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United Therapeutics (UTHR) Q2 Earnings & Sales Beat, Down Y/Y

Zacks Equity Research

United Therapeutics UTHR reported adjusted earnings of $3.63 per share for the second quarter of 2019, which beat the Zacks Consensus Estimate of $2.40. However, earnings declined 17% year over year.

Adjusted earnings exclude the impact of share-based compensation expenses, impairment charges, unrealized gains/losses on equity securities and other items. Including these items, reported earnings were $4.66 per share, up 17% year over year.

Revenues for the reported quarter were $374.0 million, which beat the Zacks Consensus Estimate of $332 million. Revenues, however, fell 16% year over year owing to loss of exclusivity for Adcirca and lower sales of Remodulin.

The stock has declined 27.3% this year so far against the industry’s increase of 7.4%.

 

Quarter in Detail

United Therapeutics markets four products for the treatment of pulmonary arterial hypertension (PAH) – Remodulin, Tyvaso, Adcirca and Orenitram. Please note that United Therapeutics bought exclusive rights to commercialize Adcirca (tadalafil) for the treatment of PAH in the United States from Eli Lilly LLY in November 2008. Eli Lilly markets tadalafil as Cialis for erectile dysfunction.

Adcirca sales were $29.1 million, down 73% year over year as generic competition resulted in lower volumes in the quarter. Adcirca experienced loss of exclusivity in May last year and generic versions were launched in August.

Orenitram sales amounted to $54 million in the reported quarter, up 9% year over year due to an increase in the number of patients being treated with the drug and price hikes. Remodulin sales were $155.8 million, down 2% year over year due to price reduction in international markets. Please note that Remodulin lost exclusivity in June 2018. A generic version was launched by Novartis’ NVS Sandoz in March 2019. More generics are expected to be launched, both in the United States and Europe, which may sharply reduce revenues from this product. Tyvaso sales totaled $109.6 million, up 3% year over year driven by patient growth and price increase.

Unituxin’s (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $25.1 million were up 27% year over year due to an increase in the number of vials sold and price increases.

Research and development expenses were $95.8 million in the quarter million, up 21% year over year. General and administrative expenses were flat at $51.0 million. Sales and marketing expense declined 12% year over year to $13.7 million.

Pipeline Update

United Therapeutics is working on expanded indications for some of its marketed products like Orenitram and Tyvaso. A phase III FREEDOM-EV study evaluated an oral combination therapy of Orenitram – OreniPlus. United Therapeutics has submitted regulatory application in the United States to get FREEDOM-EV data included on the label of Orenitram.

Other phase III programs include Tyvaso-ILD (Tyvaso being evaluated in patients with PAH associated with idiopathic pulmonary fibrosis – phase III INCREASE study), OreniLeft (Orenitram for PAH with heart failure — phase III SOUTHPAW study), gene therapy (Aurora-GT) for PAH (phase II/III SAPPHIRE study), Treprostinil Technosphere (PAH — phase III BREEZE study), Tyvaso in PAH patients who have COPD (phase III PERFECT study) and Ralinepag (PAH — phase III ADVANCE studies). We remind investors that United Therapeutics acquired rights to ralinepag from Arena Pharmaceuticals ARNA in January this year.

Success in these studies may open up attractive market opportunities and address significant unmet clinical needs.

The company is working on bringing multiple second-generation Remodulin drug delivery systems to drive Romudulin sales growth. In July last year, United Therapeutics gained FDA approval for Remodulin Injection in the Implantable System for Remodulin (ISR). United Therapeutics developed this implantable pump for delivering Remodulin intravenously in collaboration with Medtronic. The system has been developed to eliminate two biggest problems with Remodulin, subcutaneous pain and life-threatening sepsis risk. The company expects to be ready for commercial launch this year.

United Therapeutics has also developed a pre-filled, semi-disposable pump system for subcutaneous delivery of Remodulin (RemUnity) in partnership with DEKA. In February 2018, DEKA filed RemUnity with the FDA (510(k) filing) that was cleared by the FDA in May 2019. United Therapeutics intends to launch the product after it gets FDA clearance for a special 510(k) filing, which DEKA plans to submit to the FDA. RemoPro, a pain-free subcutaneous Remodulin prodrug, is in phase I studies.

Following the August 2018 merger with SteadyMed, United Therapeutics added the latter’s drug device pipeline product Trevyent for PAH to its portfolio. Trevyent is a single-use, pre-filled pump that has been developed by SteadyMed to deliver a two-day supply of treprostinil subcutaneously using SteadyMed’s PatchPump technology to treat PAH. Though SteadyMed received a refuse-to-file letter from the FDA for want of further information, SteadyMed intends to resubmit it in 2019. RemUnity and Trevyent, if approved, will provide two expanded options for patients on subcutaneous Remodulin.

United Therapeutics currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United Therapeutics Corporation Price, Consensus and EPS Surprise

 

United Therapeutics Corporation Price, Consensus and EPS Surprise

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

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