Lantheus misled investors about blockbuster imaging agent, class action lawsuit claims
Radiopharmaceutical firm Lantheus misled investors about the market position of its blockbuster imaging agent Pylarify, attorneys claim in a proposed class action lawsuit filed Tuesday.
Approved by the U.S. Food and Drug Administration in 2021, the product is a targeted PET (positron emission tomography) imaging agent for pinpointing suspected metastasis or recurrence of prostate cancer. Pylarify has seen considerable interest since, logging sales of over $1 billion last year, according to the publicly traded company.
However, investors contend between February and August, Lantheus failed to disclose that a 2025 price increase might erode the drug’s position and create an opportunity for competition to flourish.
Plaintiffs believe this threatened the product’s price point, revenue and growth potential.
“Defendants routinely instilled confidence in their…investors by repeatedly claiming Pylarify’s alleged market leadership and premium price point would allow the company to achieve its guided growth, despite competitive pressures,” attorneys charge in the complaint, filed in the U.S. District Court for the Southern District of New York on Sept. 9. “Defendants provided these overwhelmingly positive statements to investors while, at the same time, disseminating materially false and misleading statements and/or concealing material adverse facts concerning the true state of Pylarify’s competitive position.”
Investors began to question these statements when Lantheus reported first quarter earnings results in May. Pylarify’s performance was falling short of expectations, with decreasing sales due to “temporal competitive disruption,” the complaint claims. Lantheus reportedly reduced full year projections due to this shortfall, with investors reacting negatively. Company shares declined “dramatically,” from a closing market price of $104.84 per share on May 6 down to $80.49 by the next day, a 23.2% dip.
Attorneys further charge Lantheus “continued to mislead investors” about the success of Pylarify, assuring the competitive disruption was temporary. However, the “full truth finally emerged” by Aug. 6 when the company again announced disappointing results. It significantly reduced growth expectations for Pylarify, which had fallen 8.3% year over year, and slashed 2025 projections further. The price of its stock again plummeted, from $72.83 before the earnings report, down 28.8% to $51.87 by Aug. 6.
Plaintiff attorneys believe there are hundreds or potentially thousands of individuals impacted by these actions. They’re seeking certification of the class-action lawsuit and want a jury trial to determine damages sustained by investors, also asking for pre- and post-judgement interest, attorney fees and other costs.
Lantheus had not yet filed a response to the lawsuit as of Wednesday. Several law firms put out news announcement following the filing, seeking impacted investors to join the complaint.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.