On Monday, TD Cowen reaffirmed its confidence in Lantheus Holdings (NASDAQ:LNTH), maintaining a Buy rating and a price target of $110.00. The endorsement comes after a recent update from the Centers for Medicare & Medicaid Services (CMS) regarding payment calculations for Pylarify, a product offered by Lantheus.
The CMS update, released over the weekend, outlined that the Calendar Year (CY) 2025 payment rate for Pylarify will be set at the Medicare Unadjusted Composite Rate (MUC) of $337/mCi. This rate is notably lower than the current payment rates for the agent.
Despite the reduction in the payment rate for Pylarify, the impact on Lantheus is expected to be minimal. The company is actively working on transitioning to the Average Sales Price (ASP) model as swiftly as possible, a move which could mitigate the effects of the lower CMS payment rates.
Lantheus Holdings specializes in the development, manufacture, and commercialization of innovative diagnostic imaging agents and products that assist clinicians in the diagnosis and treatment of cardiovascular and other diseases. Pylarify is one such agent used in PET imaging to identify suspected prostate cancer recurrence.
The affirmation of the Buy rating and price target by TD Cowen signals their belief in the ongoing value and potential of Lantheus Holdings despite the recent CMS payment update. Lantheus has not publicly responded to the CMS update or the maintained rating and price target by TD Cowen.
In other recent news, Lantheus Holdings has reported a strong financial performance in its third quarter of 2024, with consolidated net revenue reaching $378.7 million, an 18.4% increase from the same period the previous year. The company's lead product, PYLARIFY, contributed significantly to this growth, with sales hitting approximately $260 million, a 20% year-over-year increase. Lantheus also reported growth in DEFINITY sales, which totaled $77 million. Leerink Partners adjusted their financial outlook for the company, reducing their price target for Lantheus to $122.00 from the previous $127.00 but maintained an Outperform rating on the stock. The firm’s decision follows Lantheus' recent financial results and updated full-year 2024 revenue guidance to a range of $1.51 billion to $1.52 billion.
The company also adjusted its forecast for fully-diluted earnings per share (EPS) for the fiscal year 2024 to between $6.65 and $6.70. Despite the adjustments, Leerink Partners remains optimistic about Lantheus' future, highlighting the company's strong position in the Prostate-Specific Membrane Antigen (PSMA) PET imaging space and an expanding pipeline that has not yet been fully recognized by the market.
InvestingPro Insights
Despite the recent CMS payment update for Pylarify, Lantheus Holdings (NASDAQ:LNTH) continues to demonstrate strong financial performance. According to InvestingPro data, the company has shown impressive revenue growth of 24.15% over the last twelve months as of Q3 2024, with revenues reaching $1.5 billion. This growth is complemented by a healthy gross profit margin of 64.38% and an operating income margin of 41.13%, indicating efficient operations.
InvestingPro Tips highlight that Lantheus has been profitable over the last twelve months and analysts predict continued profitability this year. This aligns with TD Cowen's maintained Buy rating and supports the company's ability to navigate challenges such as the CMS payment rate adjustment.
However, investors should note that the stock has experienced a significant 24.21% decline over the past week, possibly reflecting market reaction to the CMS update. Despite this short-term volatility, Lantheus has demonstrated a strong return over the last five years, suggesting long-term value potential.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for Lantheus Holdings, providing a more comprehensive view of the company's prospects and challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.