Shares increase after Life Healthcare sells radiopharmaceuticals company LMI

The sale of its radiopharmaceuticals division, LMI, to U.S.-listed Lantheus Holdings (LNTH.O), was disclosed by South African private hospital operator Life Healthcare (LHCJ.J), opens new tab on Monday, causing its Johannesburg-listed shares to rise.

According to Life Healthcare, it has signed legally binding contracts with a Lantheus-owned company to sell its whole interest in Life Molecular Imaging (LMI) for $350 million up front, with an additional $400 million in earnout payments possible based on future sales of LMI products until 2034.

A novel class of cancer medications known as radiopharmaceuticals targets cancer cells using radiation treatment.

At 1011 GMT, Life Healthcare’s stock had increased by almost 3%.

In an effort to simplify operations, the hospital operator has begun selling off certain assets. As part of its investment in Alliance Medical Group, it purchased LMI in 2018.

According to a statement posted on the Johannesburg Stock Exchange, “Lantheus is uniquely positioned to invest in and grow LMI’s portfolio of imaging assets and ensure that the business meets its growth potential.”