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United Therapeutics (UTHR) Q2 Earnings In Line, Sales Beat

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United Therapeutics UTHR reported earnings of $2.41 per share for the second quarter of 2020, which were in line with the Zacks Consensus Estimate but lower than $4.66 per share reported in the year-ago quarter.

The abovementioned earnings include the impact of share-based compensation expenses, unrealized gains/losses on equity securities, license related fees and other items. Excluding these items, adjusted earnings were $3.68 per share, up 1% year over year.

Revenues for the reported quarter were $362.0 million, which beat the Zacks Consensus Estimate of $341 million. However, revenues fell 3% year over year.

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

While the company saw a decline in new prescriptions for Remodulin, Tyvaso and Orenitram in the month of April as patients were unable to visit their doctors, the number of new patient prescriptions grew to reach close to pre-pandemic levels as the quarter progressed.

This year so far, the stock has risen 28% against the industry’s decrease of 6.9%.

 

 

Quarter in Detail

Adcirca sales were $19.4 million, down 33% year over year as generic competition resulted in continued erosion of market share in the quarter. 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.

Orenitram sales amounted to $75.4 million in the reported quarter, up 40% year over year due higher volumes resulting from expanded Orenitram label, reflecting the FREEDOM-EV results. Tyvaso sales totaled $119.2 million, up 9% year over year.

Remodulin sales were $119.0 million, down 24% year over year due to lower volumes in Europe as a result of generic competition and the impact of COVID-19. Volumes also declined in the United States due to reductions in new patient prescriptions and new patient starts amid COVID-19 related decline in patient visits to doctor office.

Unituxin’s (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $29.0 million were up 16% year over year.

Research and development (R&D) expenses were $78.3 million in the quarter, down 18% year over year. General and administrative expense rose 7% to $54.8 million in the quarter while sales and marketing costs declined 7% to $12.7 million.

Pipeline Update

United Therapeutics is working on expanded indications for Orenitram and Tyvaso. In February 2020, United Therapeutics announced that the pivotal phase III INCREASE study evaluating Tyvaso in patients with PAH associated with interstitial lung disease met its primary efficacy endpoint of demonstrating improvement in six-minute walk distance. The study also met its key secondary endpoints. The company submitted a supplemental new drug application recently to the FDA to expand the Tyvaso label to include INCREASE study data.

Other phase III programs include autologous cell therapy (PAH - phase II/III SAPPHIRE study), Treprostinil Technosphere dry powder inhaler (PAH — phase III BREEZE study), Tyvaso in PAH patients who have COPD (phase III PERFECT study) and Ralinepag (PAH — phase III ADVANCE outcomes studies). Success in these studies may open up attractive market opportunities and address significant unmet clinical needs. Regarding its clinical studies, the company said that enrollment of new patients has resumed at select study sites for certain studies after it was paused in the first quarter.

The company is working on bringing multiple second generation Remodulin drug delivery systems to drive sales growth. Some improved Remodulin delivery devices are expected to be launched in the next 18 months, which can widen its market. These includes RemUnity, a pre-filled, semi-disposable pump system for subcutaneous delivery of Remodulin, which the company has developed in partnership with DEKA. United Therapeutics expected to launch the product in July. However, along with the earnings release, the company said that the timing of commercial launch has been delayed due to pandemic-related issues.

United Therapeutics has developed and 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 2020. Launch of the ISR is not expected before 2021.

United Therapeutics’ Trevyent disposable treprostinil pump system was filed with the FDA in April 2019. However, in April 2020, the FDA issued a complete response letter (CRL) to the NDA indicating that some of the issues previously raised by the FDA were not addressed to its satisfaction. The company expects to re-file the NDA in 2021.

RemUnity and Trevyent, if approved, will provide two expanded options for patients on subcutaneous Remodulin.

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

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

A top-ranked small drugmaker is Nivalis Therapeutics ALPN, which has a Zacks Rank of 1. The stock has risen 161.7% this year so far. Estimates for 2020 and 2021 have narrowed from loss of $1.38 per share to loss 4 cents for 2020 and from loss of $1.77 per share to loss of 23 cents for 2021 over the past 60 days.

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