Q1 2021 United Therapeutics Corp Earnings Call
Okay.
Good morning, and welcome to the United Therapeutics Corporation first quarter 2021 earnings call. My name is Phyllis and I will be your conference operate to once a day.
All participants will be in a 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 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 would now turn the conference call over to Mr. Dewey Steadman head of Investor Relations at United Therapeutics.
Yes.
Good morning, It's my pleasure to walk you mean to the United Therapeutics Corporation first quarter, 2020 one earnings call.
And accompanying me on today's call are Dr. Martine Rothblatt, our chairperson and Chief Executive Officer, Mr. Michael Banquet, our president and Chief operating Officer.
Mr. James <unk>, our Chief Financial Officer, and Treasurer, and Dr. Leigh Peterson, our senior Vice President and our 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.
And SEC filings, including form 10-K, and 10-Q contain additional information on these risks and.
And uncertainties, we assume no obligation to update 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.
Conciliations of our 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.
Today's remarks may discuss the progress and results and clinical trials or other developments with respect to our product and these remarks are intended solely to educate investors are not and are not intended to serve as the basis for medical decision, making or just suggest that any products are safe and effective for any unapproved or investigational and youth as full prescribing information for the products are available.
On our website.
Now I'll turn the call over to Dr. Rothblatt for an overview of our first quarter 2020, one financial results and business activities of United Therapeutics Dr. Rothblatt.
Oh, Thank you Joey good morning, everybody. Thanks for joining us on our first quarter 2021 earnings call.
I'm going to start off with I saw the 30000 foot overview.
And then after that I'll open the line for any question and if there are business questions I'll refer them to our president and Michael banquet.
And if there are financial questions I'll refer them to our Chief Financial Officer James Edwin.
And didn't scientific question and Paul referred to our senior Vice President and Dr. Leigh Peterson.
I may even have the odd legal question to do it.
Well I think from a 30000 foot viewpoint.
And quantitative goal at United Therapeutics is what we call 25 by 'twenty five.
This means increasing the number of patients that we are helping with our main medicine from over 8000 patients today and over 25000 patient by 2020 five.
There's quantitative metric isn't especially important one to call out today.
Because today is world pulmonary hypertension day.
But one day and the whole calendar that countries throughout the world have agreed to focus their thoughts and tension and and for many patients and families prayers all day.
The hopes of getting better therapies and treatment for people with pulmonary hypertension.
We expect about half of the roughly 18000 patient growth that we've all required to meet our 25 by 'twenty five goal will come from patients with what's called WH soul or World Health organization group, one pulmonary arterial hypertension and about Catholic.
And that 18000 patient growth will come from patients with a world health organization or WH show group three pulmonary hypertension.
Let me start by breaking down how I believe will get off.
And our 9000 patient growth and the group one category.
And I'll talk briefly about the second 9000 patient quote and the group free category.
So for the half of the growth we expect in February show group, one and we expect that the combi and roughly equal third from our remodel and product archives, they sell product and our regulatory and product.
We think we'll be able to gain about 3000, new patients on the module and all particularly due to the convenience and patient friendliness of our newly approved the immunity pump.
We think we'll be able to gain about 3000, New group one patient on highway so because of the convenience and patient friendliness of our new green, both dry powder inhaler, which we have filed for approval and we hope to be approved in December of this year.
This is a finger size device compared to the large liquid net your likelihood that they use a day.
And then finally, we think we'll be able to gain about 3000, new patients between now and 2025 on a renter Sam.
It's a constantly growing appreciation of the efficacy of around the tram and reducing morbidity and mortality.
Now please keep in mind, that's far about the U S alone.
45000 patients in February show group, one being treated with non.
United Therapeutics drug and about 15%.
And their disease annually per the Kaplan Meier curve of their trials.
So overall there are some 50000 plus patient being treated for pulmonary hypertension about 8000 of them currently being treated by our drug.
And the balance somewhere between 40 and 45000.
Closer to 45000 being treated with non United Therapeutics drug.
So it is very.
She bubble there were plenty of market space. There is plenty of help accretion space available.
To grow and WH group one from the current 8000 patients we're treating two something like 16000 patient.
We expect to help by 2025.
Now I mentioned that are <unk>.
Total gold.
To help 25000 patients with pulmonary hypertension by the year 2020 five.
And the second half of that are achieving that 25 by 'twenty five volt.
And from penetration of February show group free by Taipei, So poor FTA approval that we achieved just last month.
Now within WH total free there are something between 30 and 40000 patients with pulmonary hypertension.
We are told actually by prescribers that the actual number is quite a bit larger and even 40000.
It's somewhat similar to the situation with February show group one.
You'll see various accounts that there are 40000 patient 50000 pace and.
We are told by prescribers that actually there are quite of a much larger number of patients with February and Joe group, one pulmonary hypertension and.
And it is a difficult disease to really quantify and identify because it's a disease that is identified by excluding numerous other conditions, whose symptom mimic.
As a group one pulmonary hypertension.
Anyway back to the group three pulmonary hypertension.
There whether the number of 30040 thousand are larger we are the only drug now who pour their thumb IPF market segment of IPF patients with pulmonary hypertension.
And this ports and the peso also cold I L. P. P. H C zone.
Are actually the ones, who have the both rapid decline and.
Other words that you have interstitial lung disease, and you have pulmonary hypertension.
Statistics show that your declines adapter is much more rapid than the patients with interstitial lung disease that do not have pulmonary hypertension.
Given that there are well over 30000 patients who need treatment and that our goal by 2025 is to capture at.
And at least 9000 of those pace and I think that's a very achievable goal and Kurt.
And so the comparison to the.
Capital market side.
So in addition to the $25 25 goal. That's all we are hard at work out and and it's our number one and quantitative priority.
Let me also mention a few of what I would kind of call free options and our pipeline and by free options. I mean, we are doing these things.
I believe they have a very high probability of success because they are and.
Either late stage clinical trials phase III clinical trials.
Typically the odds of success are quite high.
They are developments that we would call bio comparable therapeutics, meaning that they are.
Comparable to things that are already approved by the FDA.
So let's talk about some of these quote unquote free options and our pipeline.
First of all there is a phase III study of high base, though.
C O P D and so.
Treated pulmonary hypertension.
The name of the Phase III trial was called our perfect study and it should complete its enrollment by the end of next year.
Second we have a phase III trial of a drug called Walenta income.
And group one pulmonary hypertension.
And this study is also doing very well and I think it should probably completed enrolment also by the end of next year and.
It's just under one third enrolled.
<unk> enrolled at this point and time.
And the our read of the all the love and Peg trial called the outcome at Sam outcomes trial.
Next up we have yet another phase III trial, yes, one off highway and.
And so I'm, sorry, idiopathic pulmonary fibrosis IPF.
That should be completed and its enrollment Oh, I would say it would be fair.
First half of 'twenty three.
All this is very interesting for United Therapeutics, because it is actually.
First time that we have developed a non oncologic treatments.
Treatment.
Outside of all around and housing anything to do with pulmonary hypertension, and yet using a drug high peso, which has just been approved and a adjacent.
Therapeutic class.
The target of this file.
Let me unpack that for a moment.
The approval that we just had and that in and adjacent therapeutic class.
The approval the FDA granted us Jeff MA all based on our increase trial.
Patients with pulmonary fibrosis as well as pulmonary hypertension. So they.
Had kind of a double strike and that's what I mean by in a safe and therapeutic class to pulmonary fibrosis without pulmonary hypertension.
And in that adjacent therapeutic class.
We were able to show improvement in the key therapeutics clinical markers, all pulmonary fibrosis that clean.
The key indication is called.
And forced vents leary capacity or just for short and D C and where.
And we're show be able that we were able to show improvement and that.
That was.
Was shown and talked about also in our new England Journal of Medicine publication on the trial.
And.
So now were approved in the adjacent class. So we are now taking that same drug that's proven safe and effective in IPF with bio with pulmonary hypertension and developing it and IPF without pulmonary hypertension. So again I think the odds are very strong and our.
Our success in this day.
Well designed study.
The way we call that study the Pecan study.
The head of our clinical and product development program.
Or are the pulmonary fibrosis activity.
Dr Leigh Peterson.
And from the Grand coupons state of Wyoming.
Third we have another phase III study, our pivotal study and the registration study of our Enos gene therapy treatment for pulmonary hypertension.
And this one should also complete its enrollment by the end of next year.
And then last but not least it all and factor in many ways and close the first is our bio comparable once daily form of a rental tram and our bio comparable less painful form of modular.
Both of which could be won by the quantity and the fate of 2025.
So to wrap up from this high level overview, we've got an awful lot and the market.
It's a market which is.
He is a very practical fire and much larger and a number of patients who are currently helping.
A lot of new products to bring to the market.
So I think here.
If I was they are parents of a patient with pulmonary hypertension ethane.
And there are tens of thousands others hundreds of thousands of others throughout the world.
This world PIH day, I would be very thankful and very hopeful about the bright and optimistic future.
But that's a set of introductory remarks, operator, if you could be so kind to open the lines and I'll be happy to field the question.
At this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Your first question comes from the line of young Yang with Jefferies.
Thank you and I have a couple of questions and one is in quarter three ph ILD.
So.
We are just from physicians that they see their patients to every three to six months and I know.
Martine just mentioned that.
The cities and more difficult disease to diagnose and quantify compared to P. H.
But instead.
I do from targeting physicians do you plan to target patients to show that patients are actually seeking treatment with Teva. So.
And the second question is on subcutaneous and a modular and.
I understand that you may be limited to why you can say body and 10-Q.
The trial.
We and our senders and liquidity Yeah, how you doing I expect T. T P G and before mid 2022 at the release does that mean that.
Liquidity or could not channel launch the product and because they try it as Omar Thank you.
Thank you for your questions here and nice nice to hear your voice. This morning due to the shortage of time on the call, we're only going to be able to allow one question per.
Per inquisitor, if I can say that.
So I'm going to just take the first question and refer it to Michael because it's really and the domain of a business question.
Can you help volume with understanding what our strategy is with regard the ILD ph.
Sure.
Good morning, everybody. So what are you.
Where I get to the specific question around a lot of patient and maybe give a little bit of color around the ph ILD launch so.
Martine I think gave a great overview of sort of our five year vision of growing from.
Roughly 8000, and total patients to 25000 patients and roughly half of those.
And based on patients for various indications and so with respect to the ph ILD piece of that.
And what I'll reiterate what we've been saying since January and that with with this launch.
We expect the number of patients on tight Asia to approximately double by the end of it and next year.
And the other thing that we've been saying is that it's it's probably not going to be a straight line from here to that doubling and there'll be a little bit of a ramp and then you have something that looks a little bit more hockey stick ish as we get later into the year and certainly into next year and that's due to various.
Things around the fact that and and you touched on this we have.
A new group of ILD treater, so yeah, there and if they're having to go through the process of getting their patients and screen. Those patients are diagnosed patients and then clear the.
That cleared with with payers. So yeah. So that that process is ongoing and I will say and the first three to four weeks of the launch it's very early days work and incredibly pleased with what we've seen in terms of referral activity in terms of and I believe referrals that have come out and we actually have patients that have started.
Since the launch.
On Friday, so and.
I would also say that Tam and the last week I've been out meeting with six of the major ILD centers and the western half of the U S and.
And I will tell you to a to a person to a center.
All of those physicians are extremely excited about having a treatment option for.
For these very sick patients and again all have said that.
We've we have there is a meaningful unmet need here that we're going to be able to address with her day. So so so yeah. We have we have been since last summer.
And I worked building relationships with these new treaters educating them on the disease that we're able to talk.
More openly about how they saw the benefits of five day. So how do you get a patient started out and we have the approval and and the second part of that coming back around to you and his question is yes of course, we are.
We have multiple patient engagement and education efforts ongoing obviously.
And with FDA guidelines and.
Are there restrictions on and being able to communicate with patients we have to be a little bit more careful and those.
And those engagements for very good reasons, but we do have a I would say a very robust patient engagement and education effort ongoing.
Awesome, Mike Thanks, so much.
Operator next question.
Your next question comes from the line of Liana and the Sato with Wedbush Securities.
Thank you for taking my question and congratulations on all the progress.
How are you going to commercialize tie basis solution versus time based R. D. P. I at the end of the year presuming.
Approval.
Thanks, so much beyond that so great to hear your voice again as well so I'll bet again squarely a business question for Mike can you help describe the differential launch plan share.
Sure. So yeah, we're really excited about the prospect of brain and it being able to bring and the BPI to market, we think that it.
Certainly it provides a.
A more convenient use your way to deliver today so.
But if you kind of step back and really kind of look at look at the history of the United Therapeutics, and and one of our what our objective and missions.
And her happened and that is to write patient options patients would options.
Ways to take our medicine and a way that is.
We have meets kind of where they are and their disease and that's most convenient to them. So we started with remodeling.
And then redevelop two day two versions of our modular and EBITDA at Asia, which was an easier way to take a proportional inhaled and that has actually got two years to try and which is obviously, though.
This is the simplest version.
Of all of them and so I look at DPI is really kind of fitting and it's fitting kind of into that strategy of providing patient options and so I would I wouldn't I would expect that with the DPI youre going to have a significant.
Number majority of patients that are going to want to.
Transition to the dry powder inhaler and that's fantastic.
You will have other patients that.
For various reasons may choose to stay on that annualized and that's great and we're going to continue to support that product, it's a great product.
There is going and I do think that there is going to be a patient pay.
Patient type that is it.
And maybe that are suited for that that product over over the DPI.
Yeah, and don't hold me to this I think when the dust settles, you're probably looking at something around 70, 30 split between dry powder and and Nebulize ourselves. So we're going to continue to provide both options and support both options and I think they both.
Great delivery devices for the right patient.
Perfect. Thanks, so much Mike Operator next question. Please.
Your next question comes from and the line of hard Taj Singh with Oppenheimer and company.
Great. Thank you for the question.
And again, great work and got a quick.
And on Oren and Sam So you know since the approval of the freedom EV.
The addition to the label the study Freedom EV study.
Martine.
And it has.
And the trajectory growth trajectory of the product has definitely increased.
Substantially and lost two years, a Johnson <unk> Johnson of the probably the old Italian drug.
The case about 20% on average growth every quarter.
Some of that for market share some of that from an increase of the overall market side can you give us color there and also help walk us through how you see orange and trauma, adding those additional 3000 patients as you had mentioned earlier in your prepared commentary. Thank you for the question.
Great Hothouse, so often to hear your voice this morning as well.
Very interesting question are very much in the range of what we call you know business and market strategy. So Mike if I can ask you to provide her taj with some more insight into the.
Business ramp plans for rent and trim.
Yeah.
To do that yes. So.
I think with with with our rent and I think you have to kind of again kind of step back and look at the kind of a watch and kind of where that kind of fit with with COVID-19 right. So so I will say you are at.
High level I think as a company we continue to be pleased very pleased with the physician reaction to the E D data.
I think our underlying patient trends.
To be very solid and I would say in particular, I think you know and in late Q Q1, and even heading into Q2. If you look at referrals and starts we've seen actually a nice yes.
Nice nice uptick over the prior box.
I will say and.
<unk> 2020 as I kind of look back over the last 18 months and think about when we launched when we received a label expansion, which was October of 2019, when the publication came out which was in March like literally two days I think before the world shut down and.
To your point heart, Howard, we did see a nice uptick and that kind of the initial.
For the six month period, and then it just it did get sort of muted. So we had a nice ramp and then it just kind of.
Plateaued, a little bit there for a look for a little while and I think honestly look at it I think it's a function of.
And kind of COVID-19 shutting down and the lack of access that we had to physicians and.
And just impacting our ability to really kind of get out and continue to communicate the EDI data and we certainly had some access during COVID-19 virtually.
But nowhere near the access that we had pre COVID-19. So I think as we are starting to come out of this a little bit.
We're getting we're getting we're getting that access again, we're able to get out and get in and have really I think fruitful discussions with physicians and really kind of talk about the value proposition I think the doctors are seeing that and you know like I said I think we're starting to see that uptick and so I think as we go.
Looking to the future I think long term as Martine said I think we do have a long runway day with a literature and.
As we continue to educate the physicians on the value proposition.
Also think with.
Some of the data that we've talked about and prior calls around this idea of treating patients to pressure. So put in starting the model and modulus and really trying to drive down their pulmonary arterial pressure and then switching them over to a rent a trend and I think that is continuing to.
And to get a little bit of a certainly a lot of attention by physicians and I think.
Over the long term, that's going to give us I think another sort of another leverage point with our rent our travel and I think the third one that we see.
And sort of the latter half of the 25 by 'twenty five plan that Martine laid out is because I read a protocol once daily. So that provides you know as we were talking about and today, so a more convenient.
Any way to to take.
And and and potentially with a better.
Tolerability and an ability to dose faster so that I think maybe some additional attributes there so and so I think it's really sort of a combination of building on.
And and restarting again, bill down and momentum, we've seen and the last quarter and continued to leverage the EDI data leverage this treat the pressure idea that's getting some attention and then the once daily formulation, that's coming and the yes.
And the back end of the $25 25 time frame.
Excellent and Mike. Thank you so much.
Operator, I believe free up time for one last question.
Your next question comes from the line of Joe Stein with Cowen and Cowen and company.
Another Cowen good morning, and thank you.
Good morning, and thank you for taking my question.
Just a quick one on the <unk> program as you start thinking about adding more trials here and expanding <unk> opportunity is it possible to study the DPI alone in some of these trials you know maybe the increase adherence or.
Ease of use would maybe drive better treatment outcomes or do you have to start with the Nebulize version and and maybe do a PK study to show equivalents there.
Yeah.
Savi is I would say.
But if I was close to a scientific question as we've got so far this morning, I'd like to bounce that one over the Doctor Peterson to discuss.
And thank you for the call I'll read the question.
So we.
We have been told.
Or.
We have and riding that weren't we received approval for type basis for new indications and once we receive.
For the time, they said DPI for.
Four P. A H really then the approval.
Well well.
Automatically be granted for <unk>.
Additional indications for DPI as they come along so given that.
Is it really.
Depends on what we decided at the time with regard to you know supply ease of use where patients are with with wanting to beyond a DPI versus the inhaler and the Taipei. So inhaler, we don't exactly know I mean, we have studied.
And the DPI and the Televisa DPI and for human factors in all different indications, whether it's P. A H or ph ILD or even some <unk>.
Without diagnosed ph.
So as far as backyards, and they're quite similar but there is some.
No question and I can't say, one way or the other that some patients with different indications might actually prefer nebulizer for them it might be a little bit easier for them to take and and get a good day.
Versus the dry powder inhaler, because they have to.
More.
And they they actually breathe and for the dry powder inhaler.
Versus the nebulizer and it is a little bit more passive so and.
We're gonna as soon as we continue to do additional studies will investigate that but right now Teton. One is is already in the work and the sites are open and we have a protocol.
And we should have the enrollment and any any day now and that's with highway yourself.
Thanks, So much Dr Peterson and really appreciate it.
Well, we really have been and happy to have an opportunity to share our business scientific and financial progress with everybody. During this first quarter earnings call. We've been happy to share with everybody in this world from pulmonary hypertension day, that's by the end of next year, we expect to.
Be able to double the number of patients that we have on highway so and by 2025, we expect people to help.
Roughly three times as many patients with our <unk> suite of products.
And we're currently helping today.
And is a fact that our base.
Based on the Kaplan Meier curves.
All of the main approved therapy.
And that about 15% to 20% of the patients progressed and their disease symptoms and signs and symptoms each year.
And just you know to make the math easy at 50000 per.
Patient <unk>.
15% per year progressing at 7500, the year, 20% progressing as 10000, a year so whether the number of patients needing a new therapy is 1500 year.
Or I'm.
And sorry.
And 7500, a year or 10000, a year both of those numbers are well above the gross debt novel Therapeutics requires to go from 8000 patients that would help them to a day to 25000 patients that will be helping by 2025.
So I believe that the goal is realistic.
Need is real.
And our capabilities are strong and impressive and ever growing <unk>.
And so much everybody for joining us on this call and look forward to seeing you at least virtually and upcoming health care conference. Operator, you can wrap it up.
Thank you for participating in today's United Therapeutics Corporation Conference call, a rebroadcast will be available for replay for one week by dialing one 805 858367 with international callers dialing 141 and six six.
And 214642 and using access code 30447, and four eight.
Sure.
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