SVB Leerink starts Lantheus at OP; PT $24

SVB Leerink launched coverage of Lantheus Holdings (NASDAQ:LNTH) with an “outperform” rating and $24 price target. The stock closed at $16.27 on Jan. 29.

Lantheus is a leading player in diagnostic nuclear medicine, where manufacturing/supply chain expertise, along with long-standing customer relationships and brand reputation serve as competitive advantages and raise barriers-to-entry, writes analyst Richard Newitter.

He sees the company sustaining an approximate 20% compound average growth rate in revenue between 2020 and 2023 “as it leverages a growing portfolio of diagnostic image enhancing solutions (several through the highly strategic 2020 acquisition of Progenics) to target sizeable, rapidly growing and underpenetrated cardiovascular/oncology market opportunities.”

Mr. Newitter said in 2021-2022-plus a major—first-of-a-kind—new product, PyL, currently under priority FDA review, should begin to address an approximate $500-million U.S. biochemical recurrence prostate cancer diagnostics market opportunity, with potential to generate more than $100-million in revenue, and become the company’s second largest product category within two years.

“We expect PyL, along with other growth engines (DEFINITY, Azedra), to meaningfully accelerate Lantheus’ revenue and profit growth trajectory into the years ahead,” he added.