Lantheus Holdings stock down 8% on CMS reimbursement decision, analysts see 72.43% upside potential.

Lantheus Holdings (LNTH) stock fell 8% after CMS maintained current reimbursement method for diagnostic radiopharmaceuticals. Analysts are positive, with a potential 72.43% upside, and GuruFocus values suggest a 46.82% potential rise in stock price. The company's key product, Plarify, has seen revenue expectations shifted.

Lantheus Holdings (NASDAQ:LNTH) stock experienced a significant drop of 8% on Wednesday, July 2, 2025, following the Centers for Medicare & Medicaid Services (CMS) proposal to maintain the current reimbursement method for diagnostic radiopharmaceuticals [1]. The CMS proposal, released on the same day, has been criticized for not adequately addressing the high costs of these pharmaceuticals, which have been a significant concern for healthcare providers and patients alike.

The proposal maintains the current reimbursement method, which is based on the mean unit cost, rather than the average selling price. This decision has left investors concerned about the long-term impact on Lantheus's financial performance, given the company's reliance on high-cost diagnostic radiopharmaceuticals. The CMS proposal also encourages drug sponsors to submit selling price data, which could potentially lead to future changes in reimbursement methods [1].

Analysts remain positive about Lantheus's outlook despite the CMS proposal. William Blair, an analyst at Cantor Fitzgerald, believes that Lantheus shareholders will be disappointed by the CMS's proposal but expects the company's management to advocate for market reform. Andy Hsieh, another analyst, noted that while the changes may affect Pylarify's growth in the short term, the company's leading market position is expected to remain intact [1].

The stock price drop comes amid ongoing challenges in securing long-term contracts with partners, which may limit Pylarify's growth in the short term. However, analysts predict that stronger growth could pick up in the second half of the year. Additionally, the company's profitability from its Alzheimer's portfolio depends heavily on the performance of its commercial products [1].

In premarket trading, Lantheus shares were down 3% to $79.00 following the announcement of the CMS proposal [2]. Despite the recent setback, the company's key product, Pylarify, continues to be a significant driver of its revenue. The company's commitment to advocating for market reform and its focus on growth prospects suggest that Lantheus is well-positioned to navigate the challenges posed by the CMS proposal.

References:

[1] https://www.inkl.com/news/why-is-lantheus-stock-trading-lower-on-wednesday
[2] https://www.ainvest.com/news/cms-proposal-disappoints-lantheus-investors-william-blair-2507/