United Therapeutics (UTHR)

Q3 2011 Earnings Call

October 27, 2011 9:00 am ET


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

Martine Rothblatt - Founder, Chairman and Chief Executive Officer

Roger A. Jeffs - President, Chief Operating Officer and Director


Liana Moussatos - Wedbush Securities Inc., Research Division

Anupam Rama - JP Morgan Chase & Co, Research Division

Navdeep Singh - Deutsche Bank AG, Research Division

Terence C. Flynn - Goldman Sachs Group Inc., Research Division

Joseph P. Schwartz - Leerink Swann LLC, Research Division



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Good morning. My name is Latoya, and I will be the conference operator today. At this time, I would like to welcome everyone to United Therapeutics Corporation Third Quarter 2011 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 statements involve risks and uncertainties that may cause actual results to differ materially for those in the forward-looking statements. Consequently, all such forward-looking statements are qualified by cautionary language and risk factors set forth in United Therapeutics' periodic and other reports filed with the SEC. There can be no assurance that these 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. Good morning, everybody. I am pleased to be joined on the call this morning by our illustrious Chief Financial Officer, John Ferrari; and our dynamic President and Chief Operating Officer, Roger Jeffs. Also a few introductory remarks and then we would open up the phone lines and welcome all of your questions.

We achieved over $200 million in revenue this quarter, which reflects the continued strength of our core business. I'm also pleased to report that our Board of Directors recently authorized a $300 million share repurchase program, which has already begun to return additional value to our shareholders. The combination of these 2 main points from our quarterly release is that United Therapeutics' growth story remains very strong, and we remain committed to sharing that value with our shareholders on a regular basis.

I'd like to point out a couple of things that are, perhaps, not quite so clear from the black and white letters of the press release. The GAAP profitability has almost doubled from the third quarter of 2010 to the third quarter 2011 and also, for the 9 months of 2010 to 9 months of 2011. So that, certainly, is a very exciting dynamic indication of the strength of the core business.

Now I think when you take a look at the reasons behind the growth, one has to take a look primarily at the fact that United Therapeutics is a company that is committed to doing the absolute best that can be done for the pulmonary hypertension community. In fact, with now over 6,000 patients on Adcirca, over 3,000 patients on Flolan -- I'm sorry, on Remodulin, excuse the slip, and over 2,000 patients on Tyvaso, United Therapeutics actually helps more American patients with pulmonary hypertension than any other company in the world. And that's something we're really excited about, because we formed our company 15 years ago specifically to help patients with pulmonary hypertension.

Certainly, Adcirca has been a big part of our ability to reach out to more and more patients. Yet, even with the 6,000 patients we're helping on Adcirca, that's only about 20% of the diagnosed U.S. patients with pulmonary hypertension. And all of the data out there really supports the fact that there should be no patient with pulmonary hypertension who is not on a PDE-5 background therapy of which Adcirca is the most convenient, efficacious as any, as safe as any and the least expensive. So you really get 4 of a kind with Adcirca, and we certainly expect that growth to continue from its current 6,000 level up until we are hitting something close to the 30,000 patients in the U.S. with PAH who could all benefit with it.

Let's take a look at Tyvaso. Over 2,000 patients benefiting from that now, a true revolution in prostacyclin therapy. And what patients used to have to endure 24 hours a day, 365 days a year, they now just have 4 brief 1- to 2-minute inhalation session and achieve significant therapeutic benefit.

We're really excited with the growth in Tyvaso revenues, which we've been sharing with you for the past few quarters, but the fact of the matter is, is that in terms of Class III patients, which is the label for Tyvaso, we are serving maybe about 20% of the patients. So we still have 4 steps of the way to go to achieve the peak revenue potential of Tyvaso among the pulmonary hypertension community. So again, a very, very exciting growth trajectory on Tyvaso.

And finally, let's talk about Remodulin. Notwithstanding the fact that it has been on the market for 9 years, as the numbers for this quarter demonstrate, Remodulin continues to be a strong growth story. The reason for that is simply that physicians have achieved great comfort with Remodulin. And we, as a company, have gone to every possible length possible to make Remodulin as convenient and powerful for the patients as possible.

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