Q4 2020 United Therapeutics Corp Earnings Call
Kenzie: Good morning, and welcome to the United Therapeutics Corporation fourth quarter 2020 earnings call. My name is Kenzie, and I will be your conference operator today. All participants will be in listen-only mode until the question and answer portion of this earnings call. If you would like to ask a question during that time, simply press the star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key on your telephone keypad. I will now turn the conference call over to Mr. Dewey Steadman, Head of Investor Relations at United Therapeutics.
Good morning, and want them to be invited Therapeutics Corporation fourth quarter, 'twenty and 'twenty earnings call. My name is kenzie and I will be your conference operator today.
Participants will be in listen only mode until the question and answer portion of this earnings call. If you would like to ask a question during that time and simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key on your telephone keypad I will now turn the conference over to Mr. Dewey Steadman head of <unk>.
Best of relations and United There.
European ex.
Dewey Steadman: Good morning. It's my pleasure to welcome you to the United Therapeutics Corporation fourth quarter 2020 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.
Good morning, It's my pleasure to welcome you and to the United Therapeutics Corporation fourth quarter 2020 earnings call accompanying me on today's call are Dr. Martine Rothblatt, our chairman and Chief Executive Officer, Mr. Michael <unk>, Our President and Chief Operating Officer, Mr. James <unk>, Our Chief Financial Officer, and Treasurer and Dr. Lee.
Peterson, Vice President and product development.
Remarks today will include forward looking statements, representing and 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 uncertainties.
Dewey Steadman: Our latest SEC filings, including Form 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update these forward-looking statements. Today's remarks may also include financial measures that were not prepared in accordance with U.S. generally accepted accounting principles or generally accepted accounting principles. 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
Assume no obligation to update these forward looking statements.
Today's remarks May also include financial measures that were not prepared in accordance with U S. Generally accounting generally accepted accounting principles 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 Dot unit their dot com.
Dewey Steadman: 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 2020 financial results and business activities of United Therapeutics. Dr. Rothblatt
Today's remarks may discuss the progress and results from clinical trials or other developments with respect to our products and these remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision, making or does that suggest that any products are safe and effective for any unapproved or investigational and you get the full prescribing information for the products.
And are available on our website.
Now I'll turn the call over to Dr. Rothblatt for an overview of the fourth quarter and full year, 'twenty, and 'twenty and financial results and business activities of United Therapeutics, but dropbox.
Martine A. Rothblatt: Thank you, Dewey. Good morning, everyone. Welcome to the 2020 full year and fourth quarter earnings call of United Therapeutics. We are going to have a really great call today. UT is a pulmonary hypertension company that is now becoming both a pulmonary hypertension and a pulmonary fibrosis company. We expect our products in these two markets to generate double-digit growth for several years to come. For example, today we report that our fourth quarter 2020 revenues grew by double digits, about 24% from fourth quarter 2019, and even excluding a one-time 2019 aberration in the distributor order patterns, revenues still grew over 10% fourth quarter year-over-year, with Taivaso posting a 27% growth fourth quarter year-over-year, and Orenatram posting a UT record 30% growth. Let me now go into some detail on why we expect strong growth in traprosonal patient counts to continue.
Thank you Julie good morning, everyone welcome to the 2020 full year and our fourth quarter earnings call of United Therapeutics.
We are going to have a really great call today.
U T is a pulmonary hypertension company now, becoming both a pulmonary hypertension and a pulmonary fibrosis company.
We expect our products for these two markets to generate double digit growth for several years to come for example, today, we reported our fourth quarter 'twenty and 'twenty revenues grew by double digits about 24% from fourth quarter 2019, and even excluding a one time 2019 opera.
Asian, and the distributor order patterns revenue still grew over 10% fourth quarter year over year.
With Taipei, so posting a 27% growth fourth quarter year over year, and our retina tram posting a U T record 30% growth.
Let me now go into some detail on why we expect strong growth and <unk> no patient counts to continue.
Martine A. Rothblatt: Starting with our pulmonary hypertension activities, we believe organic growth from our existing three commercialized products, as well as new products emerging from our pipeline, will drive double-digit growth. Organic growth from our three existing products includes, first of all, the increasing use of remodulin as part of our Remunity protocol to drive pulmonary artery pressures down below 40 millimeters of mercury before rapidly switching patients for long-term management on Orenatram. Several top pulmonary hypertension experts have recently shown that this kind of protocol is associated with much longer patient survival than the conventional approach.
Starting with our pulmonary hypertension activities, we believe organic growth from our existing three commercialized products as well as new products emerging from our pipeline will drive double digit growth.
Our granite organic growth from our three existing products includes first of all the increasing use of Romaji island as part of our Remunerative protocol to drive pulmonary artery pressures down below 40 millimeters of Mercury before rapidly switching of patients for long term management on a run.
And a tram.
Several top pulmonary hypertension experts have recently shown that this kind of protocol is associated with much longer patient survival and the conventional approaches.
Martine A. Rothblatt: Second of all, substantial organic growth is coming from Tyvaso, based on data from our increased pivotal trial that was published this past quarter in the New England Journal of Medicine. This kind of growth is visible in the 24% year-to-year financials mentioned above. And third of all, organic growth is also coming from Renatram based on an ever greater awareness of its ability to reduce mortality and morbidity based on data from our Freedom Pivotal Study. This is clear in the 30% growth rate from fourth quarter 2019 to fourth quarter 2020.
Second of all substantial organic growth is coming from tavy. So based on data from our increased pivotal trial that was published this past quarter and the new England Journal of Medicine.
This kind of growth is visible in the 24% year to year financials mentioned above.
And third of all organic growth is also coming from a rent a tram based on ever greater awareness of its ability to reduce mortality and morbidity based on data from our freedom pivotal study.
This is clear in the 30% growth rate from fourth quarter 2019 to fourth quarter 'twenty and 'twenty.
Martine A. Rothblatt: Now we also expect growth to be driven by new products emerging from our pipeline. These for pulmonary hypertension include, first of all, our just-launched Remunity device. Secondly, our expected launch of our Implantable System for Remodulin, or ISR product, jointly developed and promoted together with Medtronic. And third, our expected launch by the end of this year of our dry powder inhaler form of Tyvaso, which we call Tyvaso DPI. Then, just around the corner, during 2022 to 2024, we expect to advance through late-stage clinical development and launch for pulmonary hypertension.
Now, we also expect <unk> growth to be driven by new products emerging from our pipeline.
These for pulmonary hypertension include first of all our just launched her immunity device secondly, our expected launch of our implantable system for a modular and our ISR product jointly developed and promoted together with Medtronic and third our expected launch by.
The end of this year of our dry powder inhaler form of Taipei, So, which we call Taipei, So T P I.
Then just around the corner during 'twenty 'twenty two to 'twenty 'twenty four we expect to advance through late stage clinical development and launch for pulmonary hypertension.
Martine A. Rothblatt: First of all, our Trevian product, optimized for dexterity-challenged patients, which is in fact just awaiting FDA approval. Second of all, our once-daily alternative to Optravi called Relenopag. Thirdly, our once-daily version of Orenatram, and fourthly, a pain-reduced form of remodulin called RemoPro. So, all told, when you add up the ones that are on the market and about to come, we have 10 parallel pathways to propel double-digit growth in pulmonary hypertension. Three on the market, three next to the market, and four in a queue behind that.
First of all our Trevi and product optimized for dexterity challenge patients, which is in fact, just awaiting resubmission to the F D. A.
Second of all our once daily alternative to a probably called relented peg.
And thirdly, our once daily version of our Reno tram and fourthly, a pain reduced form of from module and called remote pro.
So all told you add up the ones that are on the market and about to come we have 10 parallel pathways to propel double digit growth and pulmonary hypertension three on the market three next up to the market and foreign queue behind that.
Martine A. Rothblatt: Now, in addition to all of that, as mentioned at the beginning of the call, we have now built the bridge to evolve from just a pulmonary hypertension company to also being a pulmonary fibrosis company. This evolution was made possible by the beautiful results from our INCREASE trial reported in the New England Journal of Medicine that showed Tivaso in ILD-PH, or also known as WHO Group 3 disease patients, met all of its primary and all of its secondary endpoints in patients with pulmonary fibrosis, induced pulmonary hypertension.
Now in addition to all of that as mentioned at the beginning of the call. We have now built the bridge to evolve from just a pulmonary hypertension company to also being a pulmonary fibrosis company DISA.
And this evolution was made possible by the beautiful results from our increase trial reported and the New England Journal of Medicine that showed tie VSO and IL D. P. H are also known as WH show group three disease patients met all of its primary and all of its secondary endpoints in <unk>.
Patients with pulmonary fibrosis induced pulmonary hypertension.
Martine A. Rothblatt: Transcription by ESO. Translation by —
Martine A. Rothblatt: This new indication, representing I mean, over 30,000 U.S. patients, has no approved therapies, and nearly all existing pulmonary hypertension treatments are, in fact, strongly contraindicated for it. You know, it's funny for me to reflect on this, but roughly speaking, it is like pending FDA approval in April, which our fingers are all crossed on. It's like starting UT's revenue climb from the birth of the company all over again, but this time without competition from Actillion, Pfizer, or Glaxo. Now, our bridge in pulmonary fibrosis is being even further strengthened with our phase three Teton trial of Tyvaso in patients with pure pulmonary fibrosis. That is not pulmonary hypertension.
This new indication.
Representing.
And it's over 30000 and U S patients has no approved therapies and nearly all existing pulmonary hypertension treatments are in fact strongly country indicated in it.
You know it's funny for me to reflect on this but roughly speaking it is like pending FDA approval in April so our fingers are all cross Don it's like starting you Ts revenue climb from the birth of the company all over again, but this time without competition from Actelion Pfizer Glaxo.
No.
Now our bridge and the pulmonary fibrosis is being even further strengthened with our phase III Teton trial of Tavy, so and patients with cure pulmonary fibrosis that is no pulmonary hypertension.
Martine A. Rothblatt: In this trial, we'll test the hypothesis that Tyvaso is a disease-modifying drug on top of existing pulmonary fibrosis treatment. That hypothesis, already indicated by benchtop studies, received strong confirmatory data in the INCREASE trial because the patients on Tivaso had improved force vital capacity outcomes, or FVC, as compared to just a reduced rate of decline in FVC seen in the conventionally treated group. Now, this patient population, the pure pulmonary fibrosis patients, numbers about 100,000 in the US and is easily accessible since they are already being treated with either perfenadone, also known as Espriol, or nintetanib, also known as OFET.
And this trial will test the hypothesis that tie V. So its a disease modifying drug on top of existing pulmonary fibrosis treatments.
That hypothesis already indicated by bench top studies received strong confirmatory data and the increased trial because the patients on tavy. So had improved forced vital capacity outcomes are F. P C as compared to just a reduced rate of decline.
And EF V C scene and the conventionally treated group.
Now this patient population the pure pulmonary fibrosis patients numbers about 100000, and the U S and are easily accessible since they are being treated already with either pirfenidone and <unk> also known as SPL and or and Nintendo Nib also known as <unk>.
Martine A. Rothblatt: So between the Group 3 population of 30,000 patients I mentioned before that we hope to get approval for in April and the Teton population we hope to show success in by the end of next year, numbering about 100,000 patients, there will be plenty of Tyvaso patients to drive double-digit growth for several years to come. I should also add that we expect our approval of our Tyvaso DPI, as I mentioned earlier, to include a label not only for pulmonary hypertension patients but, very importantly, also for pulmonary fibrosis patients.
So between the group three population of 30000 patients had mentioned before that we hope to get approval for and April and the Teton population and we hope to show success and by the end of next year numbering about 100000 patients there'll be plenty of Taipei, so patients to drive double digit growth.
For several years to come.
I should also add that we expect our approval of our Taipei. So D. P I.
I mentioned that our earlier to include a label not only for pulmonary hypertension patients, but very importantly, also for pulmonary fibrosis patients.
Martine A. Rothblatt: In summary, without even getting into our Phase III trial in COPD-associated pulmonary hypertension or a registration trial for pulmonary hypertension gene therapy, UT's prospects have never looked better, with a total of 12 other vectors for double-digit patient growth, some in pulmonary fibrosis, some in pulmonary hypertension, some on the market, some soon to be launched. We feel very confident that the most important growth phase of United Therapeutics is just about to begin.
In summary, without even getting into our phase III trial and C. O P D associated pulmonary hypertension or a registration trial for pulmonary hypertension gene therapy, you tease prospects have never looked better.
With a total of 12 other vectors to double digit patient growth, some and pulmonary fibrosis, some and pulmonary hypertension. Some on the market. Some soon to be launched we feel very confident that the most important growth phase of United Therapeutics is just about to begin.
Martine A. Rothblatt: I'd like to open up the lines for questions. We have a number of experts joining me on the phone, so if you ask me the question, I'll forward it either to Mike Benkowitz for all business questions, to James Edgeman for all financial questions, to Dr. Leigh Peterson for scientific questions, and to Dewey Steadman for any intellectual property questions. Operator, please feel free to open the line.
And I'd like to open up the lines for questions. We have a number of experts joining me on the phone. So if you ask me the question and I'll forward it either too Mike banquet on all business questions to G. James Edgemon for all financial questions to Doctor Leigh Peterson for scientific questions.
And to Dewey Steadman for any IP questions. Operator, please feel free to open the lines.
Unknown Attendee: Thank you. 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. If you would like to withdraw your question, you may press the pound key. Our first question comes from the line of Joseph Tome with Cowan & Company. Please go ahead. Your line is open.
Thank you.
And I would like to remind everyone and Robert.
A question. Please press Star then the number one on your telephone keypad. If you would like to withdraw your question you May press the pound key.
Our first question comes from the line of Joseph Thome with Cowen and company. Please go ahead. Your line is open.
Unknown Attendee: Hi there. Thank you for taking my question and congratulations on all the progress. I want to discuss the hopeful integration of the DPI a little bit. Can you give us your thoughts on how you expect to transition in or start patients on the DPI and PAH? And then for PHILD, because the DPI could launch reasonably quickly after the formal label expansion, how are you thinking over the next 12 to 18 months integrating PHILD patients on the DPI versus the nebulized type azoversion? Thank you.
Hi, there. Thank you for taking my question and congratulations on all the progress.
And I and discuss the hopeful integration of the D. P. I a little bit can you give us your thoughts on and how you expect to transition and or start patients on the D. P. I N T E H and then for ph ILD, because the DPA could launch a reasonably quickly after the formal label expansion.
How are you thinking over the next 12 to 18 months integrating ph ILD patients on the DPI versus the Nebulize type nasal version. Thank you yeah. Thanks. So much for those are good questions. You know, they're both really and the realm of business questions that Mike banquets, and his and his very talented team have already.
Martine A. Rothblatt: Yeah. Thanks so much for those good questions. You know, they're both really in the realm of business questions that Mike Benkowitz and his very talented team have already been working on and interacting with physicians on. So, Mike, could you take that question?
And working on and interacting with physicians and so Mike.
Mike could you take that question sure.
Michael I. Benkowitz: Sure. Yeah, I think the answer really applies to both indications. And, you know, we're really excited about the progress we've made with Tybaso DPI. We're looking forward to the filing, as Martine said, in April. And with the priority review voucher we purchased at the end of last year, we're hopeful that, assuming everything goes well with the FDA, we'll be able to launch it in both indications by the end of this year.
I think the answer.
And.
Applies really I think the both indications and we're really excited about the progress we've made with high day said Epi and we're looking forward to the violate as Martine said and in April and with the priority review voucher, we purchase at the end of last year.
We're hopeful that assuming everything goes well with the FDA, we'll be able to watch that and to both indications.
By the end of this year.
I'll tell you that there's both and with P. A H docs and with ph ILD docs.
Michael I. Benkowitz: And I'll tell you that both with PAH docs and with PHILD docs there's a lot of excitement and enthusiasm around having a dry powder inhaler. And so we're preparing to aggressively launch that product and make it available to as many patients as are wanting to either start, initiate new therapy on Tybaso as well as transition over. And so I think at this point we're very encouraged by the feedback we're hearing from the physicians, and very optimistic that there will be a relatively speaking in pH, a quick transition for those patients that want to transition to DPI to be able to do so very soon after launch.
There is a lot of excitement and enthusiasm around.
And a dry powder inhaler and so.
And I.
We're preparing for it to aggressively launch that product and make it available available to as many patients as our.
Wanting to either start.
Initiate new therapy on highway so as well as transition over and so I think we're at.
At this point where.
Very encouraged by the feedback we're hearing from the physicians very optimistic that there will be a.
I think it will be a relatively speaking and ph.
Quick transition for those patients that want to transition to the PPI to be able to do so very soon after launch.
Unknown Attendee: Thanks, Mike. Operator, next question, please.
Thanks, Mike Operator next question please.
Unknown Attendee: Our next question comes from the line of Leanna Masatos with Wedbush. Please go ahead. Your line is open. Thank you for taking my question.
Our next question comes from the line of Liana and the South US with Wedbush. Please go ahead and your line is open.
Thank you for taking my question Sofa, and mute and the launch how should we think about Q1 revenues.
Unknown Attendee: So for Remunity Launch, how should we think about Q1 revenues?
Martine A. Rothblatt: Thanks, Leanna. It's nice to hear your voice this morning. Again, another business question. I'd like to forward that to Mike Benkowitz.
Thanks, Liana nice to hear your voice. This morning again, another a business question I'd like to forward that to Mike banquets.
Michael I. Benkowitz: Yeah, so, you know, again, I think with the Remunity launch, you're looking at another product where there's a lot of excitement in the market. As Martine said, we launched that earlier this month, and we're pleased to see the really early enthusiasm from physicians around Remunity. We're already seeing referrals come in, so we expect to get those patients on therapy in the coming weeks, months, and into the future.
Yeah. So you know again I think with the remunerative launch.
Youre looking at.
Yeah.
I think.
Another product, where there's a lot of excitement and market you know as Martine said, we launched that earlier this month.
And we're pleased to see the really early enthusiasm from physicians and around linearity, we're already seeing referrals come in.
And so we expect to get those patients on therapy.
And the coming weeks months and into the future.
Michael I. Benkowitz: You know, we're not going to break out Remunity versus the MS3 pump revenues. But we'll still continue to kind of report that as remodeling revenues. But we certainly believe that with the Remunity pump, we have an opportunity to continue to kind of maintain our remodeling business over the long term and grow it by virtue of the Remunity pump, as well as the next iterations of that, the machine fill pump, and, as Martine talked about, the RemoPro, which is our pain-free version of remodeling.
And you know, we're not going to breakout room unity vs.
And the MSCI pump revenues and we will still continue to kind of report that and as long as we're module and revenues.
But we certainly believe that.
With door immunity pump.
And opportunity too.
Continue to kind of maintain our remodel and business over the long term and grow it by virtue of the remunerative pop as well as the next iterations of that machine filled pump and and is marching talked about the remote pro which is R. P and free version of a mild one.
Martine A. Rothblatt: Thanks so much, Mike. You know, I'm so excited about Remunity. Leanna, I can't actually hold myself back from sharing this anecdote that flowed in just the past couple of days ago.
Thanks, So much Mike you know.
I'm, so excited about from unity beyond and I can't actually hold myself back from sharing this anecdote that float and just the past couple of days ago, there and so you don't and important pulmonary hypertension center.
Martine A. Rothblatt: There was, you know, an important pulmonary hypertension center that regularly put patients on IV remodulin but was very resistant to putting patients on sub-q remodulin. They have actually become the first center to put patients on Remunity. They were so impressed with the differences between Remunity compared to Sub-Q Remodulin that this center, which had not put patients on Sub-Q Remodulin for a long time, was now switching patients over or starting new patients on Remunity, whereas they wouldn't have done that for Sub-Q Remodulin. So I just think that this anecdote is a very positive indicator of things to come for Remunity. Operator, next question.
That had regularly put patients on IV remodeling, but was very resistant.
To putting patients on Sept, Cuba module and the.
They actually have become the first center to put patient solder immunity. They were so impressed with the differences and for immunity compared to sub Q or module and that this center that had not put patients on sub Q or module and for a long time was now switching patients over or starting new patients on a remuneration.
D, whereas they wouldn't have done that for sub Q or modular and so I just think that.
Net anecdote is a very positive indicator of things to come for immunity.
Operator next question.
Unknown Attendee: Our next question comes from the line of Eun Yang with Jeffries. Please go ahead, your line is open. Thank you. Questions on Taipei's DPI.
Our next question comes from the line of you and Wang with Jefferies. Please go ahead. Your line is open.
Thank you a question on pay visa TPI.
So once he kept prove to you all at double digit percentage and who else peak and mankind.
Unknown Attendee: So once it's approved, you owe a double-digit percentage royalty to mankind. Are there any regulatory or sales-related milestones? And with that, do you expect the gross margin to kind of settle around the mid to high 80s? Thank you.
Here, any regulatory or sales related milestones and.
And we did that do you expect gross margin to kind of settle around mid to high eighty's. Thank you.
Martine A. Rothblatt: Okay, thank you so much for the question. That sounds to me like pretty much a financial question, so I'm going to ask our CFO, James Edgemond, to please handle that.
Okay. Thank you so much for the question you know that sounds to me like a pretty much of a financial question. So I'm going to ask our CFO James Edgemon two police handle that one.
James C. Edgemond: Yeah, thank you, Martine, and good morning, Eun. You're right, we do owe mankind royalties related to patients that use the DPI going forward. And as you've probably recognized and noted in the financial statements, we have historically made milestone payments, and we've achieved these milestones under our agreement with mankind. Going forward, there are limited milestones with respect to pursuing other indications. So our main financial obligation, as you kind of referred to, is really around our royalty obligation for new patients to go on to DPI.
Yeah. Thank you Martina and good morning Hugh.
Youre right we do.
And mankind royalties related to patients that use the DPI going forward.
And as you probably and recognize and noted in our financial statements. We have historically made milestone payments and we achieved these milestones.
Under our agreement with Mannkind.
Going forward.
There are limited and milestones yeah with respect to pursuing other indications are our main financial obligation as you kind of referred to was really around our royalty obligation per new patient go into DPI.
James C. Edgemond: And as for kind of your question around gross margin, you're getting very specific in terms of what it would be, I think, overall, because we don't necessarily anticipate breaking out of Tyvaso or DPI versus the current nebulizer. So when you're modeling, I think if you take the.
And as for kind of your question around gross margin.
Youre getting very specific in terms of what it would be I think overall.
Because we don't necessarily anticipate breaking out a day, so we're DPI versus the current nebulizer.
And so when you're modeling I think if you take the royalty obligation that we owe a mankind.
James C. Edgemond: , and Martin A.. .. .. .. .. ...
James C. Edgemond: Thank you so much, James. I appreciate it. Operator, could you please take the next question?
Within your model, you're going to come out to something based upon how you're splitting their revenue, but we don't anticipate doing that on a going forward basis. So thanks for your question and Martine back to you. Thank.
Unknown Attendee: Our next question comes from the line of Jessica C. with J.P. Morgan. Please go ahead, your line is open. Hey there. Good morning.
Thank you so much James appreciate it operator could you please.
The next question.
Our next question comes from the line of Jessica Fye with J P. Morgan. Please go ahead. Your line is open.
Unknown Attendee: Thanks so much for taking my question. My question is about the Tyvaso PHILD launch and the press release, and how you kind of reiterated the hope to double the number of Tyvaso patients in the near term. I think in the past, you'd suggested maybe looking at about 18 months. When we think about that growth in patients, should we think of that as sort of straight line growth, or is this something that could have an initial bolus or, conversely, something that might start slow and then sort of inflect over time?
Yeah. Good morning, Thanks, so much for taking my question and.
And my question is on television.
So ph ILD launch.
And in the press release.
And I have reiterated the hope to double the number a 10 day so patients in the near term I think in the past. It suggests maybe looking at about 18 months, when we think about that growth and patients.
Should we think of that and sort of straight line growth or is this something that could have an initial bolus or conversely, something that might start flow and then sort of inflect overtime.
Martine A. Rothblatt: Thanks, Jessica, for your question. It's nice hearing your voice this morning. That's a very squarely business question, so I'll pass that one to Mike.
Thanks, Jessica for your question Nice hearing your voice. This morning, that's us very squarely a business question, so passat and want to make.
Michael I. Benkowitz: Yep, thanks. Thanks, Jess.
Thanks Jess.
Michael I. Benkowitz: It's a great question. As we talked about when we did the increase call and investor call last month, I think our belief is that it probably won't be a straight line. You know, we do think that there may be an initial bonus, but I can't really quantify what that is right now because I think we're still gathering that data through interactions with our position. So there may be an initial bonus, and then it could dip a little bit and then start to ramp back up.
It's a great question.
As we talked about when we did the the increased call investor call last month.
And I think our belief is it probably wont be straight line.
We do think that there may be and initial bolus I can't really quantify what that is right now because I think we're still we're still gathering that data through interactions with our.
And with our position and so there may be and initial bonus bolus and then and then it may.
Could dip a little bit and then start to start to ramp back up and I think.
Michael I. Benkowitz: My belief, based on what we're hearing right now, is I think it'll be Thinking about the big picture, you know, a little bit slower than ramping up over the next 18-month period of time. And that's really just a function of getting the patients in, getting them screened, getting an echo done, getting the right hard cath. And then, you know, I think there's still some—there's scheduling, there's logistics, and all that stuff has to happen, and then you have to get the referrals in and get patients initiated on therapy.
My my belief based on what we're hearing right now is I think it'll be.
Thinking about the big picture, a little bit slower and then ramping up over.
Over the next 18 months period of time, and that's really just a function of getting the patients and getting them screened.
Getting an echo done and getting a right heart cath and many other I think theres still some.
Theyre scheduling and there's logistics and all of that stuff has to happen and then you have to get the referrals and I didn't get it get patients initiated on a and <unk>.
Michael I. Benkowitz: So that's really the reason for that. It has nothing to do, I think, with lack of awareness or lack of enthusiasm for 4-tribasamine indication. As we talked about last month, there's certainly a lot of excitement about being able to add this to the treatment armamentarium for pulmonary hypertension, ILD.
Therapy service.
That's really the reason for that it has nothing to do I think with lack of awareness or lack of enthusiasm for.
Sure.
So and the indication as we talked about last month Theres, certainly a lot of lot of excite excitement about.
And being able to add this to the treatment armamentarium for for pulmonary hypertension and ILD.
Michael I. Benkowitz: Thanks so much, Mike. Operator, next question, please.
Thanks, so much Mike.
Operator next question please.
Unknown Attendee: The next question comes from the line of Marty Oster with Credit Suisse. Please go ahead; your line is open.
The next question comes from the line of maybe I'll start with credit Suisse. Please go ahead. Your line is open.
Unknown Attendee: Hey, thanks Martine. I think this one's going to fall into the business question category as well.
And thanks, Marty and I think this one is going to fall into the business question category as well.
Unknown Attendee: I just wanted to check in with Mike.
Just wanted to [laughter] wanted to check in with Mike debates or had some nice nice growth this year and and obviously, there's a lot of awareness and interest in the and the group III ph ILD indication that we're all hoping for approval.
Unknown Attendee: Teveso had some nice growth this year, and obviously, there's a lot of awareness and interest in the Group 3 PHILD indication that we're all hoping for approval on the PDUFA date coming up in April. Curious if you could maybe talk a little bit about, did you see any sort of increase in terms of the breadth of prescribers of Teveso this year? Were you just seeing kind of a little, like, kind of better depth and uptake of the existing base? And I'm curious if you could kind of comment as we're trying to think about how much of that growth is reflecting some of that early enthusiasm for the Broadened Indication.
Approval and the computer day coming up in April and curious if you could maybe talk a little bit about did you did you see any sort of increasing in terms of the breadth of prescribers of debates are this year, where you're just seeing kind of a little kind of better depth and uptake of existing base. Just curious if you could kind of comment is we're trying to think about how much you know kind of how much.
And that growth is reflecting some that are linked to get them from the broad and medication.
Michael I. Benkowitz: Thanks Marty, great hearing your voice again today as well.
Thanks, Marty Great care and your voice again today as well you guessed it Mike.
Michael I. Benkowitz: I haven't earned my paycheck today; this is great. Yeah, so it's a little bit difficult to know the extent to which there is off-label use as a result of the increased data. All that we're able to track is who's writing the referrals. So to your point about the prescriber base, that hasn't changed. The folks that are writing HIBASO are typical PAH prescribers, and we have not seen a material change in that. We haven't really seen an uptake in new prescribers yet, but we do expect that that's going to occur after we get the label expansion.
And on my paycheck today that sounds great.
Yeah. So it's.
It's a it's a little bit difficult to know.
The extent to which there is off label use as a result of the increased data.
All with all of that we're able to track is the is who's writing and the referrals. So to your point about the prescriber base that hasn't changed the folks that are that are writing high day. So.
Our typical ph prescribers.
We have not seen a material change and that we haven't seen really a and uptake and new prescribers yet we do expect that that's going to that's going to occur after we get and label expansion and so yeah. So within that within that within that prescriber base, you know our usual prescriber base to the extent that they're seeing and ILD patients there.
Michael I. Benkowitz: So within that prescriber base, our usual prescriber base, to the extent that they're seeing ILD patients, they could be writing for the indication. But by and large, the performance of HIBASO is within our traditional PAH docs. I think a lot of it has to do with the buzz around HIBASO in the New England Journal. And I think it's just on the PAH side, just reminding physicians what a great drug that is for PAH patients.
Could be riding through the education the biologics.
Four to five day, so is within our traditional P. A H docs I think a lot of it has to do with.
Good day.
Buzz around high day, so the new England Journal and I think it's just being in line on the ph I, just reminding physicians Oh, what a great drug that is for ph patients.
Michael I. Benkowitz: Awesome. Thanks, Mike. Thank you, Marty. Operator, next question, please.
Awesome. Thanks, Mike. Thank you Marty operator next question. Please.
Unknown Attendee: Our next question comes from the line of Hartaj Singh with Oppenheimer. Please go ahead; your line is open.
Our next question comes from the line of hard cash thing with Oppenheimer. Please go ahead. Your line is open.
Unknown Attendee: Great, thank you for the question. It's a financial question. You know, in 2020, you had a dip in your sales, you know, from losing at circa. James, I know you always talk about OPEX spend as being, you know, 50% of previous year sales. However, in 2021, you're going to have, you know, potential for launches, a lot of things going on, just how to think about that, you know, and then, you know, going forward also.
Oh, great. Thank you for the question.
Financial question.
And.
And 2020, you had a gift and your sales from losing at circa James I know you always talk about opex spend as being 50% of your sales. However in 2021, you're going to have potential on launches a lot of things going on just how to think about that and.
And then going forward also thank you for the question.
Unknown Attendee: Thank you. Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried by National Financial Services LLC, Member NYSE & SIPC, a Fidelity Investments company. His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered at www.profile-financial.com. Disclaimer! This document is a transcription and original translation. While it is believed to be current and accurate, divergence from the original is to be expected.
Thanks hard times, great I'm hearing you on line today, hopefully and Theres not treating you too bad there and New York and James solid financial question Yep.
Thank you Martine good morning, Hi, pies are any day.
Good to hear your voice and thanks to the <unk>.
Question. So the the budget algorithm that we've talked about historically and that you referred to this morning, where we can.
And our budget and a current year for example, 2021 based upon 50 per cent of prior year revenues and total.
James C. Edgemond: Thank you, Martine. Good morning, Hartaj, and it is always good to hear your voice, so thanks for the question.
James C. Edgemond: So the budget algorithm that we have talked about historically and that you referred to this morning, where we plan our budget for the current year, for example, 2021, based upon 50% of the prior year's revenues in total. So to your point around the decrease in sales, if you use EdCirca as an example, you know, overall, we still need to maintain our budgets and our financial discipline with respect to our total revenues. So as revenues grow going forward, that means unitarians, in terms of their budgets, will get additional funds for projects.
To your point around the decrease.
And sales.
And you use that and surpasses the and they example.
Overall, we still need to maintain our budget and our financial discipline.
With respect to our total revenue so.
And as revenues.
Grow going forward and that means unitary and in terms of their budgets will get it.
Additional funds for projects with respect to your specific question on 'twenty and 'twenty, one we still need to stay within our budget algorithm with all the activity that Martine and Michael talked about in terms of product launches and clinical development, we still need to make sure we stay within that budget algorithms and so our 2021 budgets are based upon 2000 <unk>.
James C. Edgemond: With respect to your specific question about 2021, we still need to stay within our budget algorithm with all the activity that Martine and Michael talked about in terms of product launches and clinical development. We still need to make sure we stay within that budget. So our 2021 budgets are based upon 2020 revenues, and that's how we built them. And that's how we'll execute across the course of 2021, and all Unitarians know that in order to get more and additional budget dollars, we need to all grow revenue across the firm. And that's what Martine talked about, double-digit growth going forward, and that really is the objective across United Therapeutics. So thanks for your question, Hartaj and Martine. Back to you.
And the revenues and that's how we built them and that's how we'll execute across the course of 2021.
And I'll unitary and no debt in order to get more and additional budget dollars, we need called low revenue across the firm and asphalt marketing and talked about double digit growth going forward and that that really is objectives across United Therapeutics. So thanks for your question heart highs and Martine back to you.
Martine A. Rothblatt: Thanks, James, for a great answer. And, you know, it's really beautiful hearing you describe the budget algorithm because the vision that I have in my head is that we don't have, you know, 100 people rowing to grow the business of the company, like just the sales and marketing force, but we have 1,000, the total headcount of United Therapeutics, all rowing in the same direction: product development, research and development, legal, financial, everybody is focused on a singular goal of growing the So that budget algorithm has had the excellent effect of kind of, you know, magnetically aligning all 1,000 Unitherians in the same positive direction. Thanks for bringing up that question. Operator, next question, please.
Thanks, James for Great answer and.
It's really beautiful hearing you describe the budget algorithm because the vision that I have in my head is is that we have not you know 100 people rowing to grow the business of the company like just the sales and marketing force, but we have a thousand of the total head count of United Therapeutics, All rowing in the same direction that <unk>.
Development, the research and development legal financial everybody is focused on a singular goal of.
Growing the company so that everybody there everybody and the company can have additional resources available to grow the projects that are nearest and dearest and center to their own career development experience. So that budget algorithm has had a and.
Excellent.
Fact of kind of you know magnetically aligning all a thousand units Syrians and the same positive direction. Thanks for bringing up that that question. Operator next question. Please.
Unknown Attendee: Our next question comes from the line of Terence Flynn with Goldman Sachs. Please go ahead; your line is open.
Our next question comes from the line of parents line with Goldman Sachs. Please go ahead. Your line is open.
Unknown Attendee: Hi, good morning. Thanks for taking the questions. Maybe two for me. Martine, you talked about double-digit revenue growth. Just wondering, you know, that's, I think, for 2021, but how sustainable is that longer term? And then on Relenipag, another important late-stage program for you guys, maybe any update on enrollment there and the potential timing of data? Thank you.
Hi, good morning, Thanks for taking the questions maybe two for me Martine you talked about double digit revenue growth just wondering.
I think for 'twenty and 'twenty, one, but how sustainable is that longer term and then unrelenting pegged. Another important late stage program for you guys, maybe any update on enrollment there and the potential timing of the data. Thank you.
Sure. Thanks, I'm going to answer the first question, which is kind of you know I guess more for like a strategic overall question and then I'm going to pass it to Doctor Peterson.
Martine A. Rothblatt: Sure, thanks. I'm going to answer the first question, which is kind of, you know, I guess, you know, more of a strategic overall question, and then I'm going to pass it to Dr. Peterson to answer the scientific question relating to Relenopeg. So as to the durability of our revenue growth, I think it looks really strong. And that was the reason I wanted to kind of highlight in the introductory remarks that we're not talking about growing within kind of a single, small, finite, crowded pond, which is a bit how I would describe Group 1 pulmonary hypertension, about 10 approved drugs, roughly speaking, 50,000 U.S. patients.
To answer the scientific question relating to relented pegged.
So.
As to the durability of our revenue growth I think it looks really strong and that was you know the reason I wanted to kind of highlight and the introductory remarks that we're not talking about growing within kind of a a single small fine.
And I crowded pond.
Which is a bit how I would describe group one pulmonary hypertension.
About can approve drugs and a roughly speaking 50000 U S patients.
Martine A. Rothblatt: We are gonna grow in that group one pulmonary hypertension, but the durability of our growth throughout the 2020s doesn't depend just on group one pulmonary hypertension. You then, on top of that, have this group three community, which is one of their feet is in pulmonary fibrosis, which is the cause of their disease, and the other of their feet is in pulmonary hypertension, which we know very well.
We are going to grow and that group, one pulmonary hypertension, but the durability of our growth you know throughout the 2000 Twenty's doesn't depend just on group one pulmonary hypertension. You then on top of that have this group three community.
Which is you know one one of their feet are and pulmonary fibrosis, which is the cause of their disease and the other of their feet is and pulmonary hypertension, which which we know very well.
And now we are.
Martine A. Rothblatt: And now we've done the necessary pivotal trial, executed to a level of scientific rigor and competence that it will enjoy publication in the New England Journal of Medicine, and hopefully, it will be approved in April. Now, with that launch, we will go into a patient population of approximately 30,000 patients who are almost all already being treated for their pulmonary fibrosis, but virtually none of them are being treated for their pulmonary hypertension because there is no drug approved to treat that.
We've we've done the necessary pivotal trial.
Executed to a level of scientific rigor and.
And and competence that it enjoyed publication and the New England Journal of Medicine.
And hopefully to be approved and April now with that launch we would go into a patient population of approximately 30000 patients.
Who are almost all already being treated for their pulmonary fibrosis, but virtually none of them are being treated for their pulmonary hypertension, because there was no drug approved to treat that.
Martine A. Rothblatt: And that's why I mentioned at the beginning of the call that this is, to me, like, you know, kind of a very beautiful scenario. It's like when we started the company, you know, a decade or two ago, there were maybe 20,000 pulmonary hypertension patients, and we were competing with Glaxo on the parenteral side, we were competing with Actelion on the oral side, we were competing with another drug called Iloprost on the inhaled side, and those actually fragmented, and then we had 10 different competitors, as we do today, but still growing organic But in group three, there's none of that.
And that's why I mentioned at the beginning of the call. This is to me like you know kind of a very beautiful scenario. It's like when we started the company a decade or two ago.
There were maybe 20000 pulmonary hypertension patient and we were competing with glaxo on the perennial side, we're completing competing with <unk>.
Actelion and on the oral side, we were competing with with Hum another drug called Hive of Prost.
The on the inhaled side and those actually fragmented and then we had 10 different competitors as we do the day, but still growing organically within group, one, but and group three there's none of that you know there's 30000 patients.
Martine A. Rothblatt: You know, there are 30,000 patients in need of therapy, and hopefully, knock on wood, we will get approved in April, and then we have an awesome therapy for them in Tyvaso. And then, like, just, you know, a year later, absolutely revolutionary therapy with the Tyvaso DPI product. So, I think that's going to drive growth for, you know, well beyond 2021, in fact, for several years. And then, you know, one more thing, which I mentioned in the introductory remarks, is this pure pulmonary fibrosis population of 100,000 patients in the U.S., all being managed with a drug that, unfortunately, reduces the rate of decline in their vital capacity but does not improve it, does not modify the disease.
In need of a therapy and hopefully knock on wood. The a we will get approved in April and then we have a you know and awesome therapy for them and <unk>. So and then like you know just you know a year later.
Absolutely revolutionary therapy with the Thai V. So DPI product.
So I think that's going to drive our growth for well below and well beyond 'twenty 'twenty, one and fact for several years and then.
No one more thing, which I mentioned and the introductory remarks is this pure pulmonary fibrosis population of 100000 patients and the U S.
All are being managed with a drug which unfortunately reduces the rate of decline in their forced vital capacity, but does not improve it does not modify the disease and we've got this very promising data from the increase study that builds upon earlier.
Martine A. Rothblatt: And we've got this very promising data from the INCREASE study that builds upon earlier benchtop data that shows that there is disease-modifying capability in Tivaso for patients with pulmonary fibrosis. We need to now validate that hypothesis with a prospective study, which is what our Teton study is currently enrolling. So, you add up Group 1, Group 3, and lung fibrosis, not to mention the PERFECT study, and I think this growing our patients by double-digit rates is something that can be reasonably anticipated for the balance of 2020. So with that answer to your business question or strategic question, let me shift over to Dr. Peterson to address the scientific question.
<unk> updated that shows actually there is disease modifying capability and tie V. So for patients with pulmonary fibrosis, we need to know validate that hypothesis with a prospective study which is what our Teton study is currently enrolling so you add up the group one the group three.
And the pulmonary fibrosis not to mention the perfect study and I think this growing our patients by double digit rates as something that can be reasonably anticipated for the balance of 2000 Twenty's and.
So with that the answer to your business question or a strategic question, let me shift over to Dr. Peterson to address the scientific question.
Leigh Peterson: You were asking about the RENAPEG studies, and in spite of the pandemic, enrollment in those studies, especially the outcome study, is going quite well. We still have a few sites that aren't open due to the pandemic, but of those sites, the majority of the sites are open.
Yes, so basically.
Were asking about the random relented Peg studies and you know.
In spite of the the Pandemics.
And those studies, especially the outcome study is going quite well, we still have a few sites that are open due to the pandemic, but of those sites. The majority and sites are open and and again, they're they're enrolling quite well.
Leigh Peterson: And again, they're enrolling quite well. This is because the outcome study is an international trial. So we have sites all over the world, and we have good enrollment both in the U.S. as well as outside of the U.S. We're still planning to have this outcome study enrolling in 2022 and then have a readout in 2024. Now, remember, this study is in-point driven, hence the name, outcome study. And so not only do we need to have the patients enrolled, but we need to follow them and collect data on the disease progression of these patients and then compare that between the two groups.
And this is this is the outcome study is and international trials. So we have sites.
All over the world and.
And we have pretty well we have good enrollment both in the U S as well as outside of the U S.
We're still planning to have this outcome study enrolled in 'twenty and 'twenty, two and then have a readout in 'twenty and 'twenty floor and I remember this study is and point driven.
The name outcome study and.
And so not only do we have the need to have the patients enrolled but we need to follow them.
And and collect data on the disease progression of these patients and then compare that into two groups. So expect the 'twenty 'twenty four readout and a 2025 launch. We're also enrolling our C. Pet study now that study isn't and point driven it's.
Leigh Peterson: So we expect a 2024 readout and a 2025 launch. We're also enrolling our CPET study. Now, that study isn't point-driven. It's a change in peak VO2 from baseline to week 28, and we'll be enrolling 193 patients in that study, and that allows for dropouts. And so if we don't have as many dropouts as maybe we put into the initial calculations, we could finish that trial sooner, but we're counting on them both to be finishing around the same time at this point. We'll know more as enrollment progresses and the sites continue to open up.
Change in peak V O two from baseline to week 28 and.
And we'll be enrolling.
193 patients and that study and that that allows for for dropouts and stuff. We don't have as many dropouts as maybe we put into the initial calculations, we could we could finish that trial sooner.
But where we're counting on them both to be finishing around the same time at this point, we'll know more as as enrollment progressions and the sites continue to open up.
Leigh Peterson: Thank you so much, Dr. Peterson. Operator, we have time for one last question.
Thank you so much Dr. Peterson operator, we have time for one last question.
Operator: We have no telephone questions in queue at this time.
We have no telephone questions and feel at this time.
Martine A. Rothblatt: Okay, thank you so much. Well, everybody, I would really like to express our appreciation for you participating in this quarterly earnings call covering the fourth quarter of 2020 and the full year 2020. As promised at the beginning, it was going to be a really great call, and it was. We had so many good questions, and it's been the pleasure of Mike Benkowitz, James Edgemond, Dewey, Dr. Peterson, and myself to join you this morning. Have a great day!
Thank you so much well everybody and we'd really like to express our appreciation for your participating and this quarterly earnings call covering the fourth quarter of 2020 full year 'twenty and 'twenty as promised at the beginning it's going it was going to be a really great call and it was we had so many good questions and it's been a pleasure.
<unk> of Mike Banquet, and James Hatchment, Dewey and Doctor Peterson and myself to join you. This morning have a great day.
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 1-855-859-2056, with international callers dialing 1-404-537-3406 and using access code 8999095.
Thank you for participating in today's United Therapeutics Corporation Conference call, a rebroadcast will be available for replay for one week by dialing 18558592 056 with international callers.
Dialing one 4045 free seven free for Euro six and using access code eight nine and nine 9095.
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