity, but we see the tau is more closely correlated with clinical symptoms. So, you know, we think that tau is ultimately probably the more meaningful agent there, and we continue to get more and more involved in that space.
Okay, great. Thanks. Yeah, some other questions I'm getting from people are on Q2 guidance of PYLARIFY and everything, but, you know-
I'm not gonna answer Q2 questions.
Ahead of isotope strategy, that's, that's not necessarily what you focus on. So instead, I think where we can end this in the last couple of minutes is, in general, what do you think is the most underappreciated aspect of, of Lantheus' isotope strategy? Yeah, either Lantheus in general or across the field.
It's execution. You know, it takes a lot to make a successful radiopharmaceutical agent, and as I mentioned in the beginning, we have decades of history in doing that, and you could see that success in the launch of PYLARIFY. And the fact that, you know, when it was approved, it was an extraordinarily short timeframe before we had our first doses out the door and before we had robust sales and continued to grow very quickly.
We were able to not only finish the development of that product successfully and get it through FDA with accelerated approval, but we also had an extraordinarily quick, successful launch, and that's the sort of value and expertise that we bring to any product out there that we're working with, is we know what it takes to make this happen. We know all of these details and complexities, and it's not something where we're trusting that someone else will take care of that and make that happen. We are actively engaged in that.
And there are, of course, many more aspects than just what I've talked about today with, you know, the isotope focus of things, the commercial aspects of this, the regulatory aspects, the payer relationships, all these things that we get very closely involved in, in order to make a successful product launch, and then to continue the success of that product, as we've shown with many of our older products.
Great. Thank you so much. I guess with that, we are up on time. But, John, I really wanna thank you for sharing all this knowledge with us and for your time and for everyone for watching.