Cautionary Note Regarding Forward-Looking Statements



Some of the statements contained in this Quarterly Report on Form 10-Q are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
forward-looking statements, including, in particular, statements about our
plans, strategies, prospects and industry estimates are subject to risks and
uncertainties. These statements identify prospective information and can
generally be identified by words such as "anticipates," "believes," "can,"
"could," "estimates," "expects," "hopes," "intends," "launch," "may,"
"pipeline," "plans," "predicts," "seeks," "should," "target," "will," "would"
and similar expressions, or by express or implied discussions regarding
potential marketing approvals or new indications for the collaborations,
products candidates or approved products described in this Quarterly Report on
Form 10-Q, or regarding potential future revenues from such collaborations,
product candidates and products. Examples of forward-looking statements include
statements we make relating to our outlook and expectations including, without
limitation, in connection with: (i) continued market expansion and penetration
for our established commercial products, particularly DEFINITY, in the face of
segment competition and potential generic competition, including as a result of
patent and regulatory exclusivity expirations and challenges; (ii) our ability
to continue to grow PYLARIFY as a commercial product, including (A) our ability
to obtain FDA approval for additional positron emission tomography ("PET")
manufacturing facilities ("PMFs") to manufacture PYLARIFY, (B) the ability of
PMFs to manufacture PYLARIFY to meet product demand, (C) our ability to sell
PYLARIFY to customers, (D) our ability to obtain and maintain adequate coding,
coverage and payment for PYLARIFY, and (E) our ability to establish PYLARIFY as
a leading PSMA PET imaging agent in a competitive environment in which other
PSMA PET imaging agents have been approved and additional ones are in
development; (iii) the global Molybdenum-99 ("Mo-99") supply; (iv) our ability
to have third party manufacturers manufacture our products and our ability to
use our in-house manufacturing capacity; (v) our ability to successfully launch
PYLARIFY AI as a commercial product; (vi) the continuing impact of the global
COVID-19 pandemic on our business, financial condition and prospects; (vii) the
efforts and timing for clinical development of our product candidates and new
clinical applications for our products, in each case, that we may develop,
including 1095 and LMI 1195, or that our strategic partners may develop,
including flurpiridaz fluorine-18 ("F 18"); (viii) our ability to identify and
acquire or in-license additional diagnostic and therapeutic product
opportunities in oncology and other strategic areas; and (ix) the potential
reclassification by the FDA of certain of our products and product candidates
from drugs to devices with the expense, complexity and potentially more limited
competitive protection such reclassification could cause. Forward-looking
statements are based on our current expectations and assumptions regarding our
business, the economy and other future conditions. Because forward-looking
statements relate to the future, such statements are subject to inherent
uncertainties, risks and changes in circumstances that are difficult to predict.
Our actual results may differ materially from those contemplated by the
forward-looking statements. These statements are neither statements of
historical fact nor guarantees or assurances of future performance. The matters
referred to in the forward-looking statements contained in this Quarterly Report
on Form 10-Q may not in fact occur. We caution you, therefore, against relying
on any of these forward-looking statements. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions, including those
described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K
for the year ended December 31, 2021, and in Part II, Item 1A. "Risk Factors" in
this Quarterly Report on Form 10-Q.

Any forward-looking statement made by us in this Quarterly Report on Form 10-Q
speaks only as of the date on which it is made. Factors or events that could
cause our actual results to differ may emerge from time to time, and it is not
possible for us to predict all of them. We undertake no obligation to publicly
update any forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by law.

Available Information



Our global Internet site is www.lantheus.com. We routinely make available
important information, including copies of our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act, as soon as reasonably practicable after those reports are
electronically filed with, or furnished to, the SEC, free of charge on our
website at investor.lantheus.com. We recognize our website as a key channel of
distribution to reach public investors and as a means of disclosing material
non-public information to comply with our disclosure obligations under SEC
Regulation FD. Information contained on our website shall not be deemed
incorporated into, or to be part of this Quarterly Report on Form 10-Q, and any
website references are not intended to be made through active hyperlinks.

Our reports filed with, or furnished to, the SEC are also available on the SEC's
website at www.sec.gov, and for Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, in an iXBRL (Inline Extensible Business Reporting
Language) format. iXBRL is an electronic coding language used to create
interactive financial statement data over the Internet. The information on our
website is neither part of nor incorporated by reference into this Quarterly
Report on Form 10-Q.
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The following discussion and analysis of our financial condition and results of
operations should be read together with the condensed consolidated financial
statements and the related notes included in Item 1 of this Quarterly Report on
Form 10-Q as well as the other factors described in Part I, Item 1A. "Risk
Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021,
and in Part II, Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q.

Overview

Our Business

We are an established leader and fully integrated provider committed to
innovative imaging diagnostics, targeted therapeutics, and artificial
intelligence solutions to Find, Fight and Follow serious medical conditions. We
classify our products in three categories: precision diagnostics,
radiopharmaceutical oncology, and strategic partnerships and other revenue. Our
leading precision diagnostic products assist healthcare professionals ("HCPs")
Find and Follow diseases in non-oncologic conditions. Our radiopharmaceutical
oncology diagnostics and therapeutics help HCPs Find, Fight and Follow cancer.
Our strategic partnerships and other revenue category focuses on facilitating
precision medicine through the use of biomarkers, digital solutions and
radiotherapeutic platforms, and also includes royalty revenue from our license
of RELISTOR.

Our commercial products are used by cardiologists, urologists, oncologists,
internal medicine physicians, nuclear medicine physicians, radiologists,
sonographers and technologists working in a variety of clinical settings. We
believe that our diagnostic products provide improved diagnostic information
that enables HCPs to better detect and characterize, or rule out, disease, with
the potential to achieve better patient outcomes, reduce patient risk and limit
overall costs for payors and throughout the healthcare system.

We produce and market our products throughout the United States (the "U.S."),
selling primarily to clinics, group practices, hospitals, integrated delivery
networks, and radiopharmacies. We sell our products outside the U.S. through a
combination of direct distribution in Canada and third party distribution
relationships in Europe, Canada, Australia, Asia-Pacific, Central America and
South America.

Our headquarters are located in North Billerica, Massachusetts, with additional offices in Somerset, New Jersey; Montreal, Canada and Lund, Sweden.



In the first quarter of 2021, we completed the evaluation of our operating and
reporting structure, including the impact on our business of the acquisition of
Progenics and the sale of our Puerto Rico subsidiary, which resulted in a change
in our operating segments to one reportable business segment.

Key Factors Affecting Our Results

Our business and financial performance have been, and continue to be, affected by the following:

PYLARIFY Approval, Commercial Launch and Revenue Growth

On May 27, 2021, we announced that the FDA had approved PYLARIFY, an F 18-labeled PET imaging agent targeting prostate-specific membrane antigen ("PSMA"). PYLARIFY is a product in our radiopharmaceutical oncology product category. We commercially launched PYLARIFY in the U.S. in June 2021.



PYLARIFY is a radioactive diagnostic agent indicated for PET imaging of
PSMA-positive lesions in men with prostate cancer with suspected metastasis who
are candidates for initial definitive therapy and with suspected recurrence
based on elevated serum prostate-specific antigen ("PSA") levels. PYLARIFY works
by binding to PSMA, a protein that is overexpressed on the surface of more than
90% of primary and metastatic prostate cancer cells. PYLARIFY works with PET/CT
technology to produce a combined PET/CT scan that enables the reader of the
PET/CT scan to detect and locate the disease.

According to the American Cancer Society, prostate cancer is the second most
common cancer in American men -- one in eight American men will be diagnosed
with prostate cancer in their lifetimes and over 3.1 million American men are
living with prostate cancer today. Based on estimates from third party sources
regarding the incidence of prostate cancer in men in the U.S., we believe the
market potential for all PSMA PET imaging agents in the U.S. could be up to
250,000 annual scans, comprised of 90,000 scans for patients with intermediate,
unfavorable or high/very high risk of suspected metastases of prostate cancer;
130,000 scans for patients with suspected recurrence of prostate cancer; and
30,000 scans for patients with metastatic castration-resistant prostate cancer
("mCRPC") who may be under consideration for PSMA-targeted therapy for the
treatment of adult patients with PSMA-positive mCRPC who have already been
treated with other anticancer treatments (androgen receptor pathway inhibition
and taxane-based chemotherapy). However, because we are still early in the
commercialization of PYLARIFY, we can give no assurance as to how clinical
practice may evolve or what our ultimate market penetration may be.
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In March 2022, we announced a strategic collaboration with Novartis to include
PYLARIFY in prostate cancer trials with Pluvicto, Novartis' recently approved
PSMA-targeted therapeutic. As part of the agreement with Novartis, we will
supply PYLARIFY for the selection of patients with prostate cancer, and Novartis
will provide all PYLARIFY-related clinical imaging data to us. In addition, the
Society for Nuclear Medicine and Molecular Imaging, or SNMMI, recently updated
their appropriate use criteria, noting that PSMA PET imaging agents, including
PYLARIFY, can be used for patient selection for PSMA-targeted radioligand
therapy.

The approval of PYLARIFY was based on data from two Company-sponsored pivotal
studies ("OSPREY" and "CONDOR") designed to establish the safety and diagnostic
performance of PYLARIFY across the prostate cancer disease continuum. Results
from OSPREY (Cohort A) demonstrated improvement in specificity and positive
predictive value of PYLARIFY PET imaging over conventional imaging in men at
risk for metastatic prostate cancer prior to initial definitive therapy. CONDOR
studied men with biochemical recurrent prostate cancer. In patients with
biochemical recurrent prostate cancer and non-informative baseline imaging,
PYLARIFY demonstrated high correct localization and detection rates, including
in patients with early recurrent disease with low, but rising, PSA blood levels
(median PSA 0.8 ng/mL).

Upon commercial launch in June 2021, PYLARIFY was immediately available in
select parts of the U.S. Over the course of the remainder of 2021, PYLARIFY
availability expanded into additional regions and is now broadly available
nationwide. We continue to expand our geographic coverage, customer contracting
and market access coverage to serve our customers and the U.S. prostate cancer
community.

The commercial launch of PYLARIFY has been complex and expensive. During 2021,
we hired additional employees to assist us with the commercialization of
PYLARIFY, including in sales, marketing, reimbursement, quality and medical
affairs. To manufacture PYLARIFY, we assembled and qualified a nationwide
network of PMFs with radioisotope-producing cyclotrons that make F 18, which has
a 110-minute half-life, so PYLARIFY is manufactured and distributed rapidly to
end-users. After being made on a cyclotron at a PMF, the F 18 is then combined
with certain chemical ingredients in specially designed chemistry synthesis
boxes to manufacture PYLARIFY. The finished PYLARIFY is then quality control
tested and transferred to a radiopharmacist who prepares and dispenses
patient-specific doses of the final product. Because each of the PMFs
manufacturing these products is deemed by the FDA to be a separate manufacturing
site, each has to be separately approved by the FDA. Although PYLARIFY is now
broadly available nationwide and we continue to qualify additional PMFs, we can
give no assurance that the FDA will continue to approve PMFs in accordance with
our planned roll-out schedule. If FDA approval of manufacturing sites is delayed
or withdrawn, our future business, results of operations, financial condition
and cash flows could be adversely affected.

In addition to the network of PMFs, we have also been working with academic
medical centers in the U.S. that have radioisotope-producing cyclotrons and
which have expressed an interest in manufacturing PYLARIFY. Under this
initiative, we enter into a fee-for-service arrangement under which the academic
medical center's PMF manufactures and supplies batches of PYLARIFY, and its
radiopharmacy prepares patient-ready unit doses, in each case for and on behalf
of us. We then sell those unit doses to the academic medical center's hospitals
and clinics, and in some instances, to additional customers in the academic
medical center's geographic area, in each case, under separate purchase
agreements. The academic medical center's PMF's ability to manufacture and
supply batches of PYLARIFY is subject to FDA approval, and we can give no
assurance that the FDA will approve such PMFs in accordance with our planned
roll-out schedule.

Our commercial launch also required obtaining adequate coding, coverage and
payment for PYLARIFY, including not only coverage from Medicare, Medicaid and
other government payors, as well as private payors, but also appropriate payment
levels, to adequately cover our customers' costs of using PYLARIFY in PSMA
PET/CT imaging procedures. We received notification that our Healthcare
Procedure Coding System ("HCPCS") code, which enables streamlined billing, went
into effect as of January 1, 2022. In addition, effective January 1, 2022, the
Centers for Medicare and Medicaid Services ("CMS") granted Transitional
Pass-Through Payment Status in the hospital outpatient setting ("TPT Status")
for PYLARIFY, enabling traditional Medicare to provide an incremental payment
for PET/CT scans performed with PYLARIFY in that setting. TPT Status for
PYLARIFY is expected to expire December 31, 2024. After TPT Status expires,
under current Medicare rules, PYLARIFY, similar to other diagnostic
radiopharmaceuticals, would not be separately reimbursed in the hospital
outpatient setting but rather would be included as part of the facility fee a
hospital otherwise receives for a PET/CT imaging procedure, and the facility fee
does not always adequately cover the total cost of the procedure. We can give no
assurance that any CMS reimbursement in the hospital outpatient setting that
follows the expiration of TPT Status will be adequate to cover the cost of a
PYLARIFY PET/CT imaging procedure.

We actively pursue patents in connection with PYLARIFY, both in the U.S. and
internationally. In the U.S. for PYLARIFY, we have four Orange Book-listed
patents, including composition of matter patents, which expire in 2030 and 2037.
Outside of the U.S., we are currently pursuing additional PYLARIFY patents to
obtain similar patent protection as in the U.S.

PYLARIFY AI Clearance and Use


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During 2021, we also announced that our subsidiary, EXINI, was granted 510(k)
clearance by the FDA in the U.S. and received CE marking in Europe for aPROMISE.
We commercially launched aPROMISE under the name PYLARIFY AI in the U.S. in
November 2021.

PYLARIFY AI is artificial intelligence medical device software developed to
assist with the reading and quantification of PYLARIFY scans. The technology
automatically analyzes a PSMA PET/CT image to segment anatomical regions - 51
bones and 12 soft tissue organs. This image segmentation enables automated
localization, detection and quantification of potential PSMA-avid lesions in a
PSMA PET/CT image, which data is then incorporated into the reporting system
used by physicians.

Anticipated Continued Growth of DEFINITY and Expansion of Our Ultrasound Microbubble Franchise



We believe the market opportunity for our ultrasound microbubble enhancing
agent, DEFINITY, continues to be significant. Historically, DEFINITY has been
our fastest growing and highest margin commercial product. We anticipate
DEFINITY sales will continue to grow in the future. As we continue to educate
the physician and healthcare provider community about the benefits and risks of
DEFINITY, we believe we will be able to continue to grow the appropriate use of
DEFINITY in suboptimal echocardiograms. In a U.S. market with three
echocardiography ultrasound enhancing agents approved by the FDA, we estimate
that DEFINITY had over 80% of the market as of December 31, 2021.

As we continue to pursue expanding our microbubble franchise, our activities include:



•Patents - We continue to actively pursue additional patents in connection with
DEFINITY and DEFINITY RT, both in the U.S. and internationally. In the U.S. for
DEFINITY, we have five Orange Book-listed method of use patents, one of which
expires in 2035 and four of which expire in 2037, as well as additional
manufacturing patents that are not Orange Book-listed expiring in 2023 and 2037.
In the U.S. for DEFINITY RT, we have six Orange Book-listed patents, including a
composition of matter patent which expires in 2035. Outside of the U.S., we are
currently pursuing additional DEFINITY and DEFINITY RT patents to obtain similar
patent protection as in the U.S. The Orange Book-listed patents include a patent
on the use of VIALMIX RFID which expires in 2037; we have submitted additional
VIALMIX RFID patent applications in major markets throughout the world.

Hatch-Waxman Act - Even though our longest duration Orange Book-listed DEFINITY
patent extends until March 2037, because our Orange Book-listed composition of
matter patent expired in June 2019, we may face generic DEFINITY challengers in
the near to intermediate term. Under the Hatch-Waxman Act, the FDA can approve
Abbreviated New Drug Applications ("ANDAs") for generic versions of drugs if the
ANDA applicant demonstrates, among other things, that (i) its generic candidate
is the same as the innovator product by establishing bioequivalence and
providing relevant chemistry, manufacturing and product data, and (ii) either
the marketing of that generic candidate does not infringe the Orange Book-listed
patent(s) or the Orange Book-listed patent(s) is invalid. Similarly, the FDA can
approve a Section 505(b)(2) New Drug Application ("505(b)(2)") from an applicant
that relies on some of the information required for marketing approval to come
from studies which the applicant does not own or have a legal right of
reference. With respect to the Orange Book-listed patent(s) covering an
innovator product, the ANDA applicant or the Section 505(b)(2) applicant (if
relying on studies related to the innovator product) (together, the "Applicant")
must give a notice (a "Notice") to the innovator of its certification that its
generic candidate will not infringe the innovator's Orange Book-listed patent(s)
or that the Orange Book-listed patent(s) is invalid. The innovator can then file
suit against the Applicant within 45 days of receiving the Notice, and FDA
approval to commercialize the generic candidate will be stayed (that is,
delayed) for up to 30 months (measured from the date on which a Notice is
received) while the patent dispute between the innovator and the Applicant is
resolved in court. The 30-month stay could potentially expire sooner if the
courts determine that no infringement had occurred or that the challenged Orange
Book-listed patent is invalid or if the parties otherwise settle their dispute.

As of the date of filing of this Quarterly Report on Form 10-Q, we have not
received any Notice from an Applicant. If we were to (i) receive any such Notice
in the future, (ii) bring a patent infringement suit against the Applicant
within 45 days of receiving that Notice, and (iii) successfully obtain the full
30-month stay, then the Applicant would be precluded from commercializing a
generic version of DEFINITY prior to the expiration of that 30-month stay period
and, potentially, thereafter, depending on how the patent dispute is resolved.
Solely by way of example and not based on any knowledge we currently have, if we
received a Notice from an Applicant in May 2022 and the full 30-month stay were
obtained, then the Applicant would be precluded from commercialization until at
least November 2024. If we received a Notice some number of months in the future
and the full 30-month stay were obtained, the commercialization date would roll
forward in the future by the same number of months. In the event a 505(b)(2)
applicant does not rely on studies related to the innovator product, the
30-month stay would not apply, but additional clinical studies may be required.

•DEFINITY RT - DEFINITY RT became commercially available in the fourth quarter
of 2021. A modified formulation of DEFINITY that allows both storage and
shipment at room temperature, DEFINITY RT provides clinicians an additional
choice and allows for greater utility of this formulation in broader clinical
settings. Given its physical characteristics, we
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believe DEFINITY RT is also well-suited for inclusion in kits requiring
microbubbles for other indications and applications (including in kits developed
by third parties of the type described in the paragraph entitled Microbubble
Franchise below).

•VIALMIX RFID - VIALMIX RFID, our next-generation activation device designed
specifically for both DEFINITY and DEFINITY RT, became commercially available in
the fourth quarter of 2021. The activation rate and time are controlled by
VIALMIX RFID through the use of radio-frequency identification technology
("RFID") to ensure reproducible activation of DEFINITY and DEFINITY RT. The RFID
tag, which is affixed to the vial label, enables the DEFINITY or DEFINITY RT
vial to be appropriately activated with the VIALMIX RFID activation device.

Global Mo-99 Supply



We currently have Mo-99 supply agreements with Institute for Radioelements
("IRE"), running through December 31, 2022, with auto-renewal provisions that
are terminable upon notice of non-renewal, and with NTP Radioisotopes ("NTP"),
acting for itself and on behalf of its subcontractor, the Australian Nuclear
Science and Technology Organisation ("ANSTO"), running through June 30, 2022,
and for which we are currently negotiating an extension.

Although we have a globally diverse Mo-99 supply with IRE in Belgium, NTP in
South Africa, and ANSTO in Australia, we still face supplier and logistical
challenges in our Mo-99 supply chain. The NTP processing facility had periodic
outages in 2017, 2018 and 2019. When NTP was not producing, we relied on Mo-99
supply from both IRE and ANSTO to limit the impact of the NTP outages. In 2019
and 2020, ANSTO experienced multiple facility issues that resulted in ANSTO
outages and volume limitations, during which time we relied on IRE and NTP to
limit the impact of those outages and limitations. Because of the COVID-19
pandemic, we experienced challenges receiving regularly scheduled orders of
Mo-99 from our global suppliers, particularly in the second quarter of 2020. We
continue to manage these various supply chain challenges, but depending on
reactor and processor schedules and operations, at times we have not been able
to fill some or all of the demand for our TechneLite generators on certain
manufacturing days. A prolonged disruption of service from one of our three
Mo-99 processing sites or one of their main Mo-99-producing reactors could have
a substantial negative effect on our business, results of operations, financial
condition and cash flows.

To augment our current supply of Mo-99, we have a strategic arrangement with
SHINE Medical Technologies LLC ("SHINE") for the future supply of Mo-99. Under
the terms of the supply agreement, entered into in November 2014, SHINE will
provide Mo-99 produced using its proprietary LEU-solution technology for use in
our TechneLite generators once SHINE's facility becomes operational and receives
all necessary regulatory approvals, which SHINE now estimates will occur in
2023. The term of this arrangement provides for three years of supply of Mo-99.
However, we cannot assure you that SHINE will be able to produce commercial
quantities of Mo-99 for our business, or that SHINE, together with our current
suppliers, will be able to deliver a sufficient quantity of Mo-99 to meet our
needs.

Inventory Supply

We obtain a substantial portion of our imaging agents from a third party
supplier. JHS is currently a significant supplier of DEFINITY and our sole
source manufacturer of NEUROLITE, Cardiolite and evacuation vials, the latter
being an ancillary component for our TechneLite generators. On February 23,
2022, our wholly-owned subsidiary, LMI, entered into a Manufacturing and Supply
Agreement (the "MSA") with JHS, effective as of February 23, 2022, pursuant to
which JHS will manufacture, and LMI will purchase, our DEFINITY, NEUROLITE,
Cardiolite and evacuation vial products. The new MSA supersedes all of the prior
agreements of the parties. The initial term of the MSA runs through December 31,
2027 and can be further extended by mutual agreement of the parties. The MSA
requires LMI to purchase from JHS specified percentages of its total
requirements for DEFINITY, as well as specified quantities of NEUROLITE,
Cardiolite and evacuation vial products, each year during the contract term.
Either party can terminate the MSA upon the occurrence of certain events,
including the material breach or bankruptcy of the other party. In addition to
JHS, we rely on Samsung BioLogics as our sole source manufacturer of DEFINITY
RT.

In 2021, we completed the construction of a specialized in-house manufacturing
facility at our North Billerica campus for purposes of producing DEFINITY and,
potentially, other sterile vial products. On February 22, 2022, we received FDA
approval of our sNDA, authorizing commercial manufacturing of DEFINITY at our
new facility, and inventory that we had previously manufactured at this facility
became commercially saleable. We believe this facility will allow us to better
manage DEFINITY manufacturing and inventory, reduce our costs in a potentially
more price competitive environment, and provide us with supply chain redundancy.

Radiopharmaceuticals are decaying radioisotopes with half-lives ranging from a
few hours to several days. These products cannot be kept in inventory because of
their limited shelf lives and are subject to just-in-time manufacturing,
processing and distribution, which takes place at our facilities in North
Billerica, Massachusetts and Somerset, New Jersey.

COVID-19 Pandemic


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The global COVID-19 pandemic has had, and may continue to have, a material
impact on our business. Towards the end of the first quarter of 2020 we began to
experience, and through the date of this filing we are continuing to experience,
impacts to our business and operations related to the COVID-19 pandemic,
including the impact of hospital staffing challenges, vaccination mandates,
employee absences due to illness, and a decline in the volume of certain
procedures and treatments using our products.

Although many of the restrictions, including stay-at-home mandates, imposed in response to the COVID-19 pandemic have been lifted in much of the U.S., and there has been a rapid rollout and development of multiple vaccines and boosters, the resurgence of COVID-19 infections continued to impact certain aspects of our business during the first quarter of 2022. For example, we believe sales of DEFINITY were impacted by elevated case counts and hospitalizations but improved over the course of the quarter, even amidst ongoing hospital nursing and sonographer shortages.



The pandemic could still have a future negative impact on our business,
particularly if there are additional resurgences as a result of mutations or
other variations to the virus that further increase its communicability or its
impact on certain populations, geographic regions and the healthcare system,
including elective procedures and hospital access.

Research and Development Expenses

To remain a leader in the marketplace, we have historically made and will continue to make substantial investments in new product development and lifecycle management for existing products.

•For PYLARIFY, our development of PYLARIFY resulted in approval by the FDA in May 2021.

•For PYLARIFY AI, our development of PYLARIFY AI resulted in a 510(k) clearance granted by the FDA in July 2021.



•For 1095, we completed an interim analysis of the ARROW Phase 2 study in mCRPC
patients in the fourth quarter of 2021 and are continuing that study without
modifications. We currently expect to complete enrollment in the ARROW Phase 2
study later in 2022.

•For LMI 1195, we plan to initiate a Phase 3 clinical trial for the use of LMI
1195 for the diagnosis and management of neuroblastoma tumors in pediatric and
adult populations. We expect to initiate approximately 20 clinical sites in the
U.S. to enroll approximately 100 patients with known or suspected neuroblastoma.

•We are also exploring additional lifecycle management opportunities for some of our current products, including AZEDRA.



Our investments in these additional clinical activities and lifecycle management
opportunities will increase our operating expenses and impact our results of
operations and cash flow, and we can give no assurances as to whether any of our
clinical development candidates or lifecycle management opportunities will be
successful.

Strategic Initiatives

We continue to seek ways to further expand our portfolio of products and product
candidates and to optimize the value of our current assets, evaluating a number
of different opportunities to collaborate with others or to acquire or
in-license additional products, product candidates, businesses and technologies
to drive our future growth. In particular, we believe that diagnostic and
therapeutic product opportunities in oncology and other strategic areas will be
critical to our future success, and we are committed to further augmenting our
commercial portfolio with revenue opportunities of a similar magnitude as
DEFINITY and PYLARIFY, either through strategic transactions or internal
development.

Oncology

As we continue to pursue expanding our strategic partnerships, our Pharma Services activities and strategic partnerships in oncology include:

•Prostate Cancer - We collaborate with pharmaceutical companies developing therapies and diagnostics in prostate cancer.



•In March 2022, we announced a collaboration with Novartis to include PYLARIFY
in prostate cancer trials with Pluvicto. As part of the agreement with Novartis,
the Company will provide PYLARIFY for the selection of patients with prostate
cancer, and Novartis will provide all PYLARIFY related clinical imaging data to
the Company.

•In January 2022, we announced a collaboration with the Prostate Cancer Clinical
Trial Consortium ("PCCTC"), a premier multicenter clinical research organization
that specializes in prostate cancer research. The intent of the strategic
collaboration is to integrate our AI platform into PCCTC studies to advance the
development and validation of novel AI-enabled biomarkers.

•In September 2021, we entered into a development and commercialization
collaboration with RefleXion Medical, Inc. to evaluate the use of piflufolastat
F 18 to enable real-time therapeutic guidance of biology-guided radiotherapy in
prostate cancer using the RefleXion X1TM platform.
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•Prior to 2021, we also entered into several other separate agreements, including with POINT Biopharma and Regeneron, under which we supply piflufolastat F 18 in connection with their clinical studies, and Curium, under which we licensed exclusive rights to Curium to develop and commercialize piflufolastat F 18 in Europe.



•Immuno-Oncology - In May 2019, we entered into a strategic collaboration and
license agreement with NanoMab, a privately-held biopharmaceutical company
focused on the development of next generation radiopharmaceuticals for cancer
precision medicine.

•Pan-Oncology - In March 2021, we acquired from Ratio Therapeutics LLC
(previously Noria Therapeutics, Inc.) exclusive, worldwide rights to NTI-1309,
an innovative imaging biomarker that targets fibroblast activation protein, an
emerging target with broad potential imaging applicability and use in oncology.
Upon further clinical development, we will assess options to bring NTI-1309 to
market as a diagnostic or potentially a therapeutic product.

Microbubble Franchise



In addition, we continue to expand our microbubble franchise. In April 2021, we
announced a strategic collaboration with Allegheny Health Network ("AHN"), which
will use our microbubbles in combination with AHN's ultrasound-assisted
non-viral gene transfer technology for the development of a proposed treatment
of xerostomia. Xerostomia is a lack of saliva production leading to dry mouth
and has a variety of causes, including radiotherapy and chemotherapy, the
chronic use of drugs and rheumatic and dysmetabolic diseases. Prior to 2021, we
entered into microbubble collaborations with the following parties: (i) Cerevast
Medical, Inc. ("Cerevast"), in which our microbubbles will be used in connection
with Cerevast's ocular ultrasound device to improve blood flow in occluded
retinal veins in the eye; (ii) CarThera SAS, for the use of our microbubbles in
combination with SonoCloud, a proprietary implantable device in development for
the treatment of recurrent glioblastoma; and (iii) Insightec Ltd. ("Insightec"),
which will use our microbubbles in connection with the development of
Insightec's transcranial guided focused ultrasound device for the treatment of
glioblastoma as well as other neurodegenerative conditions.

Generally, our costs in connection with the strategic partnerships relate to the
supply of drug and other ancillary expenses and the benefits can include
possible supply, milestone and royalty payments, additional intellectual
property rights and strategic relationships. We can give no assurance as to if
or when or if any of these collaborations and other new initiatives will be
successful or accretive to earnings.

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Results of Operations

The following is a summary of our consolidated results of operations:



                                                           Three Months Ended
                                                               March 31,
        (in thousands)                      2022           2021        Change $       Change %
        Revenues                         $ 208,880      $ 92,509      $ 116,371        125.8  %
        Cost of goods sold                  79,810        51,479         28,331         55.0  %
        Gross profit                       129,070        41,030         88,040        214.6  %
        Operating expenses
        Sales and marketing                 20,354        14,173          6,181         43.6  %

General and administrative 37,588 16,138 21,450 132.9 %


        Research and development            12,203        10,360         

1,843 17.8 %


        Total operating expenses            70,145        40,671        

29,474 72.5 %


        Gain on sale of assets                   -        15,263       

(15,263)            N/A
        Operating income                    58,925        15,622         43,303        277.2  %
        Interest expense                     1,509         2,718         (1,209)       (44.5) %

        Gain on extinguishment of debt           -          (889)           889             N/A
        Other income                          (485)         (549)            64        (11.7) %
         Income before income taxes         57,901        14,342         43,559        303.7  %
        Income tax expense                  14,939         5,334          9,605        180.1  %
        Net income                       $  42,962      $  9,008      $  33,954        376.9  %


Comparison of the Periods Ended March 31, 2022 and 2021

Revenues



We classify our revenues into three product categories: precision diagnostics,
radiopharmaceutical oncology, and strategic partnerships and other revenue.
Precision diagnostics includes DEFINITY, TechneLite and other imaging diagnostic
products. Radiopharmaceutical oncology consists primarily of PYLARIFY and
AZEDRA. Strategic partnerships and other revenue includes out-licensing
arrangements, which includes $24.0 million of revenue recognized pursuant to the
Novartis Agreement, partnerships that focus on facilitating precision medicine
through the use of biomarkers, digital solutions and radiotherapeutic platforms,
and on our other products, such as RELISTOR.
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Revenues are summarized by product category on a net basis as follows:



                                                                  Three Months Ended
                                                                       March 31,
  (in thousands)                                   2022           2021        Change $       Change %
    DEFINITY                                    $  58,328      $ 55,971      $   2,357           4.2  %
    TechneLite                                     22,605        22,800           (195)         (0.9) %

    Other precision diagnostics                     5,265         6,984    

(1,719) (24.6) %


  Total precision diagnostics                      86,198        85,755            443           0.5  %
    PYLARIFY                                       92,777             -         92,777              N/A
    Other radiopharmaceutical oncology              1,327         1,500           (173)        (11.5) %
  Total radiopharmaceutical oncology               94,104         1,500     

92,604 6,173.6 %

Strategic partnerships and other revenue 28,578 5,254


    23,324         443.9  %
  Total revenues                                $ 208,880      $ 92,509      $ 116,371         125.8  %


The increase in revenues for the three months ended March 31, 2022, as compared
to the prior year period, is primarily driven by the commercial launch of
PYLARIFY and $24.0 million of revenue recognized pursuant to the Novartis
Agreement, and an increase in DEFINITY sales volume period over period due to
improving conditions relative to the COVID-19 pandemic in the prior year. The
increase is offset, in part, by lower sales volumes from other precision
diagnostic products.

Rebates and Allowances



Estimates for rebates and allowances represent our estimated obligations under
contractual arrangements with third parties. Rebate accruals and allowances are
recorded in the same period the related revenue is recognized, resulting in a
reduction to revenue and the establishment of a liability which is included in
accrued expenses. These rebates and allowances result from performance-based
offers that are primarily based on attaining contractually specified sales
volumes and growth, Medicaid rebate programs for our products, administrative
fees of group purchasing organizations and certain distributor related
commissions. The calculation of the accrual for these rebates and allowances is
based on an estimate of the third-party's expected purchases and the resulting
applicable contractual rebate to be earned over a contractual period.

An analysis of the amount of, and change in, reserves is summarized as follows:

                                                            Rebates and
           (in thousands)                                    Allowances
           Balance, January 1, 2022                        $     10,977
           Provision related to current period revenues           6,411
           Adjustments relating to prior period revenues             62
           Payments or credits made during the period            (6,657)
           Balance, March 31, 2022                         $     10,793

Gross Profit



The increase in gross profit for the three months ended March 31, 2022, as
compared to the prior year period, is primarily due to PYLARIFY post commercial
launch sales volume and the $24.0 million pursuant to the Novartis Agreement,
which are partially offset by amortization expense of acquired intangible assets
in the Progenics Acquisition.

Sales and Marketing



Sales and marketing expenses consist primarily of salaries and other related
costs for personnel in field sales, marketing and customer service functions.
Other costs in sales and marketing expenses include the development and printing
of advertising and promotional material, professional services, market research
and sales meetings.

Sales and marketing expenses increased $6.2 million for the three months ended
March 31, 2022 as compared to the prior year period. This was primarily driven
by the commercialization activities for the launch of PYLARIFY and increased
employee-related costs (including the hiring of new employees during 2021 in
connection with the commercialization activities for PYLARIFY), as well as the
reduced level of marketing promotional programs and travel during the prior year
due to the impact of the COVID-19 pandemic.
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General and Administrative



General and administrative expenses consist of salaries and other related costs
for personnel in executive, finance, legal, information technology and human
resource functions. Other costs included in general and administrative expenses
are professional fees for information technology services, external legal fees,
consulting and accounting services as well as bad debt expense, certain facility
and insurance costs, including director and officer liability insurance.

General and administrative expenses increased $21.5 million for the three months
ended March 31, 2022 compared to the prior period. This was primarily driven by
the $18.4 million net expense for the fair value adjustments to the contingent
asset and liabilities in the first quarter of 2022 (an increase of $18.1 million
from the prior year period) (refer to Note 4, "Fair Value of Financial
Instruments", for further details on contingent consideration liabilities,
including CVRs) and increased employee-related costs, offset by
acquisition-related costs associated with the Progenics Acquisition in the prior
year.

Research and Development

Research and development expenses relate primarily to the development of new products to add to our portfolio and costs related to our medical affairs, medical information and regulatory functions.



Research and development expenses increased $1.8 million for the three months
ended March 31, 2022 as compared to the prior year period. This was primarily
driven by the level of activity of the ARROW Phase 2 study of 1095, investment
in medical affairs related to PYLARIFY and higher overall headcount related
costs, offset by the expenses related to filing fees for the PYLARIFY New Drug
Application and preparation activities for the launch of PYLARIFY during the
prior year period.

Interest Expense

Interest expense decreased by approximately $1.2 million for the three months
ended March 31, 2022 as compared to the prior year period due to lower interest
rates on our long-term debt and the repayment of the Royalty-Backed Loan on
March 31, 2021.

Income Tax Expense



The income tax expense recorded for the three months ended March 31, 2022 was
primarily due to pre-tax profits reported during the quarter, partially offset
by the benefit associated with stock compensation deductions.

We regularly assess our ability to realize our deferred tax assets. Assessing
the realizability of deferred tax assets requires significant management
judgment. In determining whether our deferred tax assets are
more-likely-than-not realizable, we evaluate all available positive and negative
evidence, and weigh the objective evidence and expected impact. We continue to
record a valuation allowance against certain of our foreign net deferred tax
assets and a small component of our domestic deferred tax assets.

Our effective tax rate for each reporting period is presented as follows:




                                                  Three Months Ended
                                                      March 31,
                                                2022              2021
                      Effective tax rate       25.8%             37.2%

Our effective tax rate in fiscal 2022 differs from the U.S. statutory rate of 21% principally due to the accrual of state taxes and the impact of non-deductible contingency reserve expense.

The decrease in the effective income tax rate for the three months ended March 31, 2022 is primarily due to the increased amount of stock compensation benefits recorded during that quarter.


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Liquidity and Capital Resources

Cash Flows

The following table provides information regarding our cash flows:



                                                               Three Months Ended
                                                                   March 31,
     (in thousands)                                           2022           2021

     Net cash provided by operating activities             $  10,264      $

9,818

Net cash (used in) provided by investing activities $ (1,390) $

13,303


     Net cash used in financing activities                 $  (2,179)     $

(34,791)

Net Cash Provided by Operating Activities



Net cash provided by operating activities of $10.3 million in the three months
ended March 31, 2022 was primarily comprised of net income adjusted for the net
effect of non-cash items such as the change in fair value of contingent assets
and liabilities of $18.4 million (refer to Note 4, "Fair Value of Financial
Instruments", for further details on contingent consideration liabilities,
including CVRs). The primary working capital sources of cash were the timing of
payments to large vendors. The primary working capital uses of cash were an
increase in trade receivables from timing of sale orders and an increase in
collection period as well as the timing of inventory purchases.

Net cash provided by operating activities of $9.8 million in the three months
ended March 31, 2021 was driven primarily by net income of $9.0 million,
depreciation, amortization and accretion expense of $8.1 million, stock-based
compensation expense of $3.3 million, and deferred income taxes of $4.6 million.
These net sources of cash were offset by a gain on sale of assets of $15.3
million and a net decrease of $1.5 million related to movements in our working
capital accounts during the period. The overall decreases in cash from our
working capital accounts were primarily driven by the payment of prior year
annual bonuses as well as increased receivables from sales offset by a reduction
in inventory due to obsolescence as well as the timing of inventory purchases.

Net Cash (Used in) Provided by Investing Activities



Net cash used in investing activities during the three months ended March 31,
2022 was primarily due to $3.2 million of capital expenditures offset by cash
proceeds of $1.8 million received from the sale of our Puerto Rico subsidiary.

Net cash provided by investing activities during the three months ended March
31, 2021 was primarily due to cash proceeds of $15.8 million received from the
sale of our Puerto Rico subsidiary, which was offset by $2.5 million of capital
expenditures.

Net Cash Used in Financing Activities



Net cash used in financing activities during the three months ended March 31,
2022 is primarily attributable to the payments on long-term debt and other
borrowings of $2.6 million related to the 2019 Term Facility and payments for
minimum statutory tax withholding related to net share settlement of equity
awards of $5.5 million offset by proceeds of $5.4 million from stock option
exercises.

Net cash used in financing activities during the three months ended March 31,
2021 is primarily attributable to the payments on long-term debt and other
borrowings of $35.6 million related to the 2019 Term Facility and Royalty-Backed
Loan, including a voluntary repayment of the outstanding principal on the
Royalty-Backed Loan and payments for minimum statutory tax withholding related
to net share settlement of equity awards of $1.6 million offset by proceeds of
$2.0 million from stock option exercises.

External Sources of Liquidity



In June 2019, we refinanced our 2017 $275.0 million five-year term loan facility
with the 2019 Term Facility. In addition, we replaced our $75.0 million
revolving facility with our current five-year revolving credit facility (the
"2019 Revolving Facility" and together with the 2019 Term Facility, the "2019
Facility"). The terms of the 2019 Term Facility are set forth in the Credit
Agreement, dated as of June 27, 2019, by and among us, the lenders from time to
time party thereto and Wells Fargo Bank, N.A., as administrative agent and
collateral agent, which was amended on June 19, 2020 (as amended, the "2019
Credit Agreement"). We have the right to request an increase to the 2019 Term
Facility or request the establishment of one or more new incremental term loan
facilities, in an aggregate principal amount of up to $100.0 million, plus
additional amounts, in certain circumstances.

We are permitted to voluntarily repay the 2019 Term Loans, in whole or in part,
without premium or penalty. The 2019 Term Facility requires us to make mandatory
prepayments of the outstanding 2019 Term Loans in certain circumstances. The
2019 Term Facility amortizes at 5.0% per year through September 30, 2022 and
7.5% thereafter, until its June 27, 2024 maturity date.
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Under the terms of the 2019 Revolving Facility, the lenders thereunder agreed to
extend credit to us from time to time until June 27, 2024 consisting of
revolving loans in an aggregate principal amount not to exceed $200.0 million at
any time outstanding. The 2019 Revolving Facility includes a $20.0 million
sub-facility for the issuance of letters of credit (the "Letters of Credit").
The 2019 Revolving Facility includes a $10.0 million sub-facility for swingline
loans (the "Swingline Loans"). The Letters of Credit, Swingline Loans and the
borrowings under the 2019 Revolving Facility are expected to be used for working
capital and other general corporate purposes.

Under the 2019 Credit Agreement, loans bear interest at LIBOR plus a spread that
ranges from 1.50% to 3.00% or the Base Rate (as defined in the 2019 Credit
Agreement) plus a spread that ranges from 0.50% to 2.00%, and the commitment fee
ranges from 0.15% to 0.40%, in each case based on our Total Net Leverage Ratio
(as defined in the 2019 Credit Agreement).

The maximum total net leverage ratio and interest coverage ratio permitted by
the financial covenant in our 2019 Credit Agreement is displayed in the table
below:

                                2019 Credit Agreement
                          Period            Total Net Leverage Ratio
                Q3 2021 and thereafter                   3.50 to 1.00

                          Period            Interest Coverage Ratio
                Q2 2021 and thereafter                   3.00 to 1.00

As of March 31, 2022, we were in compliance with all financial and other covenants under the 2019 Credit Agreement.

Please refer to our Form 10-K for fiscal year ended December 31, 2021 for further details on the 2019 Facility and the 2019 Credit Agreement.



On June 19, 2020, as a result of the Progenics Acquisition, we assumed Progenics
outstanding debt as of such date in the amount of $40.2 million. On November 4,
2016, Progenics, through its wholly-owned subsidiary, MNTX Royalties Sub LLC,
entered into the Royalty-Backed Loan. The Royalty-Backed Loan bore interest at
an annual rate of 9.5% and was scheduled to mature on June 30, 2025.

On March 31, 2021, we voluntarily repaid in full the entire outstanding principal on the Royalty-Backed Loan in the amount of $30.9 million, which included a prepayment amount of $0.5 million, and terminated the agreement.



Our ability to fund our future capital needs will be affected by our ability to
continue to generate cash from operations and may be affected by our ability to
access the capital markets, money markets or other sources of funding, as well
as the capacity and terms of our financing arrangements.

We may from time to time repurchase or otherwise retire our debt and take other
steps to reduce our debt or otherwise improve our balance sheet. These actions
may include prepayments of our term loans or other retirements or refinancing of
outstanding debt, privately negotiated transactions or otherwise. The amount of
debt that may be retired, if any, could be material and would be decided at the
sole discretion of our Board of Directors and will depend on market conditions,
our cash position and other considerations.

Funding Requirements

Our future capital requirements will depend on many factors, including:



•The level of product sales and the pricing environment of our currently
marketed products, particularly DEFINITY and PYLARIFY, as well as any additional
products that we may market in the future, including decreased product sales
resulting from the COVID-19 pandemic;

•Revenue mix shifts and associated volume and selling price changes that could result from contractual status changes with key customers and additional competition;

•The continued costs of the ongoing commercialization of PYLARIFY;

•The costs of acquiring or in-licensing, developing, obtaining regulatory approval for, and commercializing, new products, businesses or technologies, together with the costs of pursuing opportunities that are not eventually consummated;

•Our investment in the further clinical development and commercialization of products and development candidates, including AZEDRA, 1095, and LMI 1195;


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•The costs of investing in our facilities, equipment and technology infrastructure;

•The costs and timing of establishing or amending manufacturing and supply arrangements for commercial supplies of our products and raw materials and components;



•Our ability to have product manufactured and released from manufacturing sites
in a timely manner in the future, or to manufacture products at our in-house
manufacturing facilities in amounts sufficient to meet our supply needs;

•The costs of further commercialization of our existing products, particularly
in international markets, including product marketing, sales and distribution
and whether we obtain local partners to help share such commercialization costs;

•The extent to which we choose to establish collaboration, co-promotion, distribution or other similar arrangements for our marketed products;

•The legal costs relating to maintaining, expanding and enforcing our intellectual property portfolio, pursuing insurance or other claims and defending against product liability, regulatory compliance, intellectual property or other claims;

•The cost of interest on any additional borrowings which we may incur under our financing arrangements; and

•The impact of sustained inflation on our costs of goods sold and operating expenses.

We are vulnerable to future supply chain shortages, disruptions or delays, especially for our single sourced products, raw materials and components. Disruption in our financial performance could also occur if we experience significant adverse changes in product or customer mix, broad economic downturns, sustained inflation, adverse industry or company conditions or catastrophic external events, including pandemics such as COVID-19, natural disasters and political or military conflict. If we experience one or more of these events in the future, we may be required to further implement expense reductions, such as a delay or elimination of discretionary spending in all functional areas, as well as scaling back select operating and strategic initiatives.



If our capital resources become insufficient to meet our future capital
requirements, we would need to finance our cash needs through public or private
equity offerings, debt financings, assets securitizations, sale-leasebacks or
other financing or strategic alternatives, to the extent such transactions are
permissible under the covenants of our 2019 Credit Agreement. Additional equity
or debt financing, or other transactions, may not be available on acceptable
terms, if at all. If any of these transactions require an amendment or waiver
under the covenants in our 2019 Credit Agreement, which could result in
additional expenses associated with obtaining the amendment or waiver, we will
seek to obtain such a waiver to remain in compliance with those covenants.
However, we cannot be assured that such an amendment or waiver would be granted,
or that additional capital will be available on acceptable terms, if at all.

At March 31, 2022, our only current committed external source of funds is our
borrowing availability under our 2019 Revolving Facility. We had $105.4 million
of cash and cash equivalents at March 31, 2022. Our 2019 Facility, as amended,
contains a number of affirmative, negative, reporting and financial covenants,
in each case subject to certain exceptions and materiality thresholds.
Incremental borrowings under the 2019 Revolving Facility, as amended, may affect
our ability to comply with the covenants in the 2019 Facility, as amended,
including the financial covenants restricting consolidated net leverage and
interest coverage. Accordingly, we may be limited in utilizing the full amount
of our 2019 Revolving Facility, as amended, as a source of liquidity.

The CVRs we issued in the Progenics Acquisition entitle holders thereof to
future cash payments of 40% of PYLARIFY net sales over (i) $100.0 million in
2022 and (ii) $150.0 million in 2023, which, if payable, we currently intend to
fund from our then-available cash. In no event will our aggregate payments under
the CVRs, together with any other non-stock consideration treated as paid in
connection with the Progenics Acquisition, exceed 19.9% (which we currently
estimate could be approximately $100.0 million) of the total consideration we
pay in the Progenics Acquisition. Refer to Note 4, "Fair Value of Financial
Instruments", for further details on contingent consideration liabilities.

Based on our current operating plans, we believe our balance of cash and cash
equivalents, which totaled $105.4 million as of March 31, 2022, along with cash
generated by ongoing operations and continued access to our 2019 Revolving
Facility, will be sufficient to satisfy our cash requirements over the next
twelve months and beyond.

Critical Accounting Policies and Estimates



The discussion and analysis of our financial condition and results of operations
are based on our condensed consolidated financial statements, which have been
prepared in accordance with U.S. GAAP. The preparation of these condensed
consolidated financial statements requires us to make estimates and judgments
that affect our reported assets and liabilities, revenues and expenses, and
other financial information. Actual results may differ materially from these
estimates under different assumptions and conditions. In addition, our reported
financial condition and results of operations could vary due to a change in the
application of a particular accounting standard.
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There have been no other significant changes to our critical accounting policies
or in the underlying accounting assumptions and estimates used in such policies
in the three months ended March 31, 2022. For further information, refer to our
summary of significant accounting policies and estimates in our Annual Report on
Form 10-K filed for the year ended December 31, 2021.

Off-Balance Sheet Arrangements



We are required to provide the Massachusetts Department of Public Health and New
Jersey Department of Environmental Protection financial assurance demonstrating
our ability to fund the decommissioning of our North Billerica, Massachusetts
and Somerset, New Jersey production facilities upon closure, though we do not
intend to close the facilities. We have provided this financial assurance in the
form of a $28.2 million surety bond.

Since inception, we have not engaged in any other off-balance sheet arrangements, including structured finance, special purpose entities or variable interest entities.

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