This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

United Therapeutics Could Lose The Battle For PAH Therapies

The generic risk for Tyvaso is slightly different. The drug received FDA approval in 2009 and is still protected by Orphan Drug Exclusivity, which grants seven years of marketing exclusivity to new drugs that treat diseases affecting fewer than 200,000 patients in the U.S. Once Orphan Drug Exclusivity expires in mid-2016, United Therapeutics must rely on a "method of use" patent (expiring in 2018) to protect the franchise. That's a skimpy defense.

Remodulin and Tyvaso account for more than 85% of United Therapeutics' revenue base. Unless management can convince investors that the company's R&D efforts will yield new growth drivers, worries about the earnings "cliff" seem likely to keep the multiple under pressure near-term.

Enter oral treprostinil, also known as oral Remodulin.

United Therapeutics has completed three pivotal trials of oral treprostinil. One of these tested the drug as monotherapy (FREEDOM-M) and two examined use in the combination with other drugs (FREEDOM-C and FREEDOM-C2). The company has initiated another combination study of oral treprostinil, dubbed FREEDOM-C3. Results from this trial, which uses a different primary endpoint than the earlier combination studies, will be available in 2015.

The combination studies are easy to evaluate because both failed badly.

FREEDOM-C failed in late 2008, with drug-treated patients showing only an 11-meter improvement in six-minute walk test (6MWT) scores versus placebo after 16 weeks of treatment. 11 meters -- does that number sound familiar? Management argued that the study failed due to an excess of adverse event-related dropouts in the drug arm and patients' inability to slowly titrate to effective doses. To solve this issue, the company developed a lower dose pill and initiated the FREEDOM-C2 trial.

In mid-2011, FREEDOM-C2 also failed. Patients treated with oral treprostinil experienced only a slight improvement of 10 meters (again) -- in 6MWT scores compared to placebo after 16 weeks. Despite cautious titration, dropouts due to adverse events in the oral treprostinil arm were once again much higher than in the placebo group (11% versus 3%.)

Now let's look at the monotherapy data from the FREEDOM-M trial.

In mid-2011, United Therapeutics announced that oral treprostinil demonstrated a statistically significant 23-meter improvement in 6MWT scores compared to placebo (p = 0.0125.) Importantly, the company used an earlier time point -- 12 weeks -- in FREEDOM-M than in the combination studies, presumably in an effort to minimize toxicity-related dropouts.

The oral treprostinil data from the monotherapy trial look weak to me. The 23-meter benefit in the 6MWT is just a 7% relative improvement from baseline -- not clinically meaningful. Drug-related toxicities are clearly difficult to manage.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GSK $47.42 0.00%
NVS $102.40 0.00%
UTHR $155.05 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs