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United Therapeutics (UTHR) Q1 Earnings Miss, Sales Beat

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United Therapeutics UTHR reported earnings of 61 cents per share for first-quarter 2021, which missed the Zacks Consensus Estimate of $2.60 per share. Earnings declined 80% year over year due to higher R&D costs in the quarter.

The abovementioned earnings include the impact of share-based compensation expenses, impairment charges, charges related to purchase of a priority review voucher and other items. Excluding these items, adjusted earnings were $3.49 per share, down 3.3% year over year.

Revenues for the reported quarter were $379.1 million, which beat the Zacks Consensus Estimate of $367.0 million. Revenues rose 6% year over year.

United Therapeutics markets four products for pulmonary arterial hypertension (PAH) — Remodulin, Tyvaso, Adcirca and Orenitram. Higher sales of Orenitram, Unituxin and Tyvaso offset lower sales of Remodulin and Adcirca.

The stock was up 1.4% on Wednesday after the results were announced. This year so far, the stock has risen 30.5% against the industry’s decrease of 10.9%.

Quarter in Detail

Orenitram sales amounted to $72.4 million in the reported quarter, up 5% year over year due to higher volumes resulting from patient growth, following an expanded Orenitram label, reflecting the FREEDOM-EV results.

Tyvaso sales totaled $123.0 million, up 20% year over year, gaining from higher volumes as a result of patient growth. Remodulin sales were $130.2 million, down 10% year over year due to decline in both the United States and international revenues.

Adcirca sales were $9.6 million, down 23% year over year due to generic erosion. Please note that United Therapeutics bought exclusive rights to commercialize Adcirca (tadalafil) for PAH in the United States from Eli Lilly LLY in November 2008. Eli Lilly markets tadalafil as Cialis for erectile dysfunction. Adcirca/Cialis lost exclusivity in 2018 and generic versions are available.

Unituxin’s (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $43.9 million surged 65% year over year driven by volume growth.

Research and development (R&D) expenses were $303.7 million in the quarter, up 315% year over year due to $105 million paid to purchase a pediatric disease priority review voucher (PRV) and charges related to the decision to discontinue Trevyent development. Selling, general and administrative expense rose 26% to $117.2 million in the quarter.

Pipeline Update

United Therapeutics is working on expanded indications for Orenitram and Tyvaso. A supplemental new drug application to expand the Tyvaso label to include data from the phase III INCREASE study was approved by the FDA in April 2021. The pivotal phase III INCREASE study evaluated Tyvaso in patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD), a lung disease for which no treatments are presently approved. With the approval, this indication expands the use of Tyvaso to more than double the current number of patients on therapy in the near term. Tyvaso was launched for PH-ILD immediately after approval.

In January 2021, the BREEZE study met its primary objective of demonstrating safety and tolerability of Tyvaso dry powder inhaler/Tyvaso DPI in PAH patients who transitioned from Tyvaso Inhalation Solution. An NDA seeking approval of Tyvaso DPI for both PAH and PH-ILD indications was filed in April. The PRV was redeemed upon submission of the Tyvaso DPI NDA.

Other key phase III programs include Tyvaso in PAH patients who have COPD (phase III PERFECT study), Tyvaso in patients with chronic fibrosing interstitial lung disease (TETON- enrollment in phase III expected to begin in second quarter of 2021) and Ralinepag (PAH — phase III ADVANCE studies).

The company is also working on bringing multiple second generation Remodulin drug delivery systems to drive sales growth. These include RemUnity, a pre-filled, semi-disposable pump system for subcutaneous delivery of Remodulin, which the company has developed in partnership with DEKA. United Therapeutics launched the product commercially in February, much delayed from previous expectations due to pandemic-related issues.

United Therapeutics has developed an Implantable System for Remodulin (ISR), an implantable pump for delivering Remodulin intravenously in collaboration with Medtronic MDT. Though Medtronic’s pre-market approval for the ISR device was given approval by the FDA in December 2017, the launch is pending on the satisfaction of further regulatory requirements by Medtronic, which are not expected to be fulfilled in time for a 2021 launch.

Zacks Rank & Stocks to Consider

United Therapeutics currently carries a Zacks Rank #3 (Hold).

United Therapeutics Corporation Price and Consensus

United Therapeutics Corporation Price and Consensus
United Therapeutics Corporation Price and Consensus

United Therapeutics Corporation price-consensus-chart | United Therapeutics Corporation Quote

A better-ranked small drugmaker is Ironwood Pharmaceuticals IRWD, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ironwood Pharmaceuticals’ earnings estimates have risen from 87 cents to 89 cents for 2021 and from $1.01 to $1.04 per share over the past 60 days.

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Ironwood Pharmaceuticals, Inc. (IRWD) : Free Stock Analysis Report

Medtronic PLC (MDT) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

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