Q4 2024 United Therapeutics Corp Earnings Call
Speaker Change: shots from a concept car And the voice of Michael Bentam in my mind is Michael Tonks from Hell's Kitchen I hope you enjoy
G.B. Steadman: G.B. Steadman, Michael Benkowitz D.C. N.C. D.C. N.C. N.C. D.C. N.C. D.C. N.C. N.C. N.C. N.C.
Speaker Change: Good morning and welcome to the United Therapeutics Corporation 4th Quarter 2024 Corporate Update.
Cindy: My name is Cindy and I will be your conference operator today.
Speaker Change: 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.
Cindy: If you would like to ask a question during that time, simply press star then the number 1 on your telephone keypad.
Cindy: If you would like to withdraw your question, simply press star then 2 on your telephone keypad.
Please note, this call is being recorded.
Cindy: I will now like to turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics.
Please go ahead.
Speaker Change: Thank you, Cindy, and good morning. It's my pleasure to welcome you to the United Therapeutics fourth quarter 2024 corporate update webcast.
Speaker Change: We marked today will include forward-looking statements representing our expectations or beliefs regarding future events
Speaker Change: 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.
Speaker Change: Also, today's remarks may discuss the progress and results of our clinical trials or other developments with respect to our products.
Speaker Change: 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.
Speaker Change: Full prescribing information for the products are available on our website.
Accompany me on today's call.
Michael Benkowitz: Our Dr. Martine Rothblatt, our Chairperson and Chief Executive Officer Michael Benkowitz, our President and Chief Operating Officer James Edgmond, our Chief Financial Officer and Treasurer Dr. Lee Peterson, our Executive Vice President of Product Development and Xenotransplantation and Pat Poisson, our Executive Vice President of Technical Operations
Michael Benkowitz: Note that Michael Benkowitz and my colleague Harry Silvers will participate in a fireside chat and one-on-one meetings at the TD Cowan 45th Annual Healthcare Conference in Boston on March 3.
Speaker Change: And along with Gil Golden, our Chief Medical Officer, I will be at the UBS European Health Care Conference on March 4th in London. And finally, James Edgman, Harry, and I will be at the Lyric Global Health Care Conference in Miami on March 11th.
Speaker Change: Then our scientific, commercial, and medical affairs teams will present at the 20th Annual John Bain Memorial Symposia in London on March 7th and 8th, and at the International Society for Heart and Lung Transplantation Conference in Boston on April 27th to the 30th.
Speaker Change: And now I'll turn the webcast over to Martine for an overview of our development pipeline and business activities.
Martine: Thank you Dewey and good morning everyone. We have slides available for reference and I encourage you to review those at your leisure. I'm not going to speak directly to the slides.
Martine: Congratulations to the more than 1,300 Unitherians and to you, our shareholders.
Martine: for supporting yet another record revenue year for United Therapeutics in 2024. In fact, 2024 was our third year in a row of record-setting revenue.
Martine: This amazing performance was driven by our relentless drive to deliver patients with rare and underserved diseases a broad array of solutions to help them improve their lives.
Martine: Beyond our stellar commercial performance, we have now begun our three-year cascade of clinical and regulatory events.
Martine: starting with the recent IND clearance for our uKidney clinical trial. This trial is the first FDA-cleared, registration-supporting clinical trial of a xenoorgan.
Martine: and could provide an opportunity to put an end to dialysis for the hundreds of thousands of patients with end-stage renal disease who cannot qualify for a human kidney transplant or who have little chance of obtaining one before their health declines.
Martine: We expect the first transplant in the middle of this year.
Martine: Last month we completed enrollment of the inhaled troprosinil Teton 1 study in idiopathic pulmonary fibrosis. We expect top-line data from the Teton 2 study in the second half of this year and Teton 1 top-line data in the first half of 2026.
Martine: Troprostenil, which has been scientifically demonstrated to be anti-fibrotic, anti-proliferative, and anti-inflammatory, is far more than just a vasodilator. We believe its multifactorial mechanisms of action could be complementary to existing approved IPF agents and even to many of the potential IPF drugs in late-stage development.
Martine: IPF is extremely hard to treat, but we are encouraged with the success we saw in a post-hoc analysis of IPF patients with pulmonary hypertension in the INCREASE study.
Martine: Our goal is to bring this potential innovation to market as quickly as possible to patients in need of something additional to existing therapies on the market.
Martine: If successful, melinopad could fundamentally change the positioning of prostacyclines in the PAH treatment paradigm, potentially leading to the upfront use of prostacyclines in PAH.
Martine: As an example of the potential for Rolinopag, Flexipag, a twice-daily oral prostacyclin agonist, logs more than one and a half billion dollars in annual U.S. sales, and this is for a twice-daily oral product with a dose ceiling, unlike Rolinopag.
Martine: We expect to conclude enrollment in the Advanced Outcomes Study later this year, allowing for top-line data in 2026.
Martine: Literature has long suggested that earlier prostacyclin use leads to better results and a once a day oral would complement traditional ERA and PDE 5 orals that PAH patients generally use for first-line therapy.
Martine: Any one of these potential products, uKidney, inhaled triprostanil for IPF or Rolinopag, could fundamentally change how patients with ESRD, IPF, or PAH respectively are treated.
and each represents a multi-billion dollar revenue opportunity for us.
Martine: While we've posted record revenue performance, progressed several registration studies, and launched the first revolutionary trial of a XenoOrgan, we remain focused on the needs of you, our shareholders, through a disciplined financial algorithm and capital allocation philosophy.
Martine: across both our commercial and development portfolios. We've invested in CapEx to support our new TiVaso DPI manufacturing facility and acquired additional real estate to support future commercial manufacturing needs.
Martine: We also commissioned the world's first clinical scale DPF in Virginia and plan to complete two others.
Martine: On corporate development, we acquired IVIVA and Miramatrix to enhance our organ alternative development expertise. And we've licensed in new technologies to support our troposomal business.
Martine: And with all this, we still returned $1 billion to you, our shareholders, through an accelerated share repurchase program that was universally well-received. We will continue to evaluate all three core areas of our capital allocation philosophy on an ongoing basis.
Martine: Record performance, progress with our innovative and revolutionary development programs, discipline, financial management, and capital allocation. We've never been in a better position at United Therapeutics and we're excited to forge ahead in 2025.
Speaker Change: And with that, I'll now turn the call over to our President, Mike Benkowitz, who will give an overview of our commercial performance for the quarter. Mike?
Mike Benkowitz: Thank you, Martine, and good morning, everyone. Today, as Martine mentioned, we are pleased to report another year of record-breaking revenue driven by double-digit percent revenue growth for all our major revenue contributors, Tyvaso, US Vermodulin, Oranatram, and Unituxin.
leading to almost 24% growth over full year 2023.
Mike Benkowitz: For the quarter, we saw 20% revenue growth from the fourth quarter of 2023, and saw record total to process referrals and patient shipments, along with near record total starts.
Mike Benkowitz: Our fourth quarter total net revenue was down slightly sequentially, while our gross revenues for the fourth quarter was record setting.
Mike Benkowitz: The modest decline in net revenue is due in part to our recent contracting efforts for Taiveso, which I will discuss in a moment.
Mike Benkowitz: Total Tyvaso revenue for the fourth quarter was $416 million, a 19% increase over the previous year.
Mike Benkowitz: This continued strong commercial execution in what is normally a seasonally challenging quarter was driven by record patient shipments and near record referrals and starts, largely on par with the previous quarter.
Mike Benkowitz: The sequential decline in TAIDESO revenue from 3Q to 4Q was primarily driven by a larger gross-to-net deduction associated with our recent contracting efforts that we've been highlighting for the last few quarters.
Mike Benkowitz: Our investment in these contracting efforts was conducted to help position Nebulize-Tyvaso and Tyvaso-DPI at parity with current and potential future competitor products.
Mike Benkowitz: As we have previously noted, these new contracts became effective over the third and fourth quarters of 2024, and we saw this impact primarily in the fourth quarter. At this point, we believe these additional investments and rebates have largely been pulled through, creating a new base from which Taiveso can continue to grow.
Mike Benkowitz: Moving to a renter term, we reported 28% revenue growth in the fourth quarter of 2024 to $108 million, largely in line with the third quarter of 2024, and again, what is normally a seasonally weak fourth quarter for specialty pharmacy ordering.
Mike Benkowitz: In the fourth quarter, we saw record patient shipments for Orenatran.
Mike Benkowitz: Close to 50% of orenotramp starts are now coming from remodeling transitions, indicating to us that our educational efforts around use with intermediate high-risk patients needing additional PAH treatment, along with scientific discussions about the EXPEDITE study, are influencing orenotramp use.
Mike Benkowitz: Moving to remodeling, we reported fourth quarter worldwide revenue of $135 million, up 17 percent from the prior year period.
Mike Benkowitz: U.S. revenue grew 11 percent, setting another record for patient shipments. We continue to see strong referral and start trends for remodeling.
Mike Benkowitz: In January, our partner DECA received FDA clearance for the new Remunity ProPump.
Mike Benkowitz: Remunity Pro is the next generation of subcutaneous pump technology, optimized and designed for patients with PAH.
Mike Benkowitz: Compared to Remunity, Remunity Pro offers broader accessibility through intuitive technology, incorporates a touchscreen remote with step-by-step guidance, streamlined alerts, simplified patient filling, and automatic pump-driven priming. We expect to launch Remunity Pro later this year.
Mike Benkowitz: Finally, Unituxin achieved record revenue of $68 million for the fourth quarter, up 25 percent from the prior year quarter. U.S. revenue for Unituxin was $62 million, driven by both price and volume increases.
Mike Benkowitz: This growth demonstrates the product's strong market presence and the effectiveness of our commercial strategies.
Mike Benkowitz: To wrap up, we are extremely proud of our team's accomplishments this quarter as the underlying dynamics of our business remain very strong. And with the recent investment in our commercial contracting efforts, we believe we are well positioned to continue providing our important medicines to patients while delivering value to our shareholders.
Martin: Martin, I'll turn things back to you to run the Q&A.
Martin: Thank you very much, Mike. Operator, please open the lines to any questions.
Thank you. Bye. Bye.
We will now begin the question and answer session.
Speaker Change: To ask a question, you may press star then 1 on your telephone keypad.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Our first question comes from Roger Song of Jeffries. Go ahead, please.
Great. Congrats for the quarter.
Speaker Change: Thank you for taking our question, maybe start with the top line commercial franchise.
Speaker Change: and Kevin. Kevin, you don't provide 2025 sales guidance, but we understand the growth trajectory for the year. And then also you mentioned some seasonality for Q. And then how should we think about this year in the upcoming quarters and then a half year.
wants you to type that question. Thank you.
Speaker Change: Thank you, Roger, for the kudos, and I'll bounce that question to Mike.
Mike Benkowitz: Sure. So I think as we kind of think about, you know, 2025 and beyond as it relates to our what we call our foundational business, which is our existing commercial portfolio of products.
Mike Benkowitz: You know, I think what we've been saying for the last few quarters, last couple years really, is that we expect to continue to grow double digits out into the mid-decade and then, you know, obviously with an expected real in a peg.
IPF approval for Kaivé, so, you know, we can...
Mike Benkowitz: In that perspective, in terms of the base business for the next year or two years, so we're just going to continue to execute commercially and, like I said, deliver that double-digit revenue growth performance.
Perfect answer, Michael. Thank you. Operator, next question.
The next question comes from...
and Jessica Frey.
Morgan.
Speaker Change: Great, good morning. Thanks for taking my question. So with the first transplant for the eukidney clinical trial expected mid-year, can you talk about what you'll be looking for to support proceeding to the next?
Speaker Change: transplant. I think there's a waiting period in between the first and the second. And then just talk about what proof points in that program would ungate larger-scale investment in additional DPF facilities. Thank you.
Speaker Change: Thanks Jessica, nice to hear your voice this morning and I'll flip that question over to Dr. Peterson our EVP Zeno.
Speaker Change: Hi, so as you mentioned we have this is a single phaseless study and it starts with a cohort of six
participants, and then we have
12-week review period where we will be involving.
Speaker Change: Our steering committee throughout the study because it's open label, but we'll have a formal review of all of the data data safety data.
and as well as patient and graft survival data.
Speaker Change: at that point and determine the risk-benefit ratio of going forward into the remainder of the
Speaker Change: what we have planned of up to 50 patients. And as far as the endpoints or the demonstration of success, we're going to be looking again at a six-month
zoonotic infections.
Speaker Change: Lee, that's a great answer. Thank you so much. And Jess, in terms of additional spending on DPF facilities, it's premature to speculate on that, but it will just be something that we'll consider as the trial proceeds.
Operator, next question.
Speaker Change: The next question comes from Ash Verma of UBS. Go ahead, please.
Ash Verma: Hi, thanks for taking my question. I wanted to understand how you view the Hyperion impact from Windowware to your business, this study.
Ash Verma: finished earlier than expected. And in the past, I understand that you've talked about that the VINRIVER late line and combo therapy used with some of your products was kind of insulating your PEH position.
Ash Verma: But now that Wind River moves earlier line and faster than expected, can Taiwesu still grow on the PAH side?
Speaker Change: Thank you, Ash, for dialing in this morning. Mike, I think that would be the best person to answer that question.
Mike Benkowitz: Sure. So, I think in terms of the Hyperion study, I mean, obviously, we'll see how that plays out over the next couple quarters.
Mike Benkowitz: As I said in the answer to the first question, we still expect that we're going to continue to grow double digits across our franchise.
Mike Benkowitz: which is great for patients. It doesn't replace prostacyclin. I think what we've seen, you know, up until now, is that it's being used in combination with prostacyclin. I think that will continue to be the case if, for whatever reason, physicians start to move.
Mike Benkowitz: patients start on prostacycline before or after wind reviewer, eventually they're going to get to a prostacycline. So as we kind of think about our business over the long term, we think that the impact is going to be, really be immaterial.
Speaker Change: The next question comes from Joseph Tome of T.D. Cohen. Go ahead, please.
Joseph Tome: Hi there. Good morning. Thank you for taking my question and congrats on the progress.
Speaker Change: Maybe another on the xenotransplant, can you put into context the baseline disease severity of the first patient that will be enrolled, maybe as it relates to kind of the baseline disease severity of Tijuana loony?
and then
Speaker Change: Related to that, we've obviously been able to follow these patients' progress through either press releases from the hospitals themselves or news sources, I guess.
Speaker Change: Do you expect this to continue in the formal clinical study? As early as yesterday, it seems like Ms. Mooney was able to return home and we can kind of watch this as it happens. Is that going to be the case in the formal study as well? Thank you.
Speaker Change: Thank you, Joe. I think Dr. Peterson could give you a very good answer on that question.
Yeah, so I think your second question was about how
Speaker Change: We will follow our clinical study patients with regard to the news and what's been shown with Ms. Looney. We will not be doing that. For clinical studies, the data are
Speaker Change: They don't have several comorbidities. They're not very, very sick patients. Probably like you're asking specifically about the first two heart patients.
Speaker Change: our patients won't have severe cardiovascular comorbidities as well as several other. So, they'll, but again, they won't be,
Speaker Change: eligible for the list due to medical reasons. And then we also have a second population which probably Ms. Looney would fall into, which is that they are not expected to get
Speaker Change: an aloe transplant due to things such as HLA sensitization or other factors, type O blood or a combination of these factors, they're not expected to get an aloe transplant for at least five years.
Speaker Change: And so this is the second population where, again, they're on the list, but they're not expected.
Speaker Change: to really have a good chance of receiving an allotransplant. So, I hope that gives you a little bit of an indication, again, in comparison to Ms. Looney, where you've really been able to follow her status, which is really great. We're really
Speaker Change: Really happy to help help patients like her and and Probably the second category is very similar to of patients It's very similar to to where what you understand and what we understand where she is
Thank you, Dr. Peterson. Superb 360-degree answer. Next question, operator.
Speaker Change: The next question comes from Roana Ruiz of Lerank. Go ahead, please.
Speaker Change: Great morning, everyone. So, question about Tyvaso and PHILD specifically. Could prescribing growth on the ILD side plus increase in commercial volumes under Part D redesign
Speaker Change: possibly outweigh some seasonality trends from 1Q going to 2Q. Just curious if there's any color on that.
Very interesting question, Roanna. Michael, can you answer that?
Michael: drive prescribing growth in the PHILD, or I'm sorry, in the ILD treaters, those physicians that are seeing the PHILD patients. So, you know, prior to that,
Michael: or at least at launch and up until then, I think what we were seeing is the vast majority of PHILD patients were being referred to pulmonary hypertension clinics and it was those physicians that were...
that we're prescribing.
Michael: prescribing Tybaso. And so, you know, as you kind of think of the patient population, that really wasn't a sustainable model going forward if we really were going to have an impact and be able to penetrate the market. So that was really sort of the idea behind the expansion was to really start to continue to educate.
Michael: the ILD treaters on not only the disease, but how to use Tybaso, how to start managing patients. So I will say that, that so far has paid off in spades.
Michael: You know, if you look at our prescriber growth over the course of 2024, the majority of that growth is in the ILD treating community, so we are starting to get...
Michael: in that group, and then actually starting to make some inroads on the depth. I talk often about the three-plus, you know, doctors that get to three-plus patients, you know, then they quickly jump up to six, seven, eight, nine, ten patients. So we're having a lot of success, both in terms of the...
Michael: the breadth of the prescribers and starting to get more depth among those prescribers. And so I think we just expect that to continue as we move on to 2025 and beyond. And I was just looking at calculating if you look at patient growth between PHILD and
Michael: The nice thing with Tybaso is we're actually growing on both indications. So in 2024, we grew roughly, I think it was about 37%, 35% to 40%.
Michael: and PHILD, still mid-teen growth, and PAH. So it's nice to see that we're growing in both indications.
Michael: So, I think, hopefully, that addresses the first part of your question around prescriber growth and the growth of PHL fever.
versus PAH.
Michael: As it relates to Part D impact, I think, as we said for the last couple of quarters, I think that largely played out last year. You know, as we saw in Q1, we saw more PAT patients or patient assistance patients convert over to
Michael: to commercial pain patients in Q1 of 2024, and then that continued over the course of the year. We kind of celebrated about...
Michael: you know, roughly 90% of our patients are commercial-paying patients, and then roughly 10% are in our PAT program. I would expect that that's going to be kind of the new normal or new baseline going forward. It could shift.
Michael: You know bounce around a little bit quarter to quarter just depending on the type of patient We're getting in but generally I would expect to kind of settle that settle it around that so I'm not saying not expecting to see much of an impact in q1 or q2 as a result of the Part D redesign
Speaker Change: Excellent. Michael, your encyclopedic knowledge is a benefit to all of us. Thank you so much. Really appreciate it. Operator, we only have time for one last question and whoever that may be, maybe it'll be a question for our Chief Financial Officer since this is a earnings call.
Speaker Change: Next question, operator. Okay, the next question comes from Andres Arreguiriz. Go ahead, please.
Speaker Change: Thanks, good morning and thanks for taking our question and Martin, apologies you put me on the spot on the financial question. I don't think I had that one teed up here but first of all kudos so that's a great year.
and also to the milestone on getting IUD clearance.
Speaker Change: and you know, you're leading the way and it's pretty fascinating and interesting going forward here and following Tawana's progress here, hearing that she's resumed daily activities is a kudos to the team.
Speaker Change: My question was really just quickly around Taipei, so in IPF
Speaker Change: Getting a sense of the intellectual property mode that you built around out. How long we can expect exclusivity? And then quickly on contracting and some of the competitive dynamics behind that. I don't know if I squeezed too in there, but apologies for that.
Speaker Change: Yeah, okay, well thank you Andreas. We appreciate your kudos. You're off the hook on the question for James.
Speaker Change: We don't really like to discuss publicly the issues relating to IP and whatnot, and we're about out of time, so I'm going to ask just Michael if he could talk about the contracting aspects of our anticipated launch into IPF. Michael?
Speaker Change: Yeah, so I'm not sure if the question was related directly to contracting an IPF or just contracting generally or what we've done thus far, but really I think the philosophy that we...
Speaker Change: and the strategy we employed last year was to start to lock in payers with some additional rebates in anticipation of future competitors and then the idea behind that is if we start to have those rebate dollars.
Flowing through
then
Speaker Change: you know, regardless of where a potential competitor comes in with rebates.
Speaker Change: We have dollars flowing through, and so that puts us, I think, in a stronger position. It keeps us at parity.
I think payers will be less reluctant.
Speaker Change: I'm sorry, less likely, more reluctant to enter into contracts that would disadvantage us because at that point they'd basically be turning off the spigot of the rebate dollar. So that was really the idea behind the payer strategy, which is...
Speaker Change: Get the rebates in place, start to get those dollars flowing, keep us at parity with competitors and then we feel like if we're really, you know, and then have the discussion with the clinicians around what's the better product for their patients and we feel, you know, very strongly that.
Speaker Change: We're better positioned and very well positioned to succeed on that front.
Speaker Change: Thank you, Mike. Perfect answer. Operator, you may now wrap up the call.
Speaker Change: Thank you for participating in today's United Therapeutics Corporation Earnings Webcast.
Speaker Change: A re-broadcast of this webcast will be available for replay for one week by visiting the Events and Presentations section of the United Therapeutics
Investor Relations website at ir.gov.
You may now disconnect. Thank you.