UNITED THERAPEUTICS Corp Q3 FY2024 earnings call

• United Therapeutics is a momentum story with growth in foundation, innovation, and revolution waves. Foundation wave has sixth consecutive quarter of record revenue. Innovation wave has TETON 2 study of nebulized Tyvaso in idiopathic pulmonary fibrosis expected to report top line data in 2025, TETON 1 study progressing, ADVANCE OUTCOMES study of Ralinepag in PAH expected in 2026, and premarket approval application for CLES expected in 2025. Revolution wave has Phase I study for miroliverELAP underway, and feedback from FDA on UKidney 10-gene edited porcine xenokidney IND. - Completed a $1 billion accelerated share repurchase program, repurchasing approximately 3.5 million shares. - Capital allocation priorities include investing in commercial and R&D, intelligent business and corporate development, and returning capital to shareholders. - In the third quarter, recorded a $65.1 million litigation accrual in connection with the Sandoz case.

In the third quarter, United Therapeutics achieved record revenue of $749 million, a 23% growth from the third quarter of 2023. Total Tyvaso revenue was $434 million, a 33% increase, driven by growth in Tyvaso DPI, utilization by PH-ILD patients, pricing changes, etc. Orenitram had record revenue of $113 million, a 23% growth. Remodulin worldwide revenue was $128 million, a slight decline of 2% due to international order timing, but U.S. revenue grew 3%. Unituxin achieved record revenue of $61 million, up 19% from the prior year quarter. Tyvaso contributed about 58% of the total revenue, Orenitram about 15%, Remodulin about 17%, and Unituxin about 8%.

• Expect a steady stream of clinical data reads and regulatory actions through the next 36 months. - TETON 2 study of nebulized Tyvaso in idiopathic pulmonary fibrosis expected to report top line data in the second half of 2025. - Expect FDA action on premarket approval application for CLES in 2025. - Expect to complete ADVANCE OUTCOMES study of Ralinepag in PAH in 2026. - Expect data from miroliverELAP Phase I study in 2025. - Expect to file IND for xeno organ clinical study shortly.

• In the third quarter, recorded a litigation accrual of $65.1 million in connection with a potential judgment in the Sandoz case. This liability could be adjusted up or down as litigation progresses, but it's not considered a recurring expense.

Q: Joseph Thome with TD Cowen asked about the expedite question regarding transitioning from Remodulin to Orenitram, including if patients are titrating off and impact on revenue.

A: Michael Benkowitz said on the down titration off of Remodulin to Orenitram, it's not a widespread trend yet, but regarding expedite and transition from Remodulin to Orenitram, they expect higher doses with Orenitram as a result of the expedite protocol and higher average dose will be seen.

Q: Roanna Ruiz with Leerink Partners asked about drivers behind growth in nebulized Tyvaso and transition between nebulizer and DPI.

A: Michael Benkowitz said some year-over-year growth in nebulized Tyvaso was due to destocking last year, and currently, the mix of DPI and nebulizer is roughly 2/3 to 1/3 in favor of DPI, with transitions between the products being marginal.

Q: Andreas Argyrides with Oppenheimer asked about Tyvaso DPI manufacturing capacity needs for IPF and share repurchase program.

A: James Edgemond said they expect to support an IPF approval with DPI from their North Carolina manufacturing facility and don't expect shortages, and regarding share repurchase, they continue to thoughtfully evaluate capital deployment across priorities including share repurchases.

Q: Roger Song with Jefferies asked about margin nuances between IV and subcu against generics for Remodulin.

A: Michael Benkowitz said Remodulin is a go-to drug for pulmonary hypertension, patients are reluctant to go on a pump before necessary, but PAH is progressive and almost all patients will need parental prostacyclin eventually, so Remodulin will continue to perform.

Q: Jessica Fye with JPMorgan asked about pre-IND feedback for the 10-gene edit kidney and initial clinical trial design.

A: Leigh Peterson said they received pre-IND feedback on the UKidney 10-gene edited porcine xenokidney and are working to submit the IND shortly, but details of the clinical study design will be shared after IND clearance.

Q: Ash Verma with UBS asked about being on track to reach $4 billion run rate in 2025 and rebating contracting.

A: Martine Rothblatt said they feel comfortable with double-digit annual revenue growth and on track for $4 billion run rate, and Michael Benkowitz said they entered payer contracts on Part D side, with contracts in place by January 1, positioning them favorably for competitor entry.