Q3 2021 United Therapeutics Corp Earnings Call
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, 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 reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in our earnings release available on our web site at IR Dot <unk> Dot com.
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 <unk>.
Information for the products are available on our website.
Now I'll turn the call over to Dr. Rothblatt for an overview of the third quarter of 2021 financial results and business activities of United Therapeutics Dr. Rothblatt.
Thank you very much Julie good morning, everyone and welcome to our third quarter 2021 financial results call.
We've had an absolutely fantastic quarter, and I really have only great news to share with you. This morning.
For example, we have experienced double digit growth in revenues double digit growth in non-GAAP earnings.
Within our revenues, we've experienced double digit growth in Taipei, so double digit growth in uremic tram double digit growth in unit Tuck said.
It's just amazing all the way across the board, we had a fantastic quarter and factor no product category have Paul rail have sales decreased from last year. So like I said all good news today.
unknown: had a fantastic quarter. In fact, in no product category did sales decrease from last year.
Martine A. Rothblatt: So, like I said, all good news today. In addition to these operating results, we are making really great progress with all of our phase three clinical trials. We have a number of phase three clinical trials going on. We have in the area of pulmonary hypertension, our gene therapy trial called Sapphire. We also have our Runapeg two trials, all those in pulmonary hypertension. In pulmonary fibrosis, we have two phase three trials.
Addition to these operating results. We also are making really great progress with all of our phase three clinical trials, we have a number of phase III clinical trials going on we've got in the area of pulmonary hypertension or gene therapy trial called <unk>.
Sapphire, we also have our <unk>.
<unk> two trials all of those in pulmonary hypertension.
In pulmonary fibrosis, we have two phase III trials, we call them Teton, one and <unk> two and in COPD.
Martine A. Rothblatt: We call them Teton 1 and Teton 2. And in COPD, at least a type of COPD associated with pulmonary hypertension, we have another phase three clinical trial going on called Perfect. We also are just now wrapping up a phase three trial in our organ transplantation area dealing with ex vivo lung perfusion. So really, you know, a huge amount of pipeline activity going on.
At least a type of COPD associated with pulmonary hypertension, we have another phase III clinical trial going on called perfect. We also are just now wrapping up a phase III trial in our organ transplantation area dealing with ex vivo lung perfusion.
So really just a huge amount of pipeline activity going on.
unknown: In addition to all of that, we have some very exciting early stage activity where we are developing next generation forms of our perennel, inhaled, and oral products. So all the way across the board, the one which we expect to launch soonest will be the next generation product for our inhaled product, which is our dry powder inhaler.
In addition to all of that we have some very exciting earlier stage activity, where we are developing next generation <unk>.
<unk> of our.
Parenteral inhaled and oral product so all the way across the board.
One, which we expect to launch the soonest will be the next generation product for our inhaled product, that's our dry powder inhaler.
unknown: We just recently launched our next generation product for remodulin, which is remunity. And in our pipeline, we have even next-generation improvements on that product. And we are working on our next generation better dosing product for our arenatram pill. And then following that, as noted earlier, we expect Relenipag to make a huge difference in the oral treatment of pulmonary hypertension.
We just recently launched our next generation product.
For remodeling, which is remuneration.
And in our pipeline we have even next next generation improvements on that product and we are working on our next generation better dosing product for our <unk> and then following that as noted earlier, we expect our 11th had to make a huge difference.
In the oral treatment of pulmonary hypertension.
So it's.
It's kind of like.
Best case situation here at United Therapeutics, We love, what we're doing we love that we're doing it also well and on that note. Let me turn the podium over to our President and Chief operating Officer, Mike Banquets, who is responsible for so much of this great news.
unknown: So, you know, it's kind of weird.
Michael I. Benkowitz: Thanks, Martina, and good morning, everyone. As Martn said, we're very pleased to have posted a strong third quarter highlighted by year-over-year double-digit growth for total revenue, Troposinal revenue, and for three of our products, Ta-Beso, Iranatram, and Utica. At the same time, we continue to progress toward our 25 by 25 goal, which is to reach 25,000 patients with our therapies by the end of 2025. At the end of the third quarter, we had approximately 9,000 patients on our Traprosanil products in the U.S., which, when coupled with the approximately 1,000 patients on our Troprosan products outside the U.S., puts us at about 10,000 patients closer to our 25,000 patient goal.
Okay.
Thanks, Marty and good morning, everyone.
As Martine said, we're very pleased to have posted a strong third quarter highlighted by year over year double digit growth for total revenue to approximate revenue and for three of our products today, So <unk> and <unk> at.
At the same time, we continue to progress toward our 25 by 'twenty five goal, which is to reach 25000 patients with our therapies by the end of 2025.
At the end of the third quarter, we had approximately 9000 patients on our <unk> products in the U S, which when coupled with the approximately 1000 patients on our capacity of our products outside the U S puts us at about 10000 patients toward our 25000 patient goal.
Michael I. Benkowitz: This quarter, I'd like to dive into the underlying performance of our three Traprosanal products, Tybaso, Remodulin, and Aronter, so I'll begin with Taveso. Earlier this year, in anticipation of the PHILD approval that we ultimately received last April, we established a goal to double the number of patients on TaVASO from 3,000 to 6,000 by the end of next year. This assumes no COVID-related impact on health care practitioner access and patient initiation of therapy and importantly recognizes that the path to doubling may not be lenient. The third quarter was our second quarter of the PHILD launch, and we're very pleased with the progress this far.
This quarter I'd like to dive into the underlying performance of our <unk> products today, so remodeling kind of renter tram.
So I'll begin with diabetes. So earlier this year in anticipation of the ph ILD approval that we ultimately received last April we established a goal to double the number of patients on <unk>. So from 3000 to 6000 by the end of next year. This assumes no COVID-19 related impact to health care.
Shneur access at a patient initiation of therapy, and importantly recognizes that the path to doubling it may not be linear.
The third quarter was our second quarter of the ph ILD launch and we're very pleased with the progress thus far.
Michael I. Benkowitz: We continued growing the number of Tybeso active patients during the quarter, ending with approximately 4,000 patients on Tybasis, putting us one-third of the way toward our goal of doubling the number of patients on Tyvesa by the end of 2022. I also want to mention that during the third quarter, the CMS comment period regarding Medicare reimbursement for Tyveso in PHILD began and is open through mid-November. We can't predict the timing of a coverage decision, but in the meantime, federal health care patients can apply to our patient assistance program to access TIVASO prior to the coverage decision if they are eligible.
We continue growing the number of <unk> active patients during the quarter ending with approximately 4000 patients on <unk>, so putting us one third of the way toward our goal of doubling the number of patients on <unk> by the end of 2022.
I also want to mention that during the third quarter. The CMS comment period regarding Medicare reimbursement for <unk> and ph ILD commenced and is opened through mid November we can't predict the timing of a coverage decision, but in the meantime, federal health care patients can apply to our patient assistance program to access Taipei, So prior to the coverage decision.
If they are eligible once we obtain CMS coverage, we will be able to transition these patients to a reimbursement model over time.
Michael I. Benkowitz: Once we obtain CMS coverage, we will be able to transition these patients to a reimbursement model over time. To that end, we anticipate three near-term drivers of Tibera growth over the next few quarters. The first driver is the approval of Medicare reimbursement for TaVASO and PHILB. Even though federal healthcare patients may be eligible for patient assistance, we are hearing through the channel that many physicians are waiting for CMS coverage before prescribing Tyveso for their PHILD patients. The second driver, and somewhat related to the first, is that we expect to see growth in prescriptions from ILD triggers. To date, the vast majority of prescriptions have been from our historical PAA rights.
To that end, we anticipate three near term drivers for <unk> growth over the next few quarters. The first driver is the approval of Medicare reimbursement. So in ph ILD, even though federal health care patients may be eligible for patient assistance. We are hearing through the channel that many physicians are waiting for CMS coverage before prescribe.
<unk> and their ph ILD patients.
The second driver and somewhat related to the first is that we expect to see growth in prescriptions from ILD treaters.
To date, the vast vast majority of prescriptions have been from our historical PAA traders.
unknown: And then the final growth driver is the approval of Taveso DPI, which we expect no later than the summer of 2022. Moving on to Remodulin, last quarter, we learned that a generic form of subcutaneous trappostinal became available. This launch so far has played out almost exactly like the IV generic launch we saw in 2019. There has been an initial bolus of sub Q remodulin patients, similar in quantity to what we saw with IV, and which are primarily dual-eligible Medicare and Medicaid patients that had been forced switch to generic to process.
And then the final growth driver is the approval of <unk>, which we expect no later than the summer of 2022.
Moving on to our margin last quarter, we learned that a generic form of subcutaneous <unk> became available. This launch so far has played out almost exactly like the IV generic launch we saw in 2019.
There has been an initial bolus of sub Q remodel in patients similar on quantity to what we saw with IV and which are primarily these dual eligible Medicare Medicaid patients that had been forced switch to generic coprostanol.
unknown: Since the generic sub-Q launch, generic transitions have tapered off to a negligible amount as we enter Q4, and in fact, our new patient starts remain at or above our long-term trend levels, and we are now adding back patients to our active. Finally, I'll provide some color around a rennet. We've mentioned in previous calls and investor conferences that while we saw an uptick in renterrand following the Freedom EV label expansion, the launch trajectory was blunted by COVID.
Since the generic sub Q launch generic transitions have tapered off to a negligible amount as we enter Q4 and in fact, our new patient starts remain at or above our long term trend levels and we are now adding back patients to our active patient census.
Finally, I'll provide some color around our rent a tram we've mentioned in previous calls and investor conferences that while we saw an uptick on our Renaissance following the freedom EV label expansion. The launch trajectory was blunted by Covid and.
unknown: In the second quarter of this year and continuing into the third quarter, we were able to have consistently more robust interactions with prescribers about the Freedom Ev data, and we're receiving positive feedback from these physicians about the Aranetram value proposition, especially regarding its efficacy. And this has translated into strong new patient momentum over the last two quarters and the highest number of patients on Aranitram as at the end of the third quarter.
In the second quarter of this year and continuing into the third quarter, we were able to have consistently more robust interactions with prescribers about the freedom EV data and we're receiving positive feedback from these physicians about the <unk> value proposition, especially regarding its efficacy and this has translated into strong new patient start momentum over the last two quarters.
And the highest number of patients on <unk> as of the end of the third quarter.
unknown: So, in conclusion, we're pleased with the progress we're making in the ongoing Tibaso launch and PHILD and that we're on track to achieve 6,000 patients on Tiveaso by the end of next year, the continued momentum around renatram and appreciation of its value proposition, and returning to remodulent patients. And so, with that, I'll turn the call back over to you.
So in conclusion, we're pleased with the progress we're making in the ongoing <unk> launch in ph ILD and that we're on track to achieve 6000 patients on <unk> by the end of next year.
Continued momentum around our rent a tram and appreciation of its value proposition and returning to remodel and patient growth and so with that I'll turn the call back over to you of our team.
unknown: Thanks, Mark. Thanks, Mike. Amazing details and amazing progress, and kudos to you and the entire sales and marketing team. Operator, we can now take the callers.
Thanks, Mark Thanks, Mike.
Amazing details and amazing progress and kudos to you and the entire sales and marketing team.
Operator, we can now take the colors.
Operator: Thank you. And as a reminder to ask a question, please press star one on your telephone keypad. We'll go first to Joseph's Tom at Cowan & Company.
Yes.
Thank you and as a reminder to ask a question. Please press star one on your telephone keypad will.
We will go first to Joseph Tom at Cowen <unk> Company.
Joseph John: Hi Eric, good morning. Thank you for taking my question and congratulations on the progress. Just on the continued growth for Tai Beza, one of the points mentioned was increasing the number of physicians that are predominantly ILD writers. Can you just dive a little bit more into how this will happen? Are you experiencing any considerations with this physician population thus far that you're working through?
Hey, there good morning. Thank you for taking my question and congrats on the progress.
Just on the continued growth for <unk> based on one of the points mentioned was increasing the number of physicians that are predominantly ILD.
Writers can you just dive a little bit more into how this will happen.
Are you experiencing any considerations with this physician population, thus far that you're working through.
unknown: Thanks for the question. Joe and Mike, would you be able to answer that question?
Thanks for the question, Joe and Mike would you be able to answer that question.
Michael I. Benkowitz: Sure, thanks Joe. Yeah, no concerns so far. I think it's just taking some time to bring these doctors online. So keep in mind that, you know, the diagnosis process for these physicians is very different than I think what they're used to. They have to screen the patients. They have to do echocardiograms. Those things I think they're accustomed to doing. But the right heart calf is new to them. I wouldn't say it's a barrier. I just think it tends to slow.
Sure. Thanks, Joe.
No no concerns thus far I think it's.
Just taking some time to.
To bring these treaters online so keep in mind that the diagnosis process for these physicians is very different than I think what theyre used to.
They have been screening the patients they have to do.
Echocardiograms those things I think they are accustomed to doing the right heart Cath is new to them, but I wouldn't say, it's a barrier I just think it tends to slow things down. So a couple of things are happening there.
Michael I. Benkowitz: things down. So a couple of things are happening here. In some cases, referring these patients to PAH clinics, even though they have said, you know, over the long term, they intend to treat these patients. They are, in a lot of cases, these patients reside with physicians in community practices, and so they don't have a right-hard cath readily accessible, so they're having to figure out where to send these patients to get a right-hardt calf.
In some cases, referring these patients to PIH clinics.
Even though.
Over the over the long term they intend to treat these patients.
They are and some and a lot of cases. These patients are reside with physicians in community practices and so they don't have a right heart cath readily accessible so theyre, having to figure out where to send these patients to get a right heart cath.
Michael I. Benkowitz: I think the third thing to keep in mind is that a lot of these physicians are the same physicians that are also on the front line of treating COVID patients. And then finally, as I mentioned in my opening remarks, I do think that there is a little bit of waiting for CMS coverage before really kind of diving in and digging in and, you know, starting to write for Tibasos.
I think the third thing to keep in mind is a lot of these physicians are the same physicians that are also on the frontline.
Treating COVID-19 patients and then finally as I mentioned in my opening remarks, I do think that there is a little bit of.
Waiting for CMS coverage before.
Really kind of diving in and digging in and starting to write for <unk>. So we are adding we are adding new prescribers. So it's not like we're not adding they are starting to come on online I think we probably would have expected.
Michael I. Benkowitz: So we are adding new prescribers, so it's not like we're not adding. They're starting to come on online. I think we probably would have expected that it would have been a little bit faster than what we're seeing, but they are coming in.
Then a little bit faster than what we're seeing but they are coming in and I think that will continue to come as we.
Moving move into next year.
Fantastic. Thanks, so much for that question for that answer and operator, you can now call up the next.
unknown: Fantastic, Mike.
Jessica Fye: We'll go next to Jessica Fye with J.P. Morgan.
Questioner.
We will go next to Jessica Fye with J P. Morgan.
unknown: Hey guys, good morning. Thanks for taking my question. Can you talk about how many of the now, I guess, 1,000 pH-ILB patients you've added since the launch? How many of those are on Medicare and basically getting free drugs until that coverage is finalized?
Hey, guys. Good morning. Thanks for taking my question can you talk about how many of them now I guess 1000.
H ILD patients you've added since the launch how many of those are on.
Medicare and basically getting free drug until that coverage finalized.
unknown: Yeah, good to hear from you this morning, Jessica. Mike, I think that question would also be in your
Yes, good to hear you this morning Jessica.
I think that question would also be in your bailiwick.
Michael I. Benkowitz: Sure, so thanks, thanks Jess. Even prior to PHILD, I mean, you know, we've always had a patient assistance program that has, you know, a small percentage of patients in it, so receiving free drugs. I think with the PHIOLD launch and not having the CMS coverage, we have seen that kick up. I would say in the grand scheme of things, it's still a relatively small percentage. So you've gone from a small percentage that's effectively doubled, but it's still, you know, you're talking about low single-digit, or sorry, low double-digit percentages of patients that are in the patient assistance program right now. As I said, I think, you know, we should continue to.
Sure so thanks.
Thanks Jess.
Sure.
Even prior to ph ILD I mean, we've had it we've always had a patient assistance program that has.
Let's say some some small percentage of patients in it.
So receiving free drug I think with the ph aisle, the launch and not having the CMS coverage, we have seen that tick up.
I would say in the Grand scheme of things, it's still relatively small percentage. So you've gone from like a small percentage thats effectively doubled but still you are talking about low single digit sorry, low double digit percentages of patients that are in the patient assistance program right. Now is as I said I think.
And we continue to kind of really hear this anecdotally in talking with physicians I think there is this sort of warehousing effect, that's going on particularly like I said with the ILD treaters, where.
Michael I. Benkowitz: I really hear this anecdotally when talking with physicians. I think there is this sort of warehousing effect that's going on, particularly, like I said, with the ILD treaters, where I think they're waiting for the CMS coverage to go through the process of writing the referral. Because even if you're going through the patient assistance program, there is still a process that you have to go through to see if the patient's eligible and apply. And our sense is that a lot of these physicians don't want to have to go through that process again. and, you know, like I said, we are waiting until we get the CMS coverage.
I think they are waiting for the CMS coverage.
To go through the process of writing the referral because even if youre growing through the patient assistance program. There is still a process that you have to go through to see if the patients eligible and apply and.
Our sense is that a lot of these physicians don't want to have to go through that process twice.
As I said are waiting until we get the CMS coverage.
unknown: Super Mike, thanks so much for that answer and just for your question. Operator, who would be the next analyst?
Super Mike. Thanks, so much for that answer and just for your question operator, who would be the next analysts during the call.
Hartaj Singh: Next, we have Hartaj Singh with Oppenheimer.
Next we have hard time seeing with Oppenheimer.
unknown: Great, thank you for the question today and the really nice update. Just a question on, you know, this is the first time I've heard you provide the number of patients, XUS, Martine, Mike, you know, the 1000. You also are now starting a phase three study with Teton XUS. So have there been any thoughts on kind of the youth or business model XUS and how interesting that would be marketed to you? Yeah, thanks a lot for the question. Hartaj, and it was good hearing your voice this morning.
Great. Thank you for the question today.
And the really nice update.
Just a question on the first time I've heard you provide actually a number of patients ex U S.
Martine Mike. The one you also are now starting a phase III study with Teton ex U S. So have there been any thoughts on kind of.
Nuclear business model X, you ask and how interesting that market issue. Thank you.
Yeah. Thanks, a lot for the questions are causing a good hearing your voice this morning.
We are.
unknown: I think we are more interested in the XUS opportunity for IPF and possibly as well for ILD. There seems to be a much greater unmet medical need, especially with regard to IPF, where we believe we can have a disease-modifying agent. So we definitely are opening up our bandwidth, if you will, to look at more activities, XUS. We also have a terrific partner in Europe, Group O'Ferre, which we've been working with, and other partners in other parts of the world. So your intuition, HARTage, as always, is right on target, and we are ramping up activities outside the U.S. Thanks. Operating, you can bring on the next analyst.
More interested in the ex U S opportunity for IPF.
<unk>.
Possibly as well for ILD, there seems to be.
A much greater unmet medical need, especially with regard to IPF, where we believe we can have a disease modifying agent. So we definitely are.
Opening up.
Our bandwidth if you will to look at more activities ex U S. We also have a terrific partner in Europe, Grupo Fair, which we've been working with and other partners in other parts of the world. So your intuition hard Taj has always is.
All right on target and we are ramping up ramping up activities outside the U S. Thanks.
Operator, you can bring on the next analyst.
Eun Kyung Yang: We'll go to Young Yang with Jeffries.
We will go to Yang Yang with Jefferies.
unknown: Thank you. A quick question on TaVASA DPI. So when you address the single deficiency that was identified in the complete response letter, would that be the resubmission, would that be classified as Class 1 or Class 2?
Thank you.
A quick question on pay based on CPI.
You addressed the single deficiency.
<unk> the company was spun from there.
Well does that the resubmission will be classified as a class one oclock P M.
Leigh Peterson: Yeah, young, nice to hear from you this morning and a very, very interesting question. Fortunately, we have Dr. Peterson on the call, and she is our expert in matters that kind of transcend scientific and regulatory affairs. So Dr. Peterson, could you provide some insight?
Yes.
Nice to hear you this morning and.
Very very interesting question. Fortunately, we have Dr. Peterson on the call and she is our expert.
In matters that kind of transcend scientific and regulatory affairs. So.
Dr. Peterson could you provide some insight.
Leigh Peterson: Yeah, so basically, we do have some meetings that we will be having with FDA to address your specific questions on the resubmission and the timeline. But again, we're very confident that we will get approval by the summer of 2022 or earlier to address, again, the single deficiency.
Yeah. So.
Basically we do have.
The meeting that we will be having with FDA to address your specific question on the Resubmission and the timeline, but.
Again, we're very confident that we will get approval by the summer of 2022 or earlier to address again the single deficiency.
unknown: Thanks so much, Lee. Well, that seems to be the end of the queue for the questions.
Thanks, so much.
Well.
It seems to be the end of the queue on the questions and once again I'd like to say that.
Martine A. Rothblatt: And once again, I'd like to say that it's just super, super exciting. For me, as a person who likes to sort of, you know, set goals that set everybody up for winning and then see such really strong progress toward those goals. For example, it was, oh, plus or minus, like a year ago that Mike and I set up these goals of doubling the number of Taubbaso patients by the end of 22, 25,000 terprosthenal patients by the end of 25, and as you heard from the numbers we shared today, we're making amazing progress on both of those goals with the double-digit growth in revenues and, obviously, patient counts as well.
Just super Super exciting.
For me as a person who likes to sort of.
Set goals that are set everybody up for winning and then see as such.
Really strong progress towards those goals for example, it was all plus or minus like a year ago that Mike and I set up these goals of doubling the number of <unk> patients by the end of 'twenty to 'twenty 5000, coprostanol patients by the end of 'twenty five.
And.
As you heard from the numbers, we shared the day, we're making amazing progress on both of those goals with the double digit growth.
And revenues and obviously.
Patient count as well and now 40% of the way already to the 2025 goal. So it's just really really gratifying for me as CEO to see our company delivering so strongly on the forecast that we had made.
Martine A. Rothblatt: and now 40% of the way to the 2025 goal. So it's really, really gratifying for me as CEO to see our company delivering so strongly on the forecasts that we had made. Thanks again to everybody joining us this morning. I believe Mike will be speaking at Credit Suisse very shortly, so feel free to attend that conference and learn more. Operator, you can now wrap up the call.
Thank you.
Thanks, again to everybody joining us this morning, I believe Mike will be speaking at credit Suisse.
Very shortly so feel free to attend that conference and learn more operator, you can now wrap up the call.
Operator: Thank you for participating in today's United Therapeutics Corporation earnings webcast. A rebroadcast of this webcast will be available for replay for one week by visiting...
Thank you for participating in today's United Therapeutics Corporation earnings webcast, a rebroadcast of this webcast will be available for replay for one week by visiting.