Good morning, ladies and gentlemen. Welcome to the Lantheus Holdings Second Quarter 2020 Earnings Conference Call. This is your operator for today's call. Please note that all lines have been placed on mute to prevent any background noise. This call is being recorded for replay purposes.

A replay of the audio webcast will be available in the Investors section of the company's website approximately two hours after the completion of the call and will be archived for 30 days. I will now turn the call over to your host for today, Mr. Mark Kinarney, Senior Director of Investor Relations.

Mark?.

Thank you, and good morning. Welcome to the Lantheus Holdings second quarter 2020 earnings conference call. Joining me today is our President and CEO, Mary Anne Heino; and our CFO, Bob Marshall.

This morning, we issued a press release, which was furnished to the Securities and Exchange Commission under Form 8-K, reporting our second quarter 2020 results. You can find the release in the Investors section of our website at lantheus.com.

Before we get started, I'd like to remind you that our comments during this call will include forward-looking statements. Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties.

In particular, there is significant uncertainty about the duration and contemplated impact of the COVID-19 pandemic. This means that results could change at any time, and the contemplated impact of COVID-19 on the company's business results and outlook is the best estimate based on the information available as of today's date.

Please note that we assume no obligation to update these forward-looking statements, except as required by applicable law, even if actual results or future expectations change materially. Please refer to our SEC filings for a detailed discussion of these risks and uncertainties.

Also, discussions during this call will include certain non-GAAP financial measures. Reconciliation of these measures to the most directly comparable GAAP financial measures is also included in the Investors section of our website. With that, I'll now turn over the call to Mary Anne.

Mary Anne?.

Thank you, Mark, and good morning, everyone. I hope this finds each of you and your families safe and well as you listen to this call. As we continue to navigate through the COVID-19 pandemic, the health and safety of our employees, patients and other partners in the healthcare community remain our top priority.

We have strict safety protocols in place across our sites and have been vigilant in monitoring these protocols, as well as emerging information around virus transmission prevention. Since the start of pandemic, we have managed our business operations effectively.

Our essential workers have remained on campus as we continuously manufactured and shipped our products to our customers. Our other employees continued to work remotely and we have a return-to-office plan in place that ensures the safe and thoughtful return of our employees to our different campuses.

We are pleased to begin our next chapter at Lantheus, with the closing of the Progenics acquisition. At the beginning of this process, we didn't imagine our integration would be virtual, but I have been so impressed with the dedication to this effort by team members from both Lantheus and Progenics.

Since the outset, my commitment has been to ensure the new Lantheus represents the complementary strengths of both companies, with the intent to be a best-in-class organization in the markets we serve. That goal has not changed, and we believe our milestones and strategic plan will deliver that vision.

In the near term, milestones include the acceleration of product awareness and patient demand for AZEDRA and the build out of additional manufacturing to ensure we can meet demand, the PyL NDA submission and opportunities in our microbubble franchise.

We believe our capabilities and portfolios complement each other and will ensure we serve our target market of precision diagnostics, oncology radiopharmaceuticals and specialty offerings in artificial intelligence or AI, analytics and pharma services.

Now that we have moved beyond deal close to integration, we are excited to capitalize on opportunities for value creation. The Life Science sector continues to evolve with the use of isotopes in both diagnostic applications, and we intend to be a leading company in this emerging field.

More importantly, with the completion of this acquisition, we believe we are well positioned to serve the healthcare community with a more important goal, the marriage of diagnosis and treatment.

Our goal is to lead in this developing landscape of therapeutic radioisotopes and companion diagnostics, as well as radioisotope-related AI analytics and pharma services.

We believe that the theragnostics principles represented by companion diagnostics, paired with therapeutics, improves patient management and outcomes and will be a valued offering to physicians, patients and payers. Now, I will discuss business trends in our commercialized portfolio, before discussing our pipeline.

In early April, we announced that as a result of the impact of the COVID-19 pandemic, we recognized declining demand for our products, starting in the latter half of March, as hospitals restricted access to limit the spread of infection and focused on the treatment of COVID-19 infected patients, instead of elective procedures that are typically performed for outpatients.

At the time, we correctly anticipated the second-quarter impact of the COVID-19 pandemic on our business will be more significant than that seen in the latter part of the first quarter. Accordingly, we suspended our guidance and announced a number of cost saving measures intended to mitigate the economic impact to our business.

As the second quarter progressed, we experienced steady recovery of our business. This recovery has been most shaped by regional disease trends, which impacted the restoration of access to hospitals and willingness of patients to enter hospitals for outpatient services.

Noteworthy however has been the trend of increased use of ultrasound, including the use of DEFINITY in the inpatient setting during this time.

Anecdotal feedback suggests that the ultrasound diagnostic modality, they have been chosen for applicable diagnostic procedures because of the convenience and safety of having a diagnostic procedure performed at the patient's bedside rather than the need to transport potentially infectious and very ill patients within hospitals to areas where stationary diagnostic equipment is located.

While our sales team has been working remotely during this period, we have regularly engaged our customers and provided additional information and training through virtual programs.

The relative strength of DEFINITY sales in this period, we believe, was driven by the increased use of ultrasound and where appropriate, the use of an ultrasound enhancing agent such as DEFINITY. Our commercialized products demonstrated healthy trend in 2020, prior to the onset of the pandemic.

DEFINITY delivered a strong start to the year for our microbubble franchise. Because we sell our products directly to hospitals, we have access to individual customer sales data. Therefore, throughout the pandemic, we've had direct line of sight to the use of DEFINITY at the hospital level.

These data give us greater insight about the return of DEFINITY-related diagnostic procedures than does the broader metric of elective procedures commonly cited in market analyses during the pandemic. Having this impact has been a great benefit for our business planning normally, and even more so in the current environment.

I think it is also noteworthy to share that we did not furlough any of our DEFINITY or nuclear field-based employees at any point during the pandemic, to ensure they were available to assist our customers in understanding safe use of our products in the hospital and other settings.

As such, we have been in regular contact with our customers and have been able to continuously assess their needs. This information has also guided our preparation as hospitals returned to offering additional in and outpatient services that had been paused during the most acute period of the pandemic for particular regions.

While prior to the completion of our merger with Progenics, the AZEDRA field-based employees had been furloughed, we reinstated those employees and their customer-related activities as soon as the merger was completed.

We are committed to supporting patients, clinicians, physicians and our other healthcare stakeholders with their needs as we collectively fight the pandemic facing us.

With respect to other developments in our business, on our first quarter earnings call, I shared that we filed an import drug license application in China with the National Medical Product Administration or an NMPA for the DEFINITY echocardiography indications.

I am pleased to report that our application was accepted by the NMPA, and is now being reviewed. We believe this is an important milestone in our efforts to commercialize DEFINITY in China. Regarding the status of a potential generic filed in the U.S. market to DEFINITY, to-date we have not received notice of an ANDA application.

As I've noted before, we remain confident in our plans to defend the DEFINITY intellectual property estate and believe we have continued growth prospects for our microbubble franchise. Our TechneLite business also performed relatively well during the quarter.

We were able to receive moly supply from our suppliers, despite complications with airline logistics that were pandemic-related, most notably early in the second quarter. These challenges required flexibility in our manufacturing schedules, one of our core competencies at Lantheus.

Our manufacturing and logistics teams did a fantastic job to ensure that customers were minimally impacted.

Relating to AZEDRA, I would note that it has been our intent, since we first announced the Progenics acquisition, to undertake an assessment of the field-based stakeholder facing structure for opportunities to optimize demand generation and patient pull through.

While field-based demand creating efforts by Progenics were paused, as I previously noted, we reinstated those employees on day-one of the newly merged company.

As we feel these sales and medical teams reengage with these customers, we will be implementing certain strategies to address our commercial and medical footprint over the next several quarters.

We believe market opportunity exists for the only FDA-approved therapy for pheochromocytomas and paraganglioma or PPGL, and we are committed to ensuring patients and other patient-related stakeholders are aware of and have access to this important treatment.

Moving onto our pipeline, with our Progenics merger completed, we have added two new product candidates, PyL and 1095, our prostate cancer diagnostic and therapeutic agent, as our nearest term opportunities in our own internal pipeline. Today, I will discuss PyL and our progress toward NDA submission.

PyL is a PSMA targeted PET imaging agent that enables clinicians to visualize both bone and soft tissue metastases in patients with locally advanced recurrent and/or metastatic prostate cancer.

The positive results from our pivotal registrational Phase III CONDOR trial in men with biochemical recurrent prostate cancer were recently presented at two important meetings, the American Society of Clinical Oncology or ASCO, as well as the Society of Nuclear Medicine and Molecular Imaging or SNMMI.

The primary endpoint of the CONDOR trial measured the diagnostic performance of PyL in men with biochemical recurrence of prostate cancer and uninformative baseline imaging based on conventional modalities.

Importantly, in addition presented for the primary endpoint in the CONDOR trial, data was also presented for a key secondary endpoint, the physicians' intent to change the disease management plan for patients. In the CONDOR trial, physicians indicated they would modify the disease management plan in 63.9% of the patients based on PyL imaging results.

These data, which were presented at both ASCO and SNMMI, highlight the potential of PyL to detect prostate cancer non-invasively and reliably, and they better inform physicians during treatment planning with the ultimate goal of improving disease management in one of the most prevalent and growing forms of cancer in the U.S. in men.

Our PYL team has been working diligently on the NDA with the FDA. We were informed early in July of a potential equipment-related issue, which could impact the production of the PyL drug product at our channel partner PET manufacturing facilities or PMF.

This issue is related to the pumps in the manufacturing equipment and not related to any of the data in the clinical trial. We have assessed and are already addressing the potential issue and believe different mediation moved our NDA filing target date to no later than the middle of the fourth quarter.

The NDA filing remains a top priority and we are continually assessing our timeline for efficiencies that can accelerate the time to filing. Simultaneously, we are building out the team that will support PyL's launch.

Turning now to Flurpiridaz F 18 or novel PET cardiac imaging agent, our development and commercialization partner GE Healthcare has informed us that second Phase III trial continues. However, new patient enrollment has been delayed due to the impact of the pandemic.

GE Healthcare intends to resume enrollment in this quarter and expect to complete enrollment by mid-2021, and assuming regulatory approval, begin commercialization in early 2023. With that, I will conclude my update on key commercial and strategic programs and turn the call over to Bob.

Bob?.

Thank you, Mary Anne, and good morning, everyone. I will provide highlights of the second quarter financials focusing on adjusted results, unless otherwise noted. Revenue for the second quarter were $66 million, a decrease of 23% from the prior year quarter.

Revenue during the quarter demonstrated a clear progression of recovery as states and localities moved through the initial stages of economic reopening with variation across geographies. In April, the company's revenues decreased by 44.3% versus prior year.

However, by June, they were down only 2.8% on a similar basis, which does not include the contribution from Progenics. Second quarter revenues include 11 days of contribution from the Progenics portfolio, adding 1.2% of sales growth to our quarterly and consolidated results year-over-year.

Sales of DEFINITY in the second quarter were $40.4 million or 26.1% lower as compared to the prior year quarter. Notably, DEFINITY grew by 5.4% in June as compared to the prior year month in contrast to the 55.6% decrease experienced in April on a similar basis. TechneLite revenue was $18.9 million, down 6% from the prior year quarter.

Similarly to DEFINITY, sequential improvement throughout the quarter, TechneLite grew 7% in June versus the same month prior year. Other nuclear, combined with contribution for Progenics assets decreased 32.6% to $10.3 million due mainly to the ongoing impact of COVID-19-related issues on Xenon. Rebates and allowances totaled $3.5 million.

Gross profit margin in the second quarter was 41.7%, a decrease of 1,140 basis points from the second quarter of 2019 on a similar basis. The decrease was due to several factors related to COVID-19, including a change in product mix with TechneLite increased contribution to total sales relative to prior periods.

We also experienced higher supply chain expenses during the quarter due to excess moly volume purchases to meet customer demand and higher logistics costs. Lastly, we incurred higher labor cost as a percentage of revenue in the quarter.

We were conscious decision not to furlough employees in support of longer-term continuity in what is a complex manufacturing environment. We do however expect that gross margin levels will return when related product revenues return to historic run rates among other factors.

Operating expenses were 168 basis points favorable to prior year at 29.7% of net revenue, driven primarily by delivering on our quarterly spend reduction goals in the quarter, offset in part by the inclusion of the Progenics operating expense post close for the last 11 days of the quarter.

As a reminder, we have reduced salaries and hours as appropriate for all team members, implemented a hiring freeze on planned additions and realized a reduction in promotional expenditure, travel and entertainment expenses among other initiatives. Operating profit for the quarter was $79 million or a decrease of 57.4% from the same period prior year.

Adjustments in the quarter totaled $13.5 million before taxes. Of this amount, $3.4 million is associated with non-cash stock and incentive plans along with $0.5 million tied to our recent credit facility amendment.

Also, in the quarter, we recorded $8.7 million of expenses, which were contingent upon the closing of our acquisition of Progenics along with Lantheus pre-integration efforts prior to the close. The balance relates to acquired intangible amortization. Our effective tax rate was 33.1% in the quarter.

The resulting reported net income for the second quarter was a loss of $7 million and a profit of $4.5 million on an adjusted basis, a decrease of 58.3%. GAAP basic and fully diluted earnings per share were a loss of $0.16 and a profit of $0.10 on an adjusted basis, a decrease from the prior year of 61.3%. Now, turning to cash flow.

Second quarter operating cash flow was a use of $2.2 million as compared to cash inflow of $21.1 million in Q2 2019. Capital expenditures totaled $2.3 million, down from the prior year quarter.

Free cash flow, which we define as operating cash flow, less capital expenditures, was a use of $4.4 million, a decrease of $22 million in the prior year period. Our quarterly cash flow contains several one-time expenses associated with the closing of the Progenics transaction as well as modest inventory build during the quarter.

Cash and cash equivalents now stand at $90.3 million. Also, to maintain liquidity, we elected to leave the existing store relative store-related non-recourse loan outstanding during the second half of 2020. That said, we are comfortable with our strong liquidity position and as well as having continued access to our $200 million revolver.

As you know, we withdrew our revenue and adjusted earnings per share full-year guidance for 2020 earlier this year. This action was precipitated by the meaningful impact on our business due to directly to patient and hospital actions associated with the stay-at-home orders and advices in United States in response to the COVID-19 pandemic.

We have continued to monitor customer orders and order trends closely, looking to both regional and national data point to inform our internal forward-looking sensitivity analysis, and while recent revenue trends have been encouraging, there remains sufficient uncertainty in the marketplace to warrant continued pause on providing formal guidance.

That said, as expected and detailed in our previous -- in our public filings, the acquisition of Progenics will have a meaningful pricing impact on our existing financials over the next 12 months, as we integrate, invest and capture synergies to drive and create value for stockholders.

These investments will serve to create our building blocks for improved and sustainable sales growth, product diversity, and margin improvement. The second half of 2020, I can offer several integration and expense-related milestones. The company has completed more than 900 tests to-date as part of our integration planning and day one execution plan.

Additionally, we have 90 tactical and strategic integration goals to be completed during the balance of 2020. We took advantage of the time between agreement and the close to expedite integration objectives.

For instance, we have already integrated the sales force in many of our processes and systems, such as salesforce.com, as well as the unified customer contracting process.

Additionally, we migrated the Progenics business onto the Lantheus T&E platform, as well as our ERP system, which supports manufacturing, supply chain, order-to-cash, procure-to-pay, and financial reporting, going live on July 1. From a financial perspective, we are targeting the capture of $4.6 million of synergies in the second half of 2020.

These expense savings will largely be in G&A cost centers as we work toward the full $20 million of savings originally targeted. Further, for modeling purposes, we expect to repurpose expenses in investment in the relaunch of the AZEDRA, as noted by Mary Anne, as well to begin the preparation for the PyL commercial launch.

R&D will also require additional investments in support of the PyL NDA filing, including one-time submission fees, as well as needed expenditures to ensure our P&L manufacturing partnerships are prepared, approved, and ready to achieve our PyL revenue forecast.

Therefore, as you model the second half of operating expenses, attributable to the Progenics portfolio net of synergies, SG&A and R&D together will be approximately equivalent to Progenic's first quarter expense run rate extrapolated. In the first quarter, Progenics expenses for these two categories totaled approximately $21 million.

Put another way, we are effectively replicating the Progenics operating expense run rate. But through synergies and repurposing of expense, we are able to invest a greater amount near-term to drive longer-term value.

Two last modeling points, gross margin in the second half of the year should improve versus our Q2 results, but to do so incrementally and not reach more than historic levels, as I briefly noted, until we see the impacts of COVID-19 subside. Secondly, when calculating EPS, share count will be varied throughout the year.

During each quarter in the second half, the weighted average diluted outstanding shares will approximate 67 million shares and just over 54 million on a full year basis also fully diluted.

Our goal remains to accelerate revenue growth and deliver on our accretion target, accelerating revenue and improving longer-term margins and cash flow required near-term investment. Run rate synergies will manifest more clearly once we get through the initial 12-month period as a combined company.

From there, we expect to see rapid improvement in our financial performance as we realize the benefits of the merger. With that, let me turn the call back over to Mary Anne..

Thank you, Bob. In closing, I would like to recognize all Lantheus' employees, incumbent and new, for their commitment to patients and our customers.

We have been in continuous operation of delivery of needed diagnostic and therapeutic products to the healthcare community and have done so with a commitment to quality and service, which defines our company.

This is true both of those essential workers reporting to our manufacturing and distribution sites daily, as well as those diligently working from home as we do our part to serve patients and fight this virus.

I am fortunate in my position to have such a dedicated employee group and I would like to recognize that collectively, you continue to embody the very best of our company's values. Before turning to questions, I would also like to discuss the changes to our Board of Directors that were made with the completion of the transaction. Ken Pucel and Dr.

Derace Schaffer have stepped down from their Lantheus board seats and we have added Dr. Gerard Ber and Heinz Mausli, members of the former Progenics Board to our reconstituted Board of Directors. I am personally grateful to Ken and Derace for their contribution to the Lantheus Board and their support of my role.

I welcome Heinz and Gerard to the Board, and I am so excited by the future we will create with this new remerged company. With that, Bob and I are now ready to take your questions. Operator, please go ahead..

Thank you. [Operator Instructions] First question comes from the line of Raj Denhoy from Jefferies. Your line is now open. You may ask your question..

Hi, good morning..

Good morning Raj..

Good morning Raj..

Maybe I could start a little bit with the data or the detail you provided on the monthly run rate of revenue. And so, a nice rebound as you moved into June, both positive for DEFINITY and TechneLite.

And so, I know you're not giving guidance for the back, but I'm curious whether you think those positive growth rates you saw in the month of June, should be considered sustainable as you move into the back half of the year?.

Raj, of course, any comments we make are assumptive of not seeing a large resurgence of virus or a need for return to the kind of lockdown conditions that most of the communities were in, in the first half of the year.

But having said that, we do expect to see continued rebound and recovery of our product usage and with one exception in our -- I'll note that now. As Bob referenced in other revenue, the most significant negative contributing factor was a loss of revenue with Xenon.

And that is related to how the Xenon modality diagnostic procedure is actually conducted. These studies are generally two parts, a ventilation and then a perfusion scan of a patient lungs, many times looking to see their alveoli the lungs.

There is strong hesitancy for any ventilation-type procedures in today's market, just because of the risk of contamination to other either healthcare workers in the room or to patients who might then enter the rooms afterwards.

So, across the board, any type of ventilation-related procedures have been suppressed at this time, until we figure out how to have them safely and reliably, used in patients regardless of what their kind of infection status might be. So, we do not expect in the short term to see recovery of Xenon revenue. But across our other products, we do..

Helpful. And maybe one for Bob, I know you gave some detail on the spending and your ability to realize synergies from Progenics. I guess, you mentioned $21 million of expenses that they had in the first quarter operating expenses, we should just assume that that continues given that you're going to reinvest any savings.

And I suppose the question is, you know, when we might start to see some of that spending actually start to trend downward, when you might start to actually show those synergies on the P&L as opposed to reinvesting them?.

Well Raj, you made me [indiscernible] have to do with, as we build out the commercial infrastructure around PyL and of course of ramping, so the AZEDRA relaunch, if you will. Together with those two things, I mean, once those are in places where you would start to see leverage return to the P&L.

But it goes beyond just the synergy savings, those we have very clear paths forward in terms of what those synergy targets look like and how and when we're going to be able to capture them.

The other thing that's worth noting is that if you look at the operating expense from the Lantheus side of things, it wasn't just -- this isn't just about finding synergies within the combined company but the run rate savings that we put into the P&L, you see that on an absolute dollar basis, I said 168 basis points of favorability.

But that translates into $7.3 million of reduction, actual dollar savings that were put through the P&L in the second quarter. And that's inclusive of the bringing on the Progenics operating expenses in for those 11 days.

So, when you start to think through manifesting that savings on a go-forward basis, I noted that it would be 12 months before we released our, so it's partly because we have some of the near-term investment but also, timing of how we will capture additional synergies.

And then when we give our 2021 guidance, presuming that things are, fit back more to normal, I think we'll be able to see it at that juncture..

That's helpful. And then maybe just one last one, Mary Anne, on PyL. You noted the slight delay given, I guess, the issue with manufacturing, anything more on that? You did mention it had been remediated.

But is there any risk that the timelines on PyL will slip any further based upon this?.

We're confident that they won't, Raj. And I'd like to stress again, it is an equipment-related issue. And that our channel partners, which are the PET manufacturing facilities or PMF, who have been incredibly responsive. We kind of identified it very quickly.

It was part of a pump that's used in the process of synthesis and we were able to replace the pumps and we already have some encouraging data from those newly replaced pumps. So, we do not expect a delay anymore than what I already cited..

Great. Thank you..

[Operator Instructions] Next question comes from the line of Larry Solow from CJS Securities. Your line is now open. You may ask your question..

Hi. Good morning, guys..

Good morning, Larry..

I joined a couple of minutes late, so I apologize if you covered this. It sounds like that PyL, you just sort of discussed a modest delay there. And AZEDRA, it sounds like it's going to start to reramp.

Can you just discuss the rest of the Progenics product line? Obviously, I know RELISTOR, not talk about too much, but you're -- the greatest revenue generating product currently for Progenics.

How, what's the sort of outlook for that product? And then in terms of the pipeline, I guess the product in the therapeutic side and the PSMA side, I guess those trials are still delayed?.

So, yes, let me kind of break down that question, because it had several parts..

Yes, absolutely..

I'll talk to first the other products. You're right. On an absolute basis, and stand-alone Progenics, the RELISTOR revenue stream, that is the royalty stream paid by Bayer Healthcare, is the largest revenue creating item currently on the Progenics P&L.

We don't speak to it because we are not controlling the commercialization of it, but as a new product, it has remained steady in the marketplace. The patients who unfortunately need that product are not in any way pandemic-related, and they would continue to need the product on a more chronic basis.

For the other products in the -- that we inherited with the Progenics acquisition, the next nearest term one is 1095, which as you noted is a therapeutic and it will be for the treatment of prostate cancer. That trial has been paused only for new patients entering. Any patients who are already in the trial will continue to receive trial doses.

But just on safety basis and very consistent with what is happening across clinical trials in the U.S., we are not yet reenrolling new patients. I will say from an AZEDRA perspective, you didn't ask specifically about that, but I'll note what we know for the first quarter.

They were 11 therapeutic doses administered in Q2, nine of them were first doses for patients, two were second doses for patients, which usually come about three months later and second -- to-date in 2020, we have a total of 21 total doses already delivered, which is a significant ramp-up from what they had experienced in 2019.

As you heard, both Bob and I mentioned, our intent has been and remains to carefully look at what the field-based structure is, because we are confident that we can increase demand generation and patient pull through, which both will contribute positively to sales for that product..

Okay, great. And I realize not providing any updated guidance and obviously understood why in this environment. But just from a global perspective, and I don't know if you touched on it in the call, but I know when you first acquired or announced the acquisition of Progenics, you sort of had a timelines for accretion.

And ex-COVID or if we assume COVID, hopefully wanes over the next couple of years, do you still sort of maintain your general expectations for accretion as we look out 24-36 months?.

I'll say yes and let Bob give some more details..

Yes. And in fact, that was the point I am trying to make on, toward the end of my commentary, which is that we remain committed to our financial goals and targets. As everybody knows that there are public filings out there that assumed January 1 starts.

So, if you were to think in terms of dialing things forward in terms of a mid-2020 start, you know, we're now under way and we are starting to execute -- our Integration Management Office has done a fantastic job of preparing the company and each of the leaders within their own functions to be poised to capture both synergies as well as productivity gains, to be able to execute on over the near term and over the next months and years to keep us on-track along those timelines that we had previously discussed.

But just sort of -- don't focus on the year but focus on the months of ownership and we're still committed to those timelines..

Got it. And Mary, I know you mentioned with lack of, I guess, access to some echocardiograms, DEFINITY was being used a little more on the ultrasound modality. Is that something that, as you look out over the long-term could eventually be a benefit for DEFINITY, different modality? I know obviously you're trying to get into different modalities.

So, that -- does that sort of fit that potentially?.

I think it may Larry, because I think the learning has been that, in any situation, it may be safer and more convenient if you can bring diagnostic modalities to the patient and rather than having to transport patients to those areas where stationary equipment are.

And we have seen, and I may have talked about this before, but we've seen an increasing portability with ultrasound before this, where the ultrasound equipment is actually getting smaller, easier to use in a portable setting. And that in fact is part of the reason that we drove forward with our DEFINITY room temperature program.

It was our commitment to make sure that if ultrasound was going more portable, that DEFINITY could be more portable as well. And so, having a room temperature formulation rather than one that requires refrigeration, we feel kind of add to that that dynamic that we're seeing in the marketplace..

Okay, got you. And then just last question, I think in Q1 you had mentioned TechneLite obviously procedures down materially, April, May and slowly coming back. But I think you had mentioned there were some inefficiencies related to the greater pharmacies actually had to use more Moly or more TechneLite in their procedures.

Even though there were less procedures. So, that sort of somewhat offset the sales in the beginning of the quarter.

Does that -- did you see that sort of through the quarter?.

We did, and as Bob and I both noted, these are really regional variations and it really aligns very-very closely with the reopening of regions.

And so, with full reopening and kind of return of normal conduct within hospitals for in and outpatient procedures, we would expect to see their channel partners or the radiopharmacies revert back at some point to their practice of having multiple deliveries to hospitals during the day instead of the one-time delivery that they adopted during the acute phase of the pandemic.

But again, it's such a regional kind of aspect that I can't make a general statement about it..

I would add to that too. When we look at TechneLite, it didn't drop. That was what I was indicating about gross margin to the extent that I noted for DEFINITY.

I think it was for the reasons that Mary and yourself has actually just articulated, but that same ramp, even though you might have seen a change in the way the delivery into the system was occurring throughout the period, it was still a ramp of recovery.

I mean, still landing at $18.9 million, which was a pretty good result given the circumstances of the quarter, but it still did follow that same sort of trajectory. But DEFINITY recovery was a very steeper recovery, but TechneLite still it did experience an upward trajectory throughout the quarter..

Okay, great. Okay, great. Thank you. I appreciate all the color..

You're welcome..

[Operator Instructions] We show no further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may disconnect and have a wonderful day..

Thank you everyone, stay safe..