Can Mid-Cap Lantheus Continue Its Outperformance in 2022?

Mid cap Lantheus Holdings (NASDAQ: LNTH) has seen sales growth in recent quarters, fueled by a new product called Pylarify, which helps medical professionals detect prostate cancer through imaging tests.



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Lantheus went public in June 2015, which means it’s new enough to be in that zone where stocks often make big price gains. Since its IPO, it has an excellent history of returns. The ongoing price increases for the time frame are as follows:

  • One month: 8.76%
  • Three months: 5.51%
  • Year to date: 157.36%
  • A year: 221.31%
  • Three years: 56.33%
  • Five years: 32.44%

That track record has drawn professional investors to Lantheus, as you can see with MarketBeat’s institutional ownership data.

Lantheus has been in an orderly correction since mid-September. It is holding 23% above its 200-day moving average and was trading less than a percentage point below its 50-day line on Thursday.

With a market cap of $5.25 billion, Lantheus is categorized as a mid-cap. It is part of the S&P 400 midcap index, as tracked by the SPDR S&P MidCap 400 ETF (NYSEARCA: MDY). That index is down 18.32% so far in 2022. You can easily see the huge difference between the index and Lantheus’ performance.

Lantheus made a name for itself with products for the diagnosis and treatment of cancer and cardiovascular diseases. It has been profitable every year since its IPO. MarketBeat earnings and earnings data show a fairly consistent range of tallying earnings and earnings.

Earnings growth rates have been somewhat erratic, but that’s not uncommon in the medical sector, where a range of variables can affect year-over-year sales increases. Revenues have been increasing every year, except in 2020, when many electives were postponed due to COVID-19 restrictions. In 2020, earnings fell nearly 60% to $0.47 per share. That recovered slightly last year to $0.49 per share.

But the company has moved on from the era of declines and slow growth.
Can Mid-Cap Lantheus Continue Its Outperformance in 2022?

Pylarify sales drive price gains

The release of Pylarify in June 2021 triggered another series of price increases. For example, the stock rose 11% in November last year following the company’s quarterly report. Sales only increased by 15%, but profits doubled.

Over the next three quarters, sales grew between 38% and 126%, while profits rose by three or four digits.

In the most recent earnings report of August, Pylarify accounted for a whopping 58% of total revenue.

In the press release, CEO Mary Anne Heino said: “Our record-breaking financial results for the first half of 2022 reflect the strength of our strategy and ability to drive long-term growth, Pylarify, which is firmly established as the PSMA PET imaging agent to choice. It continues to drive our growth and positively impact the U.S. prostate cancer community.”
Lantheus will report its third quarter on Nov. 3, with analysts expecting net income of $0.75 per share on revenue of $229.55 million. Both would be significant gains from the previous quarter.

Smaller medical supplies lead the way

Within the medical products subsector, Lantheus, along with small-cap TransMedics (NASDAQ: TMDX), are the top price performers in the past 12 months. TransMedics develops and sells systems for preserving donor hearts prior to transplant surgery. His systems include a portable unit that keeps the donor heart warm and also supplies oxygen and nutrients.

Medtronic (NYSE:MDT) and Stryker (NYSE: SYK) both underperform as large medical products companies better known to S&P 500 investors as index components. Stryker reports profit on October 31. Wall Street expects earnings of $2.26 per share on revenue of $4.49 billion, which would be a treat for investors as both would mean year-over-year gains.

As a whole, the medical products industry has delivered a mediocre performance within the broader medical sector. The biotech subsector, while notoriously volatile, is currently the best performing, with stocks as Catalyst Pharmaceuticals (NASDAQ: CPRS) strong price action.

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