Scott Deuschle: Hey Robb, was the – how large was the missile tube recovery that you received in the quarter? I think the 10-K talks about a $28 million benefit from non-nuclear components. So I want to check if that was the right number.
Robb LeMasters: Yes, that’s not – so first, the EAC disclosure, you’ll see a couple of different elements we break out in there. One of them is the non-naval components, and then there’s just a total company number in there. You’re right that we attributed that to the non-naval component business. And we don’t really want to break that down, just given the sensitivity around customer, navy, and so forth. But let me help you with that a little bit. Ultimately, that number that you quoted right there includes a couple of different elements that we talked about in the transcript. We did successfully recover the amount and then some from 2022, I think I continually pointed people to that $11 million number in 2022. In the second quarter, we were successful, let’s say, at recovering that and then a little more.
And then we did have successful performance overall on that contract. So as you close those out, as you know, you really scrub where your EAC lands. And so that was also a meaningful component to that ultimate EAC item that you talked about. I like to just leave it there, just given the sensitivity around the customer and the negotiation, and other competitors in this market.
Scott Deuschle: Okay. Yes, it’s really helpful. Then Rex, I was wondering if you could quantify at all how large the actinium line was in 2023, either in terms of revenue or doses. And then curious if that might be the fastest growing product line at BWXT Medical in 2024 in dollar terms and whether or not you might be able to shed some light on that. Thanks.
Rex Geveden: Yes. I think we might decline to breakout the product lines on a sales basis, but I would say that actinium is certainly a fast growing product and we expect some meaningful revenue contribution in 2024 from that.
Scott Deuschle: Okay. And then I mean if some of these Phase 3 trials are successful with actinium and you’re the only commercial supplier, I mean could the market opportunity here be potentially larger than technetium with better margins or am I being too wishful thinking in that? Thanks.
Rex Geveden: Yes. I think any one product when therapeutics, we still have a lot of hope for the tech-99. So I think we’ve laid out where our targets are there. I think actinium and lutetium as well as, just to be clear, the PET diagnostic portfolio, which really follows what happens in therapeutics, right, the theranostic category, we’re going to talk about that a lot tomorrow. That’s been a huge growth driver for us. That’s germanium specifically within our portfolio as well as just pull through of other items. But tomorrow what we’re going to walk you through is exactly what you said, which as you move from, call it Phase 1 to Phase 2, Phase 3, you’re still only having patient samples of, call it 500 patients maybe as those turn in 2026 and 2027, you get multiples, right, thousands of commercial patients.
And so the scale goes up meaningfully. So to address your specific question about the size of the actinium or lutetium line, it’s small, but it can explode meaningfully when you actually convert from a sort of a Phase 3 to a commercial trial. And we see that you can do the – you can read around. A lot of those are predicted in kind of the 2026, 2027 time frame. And so that’s when we’ll get more isotopes and hopefully, even some contract drug manufacturing alongside that.
Scott Deuschle: Okay. Great. And last question, just Rex, maybe you can shed some light on what’s currently adding to the approval timeline on tech-99 and whether or not you might be able to commercialize that before the fall when I think a lot of the forward year sales go on contract. Thank you.
Rex Geveden: Yes, there’s no change in that. We – I think we’ve been saying consistently that we expect approval here in 2024 and we’re still on that track.
Scott Deuschle: All right. Thanks, guys.
Rex Geveden: Thanks, Scott. See you tomorrow.
Robb LeMasters: Thank you.
Operator: Your next question comes from the line of Jordan Lyonnais from Bank of America. Please go ahead.
Jordan Lyonnais: Hey, good evening. Thanks for taking the call. Just a question on the defense business, we’re hearing from other naval suppliers. The Navy is starting to have discussions about CapEx reimbursement. HII [ph] did report it. Other suppliers are saying they’re in talks. Is that something you guys are hearing too or would you expect to benefit from that?
Rex Geveden: So maybe I’ll – Jordan, I’ll take that one, maybe give a little broader perspective here and change altitude. From your question, I’d say first of, remember that for BWXT, we’re – our reactors and fuel are long lead items for those submarines and aircraft carriers. And so we frankly had to get out front of those capital needs before the shipyards did. And so you look at our build up to the two Virginia’s with the Columbia on top of that. And then we went through that two carrier by and actually had to put considerable capital in for that. So we got ahead of that and that was one of our major capital campaigns. And so that’s kind of done for us. We were frankly ahead of that submarine industrial based funding activity and so that’s where we’ve been and we’re sort of well equipped to deal with the volume that we see out there ahead.
That said, if some new scope comes in, for example, the AUKUS program is an example or accelerated Columbia, then we would certainly have discussions with our customer and do have discussions with our customer about where’s the most appropriate place to bear the capital load. So those discussions do go on. But I would say that, we certainly got ahead of the capital issue relative to the shipyards.
Jordan Lyonnais: Got it. Thank you so much.
Rex Geveden: You’re welcome.
Operator: Your next question comes from the line of Michael Ciarmoli from Truist Securities. Please go ahead.
