Brian Markison: Yes. I think I’ll just add to that a little bit. Their lead program in neuroendocrine tumors has us very interested. And we think it has the potential to be best-in-class, and that’s one that we’re very close to as well. So we like their platform. We like the targets they have and we especially like their Lead program.
Operator: Thank you. Our next question comes from Larry Solow of CJS Securities. Your line is open.
Larry Solow : Great. Thank you and Mary Anne, congratulations to you as well. It’s been a good six-year run for CJ myself, so.
Mary Anne Heino : I know. Thanks, Larry.
Larry Solow : Absolutely. Brian, welcome. We look forward to working with you. Just a question for both of my questions been answered. But a question for you. It looks like if I do the math on the guidance sort of at the midpoint of your revenue guidance kind of slow that down to the midpoint of EPS guidance. It looks like margins up modestly with 50 to 100 bps on the operating line, about right? And where is that going to shake out? Is it a little bit more on the gross margin side? Or do you get a little leverage? And then part two of that question is, are you building in some increased expenses or material increases for PNT2002 this year? Or is that more of a weighting it? Thanks.
Bob Marshall : All right. Thanks, Larry. That’s a great set of questions. Margins should be relatively flat, maybe slightly improved. But again, I think if you peel out the impact of the RELISTOR royalty out of the prior year, that’s about an 80 basis point headwind. So to remain flat is actually an increase. And you’re right, that is coming from product mix in terms of PYLARIFY and DEFINITY as well as some of the other cost containment factors being able to manufacture DEFINITY on campus that’s contributing and helping. And yes, you are seeing an increase in overall spend, but I can tell you that we don’t have spend for 2002 embedded in our expenses. And mainly, that’s because we want to make sure that we’re phase-gating. So as Brian indicated earlier in Paul’s remarks, we’re waiting for the data to mature before we put further investment.
And when that data does read out, we will make or not make investment as appropriate, and we’ll communicate that to the Street. I think another driver is the byproduct of having a lot of cash on the balance sheet and there is significant. And when I look through the consensus models, I did note that it’s sort of underappreciated the current level of interest rates and the forward curves that we see. So with this level of cash, it does generate that level of interest income that I noted in my scripted remarks around $36 million. Tax team does a good time — it does a good job. So as you kind of work down through the P&L, that’s what’s creating our opportunity to continue to expand and drive profitability for the company, while taking the opportunity to invest appropriately across many aspects of the organization, whether that be all the things that Paul talked about in terms of PYLARIFY protection and mitigation strategies as well as market access, market research, business development activities, which can be consuming and expensive.
But also the things that we’ve done with our ERP. The company did a fantastic job putting that in place. But it does come with a cost. But at the same time, those costs will ultimately drive workflow efficiencies that I think will continue to provide opportunities to invest in other aspects of our business, much like our R&D pipeline.
Operator: Thank you. Our next question is coming from Kemp Dolliver of Brookline Capital Markets. Your line is open.
Kemp Dolliver: Thank you and good morning. My question relates to PNT2003 and the market potential data. Could you just speak quickly about what drives the increases in the TAM between 2024 and 2029 because point you had indicated both a traditional generic strategy and then ultimately, an NDA strategy for different indications in the GetNet space. So if you — or the net space. Could you just speak to that in a little more detail?
Paul Blanchfield: Yes, I’m happy to take that. So as we noted in our prepared remarks, we did submit an ANDA for PNT2003, which has been accepted by the FDA. And based on available public information, we believe we are the first applicant. The market we estimate currently has an addressable market of about $1 billion in 2024, and that’s actually on one of the prepared slides. And that’s about 4,000-plus patients with a real focus on metastatic second-line within GetNet. As we’ve seen from recent trial results in potential expanded use of the somatostatin receptor targeted RLT, we believe there’s an opportunity for the overall market to grow specifically in first line as well as into other nets as well as Phelan Para. And so when we look at what that potential is from a utilization.
It won’t necessarily change the proposed labels. This is more likely updates to guidelines, which would expand the potential use of this asset class into those, and that’s really driving much of the expansion. And then as you get out in five years, there’s really just continued expansion of overall incidence and prevalence. And fortunately, more men and women continue to be diagnosed and present with these. And so overall, we view this as a large market opportunity with multiple room for additional players in luting PNT2003, and we’ll certainly be talking more about this opportunity and our go-to-market strategy as we get closer to 2026 and a potential launch.
Operator: Thank you. Our next question will be coming from David Turkaly of JMP Securities. Your line is open.
David Turkaly : Good morning. You mentioned the ferocity of some of your long-term partnerships. So I guess I just wanted to ask can you sign these things, can they be exclusive? And can they be multiyear, like can you have contracts that go through 2025 and 2026. I’m just trying to get a sense of that word and then sort of what you can do with these customers to potentially maybe lack some of them up.
Mary Anne Heino : I’m just going to start by clarifying. We said we were fiercely willing to fiercely defend our business, but we would not describe our partnerships as ferocious. They’re very amiable and they’re two-way, but I’ll let Paul speak more to what our strategy is there.
Paul Blanchfield: No. I appreciate the question. Naturally, I’m not going to go into significant detail given the competitive nature of it. But yes, we can’t enter into long-term contracts by that, I mean, multiyear with key customers to ensure that PYLARIFY remains their preferred choice of agent I’ll wait until over time to discuss more about what those specifically mean. But we have an incredibly experienced commercial team, I think, which includes market access, national accounts and overall sales team that is very well experienced in working with commercial customers that we know deeply and have built long-term relationships over the last number of years. And these strategic partnerships help codify that relationship and ensure that we remain solid partners together for years to come.
Mary Anne Heino : I’ll just add also you made a reference to whether these partnerships were exclusive, and it is very atypical in the radiopharmaceutical space to ask for exclusivity just because of the supply chain and supply chain considerations for these products, our strategy would be to retain PYLARIFY’s role as the most chosen and market-leading choice for PSMA-based imaging.
Operator: Thank you. Our final question of the day will be from Richard Newitter of Truist Securities. Your line is open.
Richard Newitter : Hi. Thanks for taking the follow-up. I just had one additional one. On transitional past due, one of your competitors has talked publicly about product life cycle management, possibly even restarting the transitional pass-due clock for a next-generation type diagnostic offering if it can get approved through the FDA. I’m just curious if you have any views on this kind of strategy? Is there anything you have in the pipeline beyond indication expansion, I appreciate the MIRA study and intermediate favorable indication expansion, and that sounds promising, but more specific to the product life cycle management concept? Thank you.
Paul Blanchfield: Yes. No. I understand the question, Rich, appreciate it. We’re not going to comment publicly on what our competitors and of other public companies have said. As you noted, we are focused on life cycle management with PYLARIFY, both the MIRROR study as well as assessing its use in non-prostate cancer because PSMA is expressed by other solid tumors. For pass-through, our primary focus is really to work with customers to ensure that we remain the preferred agent of choice and then naturally to engage with CMS to support legislation as well as should CMS to support regulation and then work with the FIND Act specifically supporting legislation. And so I’m not going to comment publicly on what competitors have stated about their life cycle management.
We believe PYLARIFY is the clear market leader. We believe the market is large and continues to grow, and we are focused on ensuring it remains accessible to patients that PYLARIFY continues to grow and then it remains the clear market.
Operator: Thank you. Ladies and gentlemen, there are no further questions at this time. Thank you for participating in today’s conference. This concludes the program. You may disconnect, and have a wonderful day.
