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Lantheus Holdings Inc (LNTH -0.01%)
Q3Â 2020 Earnings Call
Nov 5, 2020, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning ladies and gentlemen. Welcome to the Lantheus Holdings Third Quarter 2020 Earnings Conference Call. This is your operator for today's call. Please note that all lines have been placed on mute to prevent any background noise. [Operator Instructions] A replay of the audio webcast will be available in the Investors section of the company's website, approximately two hours after the completion of the call and will be archived for 30 days.
I'd now like to turn the call over to your host for today, Mark Kinarney, Senior Director of Investor Relations. Mark, the floor is yours.
Mark Kinarney -- Senior Director of Investor Relations
Thank you and good morning. Welcome to Lantheus Holdings third Quarter 2020 earnings conference call. This morning we issued a press release, which was furnished to the Securities and Exchange Commission under Form 8-K reporting our third quarter 2020 results. You can find the results in the Investors section of our website at www.lantheus.com. For those of you not on the webcast, you can find the slide presentation in the Investors section of our website under the Presentations tab. Before we get started, I'd like to remind you that our comments during the call will include forward-looking statements. Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. In particular, the continuing impact of COVID-19 on our business results and outlook is a best estimate based on the information available as of today's date.
Please note that we assume no obligation to update these forward-looking statements except as required by applicable law even if actual results or future expectations change materially. Please refer to our SEC filings for a detailed discussion of these risks and uncertainties. Also discussions during this call will include certain non-GAAP financial measures. Reconciliation of these measures to the most directly comparable GAAP financial measures is also included in the Investors section of our website. With me on today's call are Mary Anne Heino, our President, and CEO; and Bob Marshall, our Chief Financial Officer. Mary Anne will begin with some introductory remarks and a business update and then Bob will cover our financial results. Mary Anne will conclude the call with closing comments and then we'll open the call for Q&A.
With that, it's my pleasure to now turn the call over to Mary Anne.
Mary Anne Heino -- President and Chief Executive Officer
Thank you, Mark. And good morning everyone. I hope this finds each of you and your families safe and well as you listen to this call. As we continue to navigate through the COVID-19 pandemic, the health and safety of our employees, patients and other partners in the healthcare community remain our top priority. The long-term strategy for Lantheus is one of sustainable growth. And I am pleased to share with you today the progress we have made across the business in those areas we feel offer significant opportunities for growth. Today I will update you on our progress within our prostate cancer portfolio, our microbubble franchise, and in our pharma services business. I will begin with PyL, the lead product in our prostate cancer portfolio. In late September, we filed our NDA with the FDA for PyL, our prostate-specific membrane antigen, or PSMA PET imaging agents. In our NDA we included a request for priority review which if granted could shorten the FDA's review to six months from the time of acceptance versus the standard we used time of 10 months. We project we will receive notification from the FDA confirming acceptance of the filing for substantive review by early December. I would like to recognize the PyL NDA team for their unwavering commitment to submitting what we feel is an excellent and comprehensive filings. Despite the disruption of the pandemic, our teams continue to come together virtually as a highly effective company. We are very excited to have PyL under review for approval and potentially available to both physicians and patients who we feel will benefit from it. Prostate cancer is the second leading cause of death in men today.
Each year in the United States there are approximately 192,000 new cases of prostate cancer diagnosed and more than 3.2 million men are currently impacted by the disease. We currently estimate that there is a potential need for up to 130,000 PSMA targeted images per year in the United States, which is based on the incidence of prostate cancer biochemical recurrence in approximately 50,000 men per year in addition to ongoing imaging in the prevalent population. Needless to say, this presents a large addressable market with an estimated market valuation of approximately $0.5 billion. If approved PyL will be the first commercial F 18 labeled PSMA targeted PET diagnostic agent. Our clinical program included two perspective, well-designed Phase III studies vetted by the FDA to establish the safety and diagnostic performance of PyL imaging across the disease continuum of prostate cancer with verified data pathology or composite truth standard. PyL has been administered in approximately 3,500 patients with prostate cancer globally, including the two Progenics sponsored Phase III studies, investigator-sponsored studies, and clinical use reported in the literature and has an attractive safety profile as demonstrated throughout clinical use. In July 2020 at the Society of Nuclear Medicine and Molecular Imaging Meeting or SNMMI, we unveiled our PSMA imaging awareness campaign, which was then launched online in September. This campaign focuses on four key aspects of PSMA imaging; the role of PET imaging as a leading technology, the benefits of PSMA as a target, the advantages of F 18 as the isotope-based tracer, and finally, the additional value artificial intelligence software tools can add to the clinician. Given that PyL may be the first F 18 commercial diagnostic agent approved I'll spend a few minutes discussing how PyL is produced and distributed, as well as what we believe are inherent advantages of the F 18 isotope in this imaging agent. PyL is a nuclear PET imaging agents containing the Florine 18 isotope which is commonly abbreviated as F 18.
At a PET manufacturing facility or PMS F 18 is produced on a cyclotron. F 18 is then introduced into a synthesis box where it reacts with the PyL precursor to form the PyL drug substance which is then purified and formulated to produce a bulk finished product vial. Individual patient ready doses are then withdrawn from this bulk finished product vial and delivered to PET imaging centers which are usually part of a hospital's nuclear medicine department. This batch process approach to the production of PyL produces a large quantity of bulk finished product which can eventually be 30 to 40 doses or more per batch depending on size of cyclotron demand and proximity to end-user customers. This is important given the prevalence of prostate cancer and the volume of imaging studies performed at larger treatment centers, especially when compared to the relatively few number of doses that can be produced from a generator driven process. In addition to the advantages of batch processing we believe there are a number of other advantages of F 18, making it the ideal isotope for PSMA targeted imaging agent. For example, F 18 has a 110-minute half-life, which means doses can be easily transported to hospitals, within a two to three hour radius of the production site.
Moreover, given its half-life, F 18 offers more flexibility as to when a patient can be imaged after the dose has been prepared. This is important to an imaging center as they schedule multiple different types of PET procedures throughout the day. Further, we believe F 18 produces images with high-resolution when compared to other radioisotopes used in PET prostate cancer imaging. F 18 has a higher positron yield, which improves contrast resolution and decreases image noise. Now turning to our commercial portfolio. In August, we announced that the FDA approved our sNDA for VIALMIXRFID, a next-generation activation device designed specifically for DEFINITY. As a reminder DEFINITY is the only image-enhancing agent approved with a dedicated proprietary activation device for preparation before administration. Our proprietary device VIALMIX is used for that process. Our newly approved VIALMIXRFID incorporates two advanced features that provide important customer benefits. First VIALMIXRFID incorporates RFID tag technology, allowing for product tracing of each vial to the specific patient in which it was used. This is a patient safety feature already present in unit drug dosing in hospitals and we are pleased to be able to offer the same patient safety benefit for DEFINITY. Second, the RFID tag allows the VIALMIX to differentiate between DEFINITYand DEFINITY room temperature or RT. DEFINITY RT is a modified formulation of DEFINITY that allows for room temperature storage. It is currently under FDA review. Assuming FDA approval DEFINITY RT reconstitution parameters of shake time and shake speed will be different than those that are currently used for the DEFINITY formulation.
The VIALMIXRFID will differentiate between the two product formulations and apply the different reconstitution of parameters appropriately. This means the introduction of DEFINITY RT will be seamless to our customers and they will only require one VIALMIXRFID device for all their DEFINITY needs. A U.S. issued patent on the use of the new VIALMIXRFID with an expiration date of 2037 has been listed in the Orange Book and additional patent applications have been submitted in major markets throughout the world. We continue to see steady recovery throughout the quarter, primarily driven by DEFINITY, so we do see differences geographically due to COVID-19. Bob will speak specifically to the trends we are seeing in DEFINITY growth over prior periods. While the recovery we've seen in DEFINITY has not been matched by our nuclear portfolio overall, our TechneLite business did perform relatively well during the quarter, posting a 13.6% sequential growth rate. Our Xenon business however continues to be negatively impacted by limited utilization of in-hospital respiratory inhalation products as a result of COVID-19 transmission concerns and this market may not return to pre-COVID-19 levels until well into 2021. Regarding AZEDRA we are encouraged by its continued utilization, despite ongoing hospital access limitation to company representatives, and have been maintaining volume with our current centers of excellence network.
Going forward, our plan includes further enhancements to our commercial capabilities to drive awareness and we may also consider expanding our commercial footprints, once institutions reopen access to our sales team. We believe the market opportunity exists for the only FDA-approved therapy for pheochromocytoma and paraganglioma, and we are committed to ensuring physicians and patients are aware of and have access to this important treatment. In the meantime, we continue to make significant progress in optimizing our iodine manufacturing network to ensure sufficient supply at potentially a more favorable cost. This plan involves work at our Somerset facility, as well as with the external partners we use for additional supply. For example, as part of our integrated iodine strategy, we have been able to leverage relationships, most notably with IRE to more directly manage our I-131 supply chain. Our goal is to ensure adequate capacity to satisfy our projected commercial and clinical needs for AZEDRA as well as to support our 1095 clinical development program. Now I will discuss our progress in our pharma services digital and partnerships business. Within the last few months, we have signed clinical supply agreements with both Regeneron and Bayer to include PyL in their clinical trials for prostate cancer. PyL will be used to assess PSMA expression levels at different times during their respective studies. We believe these are illustrative of the value pharmaceutical companies see in PyL as a next-generation diagnostic imaging agent and represents a potential growth opportunity beyond the large market I discussed earlier. We also continue to identify growth opportunities in our microbubble franchise.
Last week, we announced a strategic collaboration which we will use in which we will use our microbubbles in combination with Insightec's Investigational MR-guided Focused Ultrasound platform to evaluate treatment of glioblastoma, one of the most aggressive malignant primary brain tumors affecting over three Americans per 100,000 and presenting a very low five-year survival rate. This partnership directly aligns with the key Lantheus growth strategy of pursuing new applications for our microbubble platform as well as our expansion into oncology. In the digital solutions area of our pharma services business in September 2020, the FDA granted 510(k) clearance for the use of our aBSI digital solution on the GE Precision Healthcare platform. aBSI is our stand-alone artificial intelligence or AI application approved by the FDA for the evaluation of patients with bone metastases from prostate cancer. aBSI works by quantifying the selective lesions identifies on a bone scan image. Bone scans are the second most broadly used radiopharmaceutical diagnostic imaging study performed in the U.S. The AI application provides a bone scan index value as adjunct information related to the progression of disease supporting more informed clinical decisions. We are excited about the potential for this AI application in the overall treatment paradigm of prostate cancer and the complementary role it plays to our prostate cancer product pipeline, an important growth area for the company.
Lastly, regarding 1095, our Phase II PSMA targeted clinical development candidate for the treatment of metastatic prostate cancer. In October we resume patient enrollment for our ARROW trial in both the U.S. and Canada. As a reminder, during the second quarter, Progenics had paused new enrollment to minimize the risk to subjects and healthcare providers during the pandemic. Trial resumption is sight dependent as each clinical site individually makes a determination as to when to allow new patient enrollment in the trial, given the current status of infection rates and other considerations at the clinical site.
With that I'll conclude my update on key commercial and strategic programs and turn the call over to Bob. Bob?
Robert J. Marshall -- Chief Financial Officer and Treasurer
Thank you, Mary Anne, and good morning everyone. I will focus my discussion on adjusted results unless otherwise noted. Revenue for the third quarter was $88.5 million, an increase of 3.2% in the prior-year quarter, and a decrease of 3.6% organically. We continue to see progress across our portfolio from June through the end of the quarter with revenue up by 34.1% over Q2. Sales of DEFINITY in the third quarter were $55.4 million or 5.8% higher as compared to the prior-year quarter and 37.3% higher sequentially over the second quarter. DEFINITY sustained volume strength during the quarter and when you analyze this year's performance to last year's Q3 growth rate of 19.7%. The two-year stack clearly average growth rate remains in line with low to mid-teens growth expectations. TechneLite revenue was $21.5 million, down 1.2% from the prior-year quarter, similar to DEFINITY sequential improvement TechneLite grew at a positive but lesser pace at 13.6% sequentially. Other nuclear inclusive of newly acquired assets increased 10.5% to $17.2 million. Rebates and allowances totaled $5.5 million. Gross profit margin for the third quarter was 47.4%, a decrease of 225 basis points from the third quarter of 2019. The decrease was due largely to unfavorable contribution on lower Xenon revenue year-over-year due to a relatively fixed cost of raw materials.
Additionally, ongoing Moly logistics cost and the necessary added decay purchases to support those logistics also compared unfavorably year-over-year. Operating expenses were 39.8% of net revenue, driven primarily by ongoing investment to advance pipeline products including PyL, notably the FDA filing fee paid in the quarter as well as costs associated with a larger employee base in our first full quarter as a combined company. Operating expenses were $15.6 million higher than Q2 2020, modestly lower than the anticipated increase associated with the comparative spend from Progenics, as I noted on our last earnings call. During the quarter and within these numbers, we were able to realize the targeted run-rate savings of $4.6 million announced on our prior earnings call, in addition to certain of those cost containment initiatives we implemented earlier this year. Operating profit for the quarter was $6.8 million or a decrease of 61.5% from the same period prior year. Adjustments in the quarter totaled $11.6 million before taxes. Of this amount, $4 million is associated with non-cash stock and incentive plans, $4.8 million related to acquired intangible amortization, and $800,000 related to changes in fair value associated with contingent consideration. The balance of $2 million is tied to ongoing integration efforts in other one-time expenses related to the Progenics acquisition. Our effective tax rate was 41.9% in the quarter.
The elevated rate is driven by fixed interest accrual associated with our uncertain tax positions for which we are indemnified. We need to call, taken together with certain levels of profitability, the results impact the underlying effective tax rate. The resulting reported net income for the third quarter was a loss of $6.4 million and a net profit of $2.4 million on an adjusted basis, a decrease of 78.5% compared to the prior-year period. GAAP basic and fully diluted earnings per share were a loss of $0.10 and a profit of $0.04 on an adjusted basis, a decrease from the prior year of 87.1%. Now turning to cash flow. Third quarter operating cash flow was $8.6 million as compared to $26.4 million in Q3 2019. Capital expenditures totaled $3.7 million comparable to the prior-year quarter. Free cash flow which we define as operating cash flow less capital expenditures was $4.8 million, a decrease of $18.3 million from the prior-year period. Cash earnings as well as a net contribution from working capital were the main drivers of the decrease in the quarter. Importantly, despite increased investment during the quarter related to our newly combined business in our ongoing integration efforts, we generated positive free cash flow in our first quarter following the acquisition. Cash and cash equivalents now stand at $88 million. We continue to have access to our undrawn bank revolver and are comfortable with our strong liquidity position.
While we are not providing specific targets for our fourth quarter due to the ongoing uncertainty amid the surging COVID-19 environment and we'd like to provide a level of direction for the fourth quarter. Revenue is anticipated to be largely in line with the third quarter of 2020 with ongoing support from DEFINITY which will have similar year-over-year growth as compared to our third quarter performance. As a reminder, last year's fourth quarter results for DEFINITY was 22.3% growth rate. While we anticipate slightly improved revenue performance Transient Tech transfer costs associated with both our Billerica and Somerset facilities to drive longer-term efficiencies are expected to modestly impact gross margin in the fourth quarter relative to the third. Operating expenses should be modestly higher than our adjusted Q3 run rate as we continue to build scale in our commercial and manufacturing effort in support of PyL. Additionally, we expect the resumption of patient enrollment in our 1095 clinical study alongside other R&D efforts to advance our pipeline. Lastly, we anticipate ending the year in a strong cash position. Free cash flows will continue to benefit from increasing profitability as well as ongoing diligent capital management. Looking to the future, free cash flows will also benefit from the acquired NOLs and Progenics, which totaled approximately $339 million after applying Section 382 of the Internal Revenue Code.
Taken together with pre-2020 NOLs of Lantheus, the aggregate NOLs available to the combined business are approximately $510 million of which approximately half can be used over the next five years to reduce the cash impact of taxes, over that period dependent on tax book profitability. In addition to financial performance indicators I also want to provide updates on several integration and expense-related milestones. The company remains on track to deliver on targeted strategic and tactical integration goals forecasted to be completed during 2020. For example, as Mary Anne mentioned earlier, we've accomplished the most significant goal to date with the filing of the PyL NDA in September and launched our PSMA imaging awareness campaign online. Additionally, we have finalized our manufacturing strategy in support of iodine-131 products and are executing against that plan currently. Tactically internal controls have been integrated with testing under way and various IT solutions have been merged to promote internal efficiencies and communication.
With that let me turn the call back over to Mary Anne.
Mary Anne Heino -- President and Chief Executive Officer
In closing, I would like to recognize all Lantheus' employees for their commitment to patients and to our customers. I'm very encouraged with what I've seen in the first full quarter as a combined entity. Not only have we achieved a significant milestone with our PyL submission but we also continue to make the expected progress throughout the organization in the other areas that are important to our growth strategy, our microbubble franchise and our pharma services business. With what I've seen. I am more optimistic than ever in our ability to deliver on our strategic vision a sustained growth for Lantheus'. I look forward to future updates on the progress of our business.
With that, Bob and I are now ready to take your questions. Operator, please go ahead.
Questions and Answers:
Operator
[Operator Instructions]. Your first question is from Larry Solow with CJS Securities. Please go ahead.
Larry Solow -- CJS Securities -- Analyst
Good morning and thanks for taking the questions. Mary Anne perhaps maybe a global question just on Progenics and obviously I think you I guess you announced the acquisition about a year ago. You only had it for, I guess three or four months, but just today what surprises you the most, perhaps on the plus side, and what if any things are, maybe not negative but maybe where there is more room for improvement and maybe perhaps you thought a few months ago when you first acquired the company?
Mary Anne Heino -- President and Chief Executive Officer
I think it's a very good question, Larry. Good morning. Hope you're doing well. On the, on the plus side, as I said in my closing remarks and I'll flashback to my beginning remarks, I am just incredibly impressive the way these teams have come together with no disruption to what was ongoing in the business on both sides and what was important to business to get the PyL submission in and have that be such an outstanding file. I think it's a real testament to not only the will of the two companies to come together, but the kind of the greater will to do it amid what was a kind of a really struggling backdrop the pandemic and then the need to do everything virtually. So I want to say hats off to all the employees here, it really speaks to their intent to become one. On the other positive side, as Bob noted, we are on target for our synergies, and that is something that we've always been committed to, we remain committed to, but again something that was complicated by the pandemic just from almost in an administrative perspective getting everything together.
So I'm incredibly pleased with that. On the kind of less positive side, because I'll never say negative, but unless positive side, we are operating in a world where our sales teams and all of our customer-facing teams have now had a complete sea change in how they access their customers and we're trying to find out and trying to work our way through as our so many other companies, what is the coming through this, what is the right way coming out of this to go forward and be able to offer the services that we've always offered. We're very intent on medical education. We truly feel that was our success and our cornerstone with DEFINITY. It's a model that we want to apply to AZEDRA. It's certainly part of the model that will apply with PyL but that model we completely rethought in a new world where on a going basis access to customers may be permanently limited in the physical sense. So that's something we're going to have to think through. And in the same sense, I will speak to the 1095 trial.
The ARROW trial was under way, we are starting to see good patient enrollment and accumulation of patients in the trial, and that came to a full halt for all the right reasons. We're starting now, but we are incredibly eager to bring back and have that drug offered to patients who we feel will benefit and to get ourselves to a point of patient enrollment where we can get to a point to see and make decisions around the value of that asset. So I think those are some of the things that they're not really related to the acquisition or our efforts at integration. They are more related to the backdrop of the market that we're trying to accomplish then.
Larry Solow -- CJS Securities -- Analyst
Great. Great, that's very helpful. Maybe just a follow-up question for Bob just you mentioned the synergies and whatnot are certainly on target. Can you maybe, I don't know, I know you're not giving guidance, but just on some of the cost sides. The sales and marketing line was somewhat lower than I thought it would be, and I realize you just acquired Progenics, but is that what line item that I would expect that to go up sequentially as we look out and maybe cost come from -- savings come from other line items. Is that fair to say?
Robert J. Marshall -- Chief Financial Officer and Treasurer
Yeah. Good morning, Larry. Yeah. That's actually an astute observation. The synergies are coming from the G&A line. Those things are though in the redundant positions like C-suite and that kind of thing, as well as other administrative like Board costs or work that's done from an audit fee perspective. Those are the places that we're finding cost savings. For sales and marketing, it has really more to do with the fact that what Mary Anne was just articulating we're doing less promotion in person. So there is less travel costs and those kinds of expenses. And from that perspective, we would expect yes, that as we build out our commercial team and our CCO has done a good job of attracting some talent particularly toward the end of the quarter which is why I noted that operating expenses would be slightly higher in the fourth quarter because we would see the beginnings of those people are starting to do their working to be prepared for the PyL commercial launch. And as well as dependent on ongoing whether we can get access there are regionally, some places where you can get access at the hospitals, but they're not many at this juncture. But we would forecast that as access is granted in the future that people will be doing more of that in person promotion, which is more expensive..
Larry Solow -- CJS Securities -- Analyst
Got it. Okay, great. I appreciate the call. Thanks a lot.
Operator
[Operator Instructions] And your next question is from Raj Denhoy with Jefferies. Please go ahead.
Raj Denhoy -- Jefferies -- Analyst
Yeah, hi, good morning. Maybe Bob I could ask you kind of a basic question. I apologize. But there is no revenue reported from Progenics in the quarter, no real store royalty or AZEDRA sales and I'm curious what the accounting for that is in, and why not?
Robert J. Marshall -- Chief Financial Officer and Treasurer
It's included in other, look I had said that we had acquired, which is why other new. This is where we housed our other assets is included in there. Raj. So it's not included in that number.
Raj Denhoy -- Jefferies -- Analyst
Okay. Yeah, I guess, and that sort of makes the case that you were making earlier about Xenon really falling off. I guess, because, well, maybe the question would be, could you tell us how much those two lines were so we can maybe get a sense of what the underlying other nuclear business did prior to Progenics coming in? Those two lines the RELISTOR and AZEDRA?
Robert J. Marshall -- Chief Financial Officer and Treasurer
Yeah, I don't mind. In fact, it's mathematically you could probably get there, given the growth rates, I gave you both the growth rate of that we had for the quarter plus the organic, so you could, you could back into it. So from that perspective. In combination, RELISTOR continued to perform fairly, consistently as we have been seeing sort of in that sort of $4.5 million number for the quarter and AZEDRA is very much sort of in line with what we saw in the third quarter as well, which was right around about $1.5 million worth.
Raj Denhoy -- Jefferies -- Analyst
Okay, that's helpful. Mary Anne just on PyL I'm curious you've given more information recently, just in terms of your views on the size of the market and, we have a better sense on timing, at this point. But I'm curious your views on the cadence of the ramp, should get approved and I appreciate, it could be anywhere from six to 10 months given on the -- given the expedited review path or not. How quickly does this ramp in the sense and what could constraint it? Do you have to sign contracts with the radio pharmacies? Is their capacity at cyclotron at this point? And how should we think about how this starts to roll out?
Mary Anne Heino -- President and Chief Executive Officer
Good morning, Raj. I hope you're doing well and I'm happy to talk about that because I think it is really a very intuitive question. Certainly, you're probably used to pharmaceutical launches in some of the gates that kind of control how pharmaceutical comes out and coverage is certainly one of those gates. We will be, we feel will be well prepared at once, but as you say contracts down the channel for where we need channel partners to move the product, but there are some of the gates. One of them is the pass-through application to CMS. So with this type of radiopharmaceutical product, you were required after approval to put application in through CMS for designation and recognition of cancer. It's not a question of whether it will be approved. But it's, it is a question of just from the function of putting the application and there could be a 60-day gap, between the approval date and when you get that application and then when the application comes back is approved. So I think you do need to get the uptake based on that. If you look at the population here, this is a significant Medicare population of patients in the market that I was referring to and well average age of diagnosis at the time of diagnosis for prostate cancer is below the Medicare age. These gentlemen, fortunately, live for 18 to 20 years.
So especially if you're talking about our addressable population which is mainly biochemical recurrence these are gentlemen who have been already within the treatment paradigm and so many of them will be of Medicare age. So I think we need to date that way. The other dating factor is the coverage you have across the U.S. population and with radiopharmaceuticals that are PET manufactured. When you submit your application, within your application you submit for simultaneous approval of PET manufacturing centers. These -- each site is considered an approved manufacturing site just by nature of how the product is produced as I described it in my comments earlier. And so, what is very typical with these products is, you submit with a group of PET manufacturing facilities and then immediately add approval you submit the next I'll call them a basket or group of PMS that will then also be considered and approved by the FDA as additional supplemental manufacturing sites and you can do that on a six-month basis. Now there are different regulatory pathways that allow you either quicker access to those approvals or more standard review and we intend to take availability of all of them, but that will also present getting as to what percent of the total U.S. addressable population will have I'll say access to immediately at approval. What I will say is that we are confident that by six months out we will essentially be covering the U.S. population, but from the zero to six-month period it is somewhat of a ramp.
Raj Denhoy -- Jefferies -- Analyst
Yes. So given those constraints right? So having to establish the past due payments and then ultimately getting the volume of manufacturing sites higher. Do you anticipate it there could be revenue in 2020? Next year again I realize that the timing constraints around the FDA approval process, but just trying to rightsize how to think about this next year?
Mary Anne Heino -- President and Chief Executive Officer
So Raj, you referenced 2020 I believe you probably meant 2021.
Raj Denhoy -- Jefferies -- Analyst
Sorry, 2021 yeah.
Mary Anne Heino -- President and Chief Executive Officer
We actually anticipate revenue in 2021, but we also look at it, I guess as you're noting through the lengths of those different constraints that we will face as we come through launch, we're confident about what I said. Our file, we think is very strong. We think our approach to market is strong. We certainly know that there is unmet demand in the market and there's high anticipation for this product and we also believe that the F 18-based product is the stronger product for the market. But, I think what would be fair to say as you think about how to think about the product. The higher ramp and that the steeper ramp comes in 2022.
Raj Denhoy -- Jefferies -- Analyst
Fair enough. Maybe I'll squeeze one in, I'm not sure if there are other questions. You mentioned the other products on the market, the gallium generator based products. One could make the case that given the ease of manufacturing of the agents or the lack of necessity cyclotron to manufacture it might make it easier to use initially. So how do you think that ultimately plays out in terms of your competitive position versus other product assuming you guys both get approved?
Mary Anne Heino -- President and Chief Executive Officer
And so, yes, you mentioned both get approved, that project is also under consideration by the FDA, for approval, and while the, I agree with you that at immediate approval, the channel availability is broader because it's practice is produced under the practice of pharmacy not under GMP. The significant constraints there is how many doses can be produced by any pharmacy at any time. This is a generator produced product, and specifically with the gallium generator, there is a limited number of doses that can be produced maximally for a day by each generator and the use of those doses compete with other gallium based products. There is also the logistics of when the dose is can be produced and when they can be used because the logistics, typically and this is current kind of current practice out in the U.S., but the logistics, typically in a nuclear medicine department is they typically like to schedule, more of their FTG based studies in the morning because those patients who are going -- undergoing FTG studies need to be fasting. And so it's just more humane and logistically easier if they use the morning time on the PET machines for FTG based doses. That kind of then limits the undercurrent practice limits when they can do the prostate PSMA scans in the afternoon, which further constrained how those fewer doses can be used because you can't space them out well over the day.
Raj Denhoy -- Jefferies -- Analyst
That's helpful. I appreciate it. Thank you.
Operator
[Operator Closing Remarks]
Duration: 38 minutes
Call participants:
Mark Kinarney -- Senior Director of Investor Relations
Mary Anne Heino -- President and Chief Executive Officer
Robert J. Marshall -- Chief Financial Officer and Treasurer
Larry Solow -- CJS Securities -- Analyst
Raj Denhoy -- Jefferies -- Analyst
