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Can Lantheus shareholders profit from a 'revolutionary' tool in prostate cancer?

Recent searches for Lantheus Holdings (LNTH) on TradeAlgo's unusual activity have highlighted this stock. The stock's near-term performance could be shaped by some of the following factors.

September 20, 2022
10 minutes
minute read

As the No. 1 heart ultrasound enhancement agent in the U.S. for 20 years, Lantheus Holdings (LNTH) could have rested on its accomplishments.

In spite of this, LNTH stock has soared since it announced Pylarify last year, which promises to be a game changer for the 3.1 million American men living with prostate cancer.

Lantheus launched Pylarify in June 2021 as a member of TradeAlgo's strong buy rank for life sciences.

Pylarify is an injectable imaging agent that doctors use to locate prostate cancer during organ imaging known as a PET scan.

As a first-of-its-kind diagnostic tool, it has major advantages over CT scans, bone scans, and magnetic resonance imaging, or MRI.

As of 2022, Pylarify has imaged more than 50,000 men, according to the company.

"The magnitude and speed at which the product gained ground over the last 12 months exceeded expectations," Richard Newitter, an analyst with Truist Securities, said.

During the first half of 2022, Pylarify sales reached $232 million.

That was an increase of nearly $43 million from the latter half of 2021. Pylarify changed Lantheus' growth profile virtually overnight, according to analysts familiar with the matter.

Since February, LNTH stock has risen rapidly.

Since then, Pylarify sales have soared, crushing quarterly earnings estimates twice.

It is possible that LNTH stock has more upside ahead after its huge run-up.

According to Newitter, Lantheus stock is a buy with a price target of 100. According to analysts, the stock will rise to 103.20 in the coming weeks.

The Lantheus team was not available for comment at the time TradeAlgo contacted them.

On Aug. 4, Lantheus Holdings reported 709% higher per-share earnings as revenue soared 121%.

During the first quarter, earnings per share increased by 1,840% and sales increased by 126%.

According to FactSet, analysts Lantheus will earn $3.57 per share in fiscal 2022, a 629% increase over fiscal 2021.

During the first month of the year, Wall Street predicted the company would earn $2 a share. As a result of rising estimates, Lantheus stock has soared 193% this year.

Compared to the S&P 500, which fell 16.6%. After breaking out in February, LNTH stock is far from its double-bottom buy point of 73.88. The stock is approaching the 20% profit-taking sell zone, while holding above the 21-day moving average.

Despite a renewed sell-off for stocks at large, Lantheus stock's relative strength line remains high. The longer-term uptrend remains intact.

LNTH stock has outperformed 99% of all stocks tracked by the TradeAlgo life science analysts over the past year with an RSI of 99.

The near-perfect Composite Rating of 97 indicates that Lantheus screens well on both fundamental and technical metrics

Before Pylarify debuted, Lantheus generated steady revenues around $300 million per year. According to Wall Street, Pylarify sales will reach $500 million alone in 2022, an increase of 1,063% from 2017. Lantheus' estimated $898.7 million annual revenue would also be dominated by Pylarify.

The company also continues to grow its Definity treatment for heart disease. During 2022, Wall Street expects Definity sales to increase by 3.7% to $241 million.

By 2023, Lantheus Holdings' total revenue should surpass $1 billion, led by Pylarify's upside.

With its June 2020 merger with Progenics, Lantheus acquired Pylarify. Formerly owned by Bristol Myers Squibb (BMY), Lantheus was founded in 1956 in North Billerica, Mass. In June 2015, LNTH stock went public.

Truist analyst Newitter says Pylarify is "a better way to do imaging" of prostate and urologic cancers.

The growth rate of prostate cancer is usually slow. In both the early stages of the disease as well as when it recurs or spreads to other parts of the body, conventional imaging can miss it.

Pylarify, on the other hand, enables doctors to treat patients more accurately and earlier. Prostate cancer cells contain PSMA, an antigen that Pylarify targets. In most cases, prostate cancer can be detected by elevated levels of prostate specific antigen.

According to Lantheus, Pylarify works even in men with low PSA levels. Moreover, it can detect tumors as small as 4 millimeters. Yet, a forward-looking market may already be looking past this success story.

The Revolutionary Pylarify leads to a huge shift in prostate cancer imaging, B. Riley Securities analyst Yuan Zhi suggested.

However, he advises Lantheus stock investors to watch out for rival imaging agents entering the PSMA PET scan market.

One of these competitors is Illuccix from Telix Pharmaceuticals (TLPPF), which launched in April. In March, Novartis (NVS) won regulatory approval for Locametz for PSMA PET scans.

LNTH stock, however, is rated as a buy by Zhi, with a price target of $102.

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