United Therapeutics (UTHR)

Q2 2011 Earnings Call

July 28, 2011 9:00 am ET


John Ferrari - Chief Financial Officer, Principal Accounting Officer and Treasurer

Martine Rothblatt - Founder, Chairman and Chief Executive Officer

Roger Jeffs - President, Chief Operating Officer and Director


Navdeep Singh - Deutsche Bank AG

Salim Syed

Mike Schmidt

Philip Nadeau - Cowen and Company, LLC

Terence Flynn - Lazard Capital



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Good morning. My name is Mary, and I will be your conference operator today. At this time, I would like to welcome everyone to the United Therapeutics Corporation Second Quarter 2011 Earnings Conference Call. [Operator Instructions]

Remarks today concerning United Therapeutics will include forward-looking statements, which represent United Therapeutics' expectations or beliefs regarding future events based on current assumptions. United Therapeutics cautions that such statements involve risks and uncertainties that may cause actual results to differ materially from those in the forward-looking statements. Consequently, all such forward-looking statements are qualified by the cautionary language and risk factors set forth in United Therapeutics' periodic and other reports filed with the SEC. There can be no assurance that the actual results, events or developments referenced in such forward-looking statements will occur or be realized. United Therapeutics assumes no obligation to update these forward-looking statements to reflect actual results, changes and assumptions or changes in factors affecting such forward-looking statements. Thank you.

Dr. Rothblatt, you may begin your conference.

Martine Rothblatt

Thank you, Cassandra, and thank you, everybody for joining our quarterly United Therapeutics conference call for the second quarter of 2011. I'm Martine Rothblatt, the Chairman and CEO, and I'm pleased to be joined on this conference call by Dr. Roger Jeffs, our President and Chief Operating Officer; and Mr. John Ferrari, our Chief Financial Officer.

I'm pleased with the successful unblinding of the FREEDOM-M study this quarter as well as the very good operating results we achieved. We remain on track to reach our 2011 forecast for revenues of $750 million, with a plus/minus margin of 5%.

Before I move into the question-and-answer section of the conference call, let me share with you some highlights with regard to, first, our treprostinil franchises. And then I'll review where we are on some of our non-treprostinil franchises.

So starting with treprostinil. Remodulin continues to be going very strong, roughly speaking $400 million a year revenue run rate. A couple of interesting notes on Remodulin is that we now have over 20 patients on implantable pumps using Remodulin. That's about 18 or maybe 19 patients in Europe and a couple of patients already in the U.S. The ones in the U.S. using the Medtronic SynchroMed II device and the ones in Europe using a device from a company called OMP. So the implantable pump program is going well, and I think both the physicians and patients really enjoy having that option even though it's just developmental at this point.

Tyvaso. Tyvaso revenues also going very strong. An interesting note on Tyvaso is that as the drug has reached a little bit more maturity in the market, we're seeing a steady uptick in the average number of months that patients are on therapy. I believe we're now crossing about 16 months for average patient on therapy, and that's been a steady upward trend. Very, very good indicator for the future.

I've mentioned our great satisfaction with unblinding FREEDOM-M for oral treprostinil with high statistical significance. And everything is going so smoothly with the unblinding of FREEDOM-C2 that we're likely to have those results even a little bit earlier than previously thought, probably by the end of August. So that's the treprostinil franchise looking very, very good.

Let's talk a little bit about the non-treprostinil franchises. First of all, Adcirca is now hitting about 75% of market share among the top 2 deciles. Deciles are you divide the total number of patients in the market into -- by 1/10 and each 1/10 represents the number of doctors treating those patients. So at the top deciles, doctor treat -- a few doctors treat a lot of patients. At the bottom deciles, many doctors treat perhaps 1 or 2 patients. So the top deciles are also where the key opinion leaders often are simply because they have the most experience with the most patients. And it's exciting to see more than 75% of their PDE-5 prescriptions being for Adcirca. That's a extremely simply positive signal for the future of that therapy. Overall, we remain on track for 50% market share in the PDE-5 space by the end of this year.

A second note on our non-treprostinil franchises has to deal with our second-generation prostacyclin analogue, BPSMR [ph]. This drug is now gearing up to start its pivotal study starting in the fourth quarter. It will be a morbidity and mortality, time to clinic worsening type of endpoint, which hopefully will result in a very strong second-generation type of prostacyclin analogue label.

And finally, in the non-treprostinil franchise area, I'd like to comment on the closing in time for us being able to make our chimeric antibody against neuroblastoma available to the market. This is a drug that the NCI sponsored a large pivotal study for. It showed it to be safe and effective. The results were published earlier this year in the New England Journal of Medicine. We won a competitive out-licensing effort by NCI, and so we don't have to do any further clinical development with this drug. We simply have to transition the manufacturing from a government mAb facility to our own mAb commercial facility and have that approved by the FDA.

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