Q3 2023 United Therapeutics Corp Earnings Call

Okay.

Good morning, and both of them to the other Therapeutics Corporation third quarter 2023 earnings webcast.

My name is Rocco and I will be the conference operator today.

All participants on the call portion of this webcast will be in listen only mode until the question and answer portion of this earnings call.

If you'd 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 simply press Star then the number two on your telephone keypad.

Please note this call is being recorded.

I will now turn the webcast over to Dewey Steadman head of Investor Relations at United Therapeutics. Please go ahead.

Rocco and good morning, everyone. It's my pleasure to welcome you to the United Therapeutics third quarter 2023 earnings webcast.

Company need today.

Company Me today are Dr. Martine Rothblatt, our chairperson and Chief Executive Officer, Michael <unk>, Our President and Chief operating Officer.

James <unk>, our Chief Financial Officer, and Treasurer talk Recon, our executive Vice President of technical operations and Dr. Leigh <unk>, our executive Vice President of product development and Pinot transplantation.

Our remarks today will include forward looking statements represent 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 forms 10-K, and 10-Q contain additional information on these risks and uncertainties.

We assume no obligation to update these forward looking statements. After today's remarks may discuss the progress and results of clinical trials or other developments.

Respect for 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 use the full prescribing information for these products are available on our website.

More of that pathway, Tom and I will be presenting in a fireside chat session and one on one meetings at the 2023 UBS Biopharma conference on November eight.

<unk> will participate in the fireside chat and 101 mediate the J P. Morgan Health care conference in early January.

Now I'll turn the call over to Dr. Rothblatt for an overview of our third quarter 2023 financial results and the business activities of United Therapeutics Martine.

Thank you Dewey.

First of all I'd like to congratulate our team as we had an amazing third quarter.

For the second quarter in a row I'm thrilled to report our highest quarterly revenue ever along with double digit revenue growth as compared to the third quarter of 2022.

On top of that our operational efficiency in the third quarter, resulting in one of our highest quarterly net incomes and earnings per share ever.

At United Therapeutics, we're uniquely positioned for three waves of growth with a profile that's unique in biotech.

Our first wave of growth will come through our existing commercial business led by Pie-faced. So in pulmonary hypertension associated with interstitial lung disease or ph ILD.

We continue to post solid growth in our current business with record quarterly revenue in patients on therapy for proximal products as a whole.

Our goal in ph ILD and continued leadership in pulmonary arterial hypertension or P. A H has led to nephew by typing so anti batesville PPI products combining to become the most prescribed prostacyclin therapy in the U S.

Michael will go into detail on our commercial business later in this call.

We believe this growth will continue in the near term and we expect at least a $4 billion annual revenue run rate by mid decade.

Our revenue from 2022, and implying a double digit compound annual growth rate.

Our second wave of growth will come from our near term pipeline led by the T Con pro ground and pulmonary fibrosis, and Brilinta Pak N P. A H b.

These two products if approved could lead our revenue to double again to $8 billion by the end of the decade I will provide updates on the T Con and Atlanta Peg program shortly.

Of course, both of our first and second waves of growth are subject to clinical trial outcomes regulatory approvals, new competitive entrants and the potential impact of the inflation reduction Act.

But we feel good about our prospects for meeting these revenue aspirations.

Our third wave of sustainable growth will come through the development manufacture and widespread use of manufactured organs and Oregon technologies to provide a solution to patients experiencing end stage kidney lung heart and liver disease.

Moving to our near term pipeline and second wave of growth. We have two key registration programs underway key time for pulmonary fibrosis and relented peg an oral therapy for group one P. A H.

T. Com now consists of three registration studies <unk>, one and <unk> two for idiopathic pulmonary fibrosis or I P F and now Teton P. P F.

Gressett pulmonary fibrosis.

We believe I P. F represents a 100000 patient opportunity in the United States with only two approved therapies that just slows lung function decline.

Both <unk>, one and T. Com two are enrolling patients and at this time, we are aiming for full enrollment in both studies with 576 patients each by the end of 2024.

Likewise, we believe P. P. F represents up to a 60000 patient opportunity in the U S, which is distinct from I P F.

One of the two FDA approved IPF therapies is also approved for P. P F and liking I P. F. It only slows the decline of lung function in these fragile patients.

As we reported earlier this week the Teton P. P. F study has dosed its first patient we expect this trial to enroll 698 patients.

We believe there is a relatively high probability of success in the three Teton studies based on an IPF subset of the increase study of Nebulize Taipei, So in ph ILD patients.

Unlike the two IPF therapies odd market Nebulize Taipei, so in a safety endpoint showed an improvement of one function in the subset of patients that had Ips along with pulmonary hypertension.

Martine Rothblatt: Our growth in Ph.I.L.D, and continued leadership in pulmonary arterial hypertension, or P.A.H, has led to Nebulae Typeso and the U.S.

We're also encouraged by a recent review by the data safety monitoring committee of data from 550 patients and the Teton bonding Teton two studies.

The committee completed the routine Unblinded safety review of data from these patients and unanimously recommended continuation of both trials without classification.

Martine Rothblatt: Michael will go into detail on our commercial business later in this talk. We believe this growth will continue in the near-term and we expect at least a $4 billion annual revenue run rate by mid-decade, doubling our revenue from 2022 and implying a double-digit compound annual growth rate. Our second wave of growth will come from our near-term pipeline led by the Teton program in pulmonary fibrosis and Relenapag in Ph.I.H.

Alright advanced outcome study or for Winnipeg and group one P. H continues to enroll patients and at this time, we are targeting completion of the study in 2025.

Martine Rothblatt: These two products, if approved, could lead our revenue to double again to $8 billion by the end of the decade. I will provide updates on the Teton and Relenapag program shortly. Of course, both of our first and second waves of growth are subject to clinical trial outcomes, regulatory approvals, new competitive entrance, and the potential impacts of the inflation reduction act. But we feel good about our prospects for meeting these revenue aspirations.

But one of the Penn against our next generation selective and potent prostacyclin receptor agonist and we are developing it as a once daily oral therapy for P. A H.

We believe a web pegs once daily dosing sustained release profile and titrate ability could position us favorably against the other oral prostacyclin receptor agonist as well as other therapies currently available for P. A H patients well.

<unk> provides 24 hour coverage with six and a half to 10 times the potency of the other oral prostacyclin receptor agonist on the market.

Martine Rothblatt: Our third wave of sustainable growth will come through the development, manufacture, and widespread use of manufactured organs and organ technologies to provide a solution to patients experiencing end-stage kidney, lung, heart, and liver disease. Moving to our near-term pipeline and second wave of growth, we have two key registration programs underway, Teton for pulmonary fibrosis and Relenapag and oral therapy for Group 1 PAH. Teton now consists of three registration studies, Teton 1 and Teton 2 for idiopathic pulmonary fibrosis or IPF and now Teton PPS for progressive pulmonary fibrosis.

And we will then have pegged demonstrated more than 20% improvement in pulmonary vascular resistance in phase III studies.

Close to the improvement observed an intravenous <unk>.

Long term phase two open label studies of <unk> also showed sustained improvement in six minute walk distance.

We are pleased to announce that the data safety monitoring committee for the advanced outcome study met for the fourth time last month and unanimously recommended the continuation of the trial without modification after evaluating unblinded data from 510 patients enrolled in the study.

We are targeting 700 to 1000 patients in the study depending on the pace of accruing clinical worsening event.

Moving to our Oregon programs, we have been developing several investigational approaches using different technologies with different organs.

Martine Rothblatt: We believe IPF represents a 100,000 patient opportunity in the United States with only two approved therapies that just slow lung function decline. Both Teton 1 and Teton 2 are enrolling patients and at this time we are aiming for full enrollment in both studies with 576 patients each by the end of 2024. Likewise, we believe P-P-F represents up to a 60,000 patient opportunity in the U.S., which is distinct from IPF. One of the two FDA-approved IPF therapies is also approved for PPS and like in IPF, it only slows the decline of lung function in these fragile patients.

First is our ex vivo lung perfusion surface or E. B L. P, which has led to over 350 lives saved with ones that have undergone E. L. P.

We're also developing Zeno transplantation products, consisting of Hearts and kidneys. Finally, we've been working on three D printing and regenerative medicine technologies to develop manufactured lungs and kidneys.

At United Therapeutics, we always want multiple shots on goal.

To that end, we recently acquired privately held I Viva medical based out of Bluebird, Massachusetts I.

<unk> core technology is an engineered kidney implant that mimics native kidney elements with a simple architecture to achieve implantable durable blood purification much like our native kidney.

Martine Rothblatt: As we reported earlier this week, the Teton PPF study has dosed its first patient. We expect this trial to enroll 698 patients. We believe there is a relatively high probability of success in the three Teton studies based on an IPF subset of the increased study of Nebulized Typeso in PHILD patients. Unlike the two IPF therapies on market, Nebulized Typeso in a safety endpoint showed in the improvement of lung function in the subset of patients that had IPF along with pulmonary hypertension.

Our deepest kidney is seated with a patients own cells, eliminating the need for immuno suppression.

Also earlier this week, we announced an agreement to acquire a publicly traded mineral matrix medical a company focused on ending the waiting list for organ transplantation.

Mirror matrix utilizes an Oregon manufacturing platform that consists of Decellularized porcine organs that are then recellular rise with cells derived from non transplantable donor human organs.

These Oregon construct are intended to replace some of the functionality of human organs using standard organ transplantation techniques and immuno suppression regimens.

Martine Rothblatt: We're also encouraged by a recent review by the Data Safety Monitoring Committee of data from 550 patients in the Teton One and Teton Two studies. The committee completed a routine, unblinded safety review of data from these patients and unanimously recommended continuation of both trials without classification. Our advanced outcome study of Relenophec in Group One PH continues to enroll patients. And at this time, we are targeting completion of the study in 2025.

Miro matrix has three key programs that would broaden our existing manufactured Oregon pipeline Bureau, liver E. L. A P, which is ex vivo or outside the body and intended to provide temporary external liver dialysis for acute liver failure.

Kidney fully implanted kidney and marrow liver a fully implantable liver.

Moving to Zeno transplantation, we continue to work with the FDA on the clinical path forward.

Underway with what we call pivotal preclinical studies in baboons after request of the FDA.

Martine Rothblatt: Relenophec is a next generation, selective, and potent process-cycling receptor agonist. And we are developing it as a once daily oral therapy for PAH. We believe Relenophec in one stately dosing, sustained release profile, and tight traitability could position it favorably against the other oral prostate-cycling receptor agonist as well as other therapies currently available for PAH patients. Relenophec provides 24-hour coverage with six and a half to ten times the potency of the other oral prostate-cycling receptor agonist on the market.

Specifically for our 10 gene program, we expect our last preclinical Zeno kidney transplant to occur in early 2024.

After collecting the data, we'll meet with the FDA to discuss the IMD and clinical protocol for human studies for 10 gene Zeno organs.

In parallel with the pivotal preclinical studies, we're wrapping up construction of our clinical stage designated pathogen free facility or D. P F in Virginia.

Martine Rothblatt: And Relenophec demonstrated more than 20% improvement in pulmonary vascular resistance in phase two studies. That's close to the improvement observed in intravenous epiproximal. Long-term phase two open-nabeled studies of Relenophec also showed sustained improvement in six-minute walk distance. We are pleased to announce that the Data Safety Monitoring Committee for the Advanced Outcome Study met for the fourth time last month, and unanimously recommended the continuation of the trial without modification after evaluating unblinded data from 510 patients enrolled in the study. We are targeting 700 to 1,000 patients in the study depending on the pace of accruing clinical work in the events.

We expect the facility to begin receiving pigs in early 2024 and for the facility to grow its population through the balance of 'twenty 'twenty four in preparation for clinical studies in humans for both Zeno kidneys and Hearts.

Behind our casino transplantation programs are manufactured lungs, now with large mammal testing by our North Carolina based regenerative medicine team and behind that our three D printed autologous lungs by our New Hampshire based Oregon manufacturing groups using <unk>.

Technologies from our partner three D systems.

We look forward to sharing more detail on these programs as they progress towards clinical studies.

I'm thrilled that we are in such a great position at United Therapeutics.

Martine Rothblatt: Moving to our organ programs, we have been developing several investigational approaches using different technologies with different or- begins. The first is our ex vivo lung perfusion service, or EDLP, which has led to over 350 lives saved with lungs that have undergone EDLP. We're also developing Xenotransplantation products, consisting of hearts and kidneys. Finally, we've been working on 3D printing and regenerative medicine technologies to develop manufactured lungs and kidneys. At United Therapeutics, we always want multiple shots on goal.

Our solid commercial business posting record results.

With continued strong growth ahead, our pipeline of novel therapies that could again double our revenues by the end of the decade.

And on top of all of that we have a long term plan to address one of the largest critical unmet medical needs, while helping our patients employers and the employees and shareholders all succeed.

Yeah.

I'll now turn the call over to our President Michael Banquets, who will give an overview of our commercial performance and progress towards our near term goal of a $4 billion annual revenue run rate by mid decade, Mike.

Martine Rothblatt: To that end, we recently acquired privately held IVB of medical based out of Rubber and Massachusetts. IVB's core technology is an engineered kidney implant that mimics native kidney elements with a simple architecture to achieve implantable, durable, blood purification, much like a native kidney. IVB's kidney is seeded with a patient's own cells eliminating the need for immunosuppression.

Thanks, Martin and good morning, everyone. As Martine noted today, we reported our highest revenue quarter ever at 609 $609 million up 18% from the third quarter of 2022, we saw meaningful growth for each of the <unk> franchise remodeling a rent a tram and you're going to talk to them.

With respect to a rent a tram we saw revenue of $92 million during the quarter, which was up 5% from the prior year. This growth reflects increases to both patient growth and average dose.

Martine Rothblatt: Also, earlier this week, we announced an agreement to acquire publicly traded Mural Matrix Medical, a company focused on ending the waiting list for organ transplantation. Mural Matrix utilizes an organ manufacturing platform that consists of desilularized porcelain organs that are then resilularized with cells derived from non-transplantable donor human organs. These organ constructs are intended to replace some of the functionality of human organs using standard organ transplantation techniques and immunosuppression regiments.

In the third quarter. Following the publication of two peer reviewed manuscripts. We're also able to commence education efforts by our field based teams on the expedite protocol, which is based on our rapid remodeling titration and transition to a rent a <unk> study, allowing patients to get to higher doses of our Reno Tri am quicker with less.

Side effects than starting a rent a tram de novo.

[noise] remodel and revenue of $131 million was up 15% from last year, reflecting both U S patient growth from the third quarter of 2022 as well as an increase in international sales from the same period last year page.

Martine Rothblatt: Mural Matrix has three key programs that would broaden our existing manufactured organ pipeline. Mural Liver E-L-A-P, which is X-Fivo, or outside the body, and intended to provide temporary external liver dialysis for acute liver failure. Mural Kidney, a fully-empted kidney, and Mural Liver, a fully implantable liver.

Patients, who use our immunity pompe now make up more than 50% of subcutaneous for module in patients in the U S compared to under 10% at the same period just last year.

For module and continues to be the number one prescribed parenteral therapy for P H and the U S.

Moving into unit toxin, we saw revenue of $51 million, which was up 11% from the prior year quarter. This growth was driven by an increase in U S sales and include a modest inventory build at our U S distributor.

Martine Rothblatt: Moving to Xenotransplantation, we continue to work with the FDA on a clinical path forward. We're underway with what we call pivotal pre-clinical studies in baboons at the request of the FDA. Specifically, for our 10 gene program, we expect the last pre-clinical Xenot kidney transplant to occur in early 2024. After collecting the data, we'll meet with the FDA to discuss the IND and clinical protocol for human studies for our 10 gene Xenotorgans.

Finally tie ratio.

We saw revenue of $326 million for today, So DPI Nebulize type ACO, combined which was up 26% from the prior year quarter and was the highest <unk> revenue quarter ever.

This growth was principally driven by new patients on therapy. This performance reflects the rapid uptake of paid ACO DPI, among physicians and patients as well as continued expansion into the ph ILD market.

We saw the highest number of referrals and patient starts for the combined <unk> business during the quarter I'm proud to report that <unk> is now the number one prescribed prostacyclin treatment in the U S and remains the only approved therapy for ph ILD.

Martine Rothblatt: In parallel with the pivotal pre-clinical studies, we're wrapping up construction of our clinical stage designated pathogen-free facility or DPF in Virginia. We expect the facility to begin receiving pigs in early 2024, and for the facility to grow its population through the balance of 2024, in preparation for clinical studies in humans for both Xenotidys and Xenohars.

Regarding <unk> inventory, the first phase of process improvements and new equipment at our partner Mannkind that went online in June has meaningfully helped to expand the supply of Cod ACO DPI.

These enhanced these enhancements coupled with the further expansion that will come online next year have us well positioned to provide ample supply of <unk> moving forward.

Martine Rothblatt: Behind our ethereal transplantation programs are manufactured lungs, now in large, maveltesting by our North Carolina base regenerative medicine team and behind that are 3D printed apologist lungs by our new Hampshire-based organ manufacturing group using technologies from our partner 3D systems. We look forward to sharing more detail on these programs as they progress towards clinical studies. I'm thrilled that we're in such a great position at United Therapeutics. We have a solid, commercial business posting record results with continued strong growth ahead of pipeline of novel therapies that could again double our revenues by the end of the decade. And top of all of that, we have a long-term plan to address one of the largest critical, unmet medical needs while helping our patients, employers, and employees and shareholders all succeed.

We're now working to drive growth in ph ILD, where today still remains the only approved product as I mentioned before.

We have been increasing the size of our field based teams over the last 12 months, adding medical science liaisons rejoined our specialists and more recently sales representatives and reimbursement specialists to our team with this expansion, we're able to both reach more prescribers and importantly focus on driving depth within these prescribers.

And we've already made great progress on our last earnings call I mentioned that we've more than doubled the number of financial prescribers since the ph ILD approval in 2021 and maintain depth defined as three three or more patients per prescriber at about 40% of these prescribers.

Peeling that back a little bit about 50% of the growth in those total prescribers are true ILD prescribers, which means we're now starting to see these physicians begin to treat the disease rather than refer these patients into the ph clinics depth.

<unk> within our true ILD Treaters is also coming along nicely with about 20% of those prescribers, having three or more patients on <unk>.

Michael Benkowitz: I'll now turn the call over to our president, Michael Benkowitz, who will give an overview of our commercial performance and progress for our near-term goal of a $4 billion annual revenue run rate by mid-decade. Mike? Thanks, Martin, and good morning, everyone.

Our recent sales force expansion will allow us to continue to lean into the ILD physicians, particularly in the community setting.

While <unk> has been a tremendous.

It's been a source of tremendous growth.

Launched it last year, we continue to appreciate the value of nebulizer nowadays so in our portfolio.

Michael Benkowitz: As Martin noted, today we reported our highest revenue quarter ever at 609 million dollars, up 18% from the third quarter of 2022. We saw meaningful growth for each of the Thai-based franchise, Ramadjalan, or Renetram, and the United States. With respect to our Renetram, we saw revenue of $92 million during the quarter, which was up 5% from the prior year. This growth reflects increases to both patient growth and average dose. In the third quarter, following the publication of two peer-reviewed manuscripts, we are also able to commence education efforts by our field-based teams on the expedite protocol, which is based on our rapid, Ramadjalan titration and transition to a Renetram study, allowing patients to get the higher doses of a Renetram quicker and with less side effects than starting a Renetram Benovo.

Some physicians and patients continue to prefer the nebulizer because of its profile or for reimbursement reasons. In addition, we're aware that some some pulmonologists prefer to start and try to start and titrate their ph ILD patients using the nebulizer before switching to today so DPI.

This allows more precise titration in one breath increments compared to the three breath equivalent increments of time, there's a DPI. We expect this platform strategy to become a competitive advantage over other potential DPI products should they reach the market.

Before we move to the Q&A I want to take a moment to address some questions. We've received around potential competition competition and reiterate our confidence that we're well positioned for growth in the near term with our current commercial portfolio.

Michael Benkowitz: Ramadjalan revenue of $131 million was up 15% from last year, reflecting both U.S, patient growth from a third quarter of 2022, as well as an increase in international sales from the same period last year. Patients who use our immunity pop now make up more than 50% of subcutaneous Ramadjalan patients in the U.S, compared to under 10% of the same period just last year. Ramadjalan continues to be the number one prescribed rental therapy for PH and the U.S. Moving into Unitoxin, we saw revenue of $51 million, which was up 11% from the prior year quarter. This growth was driven by an increase in U.S, sales and includes a modest inventory bills at our U.S, distributor. Finally, Thai Veso.

Questions have centered primarily around <unk> and a potential inhaled her personal competitor.

First with respect to <unk>, it's important to note that it will not be indicated for ph ILD. If approved next year, and therefore will not be a factor in the source of our most recent growth and expected near term growth.

And group one P. A H where it will be indicated if approved it appears this drug will be a nice addition to the P. A HR monetary armamentarium.

But based on the clinical data and our experience with new agents entering the space. It will be an addition, not a replacement for existing therapies and therefore, we remain extremely confident in the durability of our ph Christmas.

Michael Benkowitz: We saw revenue of $326 million for Thai Veso DPI and Nebulized Thai Veso combined, which was up 26% from the prior year quarter and was the highest Thai Veso revenue quarter ever. This growth was principally driven by new patients on therapy. This performance reflects the rapid update of Thai Veso DPI among physicians and patients, as well as continued expansion into the PH-ILD market. Again. We saw the highest number of referrals and patient starts for the combined PIVASO business during the quarter.

Having multiple pathogenic pathways is considered the current standard of care for P. H. This mirrors therapy for other serious conditions that result from multiple pathways of pathogenesis like cancers heart failure, and some viral infections and.

In fact, a tighter step was studied only in combination with other ph products, including 70% of patients on concomitant prostacyclin or prostacyclin analogs, including Archrock cross sell products.

We believe the convenience of <unk>. So DPI allows physicians to easily relatively speaking cover the prostacyclin pathway for those patients that are already on a prostacyclin and if the addition of <unk> herself helps patients live longer that's phenomenal for the patients of course, and likewise benefits us from a revenue standpoint, because patients will be.

Michael Benkowitz: I'm proud to report that PIVASO is now the number one prescribed prospect of Franklin treatment in the U.S, and remains the only approved therapy for PIVASO ILD. Regarding PIVASO DPI inventory, the first phase of process improvements and new equipment at our partner mankind that went online in June has meaningly helped to expand the supply of KIVASO DPI. These enhancements coupled with a further expansion that will come online next year have us well positioned to provide ample supply of PIVASO DPI moving forward.

On our medicines louder.

Moving to the other inhaled <unk> that could reach the market. We believe we have a preferred product with high base of DPI.

So DPI demonstrated 98% patient satisfaction on the Breeze study and has now been prescribed to more than 4000 patients a clear demonstration of patient physician interest and our DPI format.

Michael Benkowitz: We're now working to drive growth in the PIVASO ILD where KIVASO remains the only approved product as I mentioned before. We have been increasing the size of our field-based teams over the last 12 months, adding medical science liaison, regional nurse specialists, and more recently sales representatives and reimbursement specialists to our team. With this expansion, we're able to both reach more prescribers and importantly fill this on driving depth within these prescribers. We've already made great progress.

<unk> is differentiated from its potential competitor because of its simple easy to use inhaler that patients just opened loading and hail with only one breaths per cartridge four times a day.

<unk> low flow profile also facilitates <unk> delivery deep and consistently into the lungs with generally only title breathing required actuated dose.

On top of that the <unk> DPI inhalation device requires no cleaning and patients can hold the inhaler and an actual position when using the device.

Michael Benkowitz: On the last earnings call, I mentioned that we've more than doubled the number of PIVASO prescribers since the PIVASO ILD approval in 2021 and maintained depth to find this three or more patients per prescriber at about 40% of these prescribers. Peeling that back a little bit, about 50% of the growth in those total prescribers are true ILD prescribers, which means we're now starting to see these physicians begin to treat the disease rather than refer these patients into the PH clinics.

So to wrap up we're extremely proud of our record performance this quarter and we think we're in the early stages of sustainable growth for our current commercial portfolio as we continue to make inroads with ph ILD prescribers in our base business and ph will continue to be appreciated by prescribers and patients alike.

So with that Martina ill turn it back over to you for the Q&A.

Michael Benkowitz: Depth within our true ILD treatars is also coming along, I see, for about 20% of those prescribers having three or more patients on TIVASO. Our recent sales force expansion will allow us to continue the lean into the ILD physicians particularly in the community setting. While PIVASO DPI has been a tremendous growth since our we launched it last year, we continue to appreciate the value of Nebulized TIVASO and our portfolio. Some physicians and patients continue to prefer the Nebulizer because of its profile or for reimbursement reasons.

Thanks, Mike.

I hope everyone can tell that United Therapeutics is a truly compelling person with a strong cash generating commercial business supporting novel R&D efforts in rare lung disease, coupled with the revolutionary potential for Oregon manufacturing programs, operator, let's start the Q&A.

<unk> session.

Thank you if you'd like to ask a question. Please press Star then one on your telephone keypad.

To withdraw your question. Please press Star then two.

Michael Benkowitz: In addition, we're aware that some pulmonologists prefer to start and try to start and titrate their PH ILD patients using the Nebulizer before switching to TIVASO DPI. This allows more precise titration in one breath increments compared to the three breath equivalent increments of TIVASO DPI. We expect this platform strategy to become a competitive advantage over other potential DPI products should they reach the market.

Today's first question comes from Terence Flynn with Morgan Stanley. Please go ahead.

Great Congrats on all the progress thanks for taking the question.

I was just wondering maybe a question for Mike If you can offer any perspective on Thai based on net adds in the quarter. If that's been pretty consistent at that 500 patient level and then are you able to tell us where inventory levels.

Share count for the quarter like was did the quarter include a significant build or was this all demand driven on top of it so specifically.

Michael Benkowitz: Before we move to the Q&A, I want to take a moment to address some questions we've received around potential competitions and reiterate our confidence that we're well-positioned for growth in the near term with our current commercial portfolio. Questions have centered primarily around the tatters up and a potential and hailed for personal competitor. First with respect to the tatters up, it's important to note that it will not be indicated for PH ILD if approved next year and therefore will not be a factor in the source of our most recent growth and expected near term growth.

Thank you Terence Mike.

Sure Yes.

The net adds continue to clip along at a kind of that roughly 500, sometimes a little higher sometimes a little lower but kind of in that in that range per quarter. So we're really happy with that.

Continued progress and as I said in the third quarter, we saw a record record number of prescriptions and starts and so just continue to kind of pull that through and.

It keeps us keep those patients on therapy. So we're pleased with the progress on that front.

Michael Benkowitz: In group one PH where it will be indicated if approved, it appears this drug will be a nice addition to the PH armamentarium. But based on the clinical data and our experience with new agents entering the space, it will be in addition not a replacement for existing therapies and therefore we really extremely confident in the durability of our PH. Carvity Multiple Pathogenic Pathways is considered the current standard of care for pH.

From an inventory standpoint in the revenue numbers I'm not I think what you can what you can infer from the revenue numbers is that the revenues numbers revenue numbers reflect underlying patient demand. So there wasn't really a significant inventory build in the quarter and then as I said with the with the enhancements that we've seen.

That mankind.

Since June we think were.

Plus what's coming next year, we're really well positioned from an inventory standpoint going forward.

Michael Benkowitz: This mirror therapy for other serious conditions that result from multiple pathways of pathogenesis like cancers, heart failure, and some viral infections. In fact, cetater step was studied only in combination with other pH products, including 70% of patients on to competent prosthocyclins or prosthocycle analogs, including ultroprocinal products. We believe the convenience of TIDASO DPI allows physicians to easily, relatively speaking, cover the prosthocycle pathway for those patients' maternity on a prosthocycle, and if the addition of cetater self helps patients live longer, that's phenomenal for the patients, of course, and likewise benefits us from a revenue standpoint, because patients will be on our medicine's longer.

Thank you very much Mike Operator next question. Please.

Absolutely. Our next question comes from Hart with.

And Hymer. Please go ahead.

Great. Thank you for the question and really nice quarter.

Just maybe a little bit of a different tack, which is that you had really nice revenues across the board, especially <unk> ASO.

But you're really holding your opex pretty firm and staying to the odd rhythm.

The Tuesday, James talked about previously.

Operating margin just seems to keep on getting better can you just talk a little bit about that progression.

And do you expect that to keep getting better as you know.

Ph.

Franchise becomes even more profitable. Thank you for the question.

Michael Benkowitz: Moving to the other inhale-tropocinal that could reach the market, we believe we have a preferred product with TIDASO DPI. TIDASO DPI demonstrated 98% patient satisfaction in the brief study, and has now been prescribed to more than 4,000 patients. A clear demonstration of patient position interest in our DPI format. TIDASO DPI is differentiated from its potential competitor, because of its simple, easy to use inhaler that patients just opened, load and inhale, with only one breath per cartridge, four times a day.

Thank you very much hard times.

Change estimate as our Chief Financial Officer, So James could you. Please answer that question.

Yes, Thanks, Marty and good morning hard times and thank you for the question.

As a reminder, and you alluded to this in your question, we still and we'll apply that budget algorithm, where we will spend no more than cash.

Operating budget.

In 2023 for example that.

Exceed 50% of prior year revenue, so our budget algorithm.

Michael Benkowitz: TIDASO DPI's low flow profile also facilitates tropocinol delivery deep and consistently into the lungs, with generally only tidal breathing required to actuated dose. On top of that, the TIDASO DPI inhalation device requires no cleaning, and patients can hold the inhaler in an actual position when using the device.

Each year and continuing forward, we expect to apply them.

With respect to your question on the operating margin specifically.

In an environment of continued revenue growth, which we've demonstrated you will have improving operating margins over time, but remember that can bounce around quarter to quarter, because we typically look at our budget and our budget spend on an annual basis.

Michael Benkowitz: So to wrap up, we're extremely proud of our record performances quarter, and we think we're in the early stages of sustainable growth for our current commercial portfolio. As we continue to make end roads with PHIL DPI fibers and our base business NPAs will continue to be appreciated by prescribers and patients alike. So with that, Martian, I'll turn it back over to you for the Q&A.

And those expenses could be impacted by clinical trial enrollment and the timing around that for example.

Martine Rothblatt: Thanks, Mike.

But from a fiduciary and kind of fiduciary responsibility perspective, we do want to continue and we will expect to continue to play the budget algorithm.

Good financial stewards of the expenses and as you heard Mike will talk about it now in a very successful quarter.

Unknown Attendee: I hope everyone can tell that United's therapeutic is a truly compelling lesson with a strong cast-generating commercial business supporting novel R&D efforts in rare lung disease coupled with the revolutionary potential for organ manufacturing programs. Operator, let's start the Q&A session. Thank you. If you would like to ask a question, please press star then one on your telephone keypad. To withdraw your question, please press star then two.

And growing revenue.

When you think about some of the investments that Michael has made as well. So thank you very much and marching back to you.

Thank you James Thank you hard ties operator next question. Please.

The next question comes from Joseph told me it with PD Cowen. Please go ahead.

Hi, there good morning, and thank you for taking my questions. Obviously, a lot of progress on the Oregon side of the business. This quarter. When we think about the kidney the miro kidney and liver kidney implants should we think of these largely as sort of three shots on goal.

Michael Benkowitz: Today's first question comes from parents when, with Morgan Stanley, please go ahead. Great. Congrats on all the progress. Thanks for taking the question. I was just wondering, is the question from Mike, if you can offer any perspective on PIVASO net ads in the quarter, if that's been pretty consistent at that 500 patient level. And then are you able to tell us where inventory levels shook out for the quarter, like was did the quarter include a significant bill, there was this all demand driven.

In kidney transplant or are there discrete populations that could benefit from each of these products are how do you view that.

Thank you Joe I think the answer is all of the above.

And to be specific.

Definitely positively they are multiple shots on goal, but there is a large diversity of different types of manifestation of <unk>.

Michael Benkowitz: Thank you on PIVASO specifically. Thank you, Terrence. Sure. Yeah, so the net ads continue to kind of clip along it at kind of that roughly 500, sometimes little higher, sometimes a little lower, but kind of in that range per quarter, so we're really happy with that continued progress. And you know, they said in the third quarter we saw record a number of prescriptions and starts, and so you know, just continue to kind of pull that through and keep those patients on therapy.

End stage organ disease, generally and specifically within kidney disease.

I could very much see <unk>.

From one or the other groups, whether it's a zeno kidney.

Or a.

Apollo gifts.

ICF, a kidney or a.

Allergan Hello, genetically cellular rise with primary cells.

Michael Benkowitz: So we're pleased with the progress on that front. From an inventory standpoint and the revenue numbers, I think what you can infer from the revenue numbers is that the revenue numbers, revenue numbers reflect underlying patient demand. So there wasn't really a significant inventory bill in the quarter. And as I said, with the enhancements that we've seen at mankind since June, we think we're plus with coming next year, we're really well positioned from an inventory standpoint going forward.

Miro kidney going to different end stage kidney disease patient populations as you know Joe there are more than a half million people just in the United States on dialysis. So the the level of demand is really off the charts and we're confident.

Unknown Attendee: Thank you very much.

That each of these kidney technologies and our other organ technologies will find.

Very very receptive physicians and patient populations for their use thanks for the question Joe.

Unknown Attendee: Mike, operator, next question please. Absolutely.

Operator next question please.

Hartaj Singh: Our next question comes from Hartaj Singh with Oppenheimer. Please go ahead. Great. Thank you for the question and really nice quarter. Just maybe a little bit of a different tack. We choose that, you know, you had really nice revenues across the board, especially Taipei. So, but you're really holding, you know, your op-ax pretty firm and staying to that algorithm that James has talked about previously. You know, you're operating margin just teams to keep on getting better.

Absolutely. Our next question comes from Ian Yang with Jefferies. Please go ahead.

Thank you. So you recently started to a another phase two study for progressive or pulmonary fibrosis I'm just still wondering why you are not using the DPI formulation in the trial.

Uh huh.

Cta approved do you think you may not need a bridging study to P&I from donated libraries coming out of ph ILD. Thank you.

Hartaj Singh: Can you just talk a little bit about that progression? And do you expect that to keep getting better as, you know, your pH, you know, franchise becomes even more profitable? Thank you for the question. Thank you very much, Hartaj.

Thank you very good question I would like to ask.

The clinical trial executives responsible for that study Dr. Leigh Peterson, if she could please answer that.

James Edgemond: James Edgman is our key financial officer.

To your question.

Yeah sure. Thanks for the question regarding why we're not using the D. P. I we want it.

James Edgemond: So James, could you please answer that question? Yes. Thanks, Martin.

James Edgemond: Good morning, Hartaj. And thank you for the question. As a reminder, and you alluded to this in your question, we still, and we'll apply that budget algorithm where we will spend no more on cash operating budgets in 2023, for example, that exceed 50% of prior year revenues. So our budget algorithm this year, and continuing forward, we expect to apply. With respect to your question on the operating margin, specifically, in an environment of continued revenue growth, which we've demonstrated, you will have improving operating margins over time.

He's been nebulizer to renew remove as many variables as possible between the studies. So between the increase study and two ton warranty time too in 210 P. P. S. So we're sticking with the same the same delivery device for those and yes, we will definitely seek approval for that.

For the D P I.

Once we see the results.

Of these of these studies with the nebulizer.

We're still having ongoing conversations with FDA to to determine but what will be required for.

For that approval.

James Edgemond: But remember, that can bounce around quarter to quarter because we typically look at our budgets and our budget spends on an annual basis. And those expenses could be impacted by clinical trial enrollment and a timing around that, for example. But from a fiduciary and kind of fiduciary responsibility perspective, we do want to continue and we will expect to continue to apply the budget algorithm to be good financial stewards of the expenses.

Thank you very much Dr Peterson thank.

Thank you very much you for your question Operator next question. Please.

Our next question today comes from Jessica Fye with Jpmorgan. Please go ahead.

Hey, guys. Good morning, Thanks for taking my question a question on <unk>. So so recognizing that titration dynamic you mentioned, which could suggest that the mix of new starts between D. P. I N Nebulize T V. So understates the longer term proportion who might end up on DPI can you talk about what you're seeing is a mix.

James Edgemond: And as you heard Michael talk about in a very successful quarter and growing revenue when you think about some of the investments that Michael has made as well. So thank you very much and marching back to you.

New starts as well as your latest expectations for the longer term mix of time, they said DPI and they'd be lifetime, they sell within that franchise. Thanks.

James Edgemond: Thank you James.

Unknown Attendee: Thank you, Heart Ties operator.

Thank you very much Jeff Mike would you be able to give some color on that question. Please.

Unknown Attendee: Next question please.

Joseph Thome: Our next question comes from Joseph Tony with TD Cowan. Please go ahead. Hi there, good morning, and thank you for taking my questions. Obviously a lot of progress on the organ side of the business this quarter.

Sure happy to so just with respect to refer sorry, yeah with respect to the mix between.

Then the nebulizer and the D. P. I think we've said for the last couple of quarters that it's been.

Martine Rothblatt: When we think about the Zeno Kidney, the Miro Kidney, and the Viva Kidney implant, should we think of these largely as sort of three shots on goal in kidney transplant, or are there discrete populations that could benefit from each of these products? How do you view that? Thanks. Thank you, Joe. I think the answer is almost the above of both of them to be specific. Definitely, positively, they are multiple shots on goal, but there is a large diversity of different types of manifestation of end-stage organ disease generally, and specifically within kidney disease.

Kind of in the neighborhood of two thirds DPI one third nebulizer.

That continues to hold true that's what we saw in the third quarter that actually was a couple of points higher on that advisor about third quarter.

In our prior quarters, but it's generally kind of in that kind of two thirds, 65% to 70% PPI.

30% to 35% nebulizer.

I kind of expect that it's going to stay there or could it could tip up a little bit towards DPI. After the first of the year when some of the new.

Med Medicare part D redesign elements kicking kicking.

Martine Rothblatt: So I could very much see products from one of the other groups, whether it's a Zeno Kidney, or a Apolicif Izeva Kidney, or a allergenically stylized with primary cells, Miro Kidney, going to different end-stage kidney disease patient populations. As you know, Joe, there are more than a half million people just in the United States on dialysis. So the level of demand is really off the charts, and we're confident that each of these kidney technologies and our other organ technologies will find very, very receptive physicians and patient populations for their use. Thanks for the questions, Joe.

Under the IRI and patient out of pocket.

It goes down and so to the extent that that reimbursement challenges and a reason for using an advisor that might tilt things, a little bit more and more towards CPI, but but I do.

Send my opening my opening comment I continue to think that theres going to be a role for <unk> I think what we have learned over the 25 to 30 years that we've been in.

This space is that patients are very different.

Unknown Attendee: Operator, next question for you. Absolutely.

Some react better to one delivery device over another and vice versa. So.

Really happy that we have multiple options to offer patients an yeah at the end of the day.

Really we're kind of agnostic as to which device it is because.

Because either way there on unite.

Actions are benefiting from the United Therapeutics product.

Thank you so much Mike and Jeff. Thank you for the question.

We're at the end of the call, but we have time for just one last question operator last question. Please.

Ian Young: Our next question comes from Ian Young with Jeffries. Please go ahead. Thank you. So you recently started another Phase III Titan study for Progressive or Permanente fibrosis. I'm just so wondering why you are not using the DPI formulation in the trial, and once it's approved, do you think you may not need a bridging study to DPI from the Navy Lizer similar to PHILD? Thank you. Thank you, you very good question.

Thank you. Our final question today comes from Ashwin <unk> with UBS. Please go ahead.

Great Congrats on the quarter. Thanks for taking my question. So I have two on the manufacturing expansion for <unk>.

Mankind, but the BPI that with a two and a half.

Times in June is that now, allowing you to fulfill the contractual levels.

Computers would that level of supply only be fully enabled by D. Second production line to maintain spending.

Leigh Peterson: I'd like to ask the clinical trial executive responsible for that study, Dr. Lee Peterson, if she could please answer your question. Yeah, sure. Thanks for the question. Regarding why we're not using the DPI, we want to use the nebulizer to remove as many variables as possible between the studies. So between the increased study and Teton 1, Teton 2, and Teton PPS. So we're sticking with the same delivery device for those. And yes, we'll definitely seek approval for the DPI. Once we see the results of these studies with the nebulizer, we're still having ongoing conversations with FDA to determine what will be required for that approval.

That's first and I mean, there's a lot of full pipeline.

So I'm really excited about <unk>, but just curious though.

The timelines for the enrolling these studies.

Full tactic is that primarily because of the heterogeneity of the disease or just curious if there is any of the act of playing in that.

<unk>.

Okay.

Thanks for that question or that compound question. So the first part of your question relating to manufacturing be answered by our executive Vice President for technical operations, Pat <unk> and when he's done answering the first part of your question. The second targets your question relating to.

The timelines for enrollment in the pulmonary fibrosis studies that one will be answered by Dr. Leigh Peterson.

Can you go first.

Unknown Attendee: Thank you very much, Dr. Peterson. Thank you very much for your question.

Sure. Thanks, Martine and thanks for the question so.

Jessica Fye: Operator, next question. Our next question today comes from Jessica Fye with J.P. Morgan. Please go ahead. Hey guys, good morning. Thanks for taking my question on Taipei. So, recognizing that titration dynamic you mentioned, which could suggest that the mix of new starts between DPI and Nebulized Taipei. So, under states, the longer term proportion, who might end up on DPI. Can you talk about what you're seeing as the mix among new starts, as well as your latest expectations for the longer term mix of Taipei, so DPI and Nebulized Taipei, so within the franchise.

The process improvements we implemented earlier this year, we will fulfill demand both near and mid term Fortunately they've so DPI longer term as we see growth in ILD, we'll certainly need the new equipment that is coming online in.

In the first half of 2024.

So as of right now, we're able to fulfill demand and maintain inventory levels at the edge.

Sps.

And we'll be able to do so.

Until the new equipment comes online and then we'll be well prepared for the future.

Jessica Fye: Thanks. Thank you very much, Jeff. Mike, would you be able to give some color on that question, please? Sure, happy to. So, Jeff, with respect to the mix between the Nebulizer and the DPI, I think we said for the last couple quarters that it's been kind of in the neighborhood of two-thirds DPI, one-third Nebulizer. That continues to hold true. That's what we saw in the third quarter. I'm actually with a couple points higher on the Nebulizer in the third quarter than the prior quarters, but it's generally kind of in that kind of two-thirds, 65 to 70% DPI, 30 to 35% Nebulizer.

Thank you Pat Dr Peterson.

Yeah. So thanks for the question on our T program.

We actually Havent increase.

Jessica Fye: I kind of expect that it's going to stay there. It could tip up a little bit towards DPI after the first of the year when some of the new Medicare Part D redesign elements kicking the kick-in under the IRA and patient out of pocket goes down, so to the extent that reimbursement challenges are a reason for using the Nebulizer, that might tilt things a little bit more towards DPI. But as I said in my opening comments, I continue to think that there's going to be a role for Nebulizer.

Our timeline I mean, we're still on target to finish enrollment of the Teton studies at the end of 2024, but you're right. We have them increase the sample size and we've we were we're not targeting the enrollment of the 576 patients in each study.

And the reason for that is you're exactly right you mentioned the variability of the disease and we actually we we'd be a routine blinded data looks and and that's that is what we saw there there was some.

Basically a standard deviation of the FCC and the complete or prompted us to just out of caution to increase the sample size to increase the chance of success, but again, just because of the pace of enrollment into these studies, which is it's fairly rapid we have.

And increased our overall timeline to enroll those additional patients so.

Thank you so much Dr Peterson.

Jessica Fye: I think what we have learned over the 25 to 30 years that we've been in this space is that patients are very different and some react better to one delivery device over another advice person. So, you know, we're just really happy that we have multiple options to offer patients. And yeah, at the end of the day, we're really, we're kind of agnostic as to which device it is, because either way, they're on an idea. The patients are benefiting from the United Therapeutics product. Thank you so much, Mike and Jeff. Thank you for the question.

Thank you so much for the question in conclusion and as mentioned earlier, we're really happy to be in such a great position here at United Therapeutics, We have a solid commercial business posting record results with continued strong growth ahead, we have a pipeline of novel therapies that could again double our revenue by the end of.

The decade, and we have a long term plan to address one of the largest critical unmet medical needs all of the above while helping our patients employees and shareholders succeed operator, you may now terminate the call.

Michael Benkowitz: We're at the end of the call, but we have time for just one last question operator last question. Thank you.

Thank you for participating in today's United Therapeutics Corporation earnings webcast.

Ash Verma: Our final question today comes from Ash Verma with UBS. Please go ahead. Great. Congrats on the quarter. Thanks for taking our question. So I have to on the manufacturing expansion for TV. So at your partner mankind for the DPI, there was up to 1.5 times in June.

A rebroadcast of this webcast will be available for replay for one week by visiting the events and presentations section.

Therapeutics Investor Relations website at IR.

Ash Verma: Is that now allowing you to fulfill the minimum contractual levels at your distributors or would that level of supply only be fully enabled by the second production line that mankind is building that's first and I mean, there's a lot of high time. I'm very excited about PTS IDF, but just curious. The timelines for the enrolling these studies are a little bit protracted. Is that primarily because of the heterogeneity of the disease or the students, if there is any other factor playing in that. Thanks. Thanks for that question or that compound question.

<unk> Dot com.

You may now disconnect your lines and have a wonderful day.

Patrick Poisson: So let's have the first part of your question relating to manufacturing the answered by our executive vice president for technical operations, Pat Poisson. And when she's done answering the first part of your question, the second part of your question relating to the timelines for enrollment in the pulmonary fibrosis studies.

Leigh Peterson: That one will be answered by Dr. Lee Peterson.

Patrick Poisson: Pat, can you go first? Sure. Thanks, Martine. And thanks for the question. So the process improvements we implemented earlier this year will fulfill demand, both near and midterm for type SO DPI. Longer term, as we see growth in ILD will certainly need the new equipment that is coming online in the first half of 2024. So as of right now, we're able to fulfill demand and maintain inventory levels at the SPS. And we'll be able to do so until the new equipment comes online and then we'll be well prepared for the future.

Leigh Peterson: Thank you, Pat. Dr. Peterson. Yeah, so thanks for the question on our Teton program. We actually haven't increased our timeline. I mean, we're still on target to finish enrollment of the Teton studies at the end of 2024, but you're right, we have increased the sample size. And we're not targeting the enrollment of the 576 patients in each study. And the reason for that is you're exactly right. You mentioned the variability of the disease and we actually we do routine blinded data looks and and that's that is what we saw.

Leigh Peterson: There was some basically standard deviations of the FEC and the completers prompted us to just out of caution to increase the sample size to increase the chance of success. But again, just because of the pace of enrollment into these studies, which is fairly rapid, we haven't increased our overall timeline to enroll those additional patients.

Unknown Attendee: Thank you so much, Dr. Peterson asked. Thank you so much for the question.

Martine Rothblatt: In conclusion, as mentioned earlier, we're really happy to be in such a great position here at United therapeutics. We have a solid commercial business posting record results with continued strong growth ahead. We have a pipeline of novel therapies that could again double our revenue by the end of the decade. And we have a long term plan to address one of the largest critical unmetable needs all of the above while helping our patients employees and shareholders succeed operator.

Unknown Attendee: You may now terminate the call. 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 the events and presentation section. On the United therapeutics investor relations website at ir.unitther.com.

Unknown Attendee: You may now disconnect your lines and have a wonderful day.