United Therapeutics Corporation (UTHR) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call reflects strong financial performance with record revenue and growth in key products like Tyvaso DPI. The Q&A section reveals confidence in ongoing trials and a robust share repurchase plan, indicating management's belief in the company's future prospects. While there were some unanswered questions, overall sentiment remains positive, driven by strong financials and optimistic guidance.

Key Financial Performance

Total Revenue $799 million, reflecting 12% growth over the second quarter of 2024. This marks the 12th consecutive quarter of double-digit year-over-year total revenue growth, driven by robust results across the commercial portfolio.

Tyvaso DPI Revenue $315 million, representing 22% growth over the second quarter of 2024. This growth is attributed to record patient shipments and strong underlying dynamics, including referrals and starts reaching record levels.

Operating Cash Flow Nearly $1.5 billion annually. This is a result of exceptional operating efficiency and disciplined capital allocation.

Orenitram Revenue Achieved a record in both total revenue and patient shipments. This growth is part of the overall strong performance of the commercial portfolio.

Remodulin Performance Notched a top 5 quarter in total patient shipments. Strong demand continues, and the launch of the next-generation pump RemunityPRO is anticipated later this year.

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Operating Highlights

Tyvaso DPI: Achieved record total revenue of $315 million, representing 22% growth over the second quarter of 2024. Marked a record for patient shipments and referrals.

TETON studies: Focused on idiopathic pulmonary fibrosis (IPF). TETON 2 study results expected in September 2025, with potential to add IPF to Tyvaso's labeled indications by 2027.

RemunityPRO: Next-generation pump for Remodulin expected to launch later this year.

miroliverELAP study: First patient enrolled and treated in this study.

Revenue Growth: Reported record total revenue of $799 million, reflecting 12% growth over the second quarter of 2024. Achieved 12 consecutive quarters of double-digit year-over-year revenue growth.

Share Repurchase: Board authorized repurchase of up to $1 billion in shares through March 2026, citing confidence in upcoming catalysts and market positioning.

Operating Cash Flow: Generated nearly $1.5 billion in annual operating cash flow, enabling strategic capital allocation.

Pipeline Website: Launched a new pipeline website to provide detailed information on pipeline candidates.

Organ Development Programs: Progressing organ alternative technologies, including the first transplant in the EXPAND-UKidney clinical study and filing for the EXTEND and EXPRESS studies.

Competitive Positioning: Addressed competition from Liquidia's treprostinil dry powder inhaler, emphasizing Tyvaso DPI's superior product profile and market experience.

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Risk or Challenges

Market competition from Liquidia's treprostinil dry powder inhaler: Concerns about misinformation in the marketplace regarding Tyvaso DPI's dosing, tolerability, particle deposition, and ease of use. Liquidia's product is attempting to differentiate itself, which could impact Tyvaso DPI's market share.

TPIP Phase IIb PAH data concerns: Imbalances in patient population and statistical analysis in the TPIP Phase IIb PAH study may have overestimated the treatment effect. This could lead to potential challenges in competing with TPIP if it progresses to market.

Regulatory and safety hurdles for TPIP: TPIP lacks long-term safety data and faces regulatory challenges, including orphan drug exclusivity for Tyvaso until 2034. However, if approved, it could pose a competitive threat in the long term.

Dependence on TETON 2 and TETON 1 study outcomes: The success of the TETON 2 and TETON 1 studies is critical for expanding Tyvaso's indications to idiopathic pulmonary fibrosis (IPF). Any unfavorable results could hinder growth prospects.

Economic uncertainties and share price volatility: The company has authorized a $1 billion share repurchase program, citing recent dislocation in share price. This indicates potential concerns about market perception and economic uncertainties.

Pipeline development risks: The company is heavily reliant on the success of its innovation and revolution waves, including organ alternative technologies and new drug applications. Delays or failures in these programs could impact long-term growth.

Competitive pressures in pulmonary hypertension market: The launch of competing products and the evolving landscape of pulmonary hypertension treatments could challenge the company's market position and revenue growth.

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Guidance & Outlook

Revenue Growth: The company expects to sustain growth in its foundational business, which continues to drive significant cash flow and opportunity. This includes the Tyvaso franchise, which is expected to propel future growth.

Clinical Trials and Product Development: The TETON 2 study results for idiopathic pulmonary fibrosis (IPF) are expected in September 2025, with TETON 1 results anticipated in the first half of 2026. If successful, these studies will support a regulatory filing to add IPF to the labeled indications for nebulized Tyvaso, with a commercial launch planned by 2027.

Innovation and Pipeline Expansion: The company is progressing its innovation wave, including the ADVANCE OUTCOMES study in pulmonary arterial hypertension and the EXPAND - UKidney clinical study. Additionally, investigational new drug applications have been filed for the EXTEND study (UThymoKidney) and EXPRESS study (UHeart).

Financial Strategy: The Board of Directors has authorized the repurchase of up to $1 billion in shares through March 2026, reflecting confidence in the company's upcoming catalysts and financial position.

Market Position and Competition: The company is confident in its competitive position, particularly with Tyvaso DPI, despite the launch of competing products. It plans to enhance its product offerings with new devices and combinations to improve patient convenience.

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Shareholder Return Plan

Share Repurchase Authorization: The Board of Directors has authorized the repurchase of up to $1 billion in shares through March of next year.

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Key Q&A

Q:What are the comments on Yutrepia uptake in PAH and ILD, and why was ex U.S. nebulized Tyvaso down sequentially?

A:Michael Benkowitz stated that the Yutrepia launch is going as expected, with strong shipments and orders in June and positive trends in July. He attributed the decline in ex U.S. nebulized Tyvaso to ordering patterns rather than demand trends.

Q:How did the TETON trial attempt to standardize FVC decline variability in placebo arms of IPF studies?

A:Dr. Leigh Peterson explained that they used central readers for FVC results and implemented rigorous training and procedures at the site level to ensure consistency in pulmonary function testing, aiming to reduce variability.

Q:How should we interpret the IPF subgroup with pulmonary hypertension in relation to the broader IPF population?

A:Dr. Leigh Peterson highlighted that treprostinil has multiple mechanisms of action, including vasodilation and antifibrotic effects, which could make it effective in both IPF and PPF populations, regardless of pulmonary hypertension status.

Q:What are the circumstances under which the company would deploy a share repurchase authorization?

A:James Edgemond stated that the company authorized a $1 billion share repurchase due to the strength of their commercial business, robust balance sheet, confidence in upcoming catalysts, and belief in their stock's potential as an investment opportunity.

Q:What will be considered clinically meaningful for FVC results in the TETON trial, and how many patients have pulmonary hypertension with IPF?

A:Dr. C.Q. Deng clarified that the TETON study focuses on antifibrotic effects rather than vasodilation, and they did not measure hemodynamics to determine pulmonary hypertension. Clinically meaningful results would show an 80-milliliter or greater change in FVC.

Q:What is the opportunity for ralinepag with once-daily oral dosing, and how does the refined imputation method for TETON 2 align with FDA expectations?

A:Dr. Leigh Peterson mentioned that ralinepag is powered to detect a 0.65 hazard ratio for clinical worsening events, with results expected by year-end. The refined imputation method for TETON 2 aligns with FDA feedback, including handling deaths and discontinuations through statistical models.

Q:How does the TETON study address potential unblinding due to Tyvaso-induced cough?

A:Dr. C.Q. Deng and Dr. Leigh Peterson explained that cough events occur in both active and placebo groups, reducing the risk of functional unblinding. Statistical models account for these events.

Q:How important is it to show improvement on exacerbation and establish benefits in monotherapy subgroups for IPF?

A:Dr. Leigh Peterson stated that while improvement in exacerbation is ideal, the primary focus is on achieving a clinically meaningful FVC change of 80 milliliters or more. Results will be available in September.

Q:How does background therapy use in TETON compare to INCREASE, and what impact might it have on treatment effects?

A:Dr. Leigh Peterson noted that background therapy use is higher in TETON (77% and 75%) compared to INCREASE. While effective background therapy can mute investigational drug efficacy, there is still significant room for improvement in FVC outcomes.

Q:How does the FVC imputation method in TETON align with FDA expectations?

A:Dr. Leigh Peterson confirmed that the statistical analysis plan, including the death penalty and imputation methods, aligns with recent FDA feedback and is designed to meet regulatory standards.

Q:Review of Unclear Management Responses

A:Management avoided providing a direct answer to Olivia Brayer's follow-up question on TETON, citing time constraints. Additionally, Andreas Argyrides' follow-up question on the refined imputation method for TETON 2 was not fully addressed during the call.

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Earnings Word Cloud

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