Lantheus Holdings, Inc. (LNTH) Earnings Call Transcript & Summary

Hello, everyone. Welcome to Lantheus Holdings Inaugural Investor Day. I'm Mark Kinarney, Head of Investor Relations. First, let me start by saying it's so wonderful and great to see everyone here in person. The last few years has been interesting, and I know most of you from just Zoom calls and Teams calls and e-mail exchanges, but it's really great to see everyone here. We're also welcoming folks to the webcast, and we're happy to have all of you, and we're looking forward to hearing from you during the first of our 2 Q&A sessions or from either Q&A session, sorry. Before we get started, a few housekeeping items. If everyone could just mute their cell phones, this is being webcast, and it's going to be on our website for a year. So we don't want to have phones ringing and that type of thing. The other thing is I'm going to point out our safe harbor language. This slide is in our investor presentation on our website and on investorday.lantheus.com, which is the micro site for this Investor Day. Okay. So with that out of the way, let me briefly review today's agenda. I'm not going to go line by line. But at a high level, our President and CEO, Mary Anne Heino, will provide some comments on our vision and strategy for the next phase of our growth. The way we break up today is the first half of the day is primarily discussing the prostate cancer franchise. Paul and Etienne will start before handing the call off to Aseem, who will provide a PYLARIFY AI demo. Following Aseem's presentation, Dr. Bela Denes will moderate a panel with 2 prostate cancer key opinion leaders, and we'll close out this section with the first of our 2 Q&A opportunities. After a short break, Paul and Etienne will return to discuss our microbubble franchise. Dr. Denes will return to host a fireside chat with our Interim Chief Medical Officer, Dr. Jean-Claude Provost, to discuss why we believe Lantheus is uniquely positioned in this radiopharmaceutical renaissance. Etienne will return to discuss our growth strategy and then our CFO, Bob Marshall, will dig into the financial strategy. Mary Anne will return and provide closing remarks before we have the second of our 2 Q&A sessions. So with that, it's my pleasure to introduce our CEO, Mary Anne Heino.

Thank you, Mark, and good morning, everyone. I would absolutely like to echo Mark's comments and thank everyone for coming here. It is really a great experience to have everyone in person. I know, in this environment, it's always a little sketchy. Even as we stand here, we have some infection rates that are rising again. But today, we're safe and we're here and we're really thrilled to have the opportunity to talk with all of you about Lantheus. This is a story that I know for many of you who are here, you know us. It's not an easy story to learn, and many of you have really invested the time to do that. So again, I thank you. It's a story that we have been trying to get out there for years. And once you understand our story, I think you really come to appreciate the uniqueness of what we do at Lantheus. And the reason that that's worth investing in is because that is what's happening in the larger life science sector right now. The value of radiopharmaceuticals and what they bring and what they offer is really coming to bear, and Lantheus is one of the very few companies that's really at the forefront of that. And that's going to be a lot of our theme today. We're going to show you why that is, what it is and where we really want to play in that. So if we go to the next slide, I'm going to show you some key messages, and I really want you to challenge us that you hear these messages repeatedly from us throughout the day. This is what we're really trying to communicate. And unlike the other kind of interactions you have with us across the year, which are mainly our earnings calls where you mostly hear Bob and I, and more recently you've heard from Paul, these are messages that we're going to try to take out further for you. So you have a kind of a longer glimpse in where we're trying to take this company and what we're trying to achieve with Lantheus, especially in these very specialized spaces. So the radiopharmaceutical space on our nuclear portfolio and then the microbubble space, where also very exciting things are happening. And again, an appreciation of what's really possible that you can do with a bubble is really coming more into focus for the life sciences sector. So again, across these 4 key messages, I'm going to show you exactly who we've been for 65 years. And I'm going to challenge -- that probably you don't appreciate just what a history of innovation Lantheus really has. I'm going to show you what our kind of history of operational and commercial expertise is. Don't leave it to me, you're going to hear from the executive team today in presentations, and then you're going to have the opportunity to interact with many members of our management team when we do our lunch and when we get into really the second Q&A later this morning. And I want you to hear from them because if you think that when you see our executive team, they're impressive, you're going to be even more impressed by the members of our management team. That's how deep our bench is at Lantheus, and that's really what we bring when we work this company as we do. And finally, we are always and I think have demonstrated that whatever we do, whatever we take on, it always comes with a commitment to return value. I think, finally, in our history, that is being demonstrated with our stock price. We've always known that, that was what fair value should be. It hasn't always been reflected, but it is more currently, and it's our commitment to have that as we go forward. So if we go to the next slide, I'll show you the executive team at Lantheus. We are very much a United Nations. We come from all different parts of the industry. This is very purposely chosen and very much at work. We're an active working leadership team. None of us sits on our title. We work very hard at what we do. And as I mentioned, right below this team is a management team that really is the working leadership team of the company, and that management team is as strong as this executive team, and you'll get the chance to hear from them today during the Q&As and then as you sit with them during the lunch that we're going to offer. If we flip to the next slide, I'll give you a snapshot of our recent performance. It's something that we really are truly proud of coming out of 2021, which was a very strong year for us. We're into 2022, we've already reported on our first quarter, which was quite frankly, stellar. No other word describes what we did for first quarter. A lot of that performance was driven by our launch of PYLARIFY, but it is absolutely underpinned by what we do with the rest of our portfolio, which has been true throughout our history. It's our intent, and this is what you'll hear from us throughout today, that we continue to look for ways to diversify our revenue and our holdings. It will always be with assets and with opportunities that continue to bring value in because they offer value out to whoever we're serving, whatever part of the sectors that we're serving. We'll show you what some of those opportunities are, we think, today. So there is our performance, as I mentioned, driven predominantly by the products that you see on the right-hand side of the slide, but always underpinned by how we run the company and the operational excellence that we bring to everything that we do. Now I'm going to take you through a little bit of history, which I'm not sure that everyone really appreciates about Lantheus and the number of firsts that we have in the markets that we serve. Starting in 1956 in downtown Boston is New England Nuclear. We were the first company to receive a radioactive product from the Department of Energy in 1957. In 1970, we were the first company to commercially own a cyclotron in the United States market. In 1977, we were the first company to launch a radioactive product for assessment of cardiovascular disease. In 1991, we were the first company to launch a radioactive-associated technetium-labeled product, Cardiolite, which remains the most successful radioactive imaging agent -- technetium-labeled imaging agent in the world launched to date by number of users. In 2001, we were not the first to launch an ultrasound-enhancing agent, because GE Healthcare beat us to market by a few months with their agent. What we were the first and remain the first is the most successful with the highest market share for all 22 years that we've been in the market, with over 80% market share for that product. In 2018, after our acquisition of Progenics, we were the first to launch a therapeutic product for PPGL, which is pheochromocytoma and paraganglioma 2 orphan, unfortunately, orphan and devastating diseases that are now treated with our product AZEDRA. And in 2021, as I'm sure many of you know, we were the first to have it approved, a commercially available PSMA PET imaging agent. This is the history of Lantheus. And what I think you'll hear today is where we're going, where we intend also to remain first and best in class when we identify opportunities that match our skills and match our capabilities. If we go on to the next slide. These are the competitive advantages that we think allow us to take on opportunities, either organically or inorganically, and bring them to market with the same type of commitment and the same type of execution that you've seen with DEFINITY, that you've seen with Cardiolite, that you've seen with PYLARIFY. Not many folks choose to operate in the nuclear isotope space. It comes with a lot of challenges. Supply chain is only one of them. We say sometimes that in this space, the barriers to entry are just as high as the barriers to exit. But if you choose to operate here and if you master the supply chain challenges, the other challenges that come along with handling isotopes, you are one of few companies in the world who earned the right to do that. And when you do, and when you come into a period as we are in now, of renaissance, of appreciation for radio isotopes, then you are standing in a very good space, and that is where we are today. We have expertise across the entire value chain. We have a leadership team that knows how to handle these opportunities, and we feel we are uniquely positioned to take advantage, appropriately so. I always like to say to do well for having done right of what's happening in life sciences. If we go to the next slide. As we talk today, and as you hear from the leadership team, these are the themes that I'll ask you to listen for: accelerating growth across our platforms, positioning ourselves as a category leader wherever we choose to go, and finally, doing that to again diversify our portfolio across the opportunities we see. Now I've showed you our leadership team. I want to also show you our Board of Directors. Next slide. Our Board of Directors, I used to always say, was kind of overpowered for our little company, especially when we were a $1 billion company, maybe even a $2 billion company. We're growing into them, but this is an incredibly seasoned set of directors who have worked across the industry. Only 2 of these directors are original to our IPO. And that is Brian, our Chair; and Sam, our Audit Chair. The rest of these are handpicked to serve on our Board, and they are thrilled to be part of our Board and they are very actively involved. You see on the right-hand side the types of skills that we have access to with our directors, and we use them all the time. I'll close with what I opened with. Next slide. And these are the messages that we want you to hear from us today and that we want to demonstrate credibly to you throughout today. Here's where we are taking this company through these key messages. I will challenge you during the Q&A to challenge us back about whether we've kind of met the challenge and the commitment against these messages. So I'm going to turn it over to Paul and the prostate cancer franchise to start our day. Thanks, everyone.

Good morning, everyone. Thank you for being with us here today. My name is Paul Blanchfield, I am Lantheus' Chief Commercial Officer, having joined in early 2020. Prior to joining Lantheus, I spent 6.5 years at Shire Pharmaceuticals, which became Takeda Pharmaceuticals, launching products across therapeutic areas and geographic areas. And before then, I was a strategy consultant with McKinsey & Company for 5 years, serving health care companies on strategy and commercial execution. I'm incredibly excited this morning to speak about our prostate cancer franchise, together with my colleagues, Aseem and Etienne, who will join us a little bit to talk about our strategic partnerships as well as our innovative PYLARIFY AI technology. When we think about our prostate cancer franchise, there are 3 key messages that we would like you to take away. The first is that we play in an incredibly large market with over $1.1 billion of a totable addressable market that continues to grow. The second is that we are not only first to market, but we have a significant first-mover advantage, having been on the market almost a year. We believe that, that, combined with our operational excellence, creates a sustainable advantage for Lantheus and our prostate cancer franchise. And third, there's also significant long-term potential. Labels and guidelines are likely to expand in the future. You'll hear about our strategic partnerships and international opportunities as well as inorganic opportunities for us to continue to lever the capabilities that we've built through the PYLARIFY launch. Prostate cancer is a serious medical condition with significant unmet need. It is the second most common cancer in men with over 3 million men living with prostate cancer in the United States. And the market for prostate cancer is over $20 billion. Metastatic prostate cancer, in particular, is challenging, with survival rates below 30%. We believe that PSMA PET imaging and PYLARIFY, in particular, are uniquely suited to address some of these challenges while serving as an opportunity for us as an organization to continue to expand into other diagnostics, therapeutics and software solutions. Overall, this is a terrific market and a great fit for Lantheus' purpose and strategy to find, fight and follow serious medical conditions. Within prostate cancer, imaging is an incredibly important component of early detection, of diagnosis and informing treatment. Conventional imaging, which has been the standard of care for many years, has a number of challenges. First, it lacks sensitivity for early lesion detection; and second, it has limited utility in identifying metastatic prostate cancer at low PSA levels, potentially compromising therapeutic decision-making. We believe that PYLARIFY has the potential to address some of these challenges and help patients lead better, healthier lives. As you've heard us speak on investor calls and the last number of quarterly earnings calls, the addressable market for PYLARIFY is quite large. We now estimate it to be about 250,000 scans on an annual basis or just north of $1.1 billion. This includes a mix across our 2 indications, including the recently added third-line metastatic castrate-resistant prostate cancer with recurrent indication. Importantly, and as I'll touch on later, we expect this market to grow, having already raised the total addressable market 3x in the last 12 months. Naturally, we're excited to be leaders in this space and in the large and growing opportunity that we believe will continue to be able to positively impact patient lives. For those less familiar with PYLARIFY, I'd like to cover a little about our current indication as well as the competitive landscape. PYLARIFY is a PSMA or prostate-specific membrane antigen target that uses positron emission tomography, or PET, to do 2 things under our approved label. First is to identify men with suspected metastases. And second is to diagnose suspected recurrence based on elevated PSA or prostate-specific antigen levels. We are the first commercially available PSMA PET imaging agent. And while there are 4 others on the market, with 2 being academics at UCLA and UCSF and 2 recent approvals of Gallium-68 PSMA imaging agents, we are the only approved PSMA F 18-based imaging agent today. We're excited to have PYLARIFY. We are incredibly proud of it being the broadly commercially available agent and the benefits that it can have for the prostate cancer community. As I mentioned, and you certainly all monitored over the last few quarters, we have a significant first-mover advantage, having been on the market for almost a year. We're coming up on our anniversary. And we've levered that advantage to build what we believe is significant momentum and a sustainable advantage. We have continued to grow into the market, and as of the first quarter 2022, we have already penetrated 34% of the $1.1 billion market on an annualized basis. Having launched several products, as I mentioned, across therapeutic areas and geographies, I can say that I have not seen adoption curves like this in my memory. And I think this speaks to not only the innovation that PYLARIFY brings to the prostate cancer community, but to the operational excellence that Mary Anne highlighted, and the excellence across commercial, across supply chain, across medical, across market access, all of this is coming together to maximize the potential of PYLARIFY. Importantly, we are just getting started. We did $46 million in sales in all of 2021. And as we talked about seeding the market and preparing for a full launch in 2022. As Bob highlighted on our earnings call for the first quarter, we have issued updated guidance for the year for PYLARIFY of $385 million to $420 million. In short, we are already the #1 agent on the market with significant momentum and as I'll share shortly, sustainable competitive advantage. What makes up that sustainable competitive advantage? Well, we believe it's a number of things. It's our clinical differentiation and the value we create for HCPs and their patients. It's sustaining supply and the capacity advantage to meet the increasing demand we're able to generate in the marketplace. It is contracting and service, where we've made significant progress, and we are effectively serving our customers, reducing the probability that they will move to a competing agent when they become available in the marketplace. I'll touch on our market access team and the terrific accomplishments we've made in the last 12 months. And then naturally, I'll touch on demand generation before turning it over to my colleagues to talk about AI and the technology we bring. What are some of the clinical differentiators that we believe PYLARIFY brings to the market and that we believe and hear that physicians are seeing in the marketplace? In a 14-person cohort, PYLARIFY identified additional lesions in 21% of patients when compared to Gallium-68 PSMA 11 imaging. We think that's an important differentiator as physicians will now have a choice of which agent to use in the marketplace. And secondly, a diagnostic tool is valuable if it impacts patient care. And we found that 64% of evaluated patients had a change in intended management after using PYLARIFY compared to conventional imaging. In other words, physicians are utilizing the information they receive either to -- negative findings where there is no lesions detected or positive where new lesions are detected to change how they intend to treat patients. That, we believe, is a sustainable and significant advantage. Mary Anne spoke about the complexity of manufacturing and how this has been a hallmark of Lantheus' operational excellence for 66 years. To manufacture PYLARIFY, we assembled and are qualifying a nationwide network of PMFs and academic medical centers to manufacture radio isotopes using a cyclotron. After being made on the cyclotron at a PMF, the F 18 is then combined with certain chemical ingredients in what we call a synthesis box to manufacture PYLARIFY doses. PYLARIFY doses are then quality control-tested and transferred to a radio pharmacist who prepares and dispenses patient-ready doses of the final product. And this allows us to produce a significantly large quantity of doses needed for this incredibly exciting and growing market. It is clearly much more complex than this, but we wanted to give you a preview as to some of what we believe differentiates us from a manufacturing perspective. We believe this network and the overall advantages of a cyclotron F 18-based manufacturing platform have a number of sustainable advantages. First, we're levering a sizable U.S. PMF network that already exists and collectively is manufacturing over 2 million FDG doses, which is the #1 PET imaging agent used in oncology. We're plugging into that existing network that already exists and is producing F 18 on a daily basis. We believe that provides us sustainability and scale, and we've hit the ground running, levering that portfolio. Capacity. We can manufacture in many cases over 40 doses per batch and in some cases, multiple batches a day at our PMF facilities. While there are other products out in the marketplace that use generators, we believe none of them match the capacity and the throughput potential to meet customers' needs and the significant demand that we've generated in the marketplace. There are also, as Bob will talk about, margin benefits as we drive increased volume through a relatively fixed cost structure over time. The third supply advantage is F 18's 110-minute half-life. What this means is that we have the ability to use our PMF network to drive and, in some cases, fly doses across the country where we're currently serving customers in 45 states plus the District of Columbia. That ability of half-life allows us to get product into markets where we're still activating a PMF and to ensure that they continue to benefit from the potential that PYLARIFY brings them. And lastly is scheduling. We can calibrate doses for when customers need them. In fact, over 60% of our PMFs are able to produce doses at or before 9:00 a.m. or earlier, with customer dosing flexibility in the morning or the late afternoon. And so we can meet the demand where it is. But importantly, we're not sitting still. We continue to make investments in adding additional and activating new PMFs. We are adding additional cyclotrons to the PMFs that are already approved. We are adding additional synthesis boxes to increase capacity and increase redundancy. We naturally work with our PMF partners around increasing efficiency over time to ensure that we can get the maximum amount of activity out of each run on a daily basis. And we're also working with partners to increase the amount of cyclotron time. As they see the demand for PYLARIFY, they want to ensure that they have sufficient time utilizing the cyclotron to produce PYLARIFY to meet this ever-increasing demand. As we look geographically, and as many of you have seen as our website, we currently have 23 activated PMFs, which allows us to serve approximately 80% of the U.S. population, and more when we include our ability to fly doses into distinct markets. Having said that, and as Mary Anne has mentioned, we're just getting started. We continue to identify and partner with additional PMFs to serve new geographies where we are able to supply locally through a PMF rather than flying them in, but we're also adding redundancy. As Mary Anne highlighted, manufacturing nuclear products can be challenging. You can't build up 60 or 90 days' worth of inventory with a half-life of 120 minutes. And so we are just-in-time making product every day to meet our customers and our patients' needs. And we are acutely focused as an executive and a management team to ensure that we have adequate capacity and redundancy to ensure that PYLARIFY can remain the #1 PSMA PET imaging agent in the marketplace for many years to come. A third sustainable advantage is our customer contracting and quality of service. In the almost 12 months since FDA approval, we have contracted with over 80% of our target potential sites and 100% of our key academic centers. This is a critical first step in ensuring customers can order PYLARIFY. And it's not a simple step, especially in a pandemic, especially navigating hospitals' legal and financial departments, and yet we've been incredibly successful. But contracting is not enough, and indeed, it's just the start. We closely monitor our ability to meet customer needs. We call it on-time, in-full or OTIF, which is another way of saying, can we get a dose to a customer with the activity they want, when they want it? If we're able to do that, and you can see the rates in the high 90s over the last 2 quarters, then we believe we are meeting customers' needs and the need or the probability that they need to try another imaging agent will be reduced. Still, we're not satisfied with these rates, and we continue to work with our PMF partners to improve efficiency, to share learnings and best practices, to ensure that we continue to serve this patient population with the care and respect it deserves, recognizing that each one of our vials has a patient name behind it. With our clinical differentiation, our scale in manufacturing and our reliability in customer service, we firmly believe we will remain the #1 PSMA imaging agent in the marketplace. I now want to discuss briefly market access, something we're regularly asked by many of you, and it's quite nuanced. So it's nice to have a little bit more time than a quarterly call to discuss this. We believe this has been a significant advantage for us over the last 12 months, and I'm incredibly proud of the progress we've made. We have the largest dedicated team in the industry, and we believe that has and will continue to create a sustainable advantage. But before I get into that, I do think it's worth highlighting the distribution of payers across what we would consider prostate cancer. Naturally, commercial payers make up about 35%. These are the Aetnas, the Cignas, the Uniteds and the Anthems that many of us are familiar with. Medicare Advantage is the Medicare benefit administered by commercial insurers, and then there's traditional Medicare or the traditional fee-for-service portion of Medicare. I'll touch on this in a few minutes, but it's important to remember that the much-discussed traditional pass-through payment only applies to patients receiving traditional Medicare coverage in a fee-for-service as well as a site of care in the hospital outpatient setting. Of all of our launch drivers to date, our progress in coverage is certainly something that stands out. We recently announced a few weeks ago at our first quarter earnings call that 90% of covered lives across the country have access to PYLARIFY in both indications. Having launched products before, as I've mentioned, this frequently takes 2 to 3 years to achieve, and I'm incredibly proud of what our team has been able to achieve. We think this not only speaks to the innovation of PYLARIFY but to the execution of our market access team and the differentiation that we bring. But we're not done yet. And so one of the key asks and focus of our market access team is to continue to work with physicians to manage an ever-complex coding, coverage and payment environment to ensure that their patients can have access to PYLARIFY. We've also talked about our coding, where we've had HCPCS effective on January 1, 2022, and payment, as I've highlighted, with traditional pass-through as of January 1, 2022. Guidelines has also been something that our market access and our medical teams have been working with societies on. We were incredibly pleased to be included in the SNMMI and the NCCN guidelines last fall for both indications, as well as recent updates that have made to identify PSMA PET imaging, including PYLARIFY, can be used for patient selection of PSMA-targeted therapy. More to come, but we're incredibly proud of the progress we've made. The fourth advantage and a real hallmark of how Lantheus invests in its product is a leading customer-facing team to educate key stakeholders on the benefits of our product and to ultimately drive demand. We have the largest 100% dedicated U.S. PSMA PET sales team, with a mix of backgrounds on both nuclear and urology, recognizing that both of those specialties are incredibly important to be able to deliver the value proposition of PYLARIFY. In market access, we have the largest dedicated team, as I highlighted, and we continue to work with PET imaging sites, whether they be hospital or freestanding imaging centers or government facilities to help them understand the reimbursement landscape. But we're not naive to know that we can do this all ourselves. And so we have a number of carefully selected partners, whether it's our PMF partners who, in some cases, help commercialize the product and promote it to physicians. Palette Life Sciences, which is a leading urology medical device company that helps expand our reach to urology practices across the country or Syntermed, which you'll hear Etienne and Aseem speak to in partnering to promote our PYLARIFY AI. We believe we have built a differentiated team with the right backgrounds and the right scale to be able to continue to differentiate PYLARIFY in the marketplace going forward. But like with anything, the proof is in the pudding. And so who is actually using PYLARIFY? And this is something we closely monitor. And so we're pleased to share that almost 700 sites across the country are utilizing PYLARIFY on a regular basis, and this is as of the end of March. This covers, as I've mentioned before, 45 states and the District of Columbia, which is the culmination of our ability to contract, to supply and to service customers, and so they have access for their patients, and that physicians are able to request the product regardless of where they are. We continue to add sites on a daily basis, and we think this speaks for itself into the strong and the breadth of adoption of PYLARIFY to date. But more than that, we also look closely with our operational excellence of the depth of ordering, and you can see the quarterly customers increasing at a substantial rate where we continue to add new customers, as I mentioned, but also at the depth of ordering. And so it's not enough to just have a customer, we want that customer to be satisfied and to be a repeat user of our products. We're pleased that over 95% of our customers have ordered more than once. And another key piece that we closely follow is the number that have ordered over 20 doses, with over half of these customers ordering that today. This is important because once a customer starts to use over 20 doses, PYLARIFY becomes embedded in their workflows. It becomes part of the routine. They're accustomed to the reimbursement and payment landscape. And so we believe, while not self-sufficient, we still provide service appropriately. We can also add our service to the referring physicians to ensure that in the urology and medical oncology community, they understand the benefits of PYLARIFY and can drive more prescriptions to those sites. Finally, we're acutely focused on who is levering the product to ensure that we are appropriately penetrated. Naturally, we've seen an increase in hospital usage subsequent to pass-through as of January 1, but imaging centers and government facilities still make up a significant portion of the business. From a commercial execution perspective, we are focused not only, as I mentioned, on how many customers we have, but which type and how satisfied they are to ensure that we have that sustainable advantage going forward. I've talked some about what we believe has differentiated the PYLARIFY launch to date as well as what is driving our momentum and has firmly placed PYLARIFY as the preferred PSMA imaging agent in the marketplace. But we also have a number of long-term growth drivers that I want to cover. I'll touch on customer retention, including the FIND Act and pass-through status. I'll touch on future market expansion opportunities before turning over to my colleagues to talk about some of our partnerships and technical innovation. First-mover advantage, you've heard me talk about this. With 20,000-plus doses delivered and administered to patients in the first quarter of 2022, even before competing agents become available, we are embedded in customer workflows, including ordering, billing and calibration. The second key piece to note is that PYLARIFY -- I should say prostate cancer is fundamentally a disease of prevalence. 3 million men in the United States have prostate cancer, and many of them will live with prostate cancer for many years. This means they will be scanned multiple times over their lifetime, whether for an initial diagnosis, to track progress and progression or to see how they respond to therapy. Ensuring comparability in scans over time, whether it's a baseline image or tracking progression over time, we believe, will create stickiness where customers and patients will benefit from a PYLARIFY scan repeatedly over time and as appropriate. The second piece, and I highlighted earlier when I discussed market access, is the site of care mix. Pass-through is much discussed and it was an incredibly important milestone, but it's also important to understand the mix of patients that are actually subject to traditional Medicare pass-through. A large portion of patients are not subject to traditional pass-through payment. Indeed, the majority are not subject to that payment. It makes up a minority when you combine, pass-through being only for traditional Medicare in the hospital outpatient setting. So it does not apply to independent imaging centers and it does not apply to government facilities, and it is specific to this type of payer mix. It's also important to note that Medicare Advantage has been becoming an increasing share of the overall Medicare landscape over the last number of years. And so we would expect that to continue. AI is an incredibly exciting technology that we're excited to share a demo with over time. But this is an additional value-added service that our customers, both treating sites as well as referring physicians, will benefit from and we believe will create loyalty and stickiness over time. And lastly, the FIND Act. We, as a broad industry coalition, are working on this incredibly important legislation that has been introduced with bipartisan sponsors and support in both the House and the Senate. And the FIND Act would maintain separate payment status for specific radiopharmaceuticals, including PYLARIFY. We are hopeful that this will be passed in the coming months or years, and we have until 2024, with the expiration of the current pass-through environment, to have that be put in place. And so collectively, whether it's our first-mover advantage, whether it is the prevalence component of prostate cancer, whether it's our site of care and payer mix, our innovative AI technology or our legislative efforts, we're confident that we will be able to retain a significant number of customers over time and continue to grow the marketplace. As I mentioned earlier, and you've heard us on recent calls, this is a large market, but we still see future additional growth. If we look at the last 12 months, we've raised the total addressable market 3x. We included metastatic indication when we received that from the FDA last May, which increased the addressable market. We added intermediate unfavorable as a patient population last fall, when the NCCN guidelines updated their guidelines. And most recently, we've added patient selection for metastatic castrate-resistant prostate cancer third line for PSMA-targeted agents. But we don't think the market is done growing just yet. We expect that market will continue to expand, and we're highlighting 3 additional opportunities. The first is additional patient selection for metastatic castrate-resistant prostate cancer in the first and second line, which, over time, PSMA-targeted therapeutics are being studied in, and so we believe that will be an added market opportunity. And lastly, we believe that over time, medical usage may expand, noting the benefits of PSMA PET imaging and PYLARIFY in particular, to go earlier to be able to lever that population. But those are specifically U.S. opportunities that we believe could add 100,000 scans or $400 million to $500 million to the opportunity. We also are partnering with international like Curium in Europe, in the EU and the U.K. to ensure that PYLARIFY is indeed a global brand that we continue to lever and offer benefit to patients. Those are some of the advantages and the opportunities for growth, but let me turn it over to my colleague, Etienne, to talk more about our growth opportunities and lead into AI. Etienne?

Thank you, Paul. So good morning, everyone, and thank you for taking your time this morning with us. I will be your French teacher this morning. You see, you'll get used to it. So I'm Chief Business Officer at Lantheus. I'm under -- I'm managing corporate developments, which is really about managing strategy, portfolio and BD and M&A. We're also, under corporate developments, leading 3 businesses: pharma services, digital solutions and AZEDRA commercial. I joined the company 3.5 years ago, right, Mary Anne? After I received a phone call from Mary Anne, who shared with me her vision and proposed to me to join her team really to help executing it. 2 weeks after this phone call, we took with my family a one-way trip from the U.K. to Boston. So it was a quick decision. Before joining Lantheus, I've spent almost 7 years at GE Healthcare where I ran the nuclear medicine business at GE, which was a $0.5 billion business, so small [ 4G ]. A business that we turned around in a couple of years by restructuring our portfolio through M&A and divestments, changing our business model in the U.S. for accelerating growth and drive margin and geographic expansion. I've started my career as a medical rep. Believe it or not, I had 2 products in my bag at the time. Decapeptide for the treatment of prostate cancer and Somatuline for the treatment of neuroendocrine tumors. This was more than 20 years ago. And then I moved as country manager, area manager and then ran adjacent few corporate roles, commercial development, business development and franchise lead. So as Paul mentioned, we put some strategies in place really to create stickiness and upside to our core products, starting with PYLARIFY. We refocused on establishing partnerships, that's what we talked about here, and artificial intelligence. So we set up a number of collaborations with pharmaceutical companies that are developing new therapies targeting PSMA, and this with 3 goals in mind. The first one is to position a product as the standard for patient selection, but also potentially for treatment monitoring. Second objective is data generation through -- so from most of those partnerships, we get free access to data, data we can then use really to expand the label of PYLARIFY by using those data really to feed our machine learnings, and Aseem will talk a bit about AI later. So some of those partnerships are displayed here on the screen, and we'll be continuing expanding our product footprint moving forward. But you noticed that our products really involve absolutely all late-stage clinical trial by now. Another mechanism to build stickiness is artificial intelligence or AI, which has been developed to add a unique attribute to the PYLARIFY offering. PYLARIFY AI is a quantitative software that assists our customers really to detect and localize the PSMA burden out of PYLARIFY scan, leading to production of a score and a report that enable a more informed decision support, especially when it comes to treatment decisions. Of course, you can read a PYLARIFY scan without the need of a software. But our first customers, which are mainly big academic centers or large volume centers, I think that they want to use a quantitative approach really to drive standardization of the read of the scan, but also of reporting. Many of them also want to use the software. We need to be able to monitor disease progression, especially at the time of the first PSMA therapy entry. So now let me introduce you to Aseem Anand, our VP of Digital Solutions. Aseem has spent more than a decade studying biomarkers for prostate cancers at MSK, EXINI, Progenics and Lantheus. So he's really a well-established field expert, and this with vision of turning those very rich prostatic imaging into predictive tools that can ultimately better inform treatment selection. So now Aseem will perform a demo of PYLARIFY AI for you, and you'll see how powerful is the tool.

Thanks, Etienne. By the way, I understood all of that. It's really a privilege to be here. And I am the VP of Digital Solutions at EXINI. EXINI is a company based in Sweden, and it -- I have a privilege also of leading a really smart group of data scientists and machine learning engineers. And for almost a decade, EXINI has developed, navigated the regulatory landscape and launched products across the globe, AI products. Before joining EXINI in 2017, I was actually at Memorial Sloan Kettering Cancer Center for [ a decade ]. I have a PhD in nuclear medicine. And I'm really happy that my mentor, Mike Morris, is here as well. So I hope you feel proud. It's very nice to see you here. At Memorial Sloan Kettering, we were very focused on [ thinking ], validating and qualifying biomarkers. And just to reiterate on what Etienne and Paul mentioned, the quantification is very important to the differentiation of PSMA PET CT and PYLARIFY. It's important because the definition of biomarker inherently is measure -- you have to measure the biophysiological function, and that's where the biomarker is. So it's more than just saying yes and no, looking at the image, it's actually understanding the characterization and quantification that can then enhance the clinical utility of the imaging assets. So before I go to the demo, I just wanted to echo what Mary Anne said. Keeping with the tradition of Lantheus, PYLARIFY AI was the first AI-enabled platform that was actually launched last year for the quantification of PET CT. And we are very proud of that. And this year, we are very focused on launching this product with the customers. This may be repetitive, but hopefully, you understand. PYLARIFY PET CT consists of a CT component and a PET component. So I'll show you the machine learning algorithm and how it works. The CT component is what you're looking at. It tells you the anatomical context, so where the organs are, where the bone is. And this is very important because that tells you where the disease or the uptake of PYLARIFY is located. So it's really essential. So the first layer of deep learning algorithm actually works on the low-dose CT. And it's very novel, it's very comprehensive, and it uses a proprietary data set from Lantheus that we have obtained. The second component is the PYLARIFY or the PET component, which is, again, very essential because that tells you where the disease, the quantitative part of the disease or how much of the PSMA uptake is. And combining the CT and PET component, that's how you can quantify it. So I'll tell you how -- this is a video, we have captures where the physician is going through the image in our device. This is the PET CT component fused together. And the first layer of AI, you will see it working. So again, the AI, the deep learning neural network segments individual organs, about 52 individual regions of the bone and about 12 soft tissue organs. And what it does, it tells physician where the disease is located, automatically. And this is really difficult to do for a physician because low-dose CT, it is not easy to do that manually. The second component is the functional. And here, because of the segmentation, on the purple, you see liver, they can easily understand where the physiological uptake is and how much physiological uptake is. And that gets quantified automatically. Then comes the selection of lesions. And the physicians, instead of drawing the contour, with a simple click, selects the predefined lesions when they agree with the physician. So prostate cancer is a bone-trophic disease. It loves to go to bone and it's really hard to manually quantify this disease. But here, the power of AI becomes apparent because, again, with a single click, you can select all the lesions, review what the AI has predefined and then all that quantitative data and the location is presented to you. So this power of AI augments the current interpretation of how nuclear medicine imaging assessment is done. My last slide. I love the physician stories, nothing against that. But what we are trying to replace or add to or augment is a quantitative information that Dr. Morris and like same oncologists can use to understand what treatment patients should go on, what is the avidity for the prostate cancer PSMA-target therapy, what is the response, what is the progression? All of that requires measurements. And this is what we are trying to achieve. And this is what we are trying to achieve, to give that tool and platform to the physician. So with that, thank you very much, and I'll give the podium to Paul again.

Thank you, Aseem, and thank you, Etienne. We firmly believe, and hopefully you do now as well, that the PSMA market is a terrific market for Lantheus to play on. It is a large market at over $1.1 billion with future growth expected in the coming years. It's a large and attractive opportunity for us to play in. Secondly, we are the #1 PSMA PET imaging agent due to having a terrific product and proven historical operational excellence that has helped to drive those results as well as a number of sustainable advantages that we believe will drive us into the future. But it's not just about the short term. We have and continue to unlock long-term growth opportunities through our partnerships, through our international expansion, through our AI technology. And the medical community continues to evolve as they find new uses for this innovative product in PSMA PET imaging. We're incredibly excited about all we've accomplished, but we know we still have much to do. I would like to ask our Lead of Medical Affairs, Dr. Bela Denes to come up with our 2 esteemed key opinion leaders for a KOL panel. Bela?

Good morning, everyone. And again, I'd just again like to echo what everyone else has said. What a great privilege and pleasure it is to be here to present to you what the Lantheus portfolio of products and our vision for the future. I'm Bela Denes. I am a urologist by training. I trained at Washington University in St. Louis and have had academic and community practice focused in prostate cancer for about 20 years. In 2003, I joined the industry, and I've had the good fortune, for want of a better term, to launch a number of products that you may have heard of in the past though. The first product I launched was Cialis, and that has told its own kind of market story. I then launched a product called the Oncotype DX test by Genomic Health, which was subsequently acquired by Exact Sciences; and then Axumin for Blue Earth; and now PYLARIFY for Lantheus imaging. So it's been a great ride for me personally. But one of the great advantages of being here in these kind of positions in the industry is to get to interact and get to know key opinion leaders, not just in the U.S. but worldwide. And 2 of these are with us today. And we're really privileged to have with us Dr. David Crawford, who's Professor of Urology at the University of California, San Diego, and he'll introduce himself in a minute; and Mike Morris, who Aseem referred to, who is a Section Head for prostate cancer at the Memorial Cancer Care Center here in New York City. The focus of this panel discussion will be -- you've heard this morning about the market potential, the size of the market, the unmet need, those kind of things. But where the rubber really meets the road is in the doctor's office. It's that difficult conversation when you first confront a patient with the diagnosis of prostate cancer and the even more difficult conversation when that patient has undergone treatment, but the disease has recurred and they're running out of options. And they want to know where the disease is and what that management plan. So with that, we've got a number of questions that our experts will respond to from the perspective of their respective specialties. And then we'll have some time for questions and answers later. David, if you would introduce yourself, then Mike, and then we'll start with some questions.

Sure. I'll make it quick. My name is Dave Crawford. I'm a urologic oncologist currently at the University of California, San Diego. I've really spent my whole career in prostate cancer. I trained at Cincinnati, did my cancer fellowship at UCLA, have been around the country, New Mexico, and then Head of Urology for 35 years at the University of Colorado, still in there a little bit but also work out of San Diego. And as I mentioned, my interest has been prostate cancer basically my whole career.

Mike?

My name is Michael Morris. I'm the Head of Prostate Cancer of Memorial Sloan Kettering Cancer Center, spent most of my medical career here in New York City as a native New Yorker. Most of what I do, other than mentoring Aseem, as he mentioned, is -- and I'm glad to see that he's out of my wing and doing his own thing now, out from under my wing. But most of what I've done over my career is focus on that intersection between medical oncology and nuclear medicine, both in terms of therapeutics and the field of theranostics as well as dedicated diagnostic imaging and developing new imaging biomarkers for men with metastatic prostate cancer or relapsed prostate cancer.

Okay. So let's get to some questions. I'll go to you, Dr. Crawford, first because, as a urologist, the first contact with patients with chronic prostate cancer from biopsy to making the diagnosis and then having that discussion about confirming the diagnosis and then formulating that so-called shared decision plan happens in your office. Can you kind of share with the audience the impact that PYLARIFY PSMA imaging has had? I know that you've had quite a bit of experience with it since launch, and so just give the audience a feel for the impact it has in terms of the conversation and making those -- that initial management recommendation.

Sure. Glad to set the stage a little bit. Well, so I'm on the West Coast, we got the East Coast, and you're in the middle from St. Louis, so we've got everything covered. So we're starting out with the West Coast. In my career, I've seen the evolution of detection of prostate cancer early, of imaging and so forth. When I sort of first grew up and was at UCLA, what we had were something called plain films to diagnose prostate cancer. We'd look at the bones and we'd see they were a little bit darker. There were some issues, and that was it. Plus, we didn't have screening, we didn't have this thing called PSA, so most of the cases were advanced, and that's what we basically treated. The evolution, I had the opportunity to start a Prostate Cancer Education Council in the United States and still the head of that. And what we do is find prostate cancer early, hopefully. So what happened was that these advanced cases, this thing came along called technetium bone scan back in the '80s that followed the plain films. And there was, wow, we've got a way to detect this disease. And as you all know, cancer is the collection of genetic changes. The longer around, the more genetic heterogeneity that exists and less responsive it is to therapy. What that means, find it early, you got a better outcome. And I think this is where PYLARIFY fits in here. Technetium scans have been helpful. We had all the discussions back in the '80s. Oh, we're going to find too much. Oh, there's false positives. Oh, there's false negatives. Oh, how are you going to get it delivered? How are we going to do it? One thing, how are we going to get it paid for? And you sort of seen this thing over the years happened with a number of different things. What I honestly feel is that this imaging agent and some of the other PET scans -- we've had PET scans skins for a long time, but they have never worked in prostate Why? Because prostate is a slow-growing tumor, doesn't turn over a lot of glucose, things like that. And we needed something special about prostate. Well, it came around. And right now, I think this is probably one of the most important steps forward I've seen in prostate cancer in the last few decades. I'm excited about it. We were one of the first to jump on it back in -- when it was approved. And it's made a big difference in a lot of different areas.

Dr. Morris or if -- Mike, as I mentioned, in the advanced prostate cancer space, which generally is handled by medical oncology, the discussions are a little bit tougher. So would you share with us the impact that PYLARIFY has made in your management discussion with the patients and that kind of thing?

Sure. Well, the patient first presents to medical oncologists generally at the point at which they're relapsing after their definitive local therapy, that is either surgery or radiation. And that's usually manifest by just a rising PSA. And as David just outlined, usually, using our traditional imaging methods, we do not know where that disease is. And we make a lot of guesses based on predictive models as to where it might be. And then we hope for the best, keep our fingers crossed to treat the patient and then see if we were right or we were wrong at some point. And that's really unsatisfying in terms of developing a treatment plan because you're dealing with unseen disease and you're dealing with estimates and guesses. They're educated guesses, but it's not really knowing where the disease is. You can really only develop a good treatment plan and a personalized treatment plan for a patient if you know what you're treating, if you can actually see where the disease is. And now we can. If you go back, for example, to one of the registration trials, which I was part of the leadership of, the CONDOR trial, these were all men who had relapsed after their primary therapy. And then in all of those patients who are in that study, we didn't know where the disease was. They all went on that study because they had scans like most patients in this circumstance, that revealed very little. 2/3 of those patients had their management plans changed by the PSMA scan. And of those 2/3 of the patients where the physicians changed the plan as a result of the PSA, about 1/3 of those patients had their treatment plan intensified in order to increase the likelihood of curing them. And 20% of those patients reverted from a non-curative plan because the assumption was they couldn't be cured because of their poor risk characteristics to a curative one. So the goal of care was wholly shifted to one of just basically maintenance therapy with hormonal therapy to one involving radiation therapy with an intent to eradicate disease. So we're not talking about inconsequential decisions, nor are we talking about the minority of patients. For these relapsed patients, the majority of the patients will have a new treatment plan as a result of the PSMA scan, and that treatment plan will change in such a way that either the actual treatment will change, if not the entire goal of care. So it's a really important piece now of decision-making for this patient population.

Thanks, Mike. Just following up on that, as you mentioned in the CONDOR trial, all those patients had negative conventional imaging, negative bone scans, negative MRIs or negative CT scans. The NCCN panel, the National Comprehensive Cancer Guidelines were updated a couple of times last year. And in their initial update last year following the approval of the PSMA agents, the panel highlighted that in the panel's opinion, conventional imaging was no longer a prerequisite for PYLARIFY scanning. And that has some important implications in terms of patient management, cost reimbursement, et cetera. How has the adoption of that recommendation been in your respective practices? Mike?

Look, PSMA imaging is the gold standard of imaging now. There is no reason to get a tin standard before you get the gold standard. It's a waste of money, it's a waste of the patient's resources, and it exposes a patient unnecessary radiation. Just go for the PSMA PET. There's no reason to get a negative CT or negative MRI. So I think that recommendation is in recognition of the fact that most clinicians believe PSMA PET is the best scan to get. There's no lesser scan that should be ordered in order to justify getting the scan that you should have gotten in the first place.

Yes. David, what about in your practice?

Sure. Let me just frame this a little bit. All these tests and everything that we do are fine if the result is actionable and it has an effect on patients. And if we look at the biochemical failure which Michael just mentioned, what is this? This means that a man has undergone some sort of therapy that he thought and his physician thought were going to cure his disease and it didn't. And how do we find out, we find out by this thing called PSA, Prostate Specific Antigen, sometimes called Patient Stimulated Anxiety. And what happens is as the PSA goes up, men have had a treatment and they're depressed, there's a lot going on. And we used to do bone scans, we did CT scans, and it's a waste of time and money. We started something called RaDaR, which is one of the most downloaded articles in oncology right now, looking on when do you use this imaging. And this -- the PYLARIFY now has really changed that. We're up with some new imaging. So what matters is to these guys, as Michael said, is that their PSA is going up. And we had a guessing game. Was it local? Was it distant? Was it both? Now we can tell and it's actionable. That's the key, that you're spending your money and your effort, that we can still go after these things. And we can radiate, spot radiate, we know where it may be. Those are beautiful images you showed of all those lesions all over somebody's body. But that's too bad. It's sort of like you've got 5 inches to 5 images versus 40. And at the end of the day, that person is in real trouble. But right now, with finding out small lesions, things like that, we can do something about it. And so the NCCN coming forth has been important. And also, the imaging is important for me as a urologist in looking at men who present to me with questionable disease and which way do we go.

Great. At the -- across the table from you is always the patient. So patients today are much more informed, much better educated, have access to much more information, social media, the Internet, Dr. Google. So Mike, what's the level of patient awareness now that you're seeing patients coming in for a discussion or a consultation?

Well, patients, through all of those resources that you just mentioned, know what the deal is. And their lives are at stake, so they're highly motivated to come in and get a PSMA scan. Indeed, before there was FDA approval around PSMA-based imaging, we had many clinical trials of PSMA based imaging. And we always were turning patients away or patients were leaving the U.S. and flying out to other countries where they could access it. We're talking about a highly motivated group of men who know that their disease has come back or they know that they have a high-risk disease. And they know that standard scans are really bad at identifying where that disease is. They want to know what the information is in order to prolong their lives. So I think that they are a very, very highly motivated group of people, and they've really demonstrated their will to secure the scan one way or the other.

Okay. Thank you for that. Paul Blanchfield mentioned on one of his slides that reviewed the indication for PYLARIFY. And again, there's 2 distinct groups. One is in that initial staging setting for patients who are suspected or at risk for metastatic prostate cancer, and the other is in the later stage. So Dr. Crawford, it's a broad indication. It doesn't really specific the exact risk group or the type of patient. Can you elaborate what -- in your opinion, what's that patient look like who should be scanned prior to making a treatment recommendation as a urologist?

Well, yes, this fills really an unmet need that we've had and helped in talking to patients. It's not so much across the table anymore in California. It's all telemedicine and telehealth. And -- but anyway, what we were talking to patients about is, hey, look -- and the other -- this one will go to a different area here quick. What happened is that we started screening in 1989, I mentioned. And at that time, prostate cancer became the most common cancer in American men, second leading cause of death. But breast cancer was way ahead. We were doing screening. We didn't have it. PSA came along. We start screening, and we overdid it. We were finding cancers that we didn't need to find, which led to a lot of controversy about overdiagnosis and overtreatment and family practice guys saying not do it. That led -- one of the things we're seeing right now because of that, just to put that in perspective, we're seeing patients late again with PSAs of 15, of 30 and 40. And conventional imaging is negative. They have something that's bad. They have something that needs to be treated. This isn't controversial. This is something that is threatening to the patient's life. And knowledge is power, and that's what this thing -- I've always been about that, knowing what's going on and all the variables you have. And with this, we've been able to take a guy that walks in the door, he has a high PSA, he has a bad cancer, and should we subject them to a radical prostatectomy or radiation or things like that or might we be better off treating systemically and then maybe coming back and treating the local primary. This test allows us now to take those people, when they've had negative bone scans and negative CT scans, which you shouldn't do any more with these low levels, and do the test and be direct on what you're going to go after. So in my patients, it helps me to say, hey, you got a lymph node. We did studies years ago. So when you had positive lymph nodes and you took the primary route and get hormone therapy, a lot of people were alive 10 years. They want to know these things. And there's a lot of variations we can go into, we don't have time right now, about how this helps me deal with a patient on how they should be treated. And that's what it's all about.

Mike, the second indication is equally broad, if not broader. It's for patients suspected of recurrent or progressive disease based on a rising PSA. And there are some sort of misinformation out there or misunderstanding of that label and the community that it's restricted just to biochemical recurrence. Could you elaborate on your interpretation and what patients in your -- from your perspective fit that indication?

Sure. The label is -- applies to any patient who has disease progression as documented by a rising PSA. That's regardless of disease burden or prior treatment history. So it could be a very early patient who's just biochemically relapsed after surgery or radiation. But it could also include the heavily metastatic patient who has been treated with multiple different regimens of systemic therapy and who is now progressing. I think that, that brings up a very important issue, and this relates to the discussion that Aseem had in terms of AI. When you look at that patient that he showed with, let's say, 50 to 100 lesions, those patients traditionally have no way of actually visualizing their disease directly. A patient with metastatic disease has historically undergone either bone scans, which looks at the surrounding bone, or CAT scans, which is terrible at actually visualizing bony disease. PSMA-based imaging is the only imaging modality that we really have that can directly assess those metastases. And each of those metastases, all 75 or 50 of them, is, in essence, a different disease. They're all biologically discrete from each other. They're all behaving in different ways to treatment. And in the past, we had no way of really appreciating why a patient is responding, how they are responding and, for that matter, how they are progressing. Are all of those lesions not responding to treatment or perhaps only 1 of the 75 are not responding to treatment. In the past, we had no way of actually drilling down to what's happening to the metastatic disease while the patient was on treatment, and now we have those tools in place. And those tools are greatly amplified by the introduction of AI into the toolbox that we have for interpreting those scans. It's very hard for the human eye to actually appreciate the subtleties of what's happening in those individual lesions as you just look at the scan.

Great explanation. Thank you. We talked about NCCN a little bit ago. But as you both know, NCCN updated their guidelines to version 4 for 2022 just last week, so actually, a week ago today. And that update included the recommendation that patients who are being considered for Radioligand Therapy with essentially Lutetium-177 may be scanned or eligibility can be determined based on either a Gallium PSMA or an F 18 Piflufolastat or PYLARIFY scan. Mike, could you comment on why that was so important in terms of patient access and implications?

Sure. So it was about a year ago today that I have presented at ASCO the results of the VISION trial, which -- in which we demonstrated that Lutetium PSMA-617 improved survival and delayed disease progression in men with our most advanced disease. It was really a huge surprise to both myself and the prostate cancer community that, that label was linked to a very specific PSMA PET scan called a Gallium 68 PSMA-11 based scan. And the FDA was really specific about the kind of scan that will allow you to have access to Pavecto. We in the academic community and the clinical community do not believe that there is a significant difference between one PSMA scan and another PSMA scan and that, that label was overly specific. So it's really important that the NCCN, which in essence informally sets the guidelines, reflected that. We believe that the Gallium 68 is equivalent in terms of identifying candidates who are appropriate for lutetium to the PyL scan. We do not think that, that distinction that is in the label of the drug is appropriate, and NCCN is trying to rectify that projected misperception.

Yes. And we, as a community -- as a company, are working with our commercial partners, key opinion leaders, advocacy groups to address this situation. But it is important. I think the importance of the NCCN is especially in terms of payer coverage because they look at that. David?

I was going to say also the Nuclear Medicine Society and others are behind this, too. And I think that's important. This is sort of a bump in the road thing. But again, we've seen this before with scanning and things like that. And you had mentioned early on, people were going out of the country when -- we were sending people to Mayo Clinic, UCLA and that for scanning. And this is important. To what Michael described and presented on lutetium was really a game changer. Congratulations. I want to say one last thing, and I forgot to say this. I just came back last night from the American Urological Association Annual Meeting, which was in New Orleans. And it's the biggest urology meeting in the world and sort of the focus of things. I looked at -- looked this up. There were 41 , and I've got them right here, presentations on PSMA at that meeting. That is unheard of. That tells you the importance of this. If you look at prostate, they're probably maybe 400, 500 presentations maybe at the most. 41 of them were on this. And I think that there's a lot of direction and interest. There's no question. There's a lot of things that we need to learn and it's kind of fun as we move it up further in the disease.

Yes. On that note, Tom Brady, in an interview that he gave on one of the ESPN networks, once said that we didn't come this far just to come this far. So with that thought, I'd like each of you to just look into your crystal balls and tell us where you see the field evolving or moving in, in the next 3 to 5 years. Mike?

I think that the major data gap right now is how to use PSMA imaging in assessing response. So I think that, that will be a really important piece of information because then we can serially scan patients as they're on therapy and understand who's going to have a durable response to those treatments and who's not. And then we can also use PSMA-based imaging as an interim based endpoint for new drug approval, which right now bone scintigraphy serves as that role. So those 2 big areas, I think, will get filled in over the next 5 years.

And David, the last word?

Oh my gosh. You always get the last word. I agree with Michael. As I mentioned a few minutes ago, we have this RaDaR group, which has got together 5 years ago and said, hey, imaging has some problems. We're ordering a lot of tests we don't need to. We set guidelines on when you could do it and pathways. And we just got together in November a whole group of us to look at one of the things that Michael said it, and that's about classification and how you image and when you do it. And we got to rethink what we call minimal disease, severe disease, things like that. So I see that happening and I totally agree. If I look into a crystal ball, we're not going to be treating prostate cancer in 5 years while -- the way we're treating it right now. You -- I don't think we're going to be doing the radiation. We're not going to be doing the surgery. You have so many antigens in your prostate. PSA is -- PSMA is one of them, acid-phosphatase, PSA, you got a whole bunch of different ones. We can immunologically attack that disease now. When I was a resident, we used to do all these vagotomy and pyloroplasties, and I'm sure you did it, too. Maybe Lister was around when you started. But anyway, so I had to get the last one in on Bela because he's pretty good. And he'll get me, don't worry. So what's happened -- what's going to happen, I believe, is that imaging is going to play a role here. And I'm using them already to look at lesions in the prostate and target at them for like radiation failures. It's very helpful to go after them and get rid of it with cryotherapy, with HIFU, with a whole bunch of lasers, a whole bunch of different things. My prediction is imaging is going to be the diagnostic for prostate cancer. We may not do biopsies. You don't need your prostate, men, done unless they want to be fertile for a while. You can go after it. You can inject things into it. We're going to be completely different, and imaging is going to play a huge role here. And then some of the immunoconjugates or the things you're talking about, the radio ligands are going to have to be more specific, but it's going to happen. We're going to be in a whole different ball game 5 years from now.

Great. Well, I want to thank both of you for your comments and the audience for your attention and the opportunity to present. And then we'll be happy to take some questions during the Q&A.

Thank you, Bela. Thank you, Dr. Crawford. Thank you, Dr. Morris. This begins the first portion of our Q&A, where our esteemed panelist or myself or Etienne and Aseem would be happy to take questions. I would note that we are going focus on the prostate cancer franchise in these questions. This afternoon, we'll be reviewing other parts of our business and have a longer Q&A discussion this afternoon as well as an opportunity over lunch. So if you have a question, we'll pass the microphone. Go ahead.

Anthony Petrone, Mizuho. First, thanks, Lantheus, for having us at Nasdaq site. It's nice to be out. And thanks for the panel for the overview on PYLARIFY. So first 2 questions for Dr. Morris, Dr. Crawford. One is you've sort of touched on the sweet spot of patients within your practice where PYLARIFY would be a go-to diagnostic imaging agent. And you mentioned high PSA, negative bone scan or inconclusive conventional imaging. How often are you seeing those type of patients in your practice? And maybe a score out of 10, 3 out of 10 is 30% of the patients, 4 out of 10 is 40%, maybe it's 20%. So maybe in both of your practices, that high PSA patient, negative bone scan, inconclusive conventional imaging.

Mike is going to be a little bit different than me being a medical oncologist, but it is absolute -- I would say in prostate cancer patients that I'm seeing right now, 40% to 50% fit into here. We're seeing a lot of guys with borderline high PSAs. We have men who have higher Gleason scores. And those even with low PSAs are an issue. Biochemical failure, I've spent so much time in that. There are 80,000 men probably or more a year who fit that biochemical failure. And now we've got something that's actionable to go after it. So it's -- there's a lot of use. The thing of it is getting that -- has been a backlog of getting the test. We were one of the first to start in San Diego, so we've been going through it. But as I take care of patients from Colorado. Still, they're not ready to go yet, but they're getting there. So there's a lot of utilization out there. And I think that as we get caught up, we're going to find out it becomes an important tool.

Yes. As David pointed out, my practice is exclusively on those patients. So you don't -- it's not really my specific focus that you're really interested in plumbing. But the national statistics, and as David said, 30% to 40% of patients will have high-risk localized disease or intermediate high risk, but 1/3 of those who have had prostatectomies will then biochemically relapse, and 1/3 of those will then, at some point, develop metastatic disease. So if you're talking about one of the most common cancers in the world, we're talking about a lot of people in the end who would qualify for a PYLARIFY scan, at least one.

And I think we're going to see sort of a reshuffling, too, of our staging system because we have this monster that we as physicians created. It's called nonmetastatic castration-resistant prostate cancer. What that is, is somebody that had a therapy radiation surgery. The PSA goes up, patients sort of live and die by their PSAs, as I said, patient stimulating anxiety, physician stimulating anxiety. You give them hormones. Their PSA goes down. They're happy except for the side effects of hot flashes, all the other things. And now what happens, our PSA goes up again, and we image them and they're negative. And what do we do? We created that by giving them ADT. And we don't find anything, so there's some new drugs there. Now we have imaging that is more specific and sensitive, we're going to reclassify those patients. And it's going to be sort of a challenge and fun in a way to see how we're going to navigate that because I've always been a believer, and I already said it, early is better than later. Why do we screen for cancers? We do it to find them early. And if we do find them early enough, even some of the worst cancers, not liquid blood tumors, but you might be able to ablate them. And I think that, that's where we're going to go in prostate.

And one quick follow-up would be for both physicians. One of the struggles for the investment community is on the frequency of scanning these patients with PYLARIFY. So when you think add to Radioligand Therapies or other modalities or even when you capture that high-risk patient, how often do you think you'll be scanning them with PYLARIFY over an average regimen when you capture these patients?

Honestly, I would not be unhappy if I never scanned a patient with a bone scan ever again. I just -- except for clinical trials applications, there really isn't a role for bone scintigraphy as we move forward into the future, except for a small select group of very high risk, very poorly differentiated prostate cancers that don't represent the majority of people with prostate cancers. The frequency of screening is dependent on the risk of the patient and what's happening to them. If the patient has an undetectable PSA either with or without treatment, the need to image is very low. If the patient, however, is -- has a rapidly rising PSA, and you're trying to figure out where that disease is and try to snag it before it actually becomes a major problem, you're going to image that patient a lot more frequently. And if you're following a patient like mine with metastatic disease, generally, we image every 2 to 3 months because those patients are in real trouble. So it depends on the clinical state of the patient and within that state, the risk that they represent.

So I rarely disagree with Michael, but I have a little bit different path. One of the issues with sort of the PSMA and PYLARIFY and things like that are you can get a flare with androgen deprivation therapy and get false positives and so forth. There may be a role for bone scans and things like that. The other thing is Michael was used to dealing with people with more advanced disease. I see people earlier who have a long life expectancy. If you're subjecting those people to CT scans and the radiation from that like many times, we've done that, the yearly scans, scans every 2 years in people with nonmetastatic disease and things like castrate-resistant disease and so forth. There's some innate risks with that. And so I don't think bone scans are going away. We had sodium fluoride PET scans, which were interesting. There was a flare of interest in that, and that's gone away. I think there's a place for everything, to utilize it. But there's no question this is not going to be flatlined, it's going to go up.

Richard Newitter from Truist. A couple of questions from me. We heard from Paul that there's already some other radioisotopes or radiotracers on the market, gallium-based, and there will eventually also probably be additional F 18-based products. So I'm just -- I'd love to hear your views or how you anticipate your product selection when there are more products in the market. How will you choose different products? What are the key factors that will go into your decision process as you kind of choose between these different products? We heard some of the advantages of PYLARIFY. I'd love to hear what your value matrix is in that context.

So usually, in our health care system, the doctors are not making those choices. It's an issue of affordability, reimbursement and availability. I wish that it was a different system, but the amount of time that we physicians spend on the phone with insurers begging to do what we think is best for the patient and the amount of time that those discussions are not successful is uncomfortably high. So scientifically, I think that you want a scan that highlights the area that you're most focused on the best. So tracers are metabolized differently. Some go through the urinary tree and obscure things that we want to see. Others go through the liver and obscure things that we want to see there. The other thing that distinguishes one tracer from another is how much background there is versus how much the tumor is lighting up, so what that contrast is. But those are very obscure, archaic and highly scientific choices. That's not the way that most choices are made in our system. Most of those choices are made on a financial level and on an insurer, reimburser level. The best PET scan that right now is the one that you can get for the patient, period. Because any PET scan with -- using PSMA is better than no PET scan with PSMA.

Yes. I'm going to put down my medical hat for a second and then ask Paul to comment on this. But he mentioned in his slides first-to-market advantage. And as Mike said, the physicians are not in that decision tree. That's based on access and contracting and those kind of things. And you saw the map of the number of imaging centers that we're already contracted with. So I think that, that's where that -- that's another area where that first-to-market advantage as other agents come in. You've already got a supply chain. You've already got your staff that's familiar with the delivery system, the timing of delivery, and contracts are in place.

I agree, Bela. No, I think -- Dr. Morris, thank you. I think the affordability, I think we've highlighted some of the success we've had around ensuring that physicians are compensated and that PYLARIFY is covered, paid and coded appropriately and the terrific work we've had over the last year. And then we talk about availability of being able to serve PYLARIFY patients in 45 states plus the District of Columbia at 700 sites so far, where others are just getting started. I think we like our position.

Maybe just to follow up on that bit, PYLARIFY AI seems like something that would be important from a clinical standpoint, from a user experience standpoint and just a consistency standpoint over time. So just with what the answer that you just gave, I'm curious, PYLARIFY AI seems like something that doctors would potentially get involved in if the decision process kind of moved away from that kind of technology or maybe not. So maybe tell me, is PYLARIFY AI is something that would get you involved in a discussion if your institution did want to move to another product?

Sure. Look, I think AI has a lot of stakeholders who would benefit from a true development of a commercially available AI product. So there's the radiologist whose time is saved by having a computer assist. There is the patient who gets a more accurate read. And the patient also wants to actually see their scans. Most patients come in and want to know where their disease is. And AI is very good at creating maps that are very patient-friendly, that show them where their disease is and show them how they're responding. And the treating physician as a stakeholder because they have a happier patient, more reliable information. So does the AI piece factor into that decision? Sure. I mean it's just as part of the package, it keeps everybody happier.

I think you're right on with what you said on a couple of things. First of all, first to the market, I'm not a marketing person in things like that, but I know from medicine. First to the market with hormone therapy, was Takeda, Abbott [ in pap ] and was Lupron, and it's been 70% of the market just about forever. So that matters. The distribution, everything else like that is important that you have, unless something comes along that's going to use, something that's different. So if you've got it out there used to using, then it is fine. I think the physicians maybe at Memorial Sloan Kettering, you don't have a lot of influence, but I think you do. But we have -- I think we have a lot of influence on what happens and what we want. We were the ones that got it there right away in San Diego because we knew about it and we -- the urology team and the medical oncology team wanted it. So we have it and as you said, I think the AI and other things are important. And if we like what we see, unless something else comes along and say, hey, this is better, that we're going to have physicians still have a lot in the way of direction.

If I can add to the AI component as well and just to reiterate what Dr. Morris said, one of the experience that we are seeing, it's the patient engagement, it's so much better with the reporting and the quantitative assessment that we do. So there's a -- throughout the progression of imaging has gotten so complicated, that patient has been almost left outside understanding what happens with the imaging and which is very counterproductive to what has happened if you look at the evolution of radionuclide therapy and diagnostics. Imaging is so important. So AI really is a way to also bring back patients into that conversation. So I think it's very important traction.

There's interest too, has been over the years, about enumeration of lesions on the bone scan and minimal disease and all this. And people have tried to count lesions on bone scans and have things like that. I think that's going to be one of the big advantages of looking at responses to new therapies. Most therapies for prostate cancer, new drugs start out when people basically are circling the drain, have a lot of advanced disease, things like that. Every drug we have, and then it moves up. This is going to be a good way, a platform to evaluate 50% responses and quantitate them other than me just looking at an X-ray and saying it. So I think that's going to have a big advantage as drugs move up in the discovery field.

That's where our collaborations with pharmaceutical companies where a product gets involved in drug development. A clinical trial will be the first source of data iteration to address this coming big data gap that Dr. Morris, you talked about earlier about being able really to monitor disease progressions and better inform the clinicians to make the right treatment choice. And so combining access to all those data that are treated as we speak today, and there are those collaborations with AI, I think, could enable us really to tap into those new market opportunities moving forward with PYLARIFY.

If you think about the power of quantitation, why everyone focuses on PSA? Because you can say to a patient, your PSA has declined by over half. And we all understand that that's a good thing. Where the PSA is climbing, and we all understand like something is active here that it shouldn't be. With scans right now, there's really not a way to express that number that is so psychologically comprehensible and that can be manipulated from a biomarker standpoint to be imbued with clinical meaning. So we can't say your disease burden has decreased by 1/3 if you can't count the number of lesions and assess their volume. But with AI, you can. You can say, you started out with a liter of cancer in your body, and now you have 0.5 liter. That is something that we just can't do right now. And to be able to then represent an outcome on the basis of disease burden, graphically showing how the disease started here and then with treatment that went here and with relapse, it came up by another percent. It's a really powerful tool to be able to quantitate disease that we don't have right now.

Sorry, just 2 more. The first, just on PYLARIFY, is it -- would you characterize this as nice to have or must-have with where you see imaging going in the treatment of prostate cancer going forward?

A must have.

Must have?

Must have.

Dr. Crawford?

Yes. I just I think that if you don't offer this and utilize it, people are going to go elsewhere, and they're smart enough to do it. And we, as physicians, when we didn't have it at our institutions and would send people elsewhere to get it. So it is a much to have it available.

We have time for about one more question before we take a break.

Just a quick one. Jeff Bernstein from Cowen. Just to follow up, I wanted to ask Aseem. On the AI ML, I guess the big driver is having the data. So to the extent that Lantheus is the majority shareholder of scans being taken out there as there's continued observation of treatment and scans, et cetera, wouldn't you be the only guy who would have the best AI and ML as a result of that? And I don't know if the doctors want to talk about that and how the ecosystem is set up to feed data to the AI and ML.

Yes, it's a very pointed question. It's vital because machine learning is highly dependent on legal contextualized data. And we are very fortunate that Lantheus, through its trials, has one of the biggest repository of the data, PYLARIFY AI data that we have, that has enabled us to be the first in the market to launch the PYLARIFY AI product. We continue to actually make sure that we are the lead of the data from all the partnerships that Etienne was mentioning, both academic, industry and, of course, our own trials.

That's really where the academic industrial collaboration has to come into play. Images without clinical context don't teach you that much. But we on the academic side have that clinical context. We know what the patient is being treated with. We know what the numbers are in terms of other lab values and other biomarkers. So it's not just having the image. You need the clinical annotation with that to understand what that image represents. And that's where those collaborations really bear fruit. And are very satisfying to all of the stakeholders and certainly beneficial to patients.

And I know maybe if -- 5 seconds. This aspect is very important because, again, I think Lantheus has a lead on this also because the experience that we have brought in through bone scan index and working on bone scans for decades almost. So we have had an opportunity to actually accelerate that experience that we have had with bone scans and apply that in PYLARIFY and exponentially increase the potential of what AI can do PSMA PET CT. So that experience is on our leverage.

So first, I want to thank Dr. Crawford and Dr. Morris for joining us this morning and sharing about how PYLARIFY is being used in the real world as well as the potential for future innovation. I think as you can see from the morning discussion, we're incredibly excited about the progress we've made to impact the prostate cancer community in the U.S. We are privileged to have the leading PSMA PET CT agent on the marketplace, but we have a lot more work to do to be able to serve this community of 3 million men in the United States with prostate cancer, to ensure that they get the right diagnosis at the right time and have the right conversations and shared decision-making with their physicians. We're going to take a 10-minute break, and then we'll come back and discuss our microbubble franchise. Thank you. [Break]

All righty, welcome back. Hopefully, you were able to make it through the restroom line that felt a little bit like Yankee Stadium and more importantly, that you enjoyed the morning discussion around our prostate cancer franchise. We're now going to dive into our microbubble franchise for the second half of the morning as well as other topics. And Etienne and I are incredibly excited to share with you our microbubble franchise, which has been a hallmark and a core part of Lantheus' strategy for over 20 years. Similarly to prostate cancer, we have 3 key messages that I'd like you to take away from our microbubble franchise. The first is that this is a large market with an opportunity of over $600 million in the United States that is still less than 50% penetrated. So we still have significant growth potential going forward. We have a leading position in the microbubble business with over 80% share, as Mary Anne mentioned, which is a testament to the differentiated product portfolio that we offer and the operational execution that is becoming a hallmark of Lantheus. And finally, we have long-term potential through international opportunities, through strategic partnerships, that Etienne will talk through, as well as improvements in our dual-source manufacturing that we announced earlier this year and we're going to get in later today. As we talked about with prostate cancer, heart disease is an incredibly large market with a significant unmet need, which makes it highly appropriate for Lantheus to be playing in this space. Heart disease is the number one cause of death in the United States, and it accounts for 12% of health care costs or $360 billion when you account for costs and productivity. Obviously, this is a large market with significant opportunity for us to deliver better patient outcomes for this serious medical condition. Imaging plays an important role in understanding and providing informed insights for physicians and their patients to have shared decision-making about how they treat their disease. Echocardiography, in particular, is an important tool. But unfortunately, there are far too many nondiagnostic echoes, which you might see on the left. Meaning, those that don't give a clear read of the left ventricle, which create challenges for our health care system because it may need additional testing, treatment plans can be unclear and it can increase hospital stays or avoidable readmissions. DEFINITY addresses that significant unmet need, as you can see by the image on the right, where you can see clearly the borders of a left ventricle with an echo ultrasound. DEFINITY produces high-quality, consistent and reliable images, and it is the most chosen, the most studied and the most trusted ultrasound-enhancing agent, or UEA, in the United States. In the same construct as we shared earlier, the market for UEAs is comprised of the number of volume and the portion of those that are considered suboptimal. We estimate that there are between 25 million and 32 million echoes performed in the United States on an annual basis. The range is because this has varied over the last couple of years as a result of the pandemic and there's not precise data, but the range is within these bounds. Medical literature would suggest that 20% to 30% of those ultrasounds are considered suboptimal. Meaning, it's not a high-quality read of the left ventricular border. When we combine the numbers of echos as well as the suboptimal rate, we get a $600-million-plus U.S. addressable market. And as you heard from Mary Anne this morning, we're the leaders in this market with over 80% share, but we still have significant growth opportunities. The market still has an opportunity to grow but requires educating customers on the benefits of our product and workflow. New sonographers are entering the field. They continue to need to be trained. And we've talked about nursing shortages where we need to get out and continue to use our operational excellence to ensure our customers understand the benefits of DEFINITY and are prepared to use it for those appropriate patients. We continue to grow this exciting business and we believe that the combination of our product and our operational excellence will fuel growth for years to come. I've highlighted that DEFINITY is the most used product in patients with suboptimal echoes. But I want to be clear that when we're talking about DEFINITY, we're not just speaking about a single product, we're indeed talking about a portfolio. DEFINITY, which has been our hallmark for 20 years, is a refrigerated component, but we also launched last year DEFINITY RT, or room temperature, for those that do not want a refrigerated -- for those who require a nonrefrigerated option. But it also includes our VIALMIX, which is the agent that activates DEFINITY. VIALMIX RFID, in particular, is proprietary to DEFINITY and it cannot be interchanged or used with other products. That portfolio, combined with our execution, has enabled us to deliver 14% volume growth over the last number of years to be able to continue to grow this market and ensure more patients benefit from optimal echoes to inform their treatment. But we're not just focused on what we have accomplished. We are focused on continued growth and leadership. And we believe we have a number of sustainable competitive advantage, including product and clinical differentiation, including a unique and robust commercial and distribution model, our significant investment in the health care professional community and our publications and data that we continue to invest in even after 20 years. And naturally, I'll touch on our patent portfolio, recognizing that this is a 20-plus-year-old product, but we're confident that we will continue to be able to grow this product long term. So let's dive into some of these differentiators. As we think about sustainable product and clinical differentiation, we use novel activation devices to enhance our performance and safety. We believe our customers benefit from our 20-plus-year track record and recognizing the advantages that DEFINITY brings to their practice. We have multiple dosing and administrative options to meet our customer needs. We have data that highlights improved cardiac diagnosis and importantly, that better patient management comes as a result to DEFINITY usage. We have prolonged enhancement at a relatively low dose to think about how patients will respond. And we have demonstrated data that use of DEFINITY helps improve lab efficiency and customers' workflows. These characteristics, combined with our operational excellence in the product, have made DEFINITY used in over 18 million patient studies to enhance the imaging of patients' cardiovascular systems. We also have a differentiated commercial model, where we have the largest ultrasound enhancing agent sales team with averaging over 10 years of tenure in calling on these customers and working for Lantheus. In other words, we have deep existing relationships with our customers. We know how to navigate the health care system and help our customers serve their patients as best we can. But it's not just that, we also contract with them and understand them deeply where we have over 3,000 contracts with our customers across the U.S. health care system to ensure they have access to DEFINITY. But it's also our distribution model, which is key in creating customer loyalty as well as greater customer insights. We distribute directly from our headquarters in North Billerica to end customers. We don't use third-party distributors. So we understand when our customers are ordering product on a daily basis and can meet them where they are on their needs. And then lastly, we have a full portfolio. This is not just a single product, it is a portfolio offering that meets our customer needs. But it's not all about commercial. One of the key elements of value creation is that we are the largest investor in educational programs out there, and we add this capability to our customers. We have echo application specialists where we contract with sonographers to go into hospitals so they can educate customers on how they utilize DEFINITY in their health care systems. We do peer-to-peer programs on a regular basis and have quality improvement programs where we work with institutions to help them understand very specifically how DEFINITY can help improve their patient diagnosis as well as their workflow. We provide webinars and case studies to health care providers, and this has never been more important than in today's environment of significant turnover in the health care system where new people are coming in and need to be trained and brought up to speed. With all these differentiators and our activity of 40,000-plus interactions even amidst the pandemic across 25,000 health care professionals, we are out there intimately working with our customers to ensure they understand the benefits of the products we provide. But leadership is not just about activity, it's also about scientific leadership. And we look at DEFINITY being the most used, the most studied and the most trusted microbubble. We also look at our publications. DEFINITY has been included in over 2,000 peer-reviewed publications. And still, 20-plus years in, we have roughly 80 active investigator-sponsored trials where people are continuing to learn about DEFINITY and identifying new opportunities for use and the improvements it can have on the health care system. We are also looking ourselves at DEFINITY in new indications, including whether it's sonothrombolysis or STEMI where we're looking at ways that Etienne will talk about for microbubbles to be used across the blood-brain barrier. We are engaging scientifically and we're still coming out with new publications. As an example, the main 2021 study in the middle on the right highlighted that DEFINITY usage was associated with a reduction in transthoracic echoes, or TTEs, and shorter hospitalizations for patients. That's real impact that we bring to the patient community. And naturally, as I highlighted, we're clear that DEFINITY is 20-plus years old or years young, as we like to say. But we have a robust patent portfolio that we believe will provide protection for DEFINITY and the broader portfolio into the future. But there's other advantages that we believe are sustainable. I've talked about our proprietary mechanical activation. VIALMIX RFID can only be used with a Lantheus product. Another agent cannot utilize our activation device. And so that is another competitive advantage. I highlighted our direct customer distribution model. We know each of our customers, we don't work with a wholesaler or a distributor in the U.S. to go direct, and that's sustainable, and we continue to come out with new products like DEFINITY RT. In short, we believe that we have competitive advantages that will take us into the future. In manufacturing, we covered this at our earnings call on the fourth quarter, we recently received approval for Genesis, which is our own in-house manufacturing. We believe this provides dual-source manufacturing and redundancy, which is incredibly important for reliable supply. But it also creates an opportunity for margin expansion as we own the supply chain through and through to be able to deliver on time and in full to our customers. I'd now like to turn it over to my colleague, Etienne, to speak about some of our partnerships before we wrap up the microbubble portion of the meeting. Etienne?

Thank you, Paul. So like how we have spoken about PYLARIFY partnerships, we are also optimizing our microbubble platform through a number of collaborations that focus on a very broad range of therapeutic applications. The concept behind therapeutic applications using microbubble is relatively simple. You will coinject microbubbles with a therapy, let's say, your chemotherapy. Then you would apply ultrasound to the site of interest which will activate the microbubble, creating biomechanical forces that will increase the permeability of the targeted tissue of organ, which will improve drug delivery. So this concept has been applied in a number of disease states. For example, I put a few collaborations we have in place here on this screen. For example, with CarThera and Cerevast where our microbubbles are used to enable deliveries through the blood-brain barrier for the treatment of glioblastoma of brain mets. We see also still new applications of microbubbles. For example, for gene therapy delivery whereby microbubble seems to mitigate some of the limitation of viral vectors. With microbubbles, you don't have any limitation in terms of payload that could be injected in a targeted tissue. Of course, microbubbles have well-established safety profile and which allows also repeating usage. So we still see through those therapeutic applications and collaborations we put in place, the number of growth avenues that can support the long-term growth of our microbubble franchise creating, of course, upside to our plan but also with the optionality. Paul?

Thank you, Etienne. We're incredibly excited about our microbubble franchise that is 20-plus years young and still believe there is significant opportunity for us to continue to grow. The market is over $600 million in potential in the United States alone and overall is less than 50% penetrated. We believe that our portfolio and our demonstrated execution, which has garnered 80-plus percent share for many, many years, as Mary Anne highlighted, provides us a track record that demonstrates we're going to be able to continue to execute. But we're not stopping there. We view there to be significant growth opportunity in DEFINITY going forward, whether it's in the U.S., international, through partnerships as well as internal manufacturing expansion to scale our margin and capabilities going forward. We're excited of what we've accomplished, but we still know we have a tremendous amount of work to do to serve the U.S. patient population that suffers from cardiovascular disease. With that, I would like to turn it over to my colleagues, Dr. Bela Denes and Dr. Jean-Claude Provost, to discuss how we are uniquely positioned for the radiopharmaceutical renaissance that is underway. Jean-Claude, Bela?

Thanks, Paul. So as Paul suggested, we're going to now pivot from the microbubble back to radiopharmaceuticals. And it is really a privilege, and actually, it's the first time I've met them in person, to introduce Dr. Jean-Claude Provost, who is our Interim Chief Medical Officer. And before we get into the short question-and-answer, I'd like Jean-Claude to tell us a little bit about your background and your experience and just a little bit about your bio.

Okay. Thank you very much, Bela. So good morning, everyone. So my name is Jean-Claude Provost. I'm Interim Chief Medical Officer at Lantheus. I joined Lantheus 1.5 month ago. But however, I've been with the company for quite a while because I've been advising Lantheus for free as [ an agent ] advising on R&D activities, but also on business development activities. Before that, I spent 5 years at GE Healthcare. I was the global head of R&D for pharmaceutical diagnostic division that comprise both contrast agent and also radiopharmaceutical agent and also at that time had several roles include -- and also entrepreneurial experience. So I was with Pfizer, with Merck Serono and also with Bayer. And I started a long time ago at the hospital. I'm a clinical pharmacology -- I'm MD by training, but I specialize in clinical pharmacology. So nice meet you.

Thank you, Jean-Claude. So we've talked about PYLARIFY in the past and as a molecular imaging agent or radiopharmaceutical. So for the audience, could you just kind of step back a little bit and describe for us just what are radiopharmaceuticals, how do they work and how do we use them in clinical practice?

Yes. I will try to do that. So radiopharmaceutical agents, by the way, are first pharmaceutical agents containing directed isotopes. So it has come a long way from how this agent were used a century ago. So here, you have an example of, I would say, early products that we use, for instance. Initially, they were considered only on the -- only atoms or radioactive isotopes. But fortunately, it has evolved over the year in order to go through much more complex and much more targeted agent. And I would say, it's fortunate because if you try to google, for instance, the name of Radithor on Google, you will find some interesting story. And I think you will be convinced that the need of improvement for this kind of product suite. Nowadays, these products are constituted mainly of 2 parts: one being the ligand, the second being the isotope. So I'm going to start with the ligand. The ligand or also called targeting moiety or binding moiety is really the piece of the radiopharmaceutical agent that binds the receptor of the cells or targeted cells of -- that are involved in a given disease, for instance. So this piece is very important because this is a piece that is linked to specificity of the agent and disease that enables, for instance, precision medicine. So these ligands, for instance, needs to be very specific. And I would say, more specific they are, the better they are. Another characteristic of this ligand that we need to talk about is the size of the ligand. Depending on the type of application of this pharmaceutical agent you would like to have, you may select small-sized agent or bigger-sized agent. For instance, it could be small molecules or it could be large antibody. For instance, if you consider an imaging agent, it's better to privilege a small-sized agent and the reason why is because this agent can be rapidly eliminated by the kidneys. And by this way, you limit the exposure of nontarget organs to radioactivity. So I think this is -- if we take the example of PYLARIFY, for instance. PYLARIFY combines these 2 important attributes. First is a product which is highly specific of targeting very specifically PSMA receptors and on the other side, it is a small molecule. So it means that when you inject PYLARIFY in the blood, for instance, the excess of ligand that doesn't bind to prostate cancer, for instance, cells, can be rapidly eliminated by the kidney. And by this way, you avoid exposure of radioactivity to healthy organs. The second part is the isotope. So the isotope is linked to the -- or is attached to the ligand ever directly whenever it's possible, and it is the case, for instance, for fluorine or iodine or could be attached when it's not possible to the ligand, they have the use of a [ chelate ]. a [ chelate ] is a kind of chemical cage inside which you attach the isotope. And this is the case, for instance, for technetium, this is the case for lutetium, also the case for gallium. When we talk about isotopes, we can divide this isotope in 2 parts based on the type of radioactivity they emit. You have on one side, the imaging isotopes. They usually emit gamma photons or emit positrons or you have therapy isotopes and also that can be divided or subdivided in 2 pieces based also on the radiation they emit in alpha emitters because they emit alpha particles or beta emitters as they emit beta particles. So you could see and can appreciate that radiopharmaceuticals have come a long way since the use of very simple agents like that to now much more engineered product that has been specifically designed to be very focused and targeted receptors with a promise, of course, of getting a better efficacy and better safety.

Thanks for that explanation. So in a sense, it's the identification of new and better, more specific targets that's facilitating the development of the ligands and then the ligands can be either tagged cold for an image -- to image the tumor or the target or hot to actually treat the tumor. In a sense, then it's like having a series of doors with specific lots and you have a key chain with a lot of locks on it, and you have to identify the right lock to open the right door. So it's that specific.

Yes. That's correct.

Now with the advances, as you mentioned, the field is advancing now, could you take us through what that development looks like and what opportunities it may -- it offers for the clinician?

Yes. Yes, we -- I think we have seen an evolution on -- both on the ligands and also on the isotopes, and I'm going to try to illustrate that. If we first focus on the ligands, for instance, and use the example of prostate cancer in which Lantheus is really very active and highly involved, we could see a trend towards using more specific agents. For instance, the imaging of prostate cancer if you consider Carbon-11 choline that was approved by the FDA in 2012, this agent is very nonspecific of prostate cancer, however that's the indication. So then it comes to more specific agents, for instance, F 18 [ Flurpiridaz ] [ EXINI ] came on to the market, but we can say that now there has been a revolution. You heard 2 KOLs that we invited are ready now with PYLARIFY, for instance, and other PSMA-PET agent, you have a product that specifically target PSMA. And as we know, PSMA is highly expressed and nearly exclusively expressed on the surface of prostate cancer cells. So it's really a huge step forward in terms of specificity of binding. So on therapy, we have observed the same things. For instance, in the slide, you could see an example of Xofigo, which is radium dichloride, it's not the same radium, as I mentioned earlier, of course. It treats prostate cancer -- bone metastasis of prostate cancer. The mechanism of action is quite simple, is in the fact that radium of an analogue of calcium, so it can replace calcium in the bones. And therefore, this is the efficacy of Xofigo is typically on the bone metastasis. But if you would like to consider now a more targeted agent, you can achieve an efficacy not only on bone metastasis, but on the primary tumor, but also, of course, on bone metastasis, but also on other metastases, like this visceral metastasis that could not be achieved by Xofigo. So the recently approved Lutetium-PSMA-617, Pluvitco, is a good demonstration of that. If we consider now the evolution -- and well, first, I would like to say that the future of that is to move to more specific ligands, for instance. It's to move also if -- just consider prostate cancer, maybe to other targets and also considering agents that could target 2 receptors at the same time. For instance, with the specific antibodies targeting both PSMA and CD3, for instance, maybe -- could be a future for [ treatment ]. If we consider now the isotopes, there have been also large evolution in the last decades. We came from isotope that were quite good isotope for imaging, for instance, but not necessarily a better fit for purpose, if I can use this expression. Indium, for instance, has been used for years, is now declining and less used. The reason behind that is because indium is certainly good as an imaging agent, but also it emits better radiation. And by the way, it creates problem of safety because you would like to avoid irradiating too much your patient when you like just to do an imaging exam. And it has been replaced by better agent, technetium is a very good agent, gallium fluorine, Copper 64. That's the type of agent we are seeing the same, I would say, for therapeutic isotopes.

So it seems that there's kind of a parallel path to development now both in terms of identifying targets and then developing ligands to treat them as well as therapeutic agents, and that's the direction that the field is going in. Now historically, nuclear medicine has been regarded as somewhat of a niche specialty and without a lot of innovation historically. And I can remember back to my days in medical school and residency when we commonly referred to nuclear medicine as unclear medicine because that's what it was. It didn't give you a lot of information. That's all changing now. And as Mary Anne mentioned in her slides, we're seeing a renaissance essentially, a tremendous amount of investment development and activity in the field. Could you kind of tell us what, in your opinion, is driving all that?

Yes. And I think [ radio ] renaissance is a good -- is the right word, I would like to say. It's true that it is the case. And I think we have just at the beginning of this renaissance. And so far, the potential of applications is largely beyond what people imagine so far. If you consider imaging, for instance, people are looking at imaging as something that could aid the diagnosis of patient, enable the staging, for instance, sometime helping to quantify the activity, the functional activity of an organ. But you have a much more overt application that you can consider. For instance, imaging agent can be used to identify the proof of mechanism or proof of concept for therapy, for instance, that can be used also to identify the right patient for therapy. This is the concept of companion diagnostics. You can use also imaging agents in order to funnel patients in clinical trials in order to enrich the population you would like to treat and maximize the chance to demonstrate a positive result. You can use also this imaging agent to guide biopsies, for instance. They can be used also, and Dr. Morris mentioned that you can try to see whether these agents are predictive of the success of the therapy. And even you can use these agents in order to assess whether the therapy is efficient because with conventional methods, when you try it to consult patient, it takes 9 weeks to 12 weeks before seeing with standard technique whether the treatment is effective or not effective. And sometime you would like to switch to another treatment when it's not effective. And there is a promise really with this radiopharmaceutical agent to move to this stage.

So let's talk about Lantheus, okay? As the chief medical officer, and we saw Lantheus' long history in imaging, why is it and how do you see Lantheus as being uniquely positioned in this emerging era and renaissance of radiopharmaceuticals to be ideally suited to take advantage of our history, experience, efficiency?

Yes. And before responding to your question, Bela, I just would like to say a word about theranostics because I think it's something important in which Lantheus is engaged or involved. I think theranostics, it's a novel concept which is, to my opinion, very powerful. It integrates in the same platform, both the therapy and the diagnosis. So with the same ligand or ligand targeting the same receptor, you can use either an isotope for imaging in order to image your patient or an isotope to treat your patient. And so therefore -- so by this way, you have the possibility to treat what you see and see what you treat. It's really a unique opportunity to deliver the therapy at the location you have identified with a PET scanner or a SPECT scanner. So I think it's really a powerful concept. And on a purely clinical development standpoint, it is something that would derisk the development of these compounds and increase the probability of success. At Lantheus, we have 2 diagnostic pairs with 11 -- LMI 1195 in development for the imaging of neuroendocrine tumors. This agent will pair with AZEDRA, already a commercialized agent that we previously mentioned. But on the same way, LMI 1095 is a therapy, a PSMA therapy for prostate cancer. It is the therapeutic pair of PYLARIFY. So you could see that Lantheus is really in this field already and very equipped to be successful in this way. And it gives me a good segue to answer to your question. I think that Lantheus I think is very well positioned to be successful in this world or field of radiopharmaceutical. In order to be successful, you need, of course, to have set up a certain number of capabilities that Lantheus has. You need, for instance, to have research and development capabilities. And here, I'm preaching for my parish, if I can say that. So these capabilities have been recently reinforced by the acquisition of EXINI and Progenics. We need to be experienced also in highly regulated environment because these products are radiopharmaceuticals first. And so they are regulated like any pharmaceutical agent but they're also regulated as radio activations. You need to have a strong manufacturing capabilities and also a very reliable supply chain capabilities because this product are by essence radioactives, they have a certain half life and after, they cannot be used. So they need to be produced in order to be delivered to the patient. So this is very important. The commercial capabilities are also super important. And I think we have a very good commercial team. I think the example of launch of PYLARIFY is really the illustration of our capabilities. Strong connection with academic thought leaders with like [ mission allies ] is very important. We need to have also a good BD team in order to scout new opportunities. So I think all these things are very important for the success of the company. I have to say also that we have a large product of -- portfolio of products currently under development and also commercialized product in the field of radiopharmaceutical. If you look at that, you will see that very few companies have the combination of all these skills and capabilities. Lantheus is one of these companies. And I think that we are very well positioned for -- to be successful in this area, an area which is, I would say, very exciting, promising. And so that's the reason for which we are all there.

So I think you've summed that up very well. I mean it seems that Lantheus is really ideally positioned based on experience, based on the portfolio of products, based on portfolio management, supply chain management, et cetera. I'd like to just highlight 2 other things which in the last 2 seconds. One is regulatory experience. You can develop a drug but you've got to get it approved. And to get it approved, you've got to have regulatory experience. Lantheus has a strong record in that, strong relationships with the FDA and other regulatory agency. And then finally, I'd just like to make a pitch for the people because it's the people that actually make the products and contribute to the development and you've had the opportunity to meet some of us here today. Thank you.

Thank you.

Thank you. So I guess you just made my substitute. So we can move to the next slides. Sorry, I'm -- I have it in front of me. Okay. So what we're going to talk about in this session is how we are organizing ourselves and focusing our resources to build and drive sustainable and profitable growth for this company. The key takeaway I want you to take away with you is that we are really following a multichannel approach. We need to get early access to innovation to maximize our assets and to expand all [ basket ] of product to sustain this high-revenue growth. As you will see in my slides, by using BD and M&A, we need to go after late stage or commercial-stage assets. We need to fit our short-term needs using pharma services to fuel or -- and derisk our early-stage pipeline and then partnerships to optimize our portfolio and create additional growth opportunity for the future. So the mission of corporate development is to take initiatives that will help to sustain high growth in the long run, to diversify our sources of revenue and to create also upside to our plan. To achieve this goal, we are focusing on 3 areas: BD or M&A, pharma services and digital and our therapeutic commercial platform. For BD, our goal is to accelerate the revenue growth in a short time frame through acquisitions and partnerships. The role of pharma services and digital is be different and it fulfill really 2 objectives for us. The first one is to fill our early-stage pipeline and derisk it, and I will explain how. The second objective is the optimization of our products through partnerships and through AI. Our third instrument is to -- for driving growth in the therapeutic platform that we're developing around AZEDRA and that has been designed to carve in new radiopharmaceutical therapeutics as it is a core focus for our long-term growth, okay? So as you can appreciate, those 3 instruments give us multiple angles to access to innovation and drive growth and certainly position Lantheus uniquely in our ecosystem. And as you saw with Jean-Claude, it is extremely complex and require us to be pretty much grounded to be successful in this field. So I will explain you now how we are executing. So starting with business development or M&A, our focus is to acquire late-stage assets or commercial-stage assets that will fuel our revenue growth in the next, let's say, 5 years' horizon and further diversify our sources of revenue. For this, we are leveraging the really solid foundations of Lantheus that Mary Anne described earlier, the carving of Progenics that gave us access to new fields for growing our business like PET diagnostics or radiopharmaceutical therapeutics. And this really to deliver the Find, Fight and Follow, which is really about bridging diagnostics with therapeutics and outcome. And so our focus really here really is to expand those fields through BD and M&A. Unfortunately, I cannot tell you much more about our BD focus right now. So we'll be moving to pharma services. So pharma services is a business that has been created really to fulfill 2 needs. The first one is the optimization of company assets using partnerships and AI. I gave you some examples earlier with PYLARIFY and with DEFINITY. But certainly, we want to [ promote ] radiopharmaceutical imaging agent with AI as it can really improve the performance of our products and what such a platform we can leverage. While using also pharma services, we need to source and derisk early-stage assets, so high-risk, high-reward assets that we then derisk within a partnership framework kind of an incubator, if you want, that enable us really to nurture and amplify innovation, progressing our pipeline forward in a real cost-efficient fashion. And so this concept being a bit conceptual, I wanted to give you an example now using our PD-L1 imaging tracer and NM-01. So NM-01 is our PD-L1 imaging agent that just started its Phase 2 clinical trial 2 weeks ago. I can report that 2 patients has been scanned to date. And I will first explain why we like these assets and then we'll talk about the pharma services model that was used really to generate data and progress this product in a real cost-efficient fashion. We're very excited about the potential of NM-01 as it could address a really large unmet medical need. As you probably know, immune checkpoint inhibitors or checkpoint therapies targeting PD-L1 or PD-1 have demonstrated exceptional efficacy in a number of cancers, right? Those products are very well established addressing -- I think representing a market of over $40 billion today, right? And unfortunately, only 15% to 25% of the patient that get a checkpoint therapies are really responding to these therapies, which means that 2/3 of the patients treated with the checkpoints are getting unnecessary exposure to those therapies and some of those patients are incurring serious side effects, not talking about the associated cost burden. So we believe that PD-L1 imaging can potentially improve patient selection, but also predict response to checkpoint therapies as an attractive to the [ standard ] of care, which is biopsy assessment or IC because imaging will provide a whole body systematic uptake of the PD-L1 burden at patient level but also at lesion level that is something we can quantify, as Aseem explained earlier, and could enable really to improve treatment monitoring and patient selection. So this is a good illustration of an asset that we acquired when it was just starting its Phase 1 clinical trial in China in 2019, and that we put in this partnership framework to generate more data to derisk the asset with the start of a second Phase 1 clinical trial the DMF filing in the U.S., some data iteration in the U.S. and in Europe and the start now of the Phase 2 study. And this in less than 3 years, really following a real cost-efficient channel. So we plan to use this framework really to continue to fill our early-stage pipeline and derisk those 3 promising assets, but still very risky as we are doing with our FAP program NM-01 and there will be more to come. Our partnership portfolio is structured really to optimize our assets, expand and derisk our early-stage pipeline, but also to create optionality for future growth. As always, execution is everything. And so we organize ourselves and resource and alliance management team really to optimize those opportunities, not only to deliver I guess our commitment but to make sure that we could take advantage of all those relationships with those best-in-class players like Regeneron, Novartis, Bayer, which will provide a source of growth opportunities, so revenue, access to data, asset optimization, as we talked earlier. But of course, for us, there's a lot of learning working with those best-in-class players in the field. So our pipeline has been carefully and progressively built in trying to balance risk, cost and growth opportunities and here, with a focus on diagnostics and radiotherapeutics as well as the optimization of our microbubble platform. Our pipeline today is a mix of in-house led programs with partnerships usually under licensing we set up with a number of partners like Curium, GE Healthcare or ROTOP. The approach is key to our strategy because it is really enabling us to balance risk, to limit our financial exposure, but also to increase our short-term growth, right? As we can deploy our capital across many more bets, our overall success rate is dramatically increasing. So moving forward with Jean-Claude joining us and adding more capacity in R&D, we'll -- our intent is to continue expanding our pipeline with an increasing focus on late-stage assets that could complement our portfolio of products and deliver a similar impact as PYLARIFY and DEFINITY. So just to recap here, we are fueling up a multichannel approach really to get early access to innovation, to maximize our assets and more importantly, really to expand our pipeline and portfolio to deliver long-term sustainable and profitable growth of the company. I will turn now to Bob Marshall, our CFO, that will present to you the financial strategy.

Appreciate that, Paul. Going old-school because I cannot read the screen in front of me. I'm sorry I have to put it here. I wasn't sure whether to make a joke about the word count on the word excited or about the fact that the numbers that I want to show I've already read in somebody's published note. So we'll try and get to the highlights. All right, so those of you who don't know, I am Bob Marshall, I'm the CFO and treasurer. I've been with Lantheus -- like Etienne, I think we started 2 weeks apart. I previously came from Zimmer and spent 16 years of my career there in a dual role as both the corporate treasurer as well as head of IR. Prior -- the last 2 years, prior to that, I was CFO of the Americas, which was about half the total business. So my notes say, I'm supposed to say that I'm excited about showing you the strategy. So I think we're now at 45 about the growth prospects of the company, and they really are fairly significant. '21 was a pretty exciting year for us. We did spend a lot of time investing ahead of the curve. I spent a lot of time answering questions around how much money are we spending on OpEx, but it was all for a good cause because what I had always noted was that 2022 was going to be the inflection year for this company, and we were building toward that. And we are now entering that new phase of growth. We've executed on our operational excellence. We've -- Paul and his team and broadly have not taken the market for granted. And we have a history of investing prudently in manufacturing, supply chain, logistics, commercial excellence, which has set us up well to be able to sustain growth over our strategic planning horizon, which you have already seen is through 2025 is what we're offering. But what is also really important is the strong margin expansion opportunity that we have, both gross margin, operating income margin, EBITDA margin. And that is what is going to continuously fuel our balance sheet to be able to drive the strategic vision that we have for the company. So a couple of proof points. I don't think there's anything on here that people haven't seen. Obviously, if you look at that revenue CAGR here on the left, if you look at the 2016 to 2021, that was still a 7% growth rate, which is pretty healthy. And that was driven by very strong PYLARIFY and portfolio contribution, which by all accounts, is something. But when we tack on that 2022, that is an estimate. That is based on the most recent guidance that I provided. Disclosure does include the Novartis agreement. But even then, even removing that, the CAGR is -- from the 2016 is still an 18% CAGR, which we do believe we're going to be able to sustain growth longer term. From a highlight -- what has done that? Well, as Paul highlighted in his notes, DEFINITY has grown double digits and has maintained an exceptional market share at 80-plus percent, which is very significant. Again, a number that we believe that we can continue to sustain into the future as that market opportunity continues to be in front of us. The SPECT business has been stable. And as you look at the '21 number, it was very modest contribution coming from the Progenics portfolio in the overall scheme. So this was really driven these numbers or more of the historic portfolio of Lantheus. But now we are beginning to accelerate that top line. Now looking at the other side, in terms of -- the one thing that I always thought, you grow your bottom line faster than you grow your top line. And we are absolutely delivering on that as well. 2019, sort of the pre-COVID number. In 2020, we remain profitable despite the fact that you had COVID, we absorbed a negative EBITDA contributing company in Progenics and we were investing in '21 ahead of a very important product launch in PYLARIFY. So we did that through disciplined investment prioritization. We've captured the synergy targets that we set, and we were able to repurpose those funds so that we wouldn't impair, if you will, our profitability. That's something that I've noted since I've been here, I've said it once, said it a thousand times, we're going to run this company for profit. And we're going to do it with an intelligent investment to drive further growth. We're going to deliver a levered P&L in 2022 with earnings expected to be 6x what they were in 2021. So the team has really done a good job from an execution perspective, which has really set us up for a good year this year, but also beyond. So this is a metric we haven't talked about yet this year, but it is absolutely a byproduct of the profitability that we've been talking about. Just from a perspective of free cash flow, I think I use the same phrase on every earnings call, so I won't repeat it about how we define free cash flow. I don't even have to change that part of the script. But we do invest in CapEx, about 1/3 is for infrastructure, 1/3 on equipment and 1/3 for technology advancements. In 2019, which was a very strong year for free cash flow for us, historically, that was actually the last year of when we were sort of coming up and finishing the investment in our on-campus DEFINITY manufacturing. In 2020, we remained free cash flow positive. And in that number are all of the costs associated with of the Progenics acquisition, which as you all know, are very -- there's a lot of cost that goes into that, but also with the cost to capture synergies. And so that was something that we were really pretty proud of. In 2021, again, we didn't have the benefit of the revenue contribution, which we will from the Progenics portfolio. But what we did have and I think we did wisely was invest ahead for our future. So when we're looking about 2022, thus far, we haven't seen the ramp in cash flows. But I do expect as we go through the balance of this year in exponential surge in free cash flow as we go into this year and sustainably beyond this year. We're going to have a record year, delivering more than $175 million in free cash flow. That's the tip of the iceberg. And I will give a financial metric, which I know people have already scrolled to the bottom and have noted. All right. So from a balance sheet perspective, this one while this may be a boring potential chart, if you will. But we've spent a lot of time building a very thoughtful, planned out capital structure. We are conservative -- but we also believe that being conservative generally leads to improved access to capital, I should say, cheap, relatively cheaper capital irrespective of the macroeconomic environment. We've driven down both our leverage, both from a debt paydown but also through expanding EBITDA. We think the right ratio is in that 2x to 3x range. But we will allow for some flexing higher to that with a commitment to return to those levels for the right opportunities. And we did this, and we've done this and proven it historically. It was done after the IPO. It was done after absorbing Progenics. At March 31, we stood at 0.7x. I believe we'll be net cash. We'll be in a net cash position, not net debt. I won't say year-end, but I think that, that I think we get there before then. And our leverage ratio would be less than 0.5%, less than 0.5x as we get to the balance of this year. I did fail to mention though, we also have $100 million at March 31 and also an undrawn revolver of $200 million from a liquidity perspective. And so as we look to add, obviously, the cash position as we go to the balance of this year will grow significantly. So this is a chart that demonstrates how we've allocated capital. Obviously, it is highlighted by the fact that we did an all-equity deal in Progenics that dominates about 60% of the total equity that we put out. The debt reduction, again, as I mentioned, was about getting to more acceptable leverage ratios, but also about reducing our debt carry costs, and that just helps to effectively drive future flexibility. So how we allocate in terms of that upper blue segment, if you will, in terms of our spend, this is something that we take very seriously. And we only invest in those projects, our technologies that come to us with solid business rationale, things like business continuity, employee safety, but we demand very specific rates of return on every project that comes in front of us, so that we know how to do it -- how do we do that? In the last couple of years, we've formed a capital allocation committee, which is cross-functionally headed as well as a portfolio review committee, which we continuously prioritize spending to make sure that we are allocating our resources for the best possible return for -- not only for the future of the growth, but also then to figure out how we're going to drive value for shareholders longer term. We do use phase gating on our R&D projects. I know that Etienne has outlined, we are constantly checking assumptions to make sure the opportunities that we're looking at still meet expected hurdles, spending levels are appropriate. And as we add to our portfolio, our commitment remains to continuously reevaluate and prioritize those projects appropriately. So when we think about that, now you talk about capital allocation with regards to M&A, in business development, we really kind of try to use the word business development more than just M&A because M&A is a specific connotation. But there's more than one way to accumulate assets to drive growth and it's licensing, it's asset purchases. It could be the full merger and integration. The point is that we're very focused on delivering sustainable, profitable growth over the long term whenever we do deploy capital. So this is just going to, I think, reinforce some of the things that Etienne pointed out. I think you saw on his slide some of the basic criteria that we use as a sort of a filter as well as our financial criteria. So the first one is that we do have a goal of sustaining double-digit growth longer term as we think through our -- how we want to accumulate assets and develop the ones that we already own. So from that perspective, we are generally looking, as Etienne pointed out, late-stage clinical assets, much like what -- and I'll say PyL because that's what it was at the time of acquisition. But we also are looking to leverage the company's core competencies. We talked about the team that we have in the back of the room, those are our core competencies as it stretches across manufacturing, logistics, supply chain, commercial, market access, regulatory, as Bela pointed out. But we're also going to be in markets that are well defined and can withstand robust diligence efforts. So we are very much focused on making sure that we understand the markets in which we intend to play in. And as Mary Anne says, we're going to go there, we're going to go -- we'll be first. We're going to win. So from a financial perspective, I already said sustainable growth, that's a big thing, but also operational excellence. The reason for that is synergy opportunities that are easy to talk about but delivering on them, it requires a fine-tooth comb and a lot of discipline. And the reason you do that is because it gives you the opportunity to refocus that spend to drive growth. So it's not about just capturing it, but that is the alternative as well is to be able to drive and deliver margin leverage, which I think you'll be seeing that we're demonstrating in some of these new long-term targets that we're putting out. We want clear return metrics. Even when you stress test the scenarios, we look to make sure that we don't have embedded bias or I don't know how you want to call it, or assumption flaws that you are making sure that you understand fully what you're modeling. And this also helps us to define the boundaries of the purchase price so that you also understand what the economic upside that you're sharing with the seller. So that is something that we're very interested. Also delivering earnings accretion in a reasonable time horizon. Well, that can mean different things and different types of assets that you're acquiring because of the type of work that it would take to bring something from pre-commercial to commercial to execution. So I think that this does give us a solid playbook to work from -- and it really is something from the perspective of how did we use this playbook, if you will, with our Progenics acquisition. And these are the metrics back in 2019 that Mary Anne and I -- I don't know how many meetings we did, but these were the targets that we talked about. This is what we said we would deliver. And so I'm not going to read all of them. The key ones -- we said we would get the synergy targets of $20 million by 2022. We delivered 30% more than that by the end of 2021. And it was because of those activities that allowed us the flexibility to give Paul anything that he needed to make sure that we would be able to launch this product successfully and drive what we are now seeing in an accelerated top line. The other one, I probably said it a thousand times around, we would deliver 800 basis points of margin -- gross margin expansion within 3 years using 2019 as a base. We delivered 1,000 points in our last earnings call, on that target. So as such, I think you'll have already seen that, obviously, we're going to up that target, and we believe that there's further opportunity in front of that. I won't -- the last thing I'll mention is the reasonable time horizon because I do think that's important. Our guidance for 2022 contemplates that we achieved that. I didn't check the box only because it's only May. But I have every confidence that we will also be able to check this box in the same time horizon that we originally promised despite going through what the world has endured over the last couple of years. All right. So I saw this slide split to pretty quickly some decks. So these are some new targets. So obviously, revenue is -- sustainably driving revenue is what helps us achieve these numbers. And this is something that we can achieve with our existing portfolio. So this is not a look with a view towards what could be. This is what we will drive if we are able to hit all of our targets and whatnot. So talk about gross margin. So I've talked about what drives gross margin opportunity. Those things haven't really changed. It's continued DEFINITY and PYLARIFY growth. The on-campus manufacturing, which was just approved in April. We won't see the benefit of that yet. That will take a couple of years as we bleed through the mix of product that we make versus what we source, but it does continue to drive -- be an opportunity for us. AZEDRA at growth can -- at scale can also be additive to the overall opportunity. So because of those things and the opportunity that we're seeing with PYLARIFY, as Paul has continued to talk about the TAM, the market opportunity for us to deliver. As that goes, we can certainly deliver on -- in the mid-60s or 65-plus-percent gross margin profile from what had been effectively 60% was what I had -- that's what the 800 plus the 52% was the base previously. So I do see that opportunity there as well. We haven't given EBITDA sort of forward view, but think of this in terms of our ability to drive cash. And we have -- this is a significant step up from where we've been post acquisition. We are now going to be able to drive very significant EBITDA margin expansion, which is going to come through not just what I just talked about in terms of gross margin expansion, but also our opportunity with levering our P&L and being disciplined around our expense management. Now don't think that doesn't mean we're not going to invest. I mean, we are actually very much in favor of supporting our growth drivers, investing in R&D as well as the technology that are going to drive manufacturing efficiencies, as well as other operational efficiencies. And so the one -- the other one that I think this is something also we haven't offered before, which is our ability to drive free cash flow. The opportunity here is significant. This is a view of 2022 to 2025 in terms of $900-plus million of free cash flow opportunity, which we will then be able to enable us to redeploy this capital to expand shareholder value. So I think that from an executing -- this is possible by continuing to execute on our clear strategy, and we will be optimizing the assets that we have to be able to drive this kind of financial outcome. So between me, you and lunch. Just a couple of takeaways. '21 was foundational, and we've delivered on almost all of our original financial goals and those that we haven't yet are well in hand. We have leveraged our core competencies to drive revenue growth, taking a late-stage asset to commercial status, including market access, manufacturing as well as driving market acceptance. So this year, first year of accelerating growth, both revenue, earnings, free cash flow, we remain disciplined in our allocation of capital as we go forward. And we believe it's going to be significant. And lastly, we continue to execute to maintain a strong track record against our financial commitments. And those are my comments.

Okay. We're going to go to a Q&A. But before we do that, I'd like to introduce you to the leadership team and the executive team that are in the room. Before I do that, I'm just going to make a few brief closing comments. I know it's been a long morning. We've spent a lot of time today talking about our prostate cancer franchise and our microbubble franchise. So just a few short comments about that. I think Doctors Crawford and Morris spoke very clearly to what an innovation PYLARIFY represents with PSMA imaging and what that means for prostate cancer treatment. I'd like to also posit that the -- what you've seen in the launch of PYLARIFY is when innovation meets execution. And that is something that we take very seriously as a company. We took it seriously when we did the Progenics acquisition. We, as a management team, we're incredibly careful about making sure that we did everything we could with the assets and the people, the human and other talent and other value that we brought in from that company. And I think that's really played out and it's our intent and commitment to continue to do that, not only with that acquisition but the other opportunities that we will identify going forward. On the microbubble side, you've heard us talk about DEFINITY. I think at this time of year, we're all probably attending some graduations. At '22, DEFINITY would also be graduating summa cum laude in diagnostic certainty. And that is also something that is not at all a coincidence. It has to do with how we've treated that asset, how we continue to treat that asset and what we do with the value -- we have the privilege to manage in our business. So I guess, in summary, everyone who knows me knows that I have a very sketchy history with using analogies. I usually get them wrong, but I heard one today, that I think is very appropriate here, and that is we have not come this far to come this far. And that is incredibly true about where we are at Lantheus. We see a great opportunity to continue to move forward, where again, I said, innovation meets execution. Here, Renaissance meets Lantheus. Our group of expertise and capabilities matches exactly what is going on in life sciences and our intent is to intersect with that and drive forward. We're also very okay with doing well for having done right. And here, we believe the value that is finally being expressed about this company is very much in line with how we conduct ourselves and what we do with the company. And we'll continue to move forward with that. So let me introduce you to the members of the team, those who are here in the room, why don't you stand up and then as a well as members of the management team. We have here today -- Paul, he presented. Daniel Niedzwiecki, our General Counsel in the back of the room. You've met Bob, you've met Etienne. Carol has not been able to meet with us here with us today. Vivian is here, who heads up HR for us as well as Linda Lennox, who heads up communications for us. In addition, we have key members of our management team. If everyone can stand, I'll introduce you because a lot of these folks will be answering your questions now or over lunch as you sit with them. In the back corner of the room is Huw Jones, our incredible lead of our prostate cancer franchise, our commercial lead. Next to him is Joyce Whitehead, who is our VP of the PET channel. This is the incredible women who built the PET channel that you see that is taking PYLARIFY out to everyone in the market. Kate Holland is standing next to her. Kate leads up AZEDRA and that whole commercial team. Meredith Johnson is next to Kate. Meredith is our incredible [ Vice President ] in Market Access. You heard Dr. Morris say that you can't use a need unless you're sure [Technical Difficulty] it will be available [Technical Difficulty] and in addition to, again, all the great work doctors did saying that they had to have access to this product which was very important to us. It was Meredith and her team who made sure that, that access was truly there. Dottie Barr is our VP of Tech Ops and Manufacturing and Patrick Jensen, who is our Senior Director of Medical Affairs, who works with Bela on that incredible team that has clinically and scientifically supported the products since they were launched. So with that, I'm going to open up to a Q&A. You can ask whatever you like. We might not answer everything, but you can ask whatever you'd like. Rich?

It's Larry Solow, CJS. Just a quick question on DEFINITY to start. I think the share has even grown in the last few years, certainly growing 22 years. What do you attribute to that? The biggest attribute, is it the VIALMIX? Is it your sales force? Is it the publications? Is it all of the above that kind of sustains that growth and leadership position?

So Larry, I'm going to dispute with you slightly in that you're saying that share is growing. I think utilization is growing because we continue to say we hold greater than 80% share. And when you're already at that position, it's probably hard to grow that share even higher. But utilization continues to grow. And that's because here you have a diagnostic modality that is cheap, accessible and yields incredibly rich information of a patient status, whether it's healthy, which is great, so you rule out or whether it's unfortunately informative about what you should do. And I think that's the value of echocardiography. Now you saw the slides earlier -- the other -- when you add contrast, what you see is you very quickly see a lot more about the patient and so it gives you a lot more information to what to do for the patient. And I think value that's also being organized certainly during the pandemic and we talked about this in some of our calls, we saw more contract utilization because you could then more easily conduct exams at the patient's bedside. But I think it's fair to say, and Bela can weigh in on this as well, that the appreciation for not only the modality, the use of contrast with the modality continues to grow in the overall market, especially in the U.S. medical market.

Larry, the only thing I would add to that is that is that education, and we've got a really qualified team of clinical liaisons [Technical Difficulty] And we've got over 1,000 educational subjects for research [Technical Difficulty] So the guidelines are more and more incorporating microbubble [Technical Difficulty].

Where do you see sort of the room temperature fitting in? Is that more of a life cycle management? Is that an incremental growth driver?

Let me take that. So the question was around room temperature. We think room temperature is an additional offering for our customer base. Clearly, customers have been satisfied for decades with DEFINITY refrigerated product. But there are those customers for various needs that want to have a non-refrigerated version. And so we view that really as an overall part of the portfolio across our DEFINITY, DEFINITY RT, VIALMIX RFID to meet our customers' needs. We're never going to break out the individual component, but it's ensured that we can meet our customers' needs for ultrasound-enhancing agent and DEFINITY wherever they desire it.

Yes, a couple of questions. Thanks for the Analyst Day. Great job, guys. The 100,000 incremental U.S. annual scan opportunity or the potential opportunity that you highlighted. Looking at the chart, it says first-line metastatic castration resistant prostate cancer and then second line as well as incremental use into diagnostic applications. Can you just parse out a little bit more what is in that 100,000? And I think you said that equates to about $400 million to $500 million. So should we assume now that you've officially expanded your TAM? Or I guess that's only for when it's on label? But theoretically, when those trials bear out and become on label, does that mean your tangles for $1.1 billion to $1.6 billion? Or does it go from $900 million to $1.4 billion?

So I'm just going to make a comment there before Paul weighs in because we are mentioning our TAM or I think it's the TAM. And you heard Mike Morris talking about this and Howard in a slightly different way. This really is the medical community now appreciating how much can be done with PSMA and what they intend to do with PSMA. We're more responding to how they're identifying what their intent is going to be and how that intent is then being almost codified in guidelines. You heard Mike responding or referring to NCCN and you heard Howard referring to SNMMI and the other guidelines. This is us trying to capture really what the medical community is saying that how they're going to use the products and then dollarize it because that is what we do in an effort to help all of you. So Paul I'm not sure would you like to add.

I'll add. So the current addressable market is $1.1 billion plus and 250,000 scans. That includes the recently updated NCCN guidelines, which would highlight PSMA PET imaging for patient selection of PSMA therapeutics in the third-line setting, which is what the Novartis approval was effectively for. What we're highlighting and we're not raising our existing TAM, but we are highlighting that the market will increase over time, we believe, because first and foremost, there are additional indications being sought for PSMA therapeutics, right? If you've seen what those organizations have highlighted. They have studies underway to move further into second line and eventually first line. And then the other additional piece that we highlighted was that additional diagnostics could be used as like Dr. Morris and Dr. Crawford highlighted, it's a very broad label. And so currently, in the initial metastatic indication that is from guidelines for intermediate unfavorable. We believe over time that given the significant adoption of PYLARIFY and the diagnostic benefits that it provides that more patients will be underway. So we've quantified those 3 opportunities as being 100,000 potential incremental scans that when and if medical practice evolves that way, which we believe it will, would increase that total addressable market accordingly.

Got it. I guess just to go a little further on that, what's the split between kind of the therapeutic piece from second and first line expansion when that occurs? And what's the incremental diagnostic usage component to that?

Rich, just to be clear, those first and second-line patients are already in the numbers of total scans that we've been speaking to. The additional scans that come in would be the additional scans related to checking to start therapy and then checking response to therapy. So...

Yes, I would add because prostate cancer is a prevalent disease and individuals will go through, unfortunately, many lines of treatment. We're highlighting the incremental total scans of what these additional medical practice for patient selection and monitoring would add. We are not ready to break out those individual pieces because this is a naturally evolving space. And when we see therapeutic agents get those indications, we would naturally like we did recently know an increase in the total addressable market. But we're not going to break down what those are because we're still a little bit away from what those are.

Paul, if I could just add one comment is that I think that right now, we're focused on Pluvicto and Lutathera. But keep in mind that there are companies, Amgen, POINT Biopharma, Regeneron. They're all working on PSMA-targeted I-O, immuno-oncology products, bispecifics and those kind of things. All of those patients will need to meet some sort of eligibility hurdle, and it's going to be PSMA-based.

Okay. And then maybe for Bob. The oh, sorry.

I know what you're going to ask.

I just want to be clear on kind of the long-term targets that you put out there. Maybe just starting with the top line, I think you said commitment to double-digit top line growth. And I...

Check.

Check. I want to just make sure, is that an annual kind of growth forecast.

Check.

Okay. And then my understanding was that's based on all of the assets that you have in the portfolio today, but it does not include any contribution from any of those pipeline assets that potentially come into play?

So quite little ins and outs based on our strategic assumptions in our longer-term strategic plan.

Yes. I mean listen, I only talk through 2025, right? So much of what Etienne was highlighting in some of those things, they're longer term. Now that doesn't mean that there aren't going to be some of the strategic -- like there's at least 1 of the strategic partnerships that should come to market before that end of that period, but also the pharma services, the opportunity to continue to grow that part of the business as well is contributory. And they stated it was our goal, not necessarily a specific target. In other words when we think about M&A, we think about how do we sustain that longer term. And so that was the comment.

Okay. And maybe just on the margin. Bob, you had committed to 800 basis points of margin improvement. And in that old guidance, what piece was DEFINITY and in-house manufacturing contribution versus PYLARIFY? Because it looks like your 65% gross margin target, it could be conservative, in my view, at least, that you're already at 60%, in the low 60s. So you're arguing for a kind of 200 basis points more, but you haven't even seen the real benefits of in-house manufacturing yet. So I'm just trying to get -- put those pieces together and get a sense for why it's only 65%.

Well, it's 65% plus, okay? Because what we don't want to do is get too far out ahead of ourselves. So I do think that the opportunity to grow beyond that is certainly embedded within the plus symbol. I would argue that I think that the in-house manufacturing probably accounts for maybe a couple of hundred basis points of total contribution that will weed itself in over time. And again, remember, this is a target that is through 2025, which is really not that far from now because this is a process. The point of the in-house manufacturing was to have dual sourcing, to have security of supply. So it is not our objective to do -- while the facility has the capability of providing everything that we need, we will be capturing a percentage, if you will, of the total margin opportunity through that mix that we will do over the next several years. What takes it higher? What takes it higher is expanding volumes on DEFINITY and PYLARIFY beyond our current plan. Certainly, we see very good -- both of those products are above the company average. So they certainly would help as that goes. So we'll -- our opportunity to expand that.

Thanks for the really helpful discussion today. Regarding the business development criteria that you laid out, there were strategic profile characteristics you described and financial criteria described. On the profile characteristics without naming targets, obviously, are there targets that meet all those criteria? Or if there are some that don't meet all 4, which ones would you -- are higher priority or that you'd lean into and which ones would you sort of be willing to accept maybe less of or not hitting as far as those criteria are concerned?

So I would say, absolutely, there are targets that meet all the criteria. And to your second part of your question, if we prioritize our targets and they don't meet them fully, there are different ways to structure the deal that still makes it worth it for us. First and foremost, we always convince ourselves that we can do better with an asset than where it's currently sitting. And that is -- that's very important for us because from a -- just a market perspective, that's something that we have to kind of assure ourselves of before we even enter into negotiations. But again, this -- the space we're in, whether we're talking microbubbles -- and you see most of our microbubble activity has been through partnership to date. We are not at all adverse to organically developing a microbubble application when we can do it better than somebody else is already doing it. There's so much interest in microbubbles out there now that other people are doing really cool stuff with it and they want to use our microbubble and we're really -- we're okay with that. But on the radiopharmaceutical side, there's absolutely opportunities because a lot of people want to now deal with radiopharmaceuticals, but they don't want to do it themselves because they don't have that core competency. They want -- what they want is the best partner to do it with and that's what we want to be.

Can you just talk a little about the Curium partnership and the U.K. Europe potential and rollout, et cetera? Obviously, you have a lot less control over that.

Sure. Curium made perfect sense as our partner in EU and U.K. because they've got the commercial and operational footprint there, and we historically have not. Just as from a history perspective, when Lantheus was formed, it was formed as a carve-out from BMS. BMS had a full nuclear commercial company, but the Avista purchase of those assets included the full commercial footprint in the United States, the full IP worldwide but only the commercial footprint in the United States. And since that time, we have not chosen to replicate a commercial footprint or operational footprint outside of the United States. As everyone may guess, isotopes don't travel far. So you really do typically remain in a fairly tight geographic community where you serve them, and we've chosen to continue to serve primarily the United States medical market. Curium is very well established in the EU and U.K. market. Like for Brexit, I have to keep saying them differently. And so they were the natural partner there. I can't offer public information about exactly where they are because that's for them to do with their information. But they -- we do think that they are, at this time, the best partner for and the best partner we chose them for to bring PYLARIFY, if it's going to be named that, into the EU, U.K. markets.

Can you talk about the strategic roles -- strategic role of the PMFs and the nature and structure of that industry and how important you are to them?

So I'll start and then we'll turn it over to Paul and then to Joyce. The existing -- and Paul started with us today. This is a vibrant channel in the U.S. medical health care delivery market as probably evidenced by their long-standing role in delivering FDG, which is still the most commonly used PET-based imaging agent which this channel delivers over 2 million doses of a year to nuclear medicine and freestanding PET imaging places -- that's wrong, that was certainly the wrong word, in the United States medical market. As a partner, they're incredibly strategically important to us because they are the intermediary between our API and the ultimate site of imaging, which are freestanding imaging centers or nuclear medicine departments. So we chose to have the widest diverse relationship with the existing channel partners that are in -- that kind of represent this channel in the United States marketplace. And that was our strategy and one that we've executed very well. I would say to you the follow-on to your question, we are now very strategically important to them because if you understand the economics of FDG, FDG is now at this point, an aged and somewhat commoditized product and to the price level that they can command per dose for that product as is a life cycle phenomenon has come down. And as a brand new product and especially with the demand that we're seeing for PYLARIFY, I think it's fair to say that it's an important product for them. But I'll let Paul and then Joyce speak to the actual network that we've created.

Yes. Mary Anne, I think that's very well said. I'd highlight a few additional points, right? Yes, the PMF network is incredibly important to us. We do have a diverse network of PMFs to partner with. We ensure, as you saw the maps overlapping geographies. So that we're not overreliant on any individual PMF, not only for scale but also for redundancy. And we have multiple partners, both commercial and academic, recognizing that there are academic centers out there with cyclotron capabilities, and we are currently working with a number of them to be able to manufacture PYLARIFY both through their own academic use of that institution as well as, in some cases, to distribute. And so they're naturally very important. We have a very close working relationship with regular business reviews and meetings. On the flip side, I would reiterate what Mary Anne said is that FDG has become a commoditized product over decades. The fixed cost of producing for them, F 18 is not materially different, whether or not it is PYLARIFY or whether it's FDG. And so we have in place appropriate incentives and financial structures so that we all win the more PYLARIFY is brought out to the market. But Joyce, do you want to add some color? Or correct our mistakes?

I was going to say, I'm not sure if there's anything to add after all of that. So...

I will add that Joyce brought this new capability to Lantheus. We had, in our own history, we did have a PMF that we owned in Puerto Rico. We had divested that PMF shortly before the PYLARIFY launch. So this was not a core capability per se that we had, especially for the U.S. market. Joyce and her team made this now a core capability, and I would say expertise for us. Folks might not be aware, but each PMF is seen by the FDA as an individual manufacturing site and has to be approved as such by the FDA. And with this launch, which everyone should remember, we received priority review by the FDA for PYLARIFY. So our launch prep time was shortened by 4 months once we receive that status, and yet Joyce and her team from the time before launch, we only had 2 PMFs included in our NDA. So with only those 2 PMFs, they had to build the entire PMF network that we put in place with a shortened approval time, review and approval time to what it is today, serving 80% of the United States medical market. So it's an incredible competency that she and her team built that we now have is core expertise that at Lantheus. So I'll just add that, Joyce.

Anthony from Mizuho. The follow-up would be on actually PYLARIFY utilization intensity. So you had a slide where -- there's 700 active customers. There's some of those that have ordered 2-plus doses, others have ordered 50-plus. And then you have 2 nodes in the network. They could either have access through a PMF network custom or an academic site. And so are the higher utilization customers coming from academic sites? And what do you think average realization over time across all of these sites will settle? Are they going to be ordering 25 over a period, 50, can 50 go higher? What is the low point at 2 go, et cetera? And then I have guidance follow-up question.

Yes. So I think the way I would say that is, yes, we naturally closely follow this. We've got 700 plus, and we continue to add on a regular basis. We naturally track how every individual customer, so we shared with you 2 and 50 -- 20 today. We track 50, we track 100, we track many more. It naturally varies. There are -- the larger institutions where the more PET cameras you have, those are the biggest volume users. I'm not going to say what those are. But as you think about big academic institutions as well as big community hospitals, where there was a large nuclear imaging department, we're going to see more volume. Now we still have a significant opportunity to drive more volume to those centers. And so 1 of the key pieces of the strategy is we've added 700, we're still adding more. But now we need to get even more, and this is part of the partnership to get out to referring physicians. Because the patients are not captive at the nuclear medicine site, as you heard from Dr. Morris this morning, referrers are going to urologists say, "I'd like a PET scan. I'd like a greater diagnosis." They're going to be prescribing more and drive greater awareness. And so we have an opportunity twofold. One is to add even more imaging sites that have access to PYLARIFY. But second and the biggest driver is to drive more volume and referrers. We were just down this weekend at AUA, the American Urology Association meeting. You heard the number of posters and discussion points. There's a lot of excitement, but we still need to educate more to drive more volume. And so we would expect those numbers to increase both on utilization as well as the number.

And then a follow-up on guidance would be for 2022. You mentioned, Bob, the Novartis clinical trials in there and May 5, they announced the temporary suspension of manufacturing and their clinical trial enrollment. And so can you remind us what's baked in for clinical trial contribution? That will be the first question. And if I could sneak one additional one in. The CVR liability by your guidance looks like it's going to come to fruition over the next 2 years. And so when you think of the free cash flow guidance, I would assume those payments to the Progenics shareholders are reflected there.

Right. So let's unpack those things. So what I was referring to was Novartis agreement, which was a $24 million payment that we accrued for in Q1 with cash arriving in early Q2. And because it was a subsequent event, from an accounting perspective, it became embedded in our overall. So it has nothing to do with any of the clinical trials. So that part of it is about $0.25. That -- so $24 million top line, $0.25 of bottom line. And that's already sort of done and secured for the balance of the year. With regard to...

CVR.

The CVR. Yes. So the guidance does contemplate -- if you just think about the maximum payout is right around $95 million to $100 million, if you do the math, because it's capped at 19.9% of the total value of the deal. So that means that it's 40% over $100 million in 2022 and over $150 million. So that pure math says that once it goes over, call it, $350 million this year, you more or less max out. Now the way has worked thus far is that we still continue -- particularly what we did in Q1 was run on Monte Carlo analysis just by nature of how those work, it's not going to be reflected fully. It's about to $92 million -- $93 million. You can see that in the Q as it is now. So it's very nearly fully baked as we be able to continue to put on actuals through the balance of this year, we will probably move more towards a more certain liability type situation, which that number would still climb, but I don't think -- I think all of you have run the math on what it would take to get there, and that's basically how it works. With regard to the free cash flow numbers, those net number considers having paid out that amount of money in Q1 of next year.

Rich wanted his follow-up questions.

Just of the pipeline opportunities that you have been listed out there that Etienne had put up. Mary Anne, can you tell us yes, there's a lot of shots on goal, but are there any in there that you would highlight as particularly more needle-moving or game changing for you? And can you put any quantification around what the kind of the market opportunities for those would be?

So I can speak to the markets they enter, which I think then speaks to what the ultimate opportunity is. I won't put a financial target on any one of them. But we have our partnership with GE for Flurpiridaz F 18, which comes into the cardiac imaging market when we know very, very well. Cardiac disease still the #1 disease treated in and imaged in the United States market. As Etienne spoke to in our pharma services, you have our work with PD-L1 which comes into the checkpoint inhibitor market. Now we'll begin as a diagnostic companion into that market, not into the therapeutic part of that market. That's a little longer out. You heard just by where we are in the phasing of that. But you also then have -- we have our own candidate, 1095, which it will be prostate therapeutic in the PSMA therapeutic category. So I think the takeaway here is what markets we're targeting. And that's, I guess, another point I'd like to make about what's going on in radioisotopes. We are -- you see the incredible excitement about what something like PSMA brings to prostate cancer. But PD-L1 -- something like PD-L1 can bring 2 checkpoint inhibitors. What I'd like to say is, this is the start of the kind of recognition of what biomarkers can do into these incredible large categories where we have innovation without specificity. And that's something else that we're committed to as a company. We're committed to it because it's smart. It's right to do it because there's a growing mandate in health care that you don't get to use extensive drugs or drugs that have, unfortunately, some serious side effects unless they're used with the right risk ratio of benefit to patients. And I think that's a growing mandate that we're seeing is, prove that this drug is the right drug for a patient and that will work in it. That's the beauty and we had it on one of our slides about radiopharmaceuticals. You see first what you intend to treat. And then you go right back in and you treat it. And then you can go right back in and make sure it was treated. And that's something whether it's a biomarker or whether it's through AI, we have the opportunity to be that kind of demonstrative and what you're attempting to do and then what you've done, and that's what we're committed to and what we think we've got a core set of capabilities, especially around pharmaceutical -- radiopharmaceuticals. Now the cool thing about microbubbles is you now have a delivery mechanism that lets you get to where you need to be in -- with some kinds of molecules that were problematic about getting to where they needed to be for treatment before. And so we feel we've got a great package of capabilities that matches what's going on in the market. But I'm not going to put -- and it's to the questions before, that's not contemplated in the targets that we gave today. So we're not even dependent on that to deliver what we've already offered out to you today, but that's what's possible.

And there are some press in recent weeks on shortages on contrast agent particularly from your competitors, GE and Bracco. I'm pretty sure that this doesn't impact you from a sourcing or product use standpoint. But can you maybe just comment on the market environment and if this has any impact on you?

Yes. Unfortunately, you're right. It doesn't -- let me say first, it does not impact us, but it impacts patients and it impacts people. So let's just speak to that. This -- the GE particular incident is about what they call [ ionimated ] contrast agents, it's their products, iohexol and I can't pronounce the other one, but it starts with Io. And these are 2 products that are used in CT scanning and their 2 products happen to be manufactured out of Shanghai exclusively and Shanghai remains in lockdown, which comes to how the people managing there, which is something we should probably be concerned about as well. But so they're experiencing shortages because they literally can't get their product out of the country, and it's exclusively manufactured and sourced from there. And so now that shortage is impacting the United States market. There are some alternatives. Those studies are mostly done -- stomach and intestinal type studies. So it doesn't -- it's not our business. The only other place where it does impact us slightly positively, if at all, is some of those studies might be done for lung -- CT imaging of the lung. So an alternative is to use Xenon for lung studies, especially for perfusion imaging. There had been a move away from using Xenon during the pandemic because there was fear of transmission of COVID because of inhalation. But you might actually see some reversion back to those types of studies. I'm not trying to offer that as any type of hint on guidance because it would be minimal. But more importantly, they need to restore the supply chain for those agents so they come back into the markets they should be in.

Last one. The 700 sites that have utilized PYLARIFY, what percent of the market is that?

So we have not come out publicly and I know many of you have asked about the number of imaging sites that's made up of both fixed and mobile. And so there's different numbers because there's many hospitals that don't actually have their own. They have it on Mondays and Tuesdays and somebody else has it on Thursdays and Fridays. We've not come out and publicly said the percentage. I would say it's a significant penetration of our core customers as we highlighted, of the percent of our target academics and our target customer list. We still have more to add. I would point you to the IMV database, which is effectively the book of truth within radiopharmaceuticals for imaging to source those materials.

Okay. So that is our final question. We're going to now enjoy lunch. As I mentioned, we have a whole bunch of other Lantheus folks here who will enjoy it with you. For all of you savvy folks, don't try to ask them tricky questions. They've all been Reg-FD trained and you'll also have a key Lantheus person, you enjoy your conversations with them at lunch, and we'll look forward to it. Thanks, everyone.