Lantheus this week sent notices to its customers to brace themselves for a significant increase in the cost of TechneLite generators. Lantheus said the price hike is the result of a two- to threefold increase in the company's cost of molybdenum-99 (Mo-99) from its primary supplier. Mo-99 is the main precursor isotope of technetium-99m (Tc-99m), which is used in TechneLite generators. Lantheus' supply contract expired on April 30 and the new, higher prices went into effect on May 1.
In a written statement, Lantheus president and CEO Don Kiepert said rather than entering into a new agreement, the company will purchase Mo-99 "on a short-term basis at the substantially higher price, with the hope that contract discussions can continue and a more favorable price can eventually be obtained."
Lantheus plans to pass along any more favorable pricing it may secure for Mo-99 under a new definitive agreement.
Clinical indications for TechneLite include brain imaging and cerebral radionuclide angiography, thyroid imaging, salivary gland imaging, blood pool imaging, urinary bladder imaging for the detection of vesicoureteral reflux, and nasolacrimal drainage system imaging.
Lantheus noted that it will not increase the price of its Cardiolite technetium sestamibi radiopharmaceutical for SPECT myocardial perfusion imaging. However, the company warned that the cost for a myocardial perfusion scan with Cardiolite may increase, as the cost for technetium-99m, the active byproduct of Mo-99, will rise in some markets.
Global supplies of molybdenum-99 have fluctuated due to the small number of nuclear reactors worldwide where the isotope is produced. Both the National Research Universal Reactor in Chalk River, Ontario, operated by Atomic Energy of Canada, and the High Flux Reactor in Petten, the Netherlands, operated by the Nuclear Research and Consultancy Group, have spent time offline in the past two years.
In an interview with AuntMinnie.com, William Dawes, vice president of manufacturing and supply chain for Lantheus, said the company's Mo-99 supplier cited supply and demand as the reason for the sharp increase.
"As our supplier looks at the supply-demand dynamics in the marketplace right now, given all that is going on with aging reactors and global shortages, they feel like there is an equilibrium point, based on those dynamics, that is being reached by their new pricing," Dawes said. "However, as a company, we disagree with what they have put forth as that equilibrium point. On behalf of the industry we serve, we do not want to legitimize what we think is flawed thinking on an equilibrium point in the marketplace for molybdenum pricing."
Dawes, who declined to name the supplier for confidentiality reasons, said Lantheus has received assurances from its primary source that it will continue to provide adequate supplies of Mo-99. "They have given us their word that our supply will not be impacted," he added. "We expect them to live to that word and will do that."
How long the higher prices will remain in effect, Dawes said, is difficult to say.
In the meantime, Lantheus will continue to pursue alternate options for sourcing and production by diversifying its Mo-99 supply chain and negotiating with different Mo-99 manufacturers throughout the world.
"We recently diversified our supply to include our ability to source material from all current reactor suppliers," Dawes said. "We are looking strongly toward the future and have some good strategies that we are far down the road on, and we think represent the highest-value opportunities for molybdenum production over the medium and long term."
Citing confidentiality again, Dawes declined to provide additional details of those efforts.
Lantheus supplies TechneLite and technetium-related products to the Americas and the Asia-Pacific region, with the lion's share of its business in North America. The company does not distribute to Europe.
By Wayne Forrest
AuntMinnie.com staff writer
May 15, 2009
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