Q4 2019 Earnings Call

Listen only mode until the question and answers portion of this earnings call. If you would like to ask a question during that time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound on your telephone keypad I will now turn the conference call over to Mr. do we steadman head of Investor Relations.

United Therapeutics.

Thank you can be good morning, it's my pleasure to walk him into the not United Therapeutics Corporation fourth quarter 2019 earnings call accompanied me on today's call or Dr. Martine rock, why our chairman and Chief Executive Officer, Mr., Michael Benkel, Our President and Chief operating Officer, Mr., James Edgemond, our chief financial.

With her and Treasurer and Dr. Lee Peterson, Vice President of product development.

Arts today will include forward looking statements, representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results could differ materially our latest FCC filings, including form 10-K intend to contain additional information on these risks and uncertainties, we assume no.

Obligation to update forward looking statements.

Today's remarks, author and good financial member measures that were not prepared in accordance with U.S. generally accepted accounting principles are GAAP reconciliations of non-GAAP measures financial matters to the most directly comparable GAAP financial measures can be found in our earnings release available on our website at Www Dot unit third dot com.

Today's remarks may discuss the progress and result in clinical trials or other developments with respect to our products are these remarks are intended solely.

To educate investors and are not intended to service the basis for medical decision, making or to the suggest any that any product are safe and effective for any unapproved for investigational use of full prescribing information for the product is available on our website now I'll turn the call over to Dr. Rothblatt for an overview fourth quarter and full year and stuff.

19 financial results and business activities of United Therapeutics, but rather.

Thank you do we good morning, everyone and thank you for joining us on our fourth quarter and for your 2019 earnings call. We're conducting this call from our organ manufacturing laboratories up in Manchester, New Hampshire, because last night, we had a blowout celebration with the Decca.

Our research and development folks who are headquartered in Manchester for the up getting approval of our when using product, which we released all the news about bad on Monday, and there was a tremendous all accomplished that then a tremendous party. So we're still here up in Manchester New Hampshire.

And conducting our call from here I'm also pleased that Dr. Peterson is joining us on this call because another was a press release, we issued on Monday was healthy really you know Grand Slam home run result that we had on our increase trial in group three pullmantur.

Three hypertension and Dr. all Peterson was in charge of that clinical trial, which hit all of its primary and secondary end points and she's here on this call today to help answer any questions that may come up regarding the scientific and clinical aspects of that a increase.

Tom success.

So almost going to start the call today first with helping our president Mike Bank with explain a one time <unk> distributor inventory issue and then after that we will open up the call wise for any questions that you maybe have a regarding community increase our pipe.

Why everything else, albeit by so far.

Experts new head of IR I'd, Mr. Steadman, we've expanded this call to 45 minutes and for that there will be plenty of time pick out for everybody's questions and answers. So Mike can you I picked it up from here. Thanks, Martine I want to spend a few minutes discussing our 2019 full year revenue, especially that.

Right and inventory de stocking by one of our distributors in the fourth quarter, but unfortunately clouds are underlying product performance. Overall, we're very pleased that total proportional net revenues represented by sales of a letter from Tyvaso and Remodulin increased in 2019, despite the loss of generics against Remodulin earlier this year.

We're also pleased with the growth and gonna toxin or monoclonal antibody approved to treat pediatric neuroblastoma and this products increasing contribution to our overall revenues unituxin now contribute almost as much revenue has our next U.S. products sales. We believe these trends will continue with 2020 translating into total product revenue growth.

Sure.

The gross central crossing 11 is reflects the strong demand and patient growth trends, we have communicated on prior earnings calls and at Investor conferences throughout the second half a penny 19 and into 2020.

And 2019, we achieved the highest number of new patient starts all propofol products highlighted by the highest level of new Abad. One starts in 10 years and the highest number of new Orenitram and tidy sum starts and nearly four years.

This resulted in an all time high number of active patients on a personal product at the end of 2018.

As we mentioned consistently our public filings and periodically on these calls our U.S. proportional revenues reflects sales of our products to specialty pharmacy distributor, but typically place monthly orders based on current patient utilization trends and contractual minimum and maximum inventory requirements as a result sales of remodulin.

I'd, so and I went to trend can vary quarter to quarter, depending on the timing and magnitude of these words I do not precisely reflect changes in patient demand for a product.

In other words these order do not always track the volumes our distributors are discussing for patients in a given time period.

This variance between distributor orders and patient demand was highlighted in the fourth quarter from day.

One of our distributors identified any sneak in its utilization data, which led to larger than normal orders, where we're here.

This distributor addressed its heavy inventory by placing a smaller than normal order in the fourth quarter to normalize its inventory levels to be clear. This was not reflective of a change in actual patient utilization of the man.

In fact, U.S. orders work across all products and the first two months of 2020 have returned to levels more in line with actual over that.

We have a view into U.S. patient demand based on the data provided by our distributors regarding volumes dispensed to patients and it's important to consider this data to understand the overall demand for products, which remains strong and 29 feet.

Specifically, orenitram, who sent them and increased over the course of the year heavy aggregate was greater than 22.

Additionally, the man was also consistent over the course of the year and any aggregate relative to 2018.

Remodulin demand you asked experienced a slight decline of 2018 as compared to 20 heating.

As we have communicated previously a small percentage of hired or for module on patients transition to generic across smell. When the first generic version became available early in the second quarter 2018.

But these transitions declined to a negative negligible amount in the fourth quarter and in fact, we only saw one such transition in December.

After these initial transitions U.S. piece of the math logs, one remains very consistent across the remainder of the second third and fourth quarters of 2019.

As our new patients who struggled remodulin in 2019, hi treated our effective does that assume elaborate accretion transitions from remodulin could generic across Anil does not materially change, we expect to see a corresponding increase and both patient demand and are you watch remodulin revenues of 2020.

So in conclusion, we are pleased with the growth of our capacity based products in 2019 I believe this sweeter products is poised for continued growth in 2020 and as we grow the number of patients on therapy leveraged our expanded orenitram label, reflecting the freedom you view as Walt that lost anybody system for module importantly, we expect growth and total product.

Revenue in 2020 over 2018 levels.

Now I'll turn the call back over to my team. Thank you so much Mike.

Following the positive results of the increased study of tie they so.

In pulmonary hypertension associated with interstitial lung disease, we're looking forward to submitting a supplemental new drug application to expand the TV. So label mid year adapt if approved could expand type pesos addressable U.S. population by more than 30000 patients and help patients with no available upon.

Uhhuh therapies to control their pulmonary hypertension associated with eye Health D.

After increase we're looking forward the continued progress on three new infusion systems for delivery, a printer ultra Prost and all over the next 18 months the launch of Remunity system by July of this year after year action on trivia and the potential launch at the implantable system for Remodulin expected.

Next year.

A couple in all of these results together, which you can see is that over the next 18 months I'm, all things going well and I'm definitely like knocking on wood here in the biotech arena, we should have a three new product launches in approvals, we would help the.

<unk> one is the one coming up next for FDA approval.

And that should all we're hoping not to see that are well within the next 18 months and then B I have far system from Medtronic, that's why we guided toward I'm looking for approval in early 2021, and then because to be fantastic results that Dr. Peterson's team.

How's the referred to on increase will be filing that oh by the summer and given our normal 10 month or so turnaround time at the FDA review, but also launched out product within this 18 month window. So super excited to have a three approval slashed.

Launches within the next 18 months on top of the Remunity launch, which as noted on Monday, we are going to get that out to patients by independence day, marking the freedom that that for immunity project will give to our patients compared to the older delivery systems.

Well without an overview of our near term pipeline activities and being a conscious of the likely large question load I'd like to ask our operator to kindly open the lines and for any questions and then I will direct them to my James or Dr. Peter.

Then have appropriate operator.

At this time I would like to remind everyone in order to ask your question. Please press Star then the number one on your telephone keypad again that is star then the number one on your telephone keypad. Our first question comes from the line of Chris Shibutani from Cowen. Please go ahead. Your line is open.

Thank you good morning.

Hoping to get a little bit more clarity in terms of your expectation for 2020 over 29 team full year remodulin growth there seem to be several factors.

Underpinning your assumption here.

It's also very difficult for us to track some of these nuances beyond your net reporting you talk about new patient starts on an absolute basis is increasing.

You talk about sort of a slowing of the trend that you saw towards the ended the year of these patients switching to generics I can you provide us with a little bit more.

Quantification of the forces that you expect.

To occur in 2020 that are guiding your expectation for the increased revenues. Thank you.

Hey, Chris Good to hear reports. This morning. Thanks for the question I'm going to ask Mike Benkowitz to address your question sure well put out because you know we don't we don't provide a forward looking guidance on revenues for the coming here and so we're not going to we're not going to deviate from that policy, but just qualitatively.

As I said in my opening remarks.

The care transitions from.

Remod brand Remodulin to generic really declined to a trickle at the end of the year and get to the first part of this year, we've not really see a change that trend. Meanwhile, we continue to add at new patients at A. I would say very healthy clip and so when each other factor and the fact that that we're not losing patients.

But we're adding patients.

And then what do you have the launch of the community later this year, which we think is gonna be.

Very attractive to to new module in patients and other patients with P.H.. We just you know we think that that the combination of those factors will lead us to growth on that product.

And then again with the with the label. We I think we said I think that offers or would you have roughly about 20% higher starts in Q4 compared to historical trend for Remodulin and so as we continue to get the communicate to the physicians and explain the data in the benefits of the data. We look for continued growth and Remodulin and Tyvaso continues to do.

Discuss steadily.

Hold on and growing incrementally, but he has marching caught them out, but what the approval of the.

And I will be due to the increased data probably first part of 2021 that'll certainly provide a catalyst for for that product off the Mike. Thanks, So much for addressing that question operator could you queue up the next question. Please.

Our next question comes from the line of Liana Moussatos from Wedbush Securities. Please go ahead. Your line is open.

Thank you for taking my question you just mentioned the first part of the increased impacting the first part of 2021, you <unk> Dr. Peterson do you think physicians are going to wait that long since tidy. So it was already on the market and there's nothing out for these patients.

Well. Thanks for your question, we had a nice to hear your voice. This morning, but so let's have dr. Peter soon to review the some of the key outcomes from the increase study and and then I think bill when she shares type data with you. The data I think we'll speak for itself in terms of.

What physicians you know are likely to do Dr. Peterson great. Thank you, yes, so as Martin mentioned, where we're extremely excited by these results.

Okay. So has been shown to be safe and effective and the additional population I L.D. ph patients, which is about 30000 American so it it is larger than what what we've we've been working and with P.H. and it's and it's really really important because this is the only a therapy that's been shown to be effect.

The out of like five others that have been tried and and they have not shown efficacy and this one has with I mean this one showed to be effective with regards to the primary endpoint, which was the six minute walk P value of 0.004 and also.

Was positive with all of the secondary endpoint.

Including it showed a 39% decrease.

In the risk of clinical worsening and that's that's pretty huge and its study that you know this short so and also had a highly statistically significant decrease in NT probnp BNP up less than pointing here and there is there one so.

It's a huge win for the patients were really really excited for this and as you mentioned.

This population has had nothing Oh I'm all of those all of the other ph Meds trial failed.

Some even a were terminated earlier due to safety concerns and this one really showed great tolerability.

And and efficacious as we noted they still isn't P.H. as well so.

Thank you very much Dr. Peterson.

Operator next question.

Our next question comes from the line of Jessica Fye from JP Morgan. Please go ahead.

Great. Good morning, Thanks for taking my question can you talk about your expectations for.

Patient and physician demand for community with the pharmacy filled cartridges in light of the shelf life will you be able to give patients and physicians enough support to move over to that product without any concern about continuity just given that a shorter shelf life.

Yeah, just couldn't take you out so much for the question I'll just add the brief introduction, while Mike is spooling up a more detailed response to your question but.

You know when you see the unity product. It is it is so elegant the nice and I always try to put myself in the patient shoes, and you know they've been given terrible news.

How about potentially fatal illness that once they are at the point of meeting parental therapy. They understand that they have to be in some way or another connected to account for their basket that is putting lifesaving medicines into their blood stream.

Unknown Attendee: and Unknown Attendee.

24 hours a day and there they were taught by the nurses you know no matter what do you know we don't disconnect. That's for the casing phone subcutaneous you know more than just for the time it takes to change it and of course intravenous think they you know that happened a continuous risk off sepsis.

Until except for those Lucky few who are on our is our product already.

So when they when they see the a and B B, you know, rather bulky and and and ended bulks out of their clothing and whatnot current a pump that used to deliver a remodulin, it's it's intimidating and and.

It is it is so kind of intimidating that their told they need to have two would be in case, you know one of them ever fails. So when you compare that with his elegant remunity product, which has the footprint of like a silver dollar and it's.

Its going to dip and can be interface with them control devices wireless. The it's it really is gonna be I think for for the patients under physicians, our breath of fresh air.

And now it is absolutely true just because that whenever you transition patients, especially you know like.

Unknown Attendee: Thank you, Kenzie. Good morning. It's my pleasure to welcome you to the United Therapeutics Corporation fourth quarter 2019 earnings call. Accompanying me on today's call are Dr. Martine Rothblatt, our Chairman and Chief Executive Officer, Mr. Michael Benkowitz, our President and Chief Operating Officer, Mr. James Edgemond, our Chief Financial Officer and Treasurer, and Dr. Leigh Peterson, Vice President of Product Development. Remarks today will include forward-looking statements representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings, including Form 10-K and 10-Q, contain additional information on these risks and uncertainties. However, we assume no obligation to update forward-looking statements. Today's remarks also include financial measures that were not prepared in accordance with U.S. Generally Accepted Accounting Principles, or GAAP. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in our earnings release, available on our website at www.unither.com.

Functional class three and four patients where most of the patients on this product from one device to another you have to do that you know very cautiously and gradually and every single aspect like the shelf life issues on what thoughts that you mentioned all come into play, but the you know.

Unknown Attendee: Today's remarks may discuss the progress and results of clinical trials or other developments with respect to our products. These remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision-making or to suggest that any products are safe and effective for any unapproved or investigational uses. Full prescribing information for the products is available on our website. Now, I'll turn the call over to Dr. Rothblatt for an overview of the fourth quarter and full year 2019 financial results and business activities of United Therapeutics. Dr. Rothblatt?

Martine A. Rothblatt: Thank you, Dewey. Good morning, everyone, and thank you for joining us on our fourth quarter and full year 2019 earnings call. We're conducting this call from our organ manufacturing laboratories up in Manchester, New Hampshire, because last night we had a blowout celebration with the DECA research and development folks who are headquartered in Manchester for the FDA approval of our Remunity product, which we released the news about on Monday. And it was a tremendous accomplishment and a tremendous party, so we're still here up in Manchester, New Hampshire, and conducting our call from here. I'm also pleased that Dr. Peterson is joining us on this call because another press release we issued on Monday was about the really, you know, Grand Slam home run results that we had in our increased trial in Group 3 pulmonary hypertension.

They will be or we always try to look at any downside says a positive side and this product did take a little bit longer to launch than we had hoped and we did have like a kind of a heads up with the first approval a few months ago before we got to this on pharma sales, we do have an excellent.

Relationships with a accredo and CBS Carmike caremark, who would be responsible fulfilling these so I do feel that we've done a very diligent job of I'm, making his graceful.

A process as possible the transition, but let me ask Mike who directly on balances that entire process to give you a little bit more color on on why we think the transition process, it's going to be smooth and before too long.

Martine A. Rothblatt: And Dr. Peterson was in charge of that clinical trial, which hit all of its primary and secondary endpoints, and she's here on this call today to help answer any questions that may come up regarding the scientific and clinical aspects of that increased success. So I'm going to start the call today first by having our president, Mike Benkowitz, explain a one-time distributor inventory issue, and then after that, we will open up the call lines for any questions that you may have regarding remunity, increases, our pipeline, everything else. On the advice of our expert new head of IR, Mr. Steadman, we've expanded this call to 45 minutes so that there will be plenty of time to answer everybody's questions and answers. So Mike, can you take it up from here?

The the great majority of subcutaneous patients will end up on Remunity My church. Thanks Martine.

Just I think from a support perspective.

From specialty pharmacy, there's really no concerns or do you think about what what a specialty pharmacy currently does with with Remodulin patients. It's it's not like the there is a referral at a start and then they go away I mean, we they are providing ongoing nursing support a lot on almost weekly basis. During the first 60 to 90 days or then as directed by the.

Position there thereafter, another at least going back a quarter just to do a check out and training.

And making sure that everything is going well with the patients in the farm natural pharmacists is connecting with the patient at least on a monthly basis.

To make sure that they have adequate supply and kind of waiting for that shipment. So so really the only difference here from a from a from an ESP perspective is the frequency of a refills. So you're looking at something like twice a month instead of once a month and then the fact that they're doing the <unk> that the specialty pharmacies doing the resell.

Michael I. Benkowitz: Thanks, Martine. I want to spend a few minutes discussing our 2019 full-year revenue, especially in light of an inventory destocking by one of our distributors in the fourth quarter that unfortunately clouds our underlying product performance. Overall, we are very pleased that total troprocinol net revenues, represented by sales of orenotram, tibazo, and remodulin, increased in 2019, despite the launch of generics against remodulin earlier this year. We are also pleased with the growth in Unituxin, a monoclonal antibody approved to treat pediatric neuroblastoma, and this product's increasing contribution to our overall revenue. Unit Tuckson now contributes almost as much revenue as our ex-US product sales.

The good news is is there already doing that for Ivy predicts. So that template is in place that exists and so it's really just leveraging what's what's what's already in place for the pretax and putting that over to the pharmacy Phil.

And.

Okay. That's part of why we're not watching today, we're watching in July as we're working through all of those logistics with what specialty pharmacy and make sure that they have their filling process down to us I have so there's no issues. There that there is no disruptions in terms of a product going out to patients and that the nurses are.

Michael I. Benkowitz: We believe these trends will continue into 2020, translating into total product revenue growth for the U.S. The growth in traprosonal revenues reflects the strong demand and patient growth trends we have communicated on prior earnings calls and at investor conferences throughout the second half of 2019 and into 2020. In 2019, we achieved the highest number of new patient starts on our troposyl products, highlighted by the highest level of newer modulin starts in 10 years, and the highest number of newer Renatram and Tidaso starts in nearly four years. This resulted in an all-time high number of active patients on a proprosinol product at the end of 2019.

Experts in the use of the pumps equivalent of when they're going out and teaching the patients the patients how the confidence that that that the mercers know how to work the pump and so.

That along with the adult built building inventory over the next couple of months is where we're doing those things in parallel so by the time July rules around it should be a.

Pretty smooth running machine. Thank so much Mike and I know many people on this call have fallen seen Mike.

Mike or James Trophy, a show the community device add our one on one meeting at healthcare conferences, and I think everybody with ingredients.

Michael I. Benkowitz: As we mentioned consistently in our public filings and periodically on these calls, our U.S. troposynol revenues reflect sales of our products to specialty pharmacy distributors, who typically place monthly orders based on current patient utilization trends and contractual minimum and maximum inventory requirements. As a result, sales of remodulin, Tidaso, and Orenatram can vary from quarter to quarter depending on the timing and magnitude of these orders and do not precisely reflect changes in patient demand for our products. In other words, these orders do not always track the volumes our distributors are dispensing to patients in a given time period. This variance between distributor orders and patient demand was highlighted in the fourth quarter of 2019. One of our distributors identified a mistake in its utilization data, which led to larger-than-normal orders earlier in the year.

Michael I. Benkowitz: This distributor addressed its heavy inventory by placing a smaller-than-normal order in the fourth quarter to normalize its inventory. However, to be clear, this was not reflective of a change in actual patient utilization or demand. And in fact, U.S. orders for intraprofessional products in the first two months of 2020 have returned to levels more in line with actual demand. We have a view into U.S. patient demand based on the data provided by our distributors regarding volumes dispensed to patients.

Elegant and attract a device it's when you make such a nice medical device like this would you really doing is you're showing respect for the patients and I believe that the physicians and the patients I'm very much appreciate that the spec operator could you choose next question. Please.

Our next question comes from the line of Hartaj Singh from Oppenheimer. Please go ahead.

Great. Thank you for the question you know with the increased we're getting a lot of increased focus from actually investors looking at United Therapeutics, both previous investors and you to the story investors Martine. One question that comes up very frequently is that.

Therapeutics ran a very disciplined piano early on the decade also did quite a few share buybacks. The capital allocation strategy was very tight sort of well executed on so investors ask US you know how to think about that going forward is not something that is still high on the list of United Therapeutics priorities, especially in light of your full pipeline and.

Pending launches how did just think about Japan capital allocation with its share buybacks potential dividend set Arts center going forward. Thank you.

Awesome hard how it's nice to hear your voice. This morning that they are excellent strategic question and I'm going to ask our Chief Financial Officer, who oversees all capital all equation allocation questions by James Edgemond to respond hi, Thank you Mark King Good morning hard ties. Thank you for the question.

Michael I. Benkowitz: And it's important to consider this data to understand the overall demand for our products, which remained strong in 2019. Specifically, rettotramp patient demand increased over the course of the year and, in the aggregate, was greater than 2018. Tidesa demand was also consistent over the course of the year and in the aggregate relative to 2018, where modular demand in the U.S. experienced a slight decline in 2019 as compared to 2018. As we have communicated previously, a small percentage of higher dose modulin patients transitioned to generic proprosomal when the first generic version became available early in the second quarter of 2019. But these transitions declined to a negligible amount in the fourth quarter, and, in fact, we only saw one such transition in December.

It is something that we are continuing to evaluate.

But at the moment, our capital allocation priorities remain unchanged and we'll continue to be first investing in R&D opportunities there really support the business mission.

For example, what Dr. Peterson talked about in terms of the increased studying.

The second the second leg of the cap allocation priority is gonna be investing in value, creating business development activities.

And third is share repurchase.

With respect to investing in R&D budgets, our first capital allocation priority keep in mind at our annual expense budget algorithm, which we have consistently and continue to apply will not allow us to exceed 50% of our prior year revenue and why this is important is that this methodology forces us to continue.

Michael I. Benkowitz: After these initial transitions, U.S. patient demand for Imodulin remained very consistent across the remainder of the second, third, and fourth quarters of 2019. As our new patients who started remodulin in 2019 titrate to their effective dose, and assuming the rate of patient transitions from remodulin to generic proprosinol does not materially change, we expect to see a corresponding increase in both patient demand and our U. So in conclusion, we are pleased with the growth of our traprosomal-based products in 2019 and believe this suite of products is poised for continued growth in 2020 as we grow the number of patients on therapy, leverage our expanded Orenatram label reflecting the 3MED results, and launch their immunity system for remodeling. Importantly, we expect growth in total product revenue in 2020 over 2019 levels. I'll now turn the call back over to Martine.

You wait each opportunity on an ongoing and going forward basis with regard to M&A, we placed an emphasis on the strategic impact of targets in terms of the attractiveness of a therapeutic area opportunity for near term revenues and the incremental value that can be added by UTI among other items and includes.

Therapeutic areas like cardiology, Pulmonology and oncology as well, although we're not just limited to those areas. So hard times, our capital allocation strategy is still the same I hope that gave you some background on how we frame it internally.

Thank you James for that Great answer our hearts classroom I provide a if I could like tag along on James Edgemond.

Martine A. Rothblatt: Thank you so much, Mike. Following the positive results of the expanded study of Tyvaso in pulmonary hypertension associated with interstitial lung disease, we're looking forward to submitting a supplemental new drug application to expand the Tyvaso label by 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 to control their pulmonary hypertension associated with ILD. After the increase, we're looking forward to continued progress on three new infusion systems for delivery of perennial triprostanol over the next 18 months, the launch of the Remunity system by July of this year, FDA action on Trevian, Combining all of these results together, what you can see is that over the next 18 months, if all things go well, and I'm definitely knocking on wood here in the biotech arena, we should have three new product launches and approvals.

After a little bit and.

Hi White.

I think the interface between capital allocation and R&D, which has to do with our organ manufacturing activities.

So we have been making quite good progress with our xeno kidney effort, which our aims to address the unmet medical need so of over 100000 Americans on dialysis today.

Unfortunately, many of them die.

Daily a waiting for a kidney transplant that they won't be able to receive.

We file reached the point of <unk>.

Our.

In our Xeno kidney effort that we've now optimized on the 10 gene pig, which we believe will provide a repeatable oh reliable survival of that would be as good as what pompe patients on.

Dialysis could expect but what they are much better quality of life of not having to be tethered to dialysis centers.

So to give you a little bit more color on Dallas. The F.D.A. has guided us that a key threshold that they want to see before taking DC no kidneys into man is that they want to see what they have like kind of a six by six matrix plus a.

Martine A. Rothblatt: We would have the Treviant one is the one coming up next for FDA approval, and that should, we're hoping to see that well within the next 18 months. And then the IFR system from Medtronic, that one we've guided toward looking for approval in early 2021. And then because of the fantastic results that Dr. Peterson's team has delivered on increase, we'll be filing that by the summer, and given a normal 10-month or so turnaround time at the FDA, we would be able to also launch that product within this 18-month window. So, super excited to have three approvals slash launches within the next 18 months on top of the Remunity launch, which, as noted on Monday, we are going to With that overview of near-term pipeline activities and being conscious of the likely large question load, I'd like to ask our operator to kindly open the lines for any questions, and then I will direct them to Mike, James, or Dr. Peterson as appropriate. Operator?

Oh GMP like facility.

[music] produce the casino kidneys, so the fixed by six stands for.

Six.

Baboons, which is the standard model to to use for this a preclinical model.

As you know graphs on put into six baboons with the six baboons survival to at least six months without evidence of a infection or other on Ford safety consequences at the point of six month the.

The reason for six months is actually just practical baboons or our of our quite small on the order of like a 10 kilograms and the.

MD kidneys, which are designed to be human size.

After six months simply become too large for the.

For the babbling abdomen, so we have repeatedly.

Demonstrated all over six months survival with various versions of our Xeno kidneys, one feather like three gene kidneys, five gene kidneys eight nine and then we finally have like optimized on the catching kidney and we also so now what we're doing.

Operator: At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. Again, that is star, then the number one on your telephone keypad. Our first question comes from the line of Chris Shibutani from Cohen. Please go ahead; your line is open.

Six of the 10 gene kidney into baboons during calendar year 2020.

Chris Shibutani: Thank you, good morning. I'm hoping to get a little bit more clarity in terms of your expectation for 2020 over 2019 full-year remodeling growth. There seem to be several factors underpinning your assumption here. It's also very difficult for us to track some of these nuances beyond your net reporting. You talk about new patients starting on an absolute basis increasing. You talk about sort of a slowing of the trend that you saw towards the end of the year of these patients switching to generics. Can you provide us with a little bit more quantitation of the forces that you expect to occur in 2020 that are guiding your expectation for increased revenues? Thank you.

Paul in parallel with that starting last year, we built up on our first our what's called the can be.

So you know world parlance designated pathogen free facility or DPF. It means like a clean space analogous to how we would manufacturer drugs.

For for the you know the situation.

From Morgan coming out the prepared so neat GMP type of criteria so that.

The everybody is confident that the idina kidney coming out of this pig does not contain any viruses that would get harm.

To a person so we completed building the DPF facility, we've actually see section into that facility. The the first genetically modified pigs, so that should we be able to achieve our six by six goal in 2020, we have our DTF up and running and we should be.

Michael I. Benkowitz: Hey Chris, good to hear your voice this morning. Thanks for the question. I'm going to ask Mike Benkowitz to address your question.

Okay actually go into the first clinical trials with as you know kidneys and 2021. So that's that's tremendously exciting to us to see that some sort of near term now. There's you know be they'd like they say you know they the consequence of a good deal just like you know people expect a whole lot more appeal.

Michael I. Benkowitz: Sure. Well, Chris, as you know, we don't provide forward-looking guidance on revenues for the coming year, and so we're not going to deviate from that policy. But just qualitatively, as I said in my opening remarks, the transitions from brand-new remodeling to generic really declined to a trickle at the end of the year, and for the first part of this year, we've not really seen a change in that trend. Meanwhile, we continue to add new patients at a, I would say, very healthy clip, and so we need to factor in the fact that we're not losing patients, but we're And then when you have the launch of Remedy later this year, which we think is going to be very attractive to new remodulin patients and other patients with PAH, we think that the combination of those factors will lead to growth on that product.

Michael I. Benkowitz: And then, again, with the EV label, I think the numbers are roughly about 20% higher in Q4 compared to the historical trend for remodulin. And so as we continue to communicate to physicians and explain the data and the benefits of the EV data, we look for continued growth in remodulin in ILD due to the increased data, probably in the first part of 2021. That'll certainly provide a catalyst for that product.

So if we are in fact April successfully and 2021 2022 to complete a clinical study with as you know kidneys showing that we can successfully rescue people who are predicted to only have a half year apply for so left on dialysis with these casino kidneys, you can imagine.

The demand is just going to explode with 100000 people are waiting for for kidney in the United States. So we have to start thinking about building all facility the scale of which could handle from appreciable proportion of 100000 kidneys the year.

And it's not like 100000, you would've looked down because unfortunately every year more people end up with end stage renal disease. So as many as our rescued more people are coffee being added.

So a facility to.

To support you can see like 10% that demand is a is certainly a multi hundred million dollar facility. It's an expensive facility. So I just wanted to like tag onto James is perfect explanation that one additional kind of R&D ish lights on capital allocation.

Operator: Awesome, Mike. Thanks so much for addressing that question. Operator, could you queue up the next question, please?

Destination will now be the manufacturing of all the completion of our organ manufacturing facilities. Operator, if you could have done throughout the next question. Please.

Liana Mosatos: Our next question comes from the line of Liana Mosatos from Wedbush Securities. Please go ahead; your line is open.

Martine A. Rothblatt: Thank you for taking my question. You just mentioned the first part of the increased impact in the first part of 2021. Dr. Peterson, do you think physicians are going to wait that long since Tyvaso is already on the market and there's nothing else for these patients?

Our next question comes from the line of Martin I'll start with Credit Suisse. Please go ahead.

Yeah. Good morning. This is Thomas on for Marty. Thanks for taking my question, maybe just a quick follow up on Remunity given that launch. These remunity card purchases will be pretty so by specialty pharmacies. It sounds like can you give us some idea of what the gating stuff sorry for getting this is part of the manufacturing process and then how much control do you guys have.

Leigh Peterson: Well, thanks for your question, Leanna. It's nice to hear your voice this morning. Let's have Dr. Peterson review some of the key outcomes from the INCREASE study, and then I think when she shares that data with you, the data, I think, will speak for itself in terms of what physicians, you know, are likely to do. Dr. Peterson.

Over this versus your partner Decca and can you give us any kind of.

Idea for timeline expectations on this thanks.

Yeah, Thanks, Thomas and give our regards to Marty hub.

We have a very close partnership with Decca, we have spelled out in the on specific written agreements a production quantity.

Leigh Peterson: Great. Thank you. Yeah.

Leigh Peterson: So, as Martine mentioned, we're extremely excited by these results. Tyvaso has been shown to be safe and effective in this additional population of ILDPH patients, which is about 30,000 Americans. So, it's larger than what we've been working on with PAH, and it's really, really important because this is the only therapy that's been shown to be effective out of, like, five others that have been tried, and they have not shown efficacy. And this one showed to be effective with regard to the primary endpoint, which was the six-minute walk, P-value of.004, and also was positive with all of the secondary endpoints, including showing a 39% decrease in the risk of clinical worsening. And that's pretty huge in a study that's, you know, this short. And also had a highly statistically significant decrease in NT pro BNP of less than 0.0001. So it's a huge win for the patients. We're really, really excited about this.

Per month, we and all of our two way QC manufacturing people have all been Hong be Assembly line here and manufacture in Manchester, where they are manufactured and.

Before we put into the press release quote that we would launch the product on July 4th a pretty much everybody signs of blood that everything was on cued up with adequate supply.

Two.

To be able to meet the demand for the Remunity cartridges, Mike do you want to how they think that have again, that's exactly right great. Thanks, Thomas Operator next question.

Our next question comes from the line of young Yang from Jefferies. Please go ahead.

Thank you I have a question for that comparison and now with a TV success same teach you patients away. The I LD luckier video on another phase three trials Pete you patient. So we just see PD.

Thanks, So yes. Thank you for your question if I.

I think I understood. Your question correctly, you're asking based on the success of increase what you see as the probabilities of tie base. So in another group three population, which is see LPD just to bring everybody on the call into the of the same level and then I'll turn the question over to Dr. Peterson.

Leigh Peterson: And as you mentioned, this population has had nothing else. All of the other PAH meds trials have failed. Some even were terminated early due to safety concerns. And this one really showed great tolerability and efficacy, as we know Tyvexil is in PAHs.

To answer in detail, we do have another phase three study already going on in a feel PD population, it's called the perfect study.

Martine A. Rothblatt: Thank you very much, Dr. Peterson. Operator, next question.

And I.

I think one very good auger, if you will if I'm using that word correctly for the perfect study is that the same principle investigator Dr. Waxman, who initiated the increase study and of I want to simply in public.

Operator: Our next question comes from the line of Jessica Fye from J.P. Morgan. Please go ahead. Great. Good morning.

Jessica Fye: Thanks for taking my question. Can you talk about your expectations for patient and physician demand for remuneration with the Pharmacy-Filled Cartridges in Light of the Shelf Life? Will you be able to give patients and physicians enough support to move over to that product without any concern about continuity just given that shorter shelf life?

Provide a shout out to Dr. waxman arm for his assistance and encouragement for United Therapeutics entering into this whr. Good three on patient populations. He was also be on prime mover behind the perfect studies. So the same individual that was.

Martine A. Rothblatt: Yeah, Jessica, thank you so much for the question. I'll just add a brief introduction while Mike spools up a more detailed response to your question. But You know, when you see the Remunity product, it is, it is so elegant and nice, and I always try to put myself in the patient's shoes, and you know, they've been given terrible news.

Have a dominant fingerprint and the dominant shaping of the.

Martine A. Rothblatt: Transcribed by https://otter.ai

Trial design for increase also had that same footprint in shaping on perfect.

With those introductory remarks, Dr. Peterson could you provide more color on tyvaso concealed PD patient yeah. So as you just mentioned this is the P.H.C.L.P.D. patients are.

Martine A. Rothblatt: that they have a potentially fatal illness, and once they are at the point of needing parenteral therapy, they understand that they have to be, in some way or another, connected to a catheter that is putting life-saving medicine into their bloodstream, you know, 24 hours a day. And they're taught by the nurses, you know, no matter what, you know, don't disconnect this for, in the case of subcutaneous, more than just for the time it takes to change it. And of course, intravenous, you know, they have a continuous risk of sepsis until, except for those lucky few who are on our ISR product already. So when they see the rather bulky and bulky out of their clothing and whatnot current pump that's used to deliver remodulin, it's intimidating.

It's a sub category of the group three as is I ODP age and so for the disease mechanism. The you know there's.

It's similar and that you have the lung disease, and then the associated or the lung diseases actually complicated by P. P pulmonary hypertension.

And the then theory behind why our inhale Tyvaso would work and actually would hopefully not show the safety issues that we're seeing and the systemic therapies in previous studies is that because of the whole when.

Martine A. Rothblatt: And it is kind of intimidating that they're told they need to have two of these in case one of them ever fails. So when you compare that with this elegant Remunity product, which has the footprint of a silver dollar and is so intuitive and can interface with control devices wirelessly, it really is going to be, I think, for patients and their physicians, a breath of fresh air. And now it is absolutely true, Jessica, that whenever you transition patients, especially New York Functional Class III and IV patients, who are most of the patients on this product, from one device to another, you have to do that, you know, very cautiously and gradually. And every single aspect, like the, you know, shelf life issues and whatnot that you mentioned, all come into play. But the, you know, we always try to look at any downsides as a positive side.

Wanting to avoid the beat Q mismatch and and that's essentially you weren't too you want to treat or.

These are dilate the vasculature that is next to the healthy LDL lie, but not dilate those that are next to the unhealthy or damage alveoli and so and that's not only was that true and it seems to have held up we in an increase.

Hi, They said it was very very well tolerated.

Relative to placebo and so we are very hopeful that that will hold up also with that but the CR P.D. perfect study and we have every reason to believe it will and so we're really really excited for those results, it's about 20% enrolled and so.

It will be coming out in the relatively near future and.

And so.

More to come yes. Thank you Dr. Peterson for that good scientific and physiological insight into the.

Long, it's such an amazing organ and although the reasons that this has been such a core dorvin differences because pulmonary hypertension affects the very very backend of that lung corridor.

That's not the arteries that come right out of a hard it's those far distal arteries and somehow you have to manage that disease without worsening you know the blood flow between the hard from along and I just salute junior entire team for figuring out how to do that thank you operator can you queue up the next question. Please.

Martine A. Rothblatt: This product did take a little bit longer to launch than we had hoped, and we did have a kind of heads up with the first approval a few months ago before we got to this pharma fill. We do have excellent relationships with Credo and CVS Caremark, who would be responsible for filling these. So I do feel that we've done a very diligent job of making the transition as graceful as possible. But let me ask Mike, who directly manages that entire process, to give you a little bit more color on why we think the transition process is going to be smooth, and before too long, the great majority of subcutaneous patients will end up on remuneration.

Next question comes from the line of just sneak them with Bank of America. Your line is now open.

Good morning. Thank you this is Jason on for Jeff.

What are your expectations for the rates of adoption for Rem unity and potentially TREVYENT are these primarily new starts are current users of dismiss pump and then is this going to be affected at all by by payer dynamics, you know with the availability of generics and then I was hoping you could please give us a brief update on orenitram the the freedom label.

How's that going and how should we think about patient growth moving forward. Thanks, so much.

Thank you for your question, Mike do you want to start with answering his questions on Remunity and then.

Michael I. Benkowitz: Sure. Thanks, Martine.

After that I'll I'll provide higher Dr., Peter soon will provide a couple of remarks on the rather kind of label sure.

Michael I. Benkowitz: Yeah, Jess, I think from a support perspective from Specialty Pharmacy, there's really no concerns there. So you think about what Specialty Pharmacy currently does with patients who are in need of remodeling. It's not like there's a referral and a start, and then they go away.

So on and community in terms of the.

Rates of adoption between existing patients a new patients.

Michael I. Benkowitz: I mean, they're providing ongoing nursing support on an almost weekly basis during the first 60 to 90 days and then as directed by the physician thereafter, and then they're at least going back once a quarter just to do a check-in and training and make sure that everything's going well with the patient. And then the actual pharmacist connects with the patient at least on a monthly basis to make sure that they have an adequate supply and arranges for the next shipment. So really, the only difference here from an SP perspective is the frequency of the refills. So you're looking at something like twice a month instead of once a month. And then there is the fact that the Specialty Pharmacy is doing the refill. The good news is they're already doing that for IV pre-mix. So that template is in place and exists.

We believe that both populations will be interested and excited about transitioning over to transitioning are starting on the other immunity pump and so we've talked about earlier in the call. We expect a launch in July.

And starting in July and over a period of time.

We expect to see a pretty pretty rapid adoption of of those patients.

To to Remunity from a payer standpoint, there's not really going to be.

A cost difference relative to the existing pump it may actually be less expensive, we're still working through it through the pricing.

And.

Today, we're not really where we're not seeing any any any pressure with respect to generics and.

Yes, you will see if that if that changes if there's another subcu pump becomes available on the market, but as I think so right now we're not we're not we're just not seen a lot of a pair of bush push back really on the I'd sideways or the Subcu side. Thanks, Mike.

Michael I. Benkowitz: And so it's really just leveraging what's already in place for the pre-mix and porting that over to the pharmacy fill. And that's part of why we're not launching today; we're launching in July, is that we're working through all of those logistics with Specialty Pharmacy to make sure that they have their filling process down to a science so there are no issues there, that there are no disruptions in terms of product going out to patients, and that the nurses are experts in the use of the pump. So when they're going out and teaching the patients, the patients have the confidence that the nurses know how to operate the pump. And so, along with building an inventory over the next couple months, we're doing those things in parallel. So by the time July rolls around, it should be a pretty smooth running machine. Thank you.

So the Orenitram label was a great success for all of US and we were very very pleased to see it actually Dr. Peterson was also in charge of phone that study, which has just begun to bring everybody on the call to a level playing field here that study resulted in demonstrating that orenitram on top of.

Background, there study reduced morbidity and mortality in the patient population.

It's what's the its was something that everybody had long suspected but it's one thing to suspected and another thing to scientifically proven and Dr. Peterson their team.

Martine A. Rothblatt: Thanks so much, Mike. And I know many people on this call have seen Mike or James show the Remunity device at our one-on-one meetings at health care conferences. And I think everybody would agree it's an elegant and attractive device. It's when you make such a nice medical device like this, what you're really doing is you're showing respect for the patient. And I believe that physicians and patients very much appreciate that respect. Operator, could you queue up the next question, please?

Did successfully prove it in the east studied the FDA agreed and hence status on the labeled that is definitely supercharging the reputation of Orenitram among prescribers, we're seeing prescribers prescribing orenitram earlier and earlier in the.

The patients natural history of their disease. So we do believe that that.

New label has made a material impact in offending upwards to close of around the trauma adoption and we're quite confident that the.

Operator: Our next question comes from the line of Hartaj Singh from Oppenheimer. Please go ahead.

Hartaj Singh: Great, thank you for the question. You know, with the increased focus from investors looking at United Therapeutics, both previous investors and new to the story investors. Martine, one question that comes up very frequently is that, you know, United Therapeutics ran a very disciplined P&L early in the decade and also did quite a few share buybacks. The capital allocation strategy was very tight and sort of, well executed. So investors ask us, you know, how to think about that going forward. Is that something that is still high on the list of United Therapeutics priorities, especially in light of your full pipeline and, you know, impending launches, how to just think about your capital allocation, whether it's share buybacks, potential dividend, et cetera, et cetera, going forward. Thank you.

Around the tram we'll be able to deliver a billion dollars a year in revenue.

To United Therapeutics, as a result of that new label and the large number of patients with pulmonary hypertension, who unfortunately.

Don't get Treprostinil therapy early enough in their disease to save them I'd like to also mentioned that we have entered into.

The next stage of development of our once daily formulation of Orenitram, and that's an exciting pipeline product for us.

And I think that.

Martine A. Rothblatt: Awesome, Hartaj. Nice to hear your voice this morning. That's an excellent strategic question, and I'm gonna ask our Chief Financial Officer, who oversees all capital allocation questions, James Edgemond, to respond.

It's quite a reasonable expectation that within.

Less than a handful of years, we should be able to launch that product commercially into the market and provide an even more convenient means for patients to take for granted trim.

James C. Edgemond: Hi, thank you Martine. Good morning Hartaj, thank you for the question. It is something that we are continuing to evaluate, but at the moment, our capital allocation priorities remain unchanged, and they will continue to be first investing in R&D opportunities that really support the business mission, for example, what Dr. Peterson talked about in terms of the increase. The second leg of the capital allocation priority is going to be investing in value-creating business development activities. And third, share repurchase. With respect to investing in our R&D budgets, our first capital allocation priority, keep in mind that our annual expense budget algorithm, which we have consistently and continue to apply, will not allow us to exceed 50% of our prior year revenue. And why this is important is that this methodology forces us to continually evaluate each opportunity on an ongoing and going forward basis.

So we've got so many exciting things going on at United Therapeutics, I'm told that there are no more questions. So operator, you can conclude the call and everybody. Thank you for joining us this morning.

Thank you for participating in today's United Therapeutics Corporation Conference call, a rebroadcast will be available for replay for one week by dialing 180 05858367 with international callers dialing one for 166 to one for six Fourq.

And using access code one to 5981 Sixthree you may now disconnect.

[music].

James C. Edgemond: With regard to M&A, we place an emphasis on the strategic impact of targets, in terms of the attractiveness of a therapeutic area, the opportunity for near-term revenues, and the incremental value that can be added by UT, among other things. It includes therapeutic areas like cardiology, pulmonology, and oncology as well, although we're not just limited to those areas. So Hartaj, our capital allocation strategy is still the same, and I hope that gave you some background on how we implement it internally.

Martine A. Rothblatt: Thank you James for that great answer. Hartaj, I might provide a, if I could like, tag along on James Edgeman's answer a little bit and highlight the interesting interface between capital allocation and R&D, which has to do with our organ manufacturing activities. So we have been making quite good progress with our XenoKidney effort, which aims to address the unmet medical needs of over 100,000 Americans on dialysis today. Unfortunately, many of them die daily waiting for a kidney transplant that they won't be able to receive. We've reached the point in our xenokidney effort where we have now optimized on a 10-gene PIG, which we believe will provide repeatable, reliable survival that would be as good as what patients on dialysis could expect, but with a much better quality of life, not having to be tethered to dialysis centers.

Martine A. Rothblatt: So to give you a little bit more color on this, the FDA has guided us that a key threshold that they want to see before taking these xenokidneys into man is that they want to see what they have, like a kind of a six by six matrix plus a GMP-like facility to produce the xenokidney. So the 6x6 stands for six baboons, which is the standard model to use for this as a preclinical model. Six xenografts were put into six baboons, and the six baboons survived to at least six months without evidence of infection or other untoward safety consequences at the point of six months. The reason for six months is actually just practical. Baboons are quite small, on the order of like 10 kilograms, and the kidneys, which are designed to be human-sized, after six months simply become too large for the baboon's abdomen.

Martine A. Rothblatt: So we have repeatedly demonstrated over six months of survival with various versions of our xeno kidneys, ones that are like three-gene kidneys, five-gene kidneys, eight, nine, and then we finally have a 10-gene kidney that we're optimizing for six of the 10-gene kidney in the baboons during calendar year 2020. In parallel with this, starting last year, we built up our first, what's called in XenoWorld parlance, Designated Pathogen-Free Facility, or DPF. It's a clean space analogous to how we would manufacture drugs, but for the situation of an organ coming out of a pig. So it meets GMP-type criteria so that everybody is confident that the xenokidney coming out of this pig does not contain any viruses that would give harm to a person.

Martine A. Rothblatt: So we completed building this DPF facility, and we've actually C-sectioned the first genetically modified pigs into that facility so that should we be able to achieve our six by six goal in 2020, we have our DPF up and running, and we should be able to actually go into the first clinical trials with the xenokidneys in 2021. So that's tremendously exciting to us to see that it's so near term. Now there's, like they say, the consequence of a good deed is that people expect a whole lot more of you.

Martine A. Rothblatt: So if we are in fact able to successfully complete a clinical study with the xenokidneys showing that we can successfully rescue people who are predicted to only have a half year of life or so left on dialysis with these xenokidneys, you can imagine that the demand is just going to explode with 100,000 people waiting for a kidney in the United States. So we have to start thinking about building a facility the scale of which could handle some appreciable proportion of 100,000 kidneys a year. And it's not like 100,000, and you whittle it down because, unfortunately, every year, more people end up with end-stage renal disease, so as many as are rescued, more people are constantly being added.

Martine A. Rothblatt: So a facility to support even say 10% of that demand is certainly a multi-hundred million dollar facility. It's an expensive facility. So I just wanted to like tag on to James's perfect explanation that, you know, one additional kind of R&D-ish like capital allocation destination will now be the manufacturing of the completion of our organ manufacturing facilities. Operator, if you could queue up the next question, please.

Operator: Our next question comes from the line of Martin Oster with Credit Suisse. Please go ahead.

Thomas: Yeah, good morning. This is Thomas on behalf of Marty.

Martine A. Rothblatt: Thanks for taking the question. Maybe just a quick follow-up on RemUnity. Given that at launch, these RemUnity cartridges will be prefilled by specialty pharmacies, it sounds like. Can you give us some idea of what the gating steps are for getting this as part of the manufacturing process? And then how much control do you guys have over this versus your partner DECA? And can you give us any kind of idea for timeline expectations on this? Thanks.

Martine A. Rothblatt: Yeah, thanks Thomas, and give our regards to Marty. We have a very close partnership with DECA. We have spelled out in specific written agreements a production quantity per month. We and all of our QA, QC manufacturing people have all been on the assembly line here in Manchester, where they are manufactured. And before we put into the press release quote that we would launch the product on July 4th, pretty much everybody signed in blood that everything was queued up with an adequate supply to be able to meet the demand for the immunity cartridges. Mike, do you want to add anything to that?

Operator: Great. Thanks, Thomas. Operator, next question.

Eun Kyung Yang: Our next question comes from the line of Eun Yang from Jefferies. Please go ahead. Thank you. I have a question for Dr. Peterson. Now that Tybasa has been successful in PHE patients with ILD, what's your view on another Phase III trial in PHE patients with COPD?

Martine A. Rothblatt: Thanks. So, Ian, thank you for your question and if I think I understand your question correctly. You're asking, based on the success of INCREASE, what do you see as the probabilities of TIVASO in another group 3 population, which is COPD? Just to bring everybody on the call to the same level, then I'll turn the question over to Dr. Peterson to answer in detail. We do have another phase 3 study already going on in a COPD population. It's called the PERFECT study. I think one very good auger, if you will, if I'm using that word correctly, for the PERFECT study is that the same principal investigator, Dr. Waksman, who initiated the INCREASE study, and I want to simply publicly provide a shout out to Dr. Waksman for his assistance and encouragement for United Therapeutics entering into this WHO group 3 patient population. He was also the prime mover behind the PERF So the same individual that had the dominant fingerprint and the dominant shaping of the trial design for INCREASE also had that same footprint and shaping on PERFECT. With those introductory remarks, Dr. Peterson, could you provide more color on TYVASO in COPD patients?

Leigh Peterson: Yeah, so as you just mentioned, the PHCOPD patients are a subcategory of Group 3, as is ILDPH. And so for the disease mechanism, you know, there's... It's similar in that you have the lung disease and then the associated or the lung disease is actually complicated by pulmonary hypertension. And the theory behind why our inhaled Tybaso would work and actually would hopefully not show the safety issues that were seen in systemic therapies in previous studies is that because of the whole wanting to avoid the VQ mismatch. And that's why you want to treat or vasodilate the vasculature that is next to the healthy alveoli but not dilate those that are next to the unhealthy or damaged alveoli.

Leigh Peterson: And not only was that true, but it seems to have held up. In addition, Tybaso was very, very well tolerated relative to placebo. And so we are very hopeful that that will hold up also with the COPD perfect study. And we have every reason to believe it will. And so we're really, really excited for those results. It's about 20% enrolled. And so that'll be coming out in the relatively near future. And so more.

Martine A. Rothblatt: Yes, thank you, Dr. Peterson, for the good scientific and physiological insight into the lung. It's such an amazing organ, and one of the reasons that this has been such a corridor of indifference is that pulmonary hypertension affects the very, very back end of that lung corridor. You know, it's not the arteries that come right out of the heart; it's those far distal arteries, and somehow, you have to manage that disease without worsening, you know, the blood flow between the heart and the lungs, and I just salute you and your entire team for figuring out how to do that. Thank you. Operator, can you queue up the next question, please?

Operator: And this question comes from the line of Jeff Mecham with Bank of America. Your line is now open.

Jason: Good morning and thank you. This is Jason on behalf of Jeff.

Unknown Attendee: What are your expectations for the rates of adoption for RemUnity and potentially Treviant? Are these primarily new starts or current users of the Smith Pump? And then is this going to be affected at all by payer dynamics, you know, with the availability of generics? And then I was hoping you could please give us a brief update on Renutram, the Freedom EV label, and how's that going, and how should we think about patient growth moving forward?

Martine A. Rothblatt: Thank you for your question. Mike, do you want to start by answering his questions on Remunity? And then after that, I or Dr. Pearson will provide a couple of remarks on the Remitron label.

Michael I. Benkowitz: Sure.

Michael I. Benkowitz: So, on re-immunity, in terms of the rates of adoption between existing patients and new patients, we believe that both populations will be interested and excited about transitioning over to, or starting on, the re-immunity pump, and so, you know, as we talked about earlier in the call, we expect a launch in July, and starting in July, and we expect to see a pretty rapid adoption of those patients to immunity. From a payer standpoint, there's not really going to be a cost difference relative to the existing pump. It may actually be less expensive. We're still working through the pricing. And, you know, to date, we're not seeing any pressure with respect to generics. And, you know, we'll see if that changes if another sub-Q pump becomes available on the market. But as things sit right now, we're just not seeing a lot of payer pushback on the IV side or the sub-Q side.

Martine A. Rothblatt: Thanks, Mike. So the Orenotram label was a great success for all of us, and we were very, very pleased to see it. Actually, Dr. Peterson was also in charge of that study, which, just again, to bring everybody on the call to a level playing field here, that study resulted in demonstrating that Orenotram, on top of the background study, reduced morbidity and mortality in the patient population. It was something that everybody had long suspected, but it's one thing to suspect it and another thing to scientifically prove it, and Dr. Peterson and her team did successfully prove it in the EV study.

Martine A. Rothblatt: The FDA agreed, and hence that is what is on the label. That is definitely boosting the reputation of Orenotram among prescribers. We're seeing prescribers prescribing Orenotram earlier and earlier in the patient's natural history of their disease, so we do believe that that new label has made a material impact on bending upwards the curve of Orenotram adoption, and we're quite confident that Orenotram will be able to deliver a billion dollars a year in revenue to United Therapeutics as a result of that new label and the large number of patients I'd also like to mention that we have entered into the next stage of development for our once-daily formulation of Orenotram, and that's an exciting pipeline product for us, and I think that it's quite a reasonable expectation that within less than a handful of years, we should be able to launch that product commercially into the market and provide an even more convenient means for a patient to take Orenotram. So we've got so many exciting things going on at United Therapeutics. I'm told that there are no more questions. So operator, you can conclude the call, and everybody thank you for joining us this morning.

Operator: Thank you for participating in today's United Therapeutics Corporation conference call. A rebroadcast will be available for replay for one week by dialing 1-800-585-8367, with international callers dialing 1-416-621-4642 and using access code 1598163. You may now disconnect.

Unknown Attendee: BF-WATCH TV 2021