United Therapeutics Corporation Reports Third Quarter 2020 Financial Results
- Third quarter Orenitram® net revenue growth of 20% and Tyvaso® net revenue growth of 17% year-over-year
- Remodulin® sequential quarterly net revenue growth of 5%
- INCREASE sNDA under FDA review with April 2021 action date; Remunity™ launch preparations continue
"As our core business continues to perform well, we have a solid footing to enter 2021 with several key product launches including the potential INCREASE product label expansion for Tyvaso, the Remunity Pump for Remodulin, and the Implantable System for Remodulin," said
"We are very pleased with the strong year-over-year growth for both Orenitram and Tyvaso," said
THIRD QUARTER 2020 FINANCIAL RESULTS
Key financial highlights include (dollars in millions, except per share data):
Three Months Ended |
Dollar |
Percentage |
||||||||||||
2020 |
2019 |
|||||||||||||
Revenues |
$ |
380.1 |
$ |
401.5 |
$ |
(21.4) |
(5) |
% |
||||||
Net income |
$ |
171.2 |
$ |
132.4 |
$ |
38.8 |
29 |
% |
||||||
Non-GAAP earnings(1) |
$ |
173.0 |
$ |
168.3 |
$ |
4.7 |
3 |
% |
||||||
Net income, per basic share |
$ |
3.86 |
$ |
3.02 |
$ |
0.84 |
28 |
% |
||||||
Net income, per diluted share |
$ |
3.84 |
$ |
3.01 |
$ |
0.83 |
28 |
% |
||||||
Non-GAAP earnings, per diluted share(1) |
$ |
3.88 |
$ |
3.83 |
$ |
0.05 |
1 |
% |
________________________ |
|
(1) |
See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below. |
Revenues
The table below summarizes the components of total revenues (dollars in millions):
Three Months Ended |
Dollar |
Percentage |
||||||||||||
2020 |
2019 |
|||||||||||||
Net product sales: |
||||||||||||||
Remodulin® |
$ |
124.5 |
$ |
168.3 |
$ |
(43.8) |
(26) |
% |
||||||
Tyvaso® |
129.5 |
110.8 |
18.7 |
17 |
% |
|||||||||
Orenitram® |
74.7 |
62.0 |
12.7 |
20 |
% |
|||||||||
Unituxin® |
37.6 |
30.1 |
7.5 |
25 |
% |
|||||||||
Adcirca® |
13.8 |
30.3 |
(16.5) |
(54) |
% |
|||||||||
Total revenues |
$ |
380.1 |
$ |
401.5 |
$ |
(21.4) |
(5) |
% |
As of the end of the third quarter of 2020, new patient prescriptions and new patient starts, which had declined in
The reduction in Remodulin revenues was driven primarily by a reduction in quantities sold in
Expenses
Cost of product sales. The table below summarizes cost of product sales by major category (dollars in millions):
Three Months Ended |
Dollar |
Percentage |
||||||||||||
2020 |
2019 |
|||||||||||||
Category: |
||||||||||||||
Cost of product sales |
$ |
24.5 |
$ |
32.3 |
$ |
(7.8) |
(24) |
% |
||||||
Share-based compensation (benefit) expense(1) |
(0.5) |
0.7 |
(1.2) |
(171) |
% |
|||||||||
Total cost of product sales |
$ |
24.0 |
$ |
33.0 |
$ |
(9.0) |
(27) |
% |
________________________ |
|
(1) |
Refer to Share-based compensation below. |
Research and development expense. The table below summarizes research and development expense by major category (dollars in millions):
Three Months Ended |
Dollar |
Percentage |
||||||||||||
2020 |
2019 |
|||||||||||||
Category: |
||||||||||||||
Research and development projects |
$ |
71.8 |
$ |
83.0 |
$ |
(11.2) |
(13) |
% |
||||||
Share-based compensation (benefit) expense(1) |
(3.1) |
2.7 |
(5.8) |
(215) |
% |
|||||||||
Total research and development expense |
$ |
68.7 |
$ |
85.7 |
$ |
(17.0) |
(20) |
% |
________________________ |
|
(1) |
Refer to Share-based compensation below. |
Selling, general, and administrative expense. The table below summarizes selling, general, and administrative expense by major category (dollars in millions):
Three Months Ended |
Dollar |
Percentage |
||||||||||||
2020 |
2019 |
|||||||||||||
Category: |
||||||||||||||
General and administrative |
$ |
62.8 |
$ |
64.1 |
$ |
(1.3) |
(2) |
% |
||||||
Sales and marketing |
12.4 |
14.8 |
(2.4) |
(16) |
% |
|||||||||
Share-based compensation (benefit) expense(1) |
(8.9) |
20.5 |
(29.4) |
(143) |
% |
|||||||||
Total selling, general, and administrative expense |
$ |
66.3 |
$ |
99.4 |
$ |
(33.1) |
(33) |
% |
________________________ |
|
(1) |
Refer to Share-based compensation below. |
Share-based compensation. The table below summarizes share-based compensation (benefit) expense by major category (dollars in millions):
Three Months Ended |
Dollar |
Percentage |
||||||||||||
2020 |
2019 |
|||||||||||||
Category: |
||||||||||||||
Stock options |
$ |
9.2 |
$ |
18.4 |
$ |
(9.2) |
(50) |
% |
||||||
Restricted stock units |
5.5 |
3.8 |
1.7 |
45 |
% |
|||||||||
Share tracking awards plan (STAP) |
(27.5) |
1.4 |
(28.9) |
NM(1) |
||||||||||
Employee stock purchase plan |
0.3 |
0.3 |
— |
— |
% |
|||||||||
Total share-based compensation (benefit) expense |
$ |
(12.5) |
$ |
23.9 |
$ |
(36.4) |
(152) |
% |
________________________ |
|
(1) |
Calculation is not meaningful. |
The increase in share-based compensation benefit for the three months ended
Other expense, net. The change in other expense, net for the three months ended
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for: (i) share-based compensation (benefit) expense (including expenses relating to stock options, restricted stock units, share tracking awards, and our employee stock purchase plan); (ii) impairment of investment in privately-held company; (iii) unrealized gain on investment in privately-held company; (iv) net unrealized and realized losses on equity securities; (v) impairments of property, plant, and equipment; (vi) license-related fees; and (vii) tax impact on non-GAAP earnings adjustments.
A reconciliation of net income to non-GAAP earnings is presented below (in millions, except per share data):
Three Months Ended |
|||||||
2020 |
2019 |
||||||
Net income, as reported |
$ |
171.2 |
$ |
132.4 |
|||
Adjusted for the following items: |
|||||||
Share-based compensation (benefit) expense(1) |
(12.5) |
23.9 |
|||||
Impairment of investment in privately-held company(2) |
3.5 |
— |
|||||
Unrealized gain on investment in privately-held company(3) |
(2.3) |
— |
|||||
Net unrealized and realized losses on equity securities(3) |
3.0 |
13.0 |
|||||
Impairments of property, plant, and equipment(4) |
5.4 |
8.4 |
|||||
License-related fees(5) |
3.6 |
— |
|||||
Tax expense (benefit) |
1.1 |
(9.4) |
|||||
Non-GAAP earnings |
$ |
173.0 |
$ |
168.3 |
|||
Non-GAAP earnings per share: |
|||||||
Basic |
$ |
3.90 |
$ |
3.83 |
|||
Diluted |
$ |
3.88 |
$ |
3.83 |
|||
Weighted average number of common shares outstanding: |
|||||||
Basic |
44.4 |
43.9 |
|||||
Diluted |
44.6 |
44.0 |
________________________ |
|
(1) |
Recorded within operating expenses on our consolidated statements of operations. |
(2) |
Recorded within impairment of investment in privately-held company on our consolidated statements of operations. |
(3) |
Recorded within "other expense, net" on our consolidated statements of operations. |
(4) |
Recorded within selling, general, and administrative on our consolidated statements of operations. |
(5) |
Recorded within research and development on our consolidated statements of operations. |
NEW PRODUCT COMMERCIALIZATION UPDATE
In our near-term time horizon, we plan to launch Tyvaso for a new indication, and to launch three new products for pulmonary arterial hypertension (PAH): the Remunity™ Pump, the Trevyent® system, and the Implantable System for Remodulin.
Tyvaso in pulmonary hypertension due to interstitial lung disease (PH-ILD). On
In
We submitted the INCREASE study results to the
Remunity Pump for Remodulin. We commenced launch activities for the Remunity Pump for Remodulin, including shipping training devices to specialty pharmacies and certain health care practitioners, and entering into agreements with specialty pharmacies to purchase Remunity Pumps and accessories and to pre-fill the Remunity cartridges exclusively with Remodulin. We also confirmed with the relevant
Trevyent. We submitted a 505(b)(1) new drug application (NDA) to the FDA for our Trevyent disposable treprostinil pump system in
Implantable System for Remodulin (ISR). Developed in collaboration with
RESEARCH AND DEVELOPMENT UPDATE
Our clinical studies remain open, and enrollment of new patients has resumed at select study sites for certain studies. Most of our ongoing clinical studies paused enrollment during the first quarter of 2020 due to the pandemic, but patients already enrolled in studies continue to receive the study drug and complete necessary clinical evaluations as appropriate.
The following studies have since re-opened enrollment at select sites:
- the BREEZE and pivotal pharmacokinetics studies of Treprostinil Technosphere® — while the BREEZE study remains ongoing, the pharmacokinetics study was completed in
October 2020 ; - the ADVANCE OUTCOMES study of ralinepag;
- the SAPPHIRE study of Aurora-GT™;
- our phase 1 study of Unexisome™ for bronchopulmonary dysplasia; and
- our initial phase 1 study of OreniPro™, which has since been completed.
We also recommenced startup activities for the ADVANCE CAPACITY study of ralinepag. While enrollment of the PERFECT study of Tyvaso in pulmonary hypertension associated with chronic obstructive pulmonary disease (PH-COPD) remains paused, we are continuing new clinical site startup activities for this study.
Although we re-opened enrollment of certain studies at a limited number of clinical trial sites, it is difficult to predict when we will be able to re-open enrollment at additional sites for these studies, and whether we will experience further disruptions as the pandemic unfolds. In addition, it is unclear what impact the pandemic may have on the timing of future studies, such as our planned TETON studies. As such, we expect that completion and data readouts for several of our ongoing and planned studies will be delayed, but we do not currently expect delays of our near-, medium-, and long-term windows for product launch plans. To mitigate potential delays, we are expanding our efforts to enter into contracts with additional clinical study sites and complete other site activation activities for certain studies where practicable so that we may rapidly resume enrollment of our clinical studies at the appropriate time.
Treprostinil Technosphere dry powder inhaler — BREEZE. The BREEZE study (NCT03950739) seeks to evaluate 45 patients on a stable dose of Tyvaso after switching to our new dry powder inhaler (DPI) form of treprostinil, which we licensed from MannKind Corporation. The primary endpoint of the study is the number of subjects with treatment-emergent adverse events after three weeks of treatment with the DPI. In
Unituxin in relapsed/refractory neuroblastoma — ANBL1221. We are pursuing an indication expansion for Unituxin for the treatment of pediatric patients with relapsed or refractory neuroblastoma based on the results of the
Tyvaso in PH-COPD — PERFECT. The PERFECT study (NCT03496623) seeks to evaluate Tyvaso in patients with PH-COPD. In a 30-week crossover study, 136 subjects will be randomized between inhaled treprostinil and placebo for a 26-week treatment period. The primary endpoint of the study is the change in 6MWD from baseline to week 12 on active treatment compared to placebo. A contingent design for the study allows for the evaluation of 314 patients in two parallel groups.
Tyvaso in patients with chronic fibrosing interstitial lung disease (CFILD) — TETON. We are planning a new phase 3 program called TETON, which will be comprised of one or more phase 3 studies of Tyvaso in subjects with various forms of chronic fibrosing interstitial lung diseases, which includes patients with idiopathic interstitial pneumonias, chronic hypersensitivity pneumonitis, and environmental/occupational lung disease. The first TETON study will enroll subjects with idiopathic pulmonary fibrosis. The primary endpoint of this study is planned to be the change from baseline to week 52 in absolute forced vital capacity. This program was prompted by data from the INCREASE study, which demonstrated improvements in certain key parameters of lung function in pulmonary hypertension patients with fibrotic lung disease (improved forced vital capacity and reduced exacerbations of underlying lung disease).
Ralinepag phase 3 development program — ADVANCE CAPACITY and ADVANCE OUTCOMES. We have two ongoing phase 3 clinical studies to support the potential registration of oral ralinepag for PAH.
- ADVANCE CAPACITY. The phase 3 ADVANCE CAPACITY study (NCT04084678) seeks to evaluate 193 subjects with PAH, randomized between oral ralinepag and placebo at a 2:1 ratio, along with PAH background therapy, for 28 weeks. The primary endpoint of the study is the change from baseline to week 28 in peak oxygen consumption assessed by cardiopulmonary exercise testing.
- ADVANCE OUTCOMES. The phase 3 ADVANCE OUTCOMES study (NCT03626688) seeks to evaluate approximately 700 PAH patients, randomized 1:1 between oral ralinepag and placebo along with background therapy. The primary endpoint is the time from randomization to the first adjudicated protocol-defined clinical worsening event.
Autologous cell therapy for PAH — SAPPHIRE. Conducted by our Canadian affiliate
LNG01 in interstitial lung disease. During the third quarter of 2020, we discontinued the development of LNG01, a Wnt pathway inhibitor formerly known as SM04646, and terminated the related license agreement with
INDUCEMENT RESTRICTED STOCK UNITS
On
CONFERENCE CALL
We will host a teleconference on
This teleconference will also be webcast and can be accessed via our website at https://ir.unither.com/events-and-presentations/default.aspx.
ABOUT
Through our wholly-owned subsidiary, Lung Biotechnology PBC, we are focused on addressing the acute national shortage of transplantable lungs and other organs with a variety of technologies that either delay the need for such organs or expand the supply. Lung Biotechnology is the first public benefit corporation subsidiary of a public biotechnology or pharmaceutical company.
NON-GAAP FINANCIAL INFORMATION
This press release contains a financial measure, non-GAAP earnings, which does not comply with
We use non-GAAP earnings to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources in an effort to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) assessing our capacity to fund capital expenditures and expand our business. We believe this non-GAAP financial measure improves investors' understanding of our financial results by providing greater transparency with respect to the information our management uses to evaluate and compare the performance of our core operations and make operating decisions. This non-GAAP financial measure enables investors to see our business through the eyes of our management. However, there are limitations in the use of this non-GAAP financial measure in that it excludes certain operating expenses that are recurring in nature. In addition, our calculation of this non-GAAP financial measure may differ from the methodology used by other companies. The presentation of this non-GAAP financial measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of net income, the most directly comparable GAAP financial measure, to non-GAAP earnings can be found in the table above under the heading, Non-GAAP Earnings.
FORWARD-LOOKING STATEMENTS
Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, our launch plans for the INCREASE product label expansion for Tyvaso, the Remunity Pump, and the ISR, and the potential of these three launches to return our company to revenue growth, our planned launch of Trevyent, our research and development plans and regulatory filings related to Treprostinil Technosphere, OreniPro, Unituxin, the TETON, PERFECT and SAPPHIRE studies, ralinepag, and our organ transplantation programs, our expectation that we will sustain our success in the long-term, and similar statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are subject to certain risks and uncertainties, including the effects of and uncertainty surrounding the COVID-19 pandemic, as well as those described in our periodic reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from anticipated results. Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in our periodic reports and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We are providing this information as of
Orenitram, Remodulin, Trevyent, Tyvaso, and Unituxin are registered trademarks of
Technosphere is a registered trademark of MannKind Corporation.
Adcirca is a registered trademark of Eli Lilly and Company.
CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) |
|||||||
Three Months Ended |
|||||||
2020 |
2019 |
||||||
(Unaudited) |
|||||||
Revenues: |
|||||||
Net product sales |
$ |
380.1 |
$ |
401.5 |
|||
Total revenues |
380.1 |
401.5 |
|||||
Operating expenses: |
|||||||
Cost of product sales |
24.0 |
33.0 |
|||||
Research and development |
68.7 |
85.7 |
|||||
Selling, general, and administrative |
66.3 |
99.4 |
|||||
Total operating expenses |
159.0 |
218.1 |
|||||
Operating income |
221.1 |
183.4 |
|||||
Interest income |
6.4 |
12.1 |
|||||
Interest expense |
(4.9) |
(11.7) |
|||||
Other expense, net |
(0.1) |
(16.9) |
|||||
Impairment of investment in privately-held company |
(3.5) |
— |
|||||
Total other expense, net |
(2.1) |
(16.5) |
|||||
Income before income taxes |
219.0 |
166.9 |
|||||
Income tax expense |
(47.8) |
(34.5) |
|||||
Net income |
$ |
171.2 |
$ |
132.4 |
|||
Net income per common share: |
|||||||
Basic |
$ |
3.86 |
$ |
3.02 |
|||
Diluted |
$ |
3.84 |
$ |
3.01 |
|||
Weighted average number of common shares outstanding: |
|||||||
Basic |
44.4 |
43.9 |
|||||
Diluted |
44.6 |
44.0 |
SELECTED CONSOLIDATED BALANCE SHEET DATA (Unaudited, in millions) |
|||
|
|||
Cash, cash equivalents, and marketable investments |
$ |
2,808.0 |
|
Total assets |
4,411.2 |
||
Total liabilities |
1,128.1 |
||
Total stockholders' equity |
3,283.1 |
Contact:
Phone: (202) 919-4097
Email: [email protected]
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