Case study outline consideration
I.
II.
III.
IV.
V.
VI.
Introduction – at least one paragraph.
External Environment
A. Industry overview and analysis
1. Industry trend – at least one paragraph
2. Competitor discussion – at least one paragraph
B. Five Forces
1. Threat of new entrants – at least three sentences
2. Threat of substitutes – at least three sentences
3. Bargaining power of buyers – at least three sentences
4. Bargaining power of suppliers – at least three sentences
5. Intensity of competition – at least three sentences
Internal analysis
A. Core competency – one paragraph
B. SWOT analysis
1. Strengths
a. First strength – one paragraph
b. Second strength – one paragraph
2. Weaknesses
a. First weakness – one paragraph
b. Second weakness – one paragraph
3. Opportunities
a. First opportunity – one paragraph
b. Second opportunity – one paragraph
4. Threats
a. First threat – one paragraph
b. Second threat – one paragraph
C. Strategy performance – one paragraph
D. Financial performance – one paragraph
Recommendations – at least one paragraph
References – APA formatted
Appendix
A. 2x2 SWOT matrix
Title
Introduction
Write a minimum of one paragraph.
External Environment
Industry overview and analysis
Industry trend
Write a minimum of one paragraph.
Competitor discussion
Write a minimum of one paragraph.
Five Forces
Threat of new entrants
Write at least three sentences.
Threat of substitutes
Write at least three sentences.
Bargaining power of buyer
Write at least three sentences.
Bargaining power of suppliers
Write at least three sentences.
Intensity of competition
Write at least three sentences.
Internal analysis
Core competency
Write one paragraph.
SWOT analysis
Strengths
First strength – write one paragraph.
Second strength – write one paragraph.
Weaknesses
First weakness – write one paragraph.
Second weakness – write one paragraph.
Opportunities
First opportunity – write one paragraph.
Second opportunity – write one paragraph.
Threats
First threat – write one paragraph.
Second threat – write one paragraph.
Strategy performance
Write at least one paragraph.
Financial performance
Write at least one paragraph.
Discussion
One paragraph synthesis of strengths and weaknesses.
One paragraphs synthesis of opportunities and threats.
One paragraph synthesizing both of the above paragraphs.
Recommendation
Write at least one paragraph wrap up.
References
Note; references start on their own page, title page for references should not be bold,
references should be in APA format, references should be shown with a hanging indent
Appendix
2x2 SWOT matrix
Company SWOT matrix
Strengths
Internal
Strength 1
Strength 2
Weaknesses
Weakness 1
Weakness 2
Opportunities
External
Opportunity 1
Opportunity 2
Threats
Threat 1
Threat 2
Module 4 Case Assignment (SWOT Analysis)
Writing expectations include competency in the following:
Sentence Structure
Verb Tense and Agreement
Pronoun Use
Possessive Use
Punctuation
Spelling
Focus and Organization
Thesis Statement & Conclusion
The case assignment will be a 5 -8 page paper on your Signature
Assignment organization you selected in module 1. Consider yourself
a Strategic Management consultant who was selected by the CEO for
your subject matter expertise. You know the first thing to do is
conduct a SWOT analysis. You will have to find out as much as you
can about the organization you selected, and compare it to others like
it in the industry. You should base your comparison on all the topics
discussed in modules 1 - 4.
Given the above information, conduct a SWOT analysis for what you
have discovered up to now. For example, it's up to you to identify
SWOT in the organization based on the research conducted on that
organization compared with others. The paper should be written in
APA format with a minimum of 7 references (at least 5 references
should be from Academic databases, such as EbscoHost). The 5 - 8
pages do not include the title page, bibliography and any appendices.
Areas to consider/include in your paper:
Provide one to two paragraphs on the trends in the company’s
industry, and explain how these trends might impact a
company’s strategy.
Provide one paragraph on the company’s strategic intent.
Explain in one paragraph the company’s financial objectives
and if they have achieved these objectives successfully.
Must be double-spaced with 1-inch margins and typed in
12-point Times New Roman.
Essays should be proofread for spelling and grammar
mistakes.
Essays should be in APA style.
You must cite all texts used, including page numbers to avoid
plagiarism.
Your essay must have a thesis statement and conclusion that
are both supported by research and analysis.
If you do not turn in your Case Assignment before the deadline, points
may be deducted from your score for tardiness. If you anticipate a
problem turning in your assignment on time, please contact your
instructor immediately to avoid a failing grade for non-submission.
Powered by TCPDF (www.tcpdf.org)
Contact: Dewey Steadman
Phone: (202) 919-4097
Email: ir@unither.com
United Therapeutics Corporation Reports Fourth Quarter
and Full Year 2019 Financial Results
~ Full year net revenue growth of 3% excluding Adcirca® ~
~ Company expects 2020 full year net revenue growth ~
~ INCREASE study of Tyvaso® in PH-ILD meets primary and secondary endpoints ~
~ Remunity™ system cleared by FDA for pharmacy-filled use; launch expected by July 2020 ~
Silver Spring, MD and Research Triangle Park, NC, February 26, 2020: United Therapeutics Corporation
(Nasdaq: UTHR) today announced its financial results for the fourth quarter and year ended December 31,
2019. Full year net revenue decreased 11% to $1,449 million, largely due to the launch of generic versions of
Adcirca® in late 2018. Full year net revenue excluding Adcirca increased 3% in 2019 as compared to 2018.
Quarterly net revenue of $311 million decreased 18% from the prior year. The year-over-year quarterly revenue
decline was largely due to an estimated $43.6 million decrease in purchases of our treprostinil-based products in
the fourth quarter of 2019 by one U.S. distributor to adjust its inventory levels to correct for a mistake in the
distributor’s utilization calculations. The distributor adjustment is not reflective of a change in actual patient
utilization or demand as there was no material change to treprostinil products dispensed by our distributors to
patients during 2019.
“Following the positive results of the INCREASE study of Tyvaso® (treprostinil) Inhalation Solution in
pulmonary hypertension associated with interstitial lung disease (ILD), we’re looking forward to submitting a
supplemental new drug application to expand the Tyvaso label mid-year that, if approved, could expand
Tyvaso’s addressable U.S. population by more than 30,000 patients and help patients with no available
approved therapies control their pulmonary hypertension associated with ILD,” said Martine Rothblatt, Ph.D.,
Chairman and Chief Executive Officer of United Therapeutics. “After INCREASE, we’re looking forward to
continued progress on three new infusion systems for delivery of parenteral treprostinil over the next 18
months: the launch of the Remunity™ system by July of this year, FDA action on the Trevyent® system, and
the potential launch of the Implantable System for Remodulin expected next year.”
Michael Benkowitz, President and Chief Operating Officer of United Therapeutics, commented, “Overall, we
are pleased with the growth in our treprostinil products in 2019, and in particular, the strength in Remodulin
new patient starts and active patients on therapy, despite generic competition for most of the year. With 2020
representing the first full year of an expanded Orenitram® label reflecting the FREEDOM-EV results, and the
anticipated near-term launch of Remunity, we’re confident in our ability to grow our net revenue over 2019
levels.”
1
FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS
Key financial highlights include (dollars in millions, except per share data):
Three Months Ended
December 31,
2019
2018
Year Ended
December 31,
2019
2018
Revenues
$
311.1 $
381.4 $
1,448.8 $
1,627.8
Net income (loss)
$
52.6 $
65.3 $
(104.5) $
589.2
Non-GAAP earnings(1)
$
86.3 $
147.1 $
569.2 $
676.0
Net income (loss), per basic share
$
1.20 $
1.50 $
(2.39) $
13.54
$
1.20 $
1.48 $
(2.39) $
13.39
$
1.96 $
3.34 $
12.94 $
15.36
Net income (loss), per diluted share
(1)
Non-GAAP earnings, per diluted share
(1)
See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income
(loss) to non-GAAP earnings below.
Revenues
The table below summarizes the components of total revenues (dollars in millions):
Three Months Ended
December 31,
2019
2018
Percentage
Change
Year Ended
December 31,
2019
Percentage
2018
Change
Net product sales:
Remodulin®
$
Tyvaso®
Orenitram®
Unituxin
®
Adcirca®
Total revenues
$
107.4 $
159.1
(32)% $
587.0 $
599.0
(2)%
91.4
106.9
(14)%
415.6
415.2
—%
50.9
49.6
3%
225.3
205.1
10%
33.6
24.1
39%
113.7
84.8
34%
27.8
41.7
(33)%
107.2
323.7
(67)%
1,627.8
(11)%
311.1 $
381.4
(18)% $
1,448.8 $
Revenues for the quarter and year ended December 31, 2019, decreased by $70.3 million and
$179.0 million, respectively, as compared to the same periods in 2018. The decrease in full year
revenues was primarily due to a decrease in Adcirca sales as a result of the onset of generic
competition for Adcirca in August 2018. Net revenues from our treprostinil-based products
(Remodulin, Tyvaso and Orenitram) grew by $8.6 million in full year 2019, compared to 2018.
As we note in our Annual Report on Form 10-K for 2019, our distributors typically place
monthly orders based on utilization trends and contractual minimum and maximum inventory
requirements. As a result, sales of Remodulin, Tyvaso and Orenitram can vary depending on the
timing and magnitude of these orders and do not precisely reflect changes in patient demand for
our products. The information we have on patient demand, active patients on therapy and
patients using these products for the first time is based upon our review of patient utilization data
provided to us by our specialty pharmaceutical distributors.
2
U.S. patient demand for Remodulin remained strong across 2019. Despite the launch of generic
versions of treprostinil, the number of new U.S. patients starting to use Remodulin in 2019
reached the highest level in the last ten years. A small percentage of higher dose Remodulin
patients transitioned to generic treprostinil when the first generic version became available in
2019, but these transitions declined to a negligible amount in the fourth quarter of 2019. After
these initial transitions to generic treprostinil, U.S. patient demand for Remodulin remained
consistent across the second, third and fourth quarters. As new patients who started Remodulin in
2019 titrate to their effective dose, and assuming the rate of patient transitions from Remodulin
to generic treprostinil does not materially change, we expect to see a corresponding increase in
our U.S. Remodulin revenues in 2020.
Distributor Adjustment. During the fourth quarter of 2019, one of our U.S. distributors
identified a mistake in its utilization data, which caused the distributor to order more
product than normal, primarily in the third quarter of 2019. Specifically, we estimate that
the distributor’s excess orders of Remodulin, Tyvaso and Orenitram generated additional
net sales for these products totaling $15.6 million, $10.6 million and $5.2 million,
respectively, or $31.4 million in total, during the third quarter of 2019. Upon the
distributor’s correction of its utilization data in the fourth quarter of 2019, the distributor
reduced its purchases of our products in order to normalize its inventory levels. We
estimate that this correction reduced our net sales of Remodulin, Tyvaso and Orenitram
during the fourth quarter of 2019 by $21.9 million, $14.4 million and $7.3 million,
respectively, or $43.6 million in total. We believe this distributor’s inventory levels have
returned to normal, and anticipate more traditional ordering patterns going forward.
While this inventory fluctuation had a significant impact on our net sales during the third
and fourth quarters of 2019, the effect on full-year net revenues was negligible.
Remodulin net product sales for the quarter ended December 31, 2019 decreased by
$51.7 million as compared to the quarter ended December 31, 2018. U.S. Remodulin net
product sales decreased by $37.5 million, primarily due to: (1) the $21.9 million negative
impact of a distributor reducing its purchases of Remodulin in order to normalize its
inventory levels, as discussed above; and (2) a decrease in quantities sold of $13.4
million, primarily due to changes in patient mix that resulted from a limited number of
existing higher dosage patients switching to generic treprostinil during the second quarter
of 2019, and the fact that new patients start on lower dosages of Remodulin and then
begin the process of titrating to their effective dose. International Remodulin net product
sales decreased by $14.2 million, primarily due to: (1) lower quantities sold of $10.9
million; and (2) the $3.9 million impact of price reductions to certain international
distributors.
Remodulin net product sales for the year ended December 31, 2019 decreased by $12.0
million as compared to 2018. U.S. Remodulin net product sales decreased by $37.5
million, primarily due to: (1) a decrease in quantities sold of $24.0 million, primarily due
to changes in patient mix that resulted from a limited number of existing higher dosage
patients switching to generic treprostinil, and the fact that new patients start on lower
dosages of Remodulin and then begin the process of titrating to their effective dose; and
(2) higher gross-to-net revenue deductions of $11.0 million. International Remodulin net
product sales increased by $25.5 million, primarily due to higher quantities sold of $47.0
3
million, partially offset by the $21.5 million impact of price reductions to certain
international distributors.
Tyvaso net product sales for the quarter ended December 31, 2019 decreased by $15.5
million as compared to the quarter ended December 31, 2018. The decrease was
primarily due to: (1) higher gross-to-net revenue deductions of $17.1 million, which
included the reversal in the fourth quarter of 2018 of an estimated $15.4 million liability
for Medicaid rebates; and (2) the $14.4 million negative impact of a distributor reducing
its purchases of Tyvaso in order to normalize its inventory levels, as discussed above.
This decrease was partially offset by: (1) the impact of replacing $6.2 million of
commercial Tyvaso in the fourth quarter of 2018 that a U.S. distributor previously used in
connection with a clinical trial; and (2) the $4.8 million impact of a January 2019 price
increase.
Tyvaso net product sales for the year ended December 31, 2019 increased by $0.4 million
as compared to 2018. The increase was primarily due to: (1) the $21.6 million impact of a
January 2019 price increase; and (2) the impact of replacing $6.2 million of commercial
Tyvaso product in 2018 that a U.S. distributor previously used in connection with a
clinical trial. This increase was partially offset by higher gross-to-net revenue deductions
of $24.3 million, which included the reversal in 2018 of an estimated $15.4 million
liability for Medicaid rebates.
Orenitram net product sales for the quarter and year ended December 31, 2019 increased
by $1.3 million and $20.2 million, respectively, as compared to the same periods in 2018.
For the quarter and year ended December 31, 2019, these increases resulted from: (1)
$7.6 million and $16.4 million, respectively, due to growth in the number of patients
being treated with Orenitram; and (2) $2.8 million and $12.3 million, respectively, due to
a January 2019 price increase, partially offset by higher gross-to-net revenue deductions
of $1.8 million and $8.5 million, respectively. In addition, the fourth quarter of 2019
included the $7.3 million negative impact of a distributor reducing its purchases of
Orenitram in order to normalize its inventory levels, as discussed above.
Unituxin net product sales for the quarter and year ended December 31, 2019 increased
by $9.5 million and $28.9 million, respectively, as compared to the same periods in 2018.
For the quarter and year ended December 31, 2019, these increases resulted from: (1) a
$6.5 million and $21.5 million, respectively, increase in the number of vials sold; and (2)
$3.1 million and $8.3 million, respectively, due to an April 2019 price increase.
Adcirca net product sales for the quarter and year ended December 31, 2019 decreased
by $13.9 million and $216.5 million, respectively, as compared to the same periods in
2018. These decreases were primarily due to a decrease in bottles sold following the
onset of generic competition for Adcirca beginning in August 2018.
4
Expenses
Cost of product sales. The table below summarizes cost of product sales by major category
(dollars in millions):
Three Months
Ended
December 31,
2019
Percentage
2018
Change
Year Ended
December 31,
2019
2018
Percentage
Change
Category:
Cost of product sales
$
Share-based compensation
expense (benefit)(1)
Total cost of product sales
(1)
28.2
$
0.6
$
28.8
$
32.2
(12)% $ 117.4
(0.3)
300%
31.9
(10)% $ 117.6
0.2
$ 201.9
(3.2)
$ 198.7
(42)%
106%
(41)%
Refer to Share-based compensation below for discussion.
Cost of product sales, excluding share-based compensation. The decrease in cost of product
sales of $4.0 million for the quarter ended December 31, 2019, as compared to the same period
in 2018, was primarily attributable to a decrease in royalty expense for Adcirca as fewer bottles
were sold following the onset of generic competition for Adcirca beginning in August 2018.
The decrease in cost of product sales of $84.5 million for the year ended December 31, 2019, as
compared to the same period in 2018, was primarily attributable to a $91.9 million decrease in
royalty expense for Adcirca as fewer bottles were sold following the onset of generic
competition for Adcirca beginning in August 2018.
Research and development expense. The table below summarizes research and development
expense by major category (dollars in millions):
Three Months
Ended
December 31,
Percentage
2019
2018
Change
Research and development
projects
$ 109.6
$ 139.9
Share-based compensation
expense (benefit)(1)
4.0
Year Ended
December 31,
2019
2018
Percentage
Change
Category:
Total research and
development expense
(1)
$ 113.6
(1.1)
$ 138.8
(22)% $ 1,182.2
464%
0.4
(18)% $ 1,182.6
$ 370.0
(12.1)
$ 357.9
220%
103%
230%
Refer to Share-based compensation below for discussion.
Research and development expense, excluding share-based compensation. We continued to
invest in our product pipeline during 2019, which includes products in multiple phase III clinical
trials as well as programs in regenerative medicine and organ manufacturing. The decrease in
5
research and development expense of $30.3 million for the quarter ended December 31, 2019, as
compared to the same period in 2018, was primarily due to a decrease in one-time payments of
$32.5 million under our licensing and research agreements with MannKind Corporation
(MannKind).
The increase in research and development project expense of $812.2 million for the year ended
December 31, 2019, as compared to 2018, was driven by the continued investment in our product
pipeline, which includes multiple phase III clinical trials in cardiopulmonary diseases and
oncology as well as programs in regenerative medicine and organ manufacturing. Research and
development expense for the treatment of cardiopulmonary diseases increased by $804.4 million
for the year ended December 31, 2019, as compared to the same period in 2018, due to: (1) an
$800.0 million up-front payment in January 2019 to Arena Pharmaceuticals, Inc. under our
licensing agreement related to ralinepag; and (2) $40.3 million of expenditures in 2019
associated with the phase III ADVANCE studies of ralinepag; partially offset by (3) a $30.0
million decrease in 2019 in spending related to one-time payments under our licensing and
research agreements with MannKind. Research and development expense for organ
manufacturing projects increased by $14.2 million for the year ended December 31, 2019, as
compared to the same period in 2018, due to increased preclinical work on technologies designed
to increase the supply and distribution of transplantable organs and tissues. Research and
development expense for cancer-related projects decreased by $10.9 million for the year ended
December 31, 2019, as compared to 2018, due to a decrease in spending on the DISTINCT study
once the study was fully enrolled in late 2018.
Selling, general and administrative expense. The table below summarizes selling, general and
administrative expense by major category (dollars in millions):
Three Months
Ended
December 31,
2019
Category:
General and administrative
Sales and marketing
Share-based compensation expense
(benefit)(1)
Total selling, general and
administrative expense
(1)
$
61.7 $
18.6
2018
58.1
16.9
24.9
$
105.2 $
Percentage
4.2
79.2
Change
6% $
10%
493%
33% $
Year Ended
December 31,
2019
230.7 $
60.7
44.8
336.2 $
2018
217.8
59.1
Percentage
Change
6%
3%
(11.1)
504%
265.8
26%
Refer to Share-based compensation below for discussion.
General and administrative, excluding share-based compensation. The increase in general and
administrative expenses of $12.9 million for the year ended December 31, 2019, as compared to
the same period in 2018, primarily resulted from: (1) a $6.7 million increase in compensation
due to an increase in staffing; and (2) a $5.6 million increase in consulting expenses.
6
Share-based compensation. The table below summarizes share-based compensation expense
(benefit) by major category (dollars in millions):
Three Months
Ended
December 31, Percentage
2019
Category:
Stock options
Restricted stock units
Share tracking awards plan (STAP)
Employee stock purchase plan
$
Total share-based compensation expense (benefit)$
2018
Change
Year Ended
December 31, Percentage
2019
2018
Change
18.3 $ 13.7
3.5
2.0
7.3 (13.3)
0.4
0.4
34%$ 70.5 $ 58.5
75% 13.3
7.3
155% (39.7) (93.4)
—%
1.3
1.2
21%
82%
57%
8%
29.5 $
954%$ 45.4 $ (26.4)
272%
2.8
The increases in share-based compensation expense of $26.7 million and $71.8 million,
respectively, for the quarter and year ended December 31, 2019, were primarily due to an
increase in STAP expense of $20.6 million and a decrease in STAP benefit of $53.7 million,
respectively. The increase in STAP expense for the quarter ended December 31, 2019 was
primarily driven by an increase in our stock price during the fourth quarter of 2019 as compared
to a decrease in our stock price during the same period in 2018. The decrease in STAP benefit
for the year ended December 31, 2019 was primarily driven by a more significant decrease in our
stock price during 2018 as compared to 2019. The remaining increase in share-based
compensation expense for the year ended December 31, 2019 was primarily due to an increase of
$12.0 million in stock option expense due to additional awards of options granted and
outstanding in 2019 and a $6.0 million increase in restricted stock unit expense due to additional
awards of restricted stock units granted and outstanding in 2019.
Other Income (Expense), Net. The increase in other income (expense), net of $30.3 million for
the year ended December 31, 2019 was primarily due to the recognition of $21.4 million net
unrealized and realized gains on publicly-traded equity securities. The remaining increase in
other income (expense), net for the year ended December 31, 2019 was primarily due to an
increase of $4.8 million of net unrealized and realized foreign currency gains compared to the
same period in 2018.
Impairments of Investment in a Privately-Held Company. We recorded no impairment
charges for the quarter and year ended December 31, 2019, and we recorded $41.1 million and
$53.5 million of impairment charges, respectively, for the quarter and year ended December 31,
2018 related to our investment in a privately-held company.
Income Taxes. The income tax benefit was $60.5 million for the year ended December 31, 2019,
as compared to income tax expense of $169.7 million for the same period in 2018. For the years
ended December 31, 2019 and 2018, the effective tax rates were approximately 37 percent and
22 percent, respectively. We recognized a loss before income taxes and a corresponding income
tax benefit for the year ended December 31, 2019, as a result of the one-time $800.0 million
payment to Arena in January 2019. As a result of this loss, our tax benefit and resulting effective
tax rate for the year ended December 31, 2019 increased primarily due to our anticipated tax
credits, compared to the year ended December 31, 2018.
7
Non-GAAP Earnings
Non-GAAP earnings is defined as net income (loss), adjusted for: (1) share-based compensation
expense (including expenses relating to stock options, restricted stock units, share tracking
awards and our employee stock purchase plan); (2) impairments of investment in privately-held
company; (3) impairment charges; (4) license-related fees; (5) impact of The Tax Cuts and Jobs
Act (Tax Reform); (6) net unrealized and realized gains on equity securities; and (7) tax benefit
on non-GAAP earnings adjustments.
A reconciliation of net income (loss) to non-GAAP earnings is presented below (in millions,
except per share data):
Three Months Ended
December 31,
2019
Net income (loss), as reported
$
2018
52.6 $
Year Ended
December 31,
2019
65.3 $
2018
(104.5) $
589.2
(26.4)
Adjusted for the following charges:
Share-based compensation expense (benefit)
29.5
2.8
45.4
Impairments of investment in privately-held company
—
41.1
—
53.5
Impairment charges
—
—
17.2
—
License-related fees
12.5
51.0
825.0
71.0
Impact of Tax Reform
—
(1.8)
Net unrealized and realized gains on equity securities
(1.9)
—
Tax benefit
(6.4)
(11.3)
$
86.3 $
147.1 $
569.2 $
676.0
Basic
$
1.97 $
3.37 $
13.00 $
15.54
Diluted
$
1.96 $
3.34 $
12.94 $
15.36
Basic
43.9
43.6
43.8
43.5
Diluted
44.0
44.0
44.0
44.0
Non-GAAP earnings
—
(1.8)
(21.4)
—
(192.5)
(9.5)
Non-GAAP earnings per share:
Weighted average number of common shares outstanding:
8
PRODUCT COMMERCIALIZATION UPDATE
Over the next 18 months, we expect to launch three products for pulmonary arterial hypertension
(PAH): the Remunity system, the Trevyent system and the Implantable System for Remodulin.
Remunity system for Remodulin. On February 24, 2020, we announced FDA clearance
of the pharmacy-filled version of the Remunity system for Remodulin, developed in
partnership with DEKA. We plan to make the Remunity system available to patients by
July 2020. The Remunity system consists of a small, lightweight, ambulatory pump that
is intended to have a service life of at least three years. The Remunity system uses
disposable prefilled cassettes, which are connected to the pump. The system was initially
cleared by the FDA in May 2019 with instructions for patient filling. This additional
510(k) clearance enables cassettes to be prefilled with Remodulin by contracted specialty
pharmacy distributors in order to improve convenience for patients. We are also
developing a version of the system that includes disposable components that are prefilled
as part of the manufacturing process.
Trevyent®. We submitted a 505(b)(1) new drug application (NDA) to the FDA for our
Trevyent disposable treprostinil pump system in June 2019. The FDA accepted the NDA
for review with a Prescription Drug User Fee Act (PDUFA) target action date of April
27, 2020. However, recent interactions with the FDA have included a mid-cycle
information request from the FDA noting several deficiencies in the Trevyent NDA. We
have provided written responses to the FDA addressing these deficiencies in hopes of
preserving the current PDUFA date; however, based on recent discussions with the FDA,
we believe the PDUFA date could be extended beyond April 2020, and/or the FDA may
issue a complete response letter if the FDA is not satisfied with our responses to the
agency’s comments.
Implantable System for Remodulin (ISR). Developed in partnership with Medtronic,
the premarket approval application (PMA) for ISR was approved by the FDA in
December 2017. However, our ability to launch the product is subject to our partner
satisfying various conditions to its PMA approval. Our partner continues to work toward
satisfying these conditions, but in December 2019, due to recent FDA communications,
our partner informed us that these conditions will not be satisfied in 2020. As such we
announced on December 13. 2019 that we expect a delay in the ISR launch until 2021.
RESEARCH AND DEVELOPMENT UPDATE
Updates on selected later-stage programs are below.
Tyvaso in pulmonary hypertension due to interstitial lung disease (PH-ILD) INCREASE. On February 24, 2020, we reported that the INCREASE study of Tyvaso in
patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD)
met its primary endpoint of demonstrating improvement in six-minute walk distance
(6MWD). Tyvaso also showed benefits across several key subgroups, including etiology
of PH-ILD, disease severity, age, gender, baseline hemodynamics, and dose. Significant
improvements were also observed in each of the study’s secondary endpoints, including
reduction in the cardiac biomarker NT-proBNP, time to first clinical worsening event,
change in peak 6MWD at Week 12, and change in trough 6MWD at week 15. Treatment
9
with Tyvaso of up to 12 breaths per session, four times daily, in the INCREASE study
was well tolerated and the safety profile was consistent with previous Tyvaso studies and
known prostacyclin-related adverse events.
We expect to submit the results to the FDA by mid-year in support of an efficacy
supplement that is expected to result in revised labeling that reflects the outcome of the
INCREASE study. Detailed study results will be provided through scientific disclosure at
upcoming conferences and in peer-reviewed publications.
Treprostinil Technosphere® dry powder inhaler - BREEZE. Enrollment is ongoing
for the BREEZE study comparing our new dry powder inhaler (DPI) form of treprostinil,
which we in-licensed from MannKind, to Tyvaso.
The phase I BREEZE study (NCT03950739) seeks to evaluate 45 patients on a stable
dose of Tyvaso after switching to our new DPI. The primary endpoint of the study is the
number of subjects with treatment-emergent adverse events after three weeks of
treatment with the DPI.
We expect to receive results of the BREEZE study by mid-year 2020. During the first half
of 2020, we also plan to commence a second clinical study in healthy volunteers to
compare the pharmacokinetics of Treprostinil Technosphere to Tyvaso. We expect these
two studies, combined with long-term stability studies of the DPI product, will form the
basis of a 505(b)(1) new drug application to the FDA for our treprostinil DPI delivery
product.
Unituxin in relapsed/refractory neuroblastoma - ANBL1221. We are pursuing an
indication expansion for Unituxin in relapsed/refractory neuroblastoma based on the
results of the Children Oncology Group’s ANBL1221 study (NCT01767194). We expect
to meet with the FDA in the first half of this year to potentially support a subsequent
supplemental biologics license application.
Tyvaso in pulmonary hypertension due to chronic obstructive pulmonary disease
(PH-COPD) - PERFECT. Enrollment is ongoing for the phase III PERFECT study
evaluating Tyvaso in patients with WHO Group 3 PH associated with chronic obstructive
pulmonary disease (PH-COPD).
The PERFECT study (NCT03496623) seeks to evaluate patients with PH-COPD. In a 30week 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. A contingent design for the study allows for the
evaluation of 314 patients in two parallel groups.
We expect to provide enrollment updates for the PERFECT study in the future.
Ralinepag phase III development programs - ADVANCE CAPACITY and
ADVANCE OUTCOMES. We have two ongoing phase III clinical studies to support the
potential registration of oral ralinepag for PAH.
ADAVANCE CAPACITY. The phase III ADVANCE CAPACITY study (NCT04084678)
seeks to evaluate 193 subjects with PAH, randomized between oral ralinepag and placebo
10
at a 2:1 ratio, along with PAH background therapy, for 28 weeks with an optional open
label extension period.
The primary endpoint of the study is the change from baseline to week 28 in peak VO2
assessed by cardiopulmonary exercise testing. We expect to begin enrolling this study in
mid-year 2020.
ADVANCE OUTCOMES. The phase III ADVANCE OUTCOMES study
(NCT03626688) seeks to evaluate 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 protocoldefined clinical worsening event. This study is currently enrolling patients. We plan to
provide enrollment updates in the future.
Autologous cell therapy for PAH - SAPPHIRE. Conducted by our Canadian affiliate
Northern Therapeutics, Inc., the phase II/III SAPPHIRE study seeks to evaluate the use of
autologous endothelial progenitor cells (EPCs) transfected with human endothelial NOsynthase in patients with PAH taking conventional PAH treatments. The study seeks to
enroll 45 PAH patients in one of three arms: (1) placebo for six months followed by
autologous EPCs for six months; (2) autologous EPCs for six months followed by
placebo for six months; and (3) autologous EPCs for twelve months.
The primary endpoint is the change in 6MWD from baseline to month six. This study is
currently enrolling patients. We plan to provide enrollment updates in the future.
Unituxin in small cell lung cancer (SCLC) - DISTINCT. On February 3, 2020, we
announced that the phase II/III DISTINCT study did not meet its primary endpoint. We
continue to analyze data from the study and expect to disseminate data from the study
either at an upcoming scientific conference or in a journal publication.
INDUCEMENT RESTRICTED STOCK UNITS
On February 21, 2020, we granted a total of 3,862 restricted stock units under our 2019
Inducement Stock Incentive Plan to three newly hired employees. These restricted stock units
vest in three equal installments on February 28, 2021, February 28, 2022 and February 28, 2023,
assuming continued employment on such dates, and are subject to the standard terms and
conditions we filed with the SEC as Exhibit 10.2 to our Current Report on Form 8-K on March 1,
2019. We are providing this information in accordance with Nasdaq Listing Rule 5635(c)(4).
CONFERENCE CALL
We will host a teleconference on Wednesday, February 26, 2020, at 9:00 a.m. Eastern Time. The
teleconference is accessible by dialing (866) 209-9943 in the United States, with international
callers dialing +1 (825) 312-2282. A rebroadcast of the teleconference will be available for one
week and can be accessed by dialing (800) 585-8367 in the United States, with international
callers dialing +1 (416) 621-4642, and using access code: 1598163.
This teleconference will also be webcast and can be accessed via our website at
http://ir.unither.com/events-presentations.
11
ABOUT UNITED THERAPEUTICS
United Therapeutics Corporation focuses on the strength of a balanced, value-creating
biotechnology model. We are confident in our future thanks to our fundamental attributes,
namely our obsession with quality and innovation, the power of our brands, our entrepreneurial
culture and our bioinformatics leadership. We also believe that our determination to be
responsible citizens — having a positive impact on patients, the environment and society — will
sustain our success in the long term.
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 United States generally accepted accounting principles (GAAP). This measure supplements
our financial results prepared in accordance with GAAP as reported below.
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, statements related to our expectation of
revenue growth in 2020, our expectations regarding distributor ordering patterns, our launch
plans for Remunity, Trevyent and the ISR, our planned expansion of the Tyvaso label to include
the results of the INCREASE study and to increase the addressable U.S. patient population for
Tyvaso, our research and development plans and regulatory filings related to Treprostinil
Technosphere, Unituxin, the PERFECT and SAPPHIRE studies, ralinepag, our organ
transplantation programs, and our expectation that we will sustain our success in the long-term.
These forward-looking statements are subject to certain risks and uncertainties, such as those
12
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 forwardlooking 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 February 26, 2020, and assume no obligation
to update or revise the information contained in this press release whether as a result of new
information, future events or any other reason.
Orenitram, Remodulin, Tyvaso, Unituxin and Trevyent are registered trademarks of United
Therapeutics Corporation and its subsidiaries. Remunity is a trademark of United Therapeutics
Corporation.
Technosphere is a registered trademark of MannKind Corporation.
Adcirca is a registered trademark of Eli Lilly and Company.
13
UNITED THERAPEUTICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended
December 31,
2019
2018
Year Ended
December 31,
2019
2018
Revenues:
Net product sales
$
311.1 $
381.4 $
1,448.8 $
1,627.8
311.1
381.4
1,448.8
1,627.8
28.8
31.9
117.6
198.7
Research and development
113.6
138.8
1,182.6
357.9
Selling, general and administrative
105.2
79.2
336.2
265.8
247.6
249.9
1,636.4
822.4
63.5
131.5
Interest income
11.5
Interest expense
Total revenues
Operating expenses:
Cost of product sales
Total operating expenses
Operating income (loss)
(187.6)
805.4
8.7
44.2
28.6
(10.0)
(4.3)
(44.2)
(13.9)
Other income (expense), net
3.3
(2.9)
22.6
(7.7)
Impairment of investment in privately-held company
—
(41.1)
—
(53.5)
4.8
(39.6)
22.6
(46.5)
68.3
91.9
(165.0)
758.9
(15.7)
(26.6)
60.5
(169.7)
Total other income (expense), net
Income (loss) before income taxes
Income tax (expense) benefit
Net income (loss)
$
52.6 $
65.3 $
(104.5) $
589.2
Basic
$
1.20 $
1.50 $
(2.39) $
13.54
Diluted
$
1.20 $
1.48 $
(2.39) $
13.39
Basic
43.9
43.6
43.8
43.5
Diluted
44.0
44.0
43.8
44.0
Net income (loss) per common share:
Weighted average number of common shares
outstanding:
14
SELECTED CONSOLIDATED BALANCE SHEET DATA
(In millions)
December 31,
2019
Cash, cash equivalents and marketable securities
$
2018
2,253.4 $
1,858.5
Total assets
3,913.4
3,401.0
Total liabilities and temporary equity
1,133.0
612.4
Total stockholders’ equity
2,780.4
2,788.6
15
Purchase answer to see full
attachment