United Therapeutics Gains on Q1 Earnings - Analyst Blog

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Shares of United Therapeutics ( UTHR ) continued to gain on the company's first quarter results - shares were up 12.4% over two trading sessions since the earnings release.

The company reported earnings of $2.43 per share in the first quarter, well above the Zacks Consensus Estimate of $1.57 and the year-ago earnings of $1.19 per share. Revenues, which increased 18.1% to $289.4 million, missed the Zacks Consensus Estimate of $296.0 million.

The Quarter in Detail

Remodulin revenues increased 18.7% from the year-ago quarter to $136.1 million. Revenues improved 13.5% sequentially.

United Therapeutics is working on introducing Remodulin in the Japanese and Chinese markets which would bring in incremental sales. Moreover, the company has an agreement with Medtronic, Inc. ( MDT ) for the development of an implantable pump to deliver Remodulin.

Meanwhile, Tyvaso and Adcirca contributed $107.1 million (up 13.1%) and $41.4 million (up 22.3%), respectively, to first quarter revenues.

We note that United Therapeutics is facing a patent challenge for Remodulin injection from Sandoz. United Therapeutics has filed a patent infringement lawsuit against Sandoz. The trial is expected to continue through mid-May.

R&D expenses for the first quarter declined 75.3% to $12.4 million mainly due to lower share-based compensation expense.

SG&A spending decreased 57.7% from the year-ago quarter to $30.2 million due to lower share-based compensation costs.

Our Take

United Therapeutics' first quarter results were mixed with the company beating on earnings thanks to lower stock-based compensation expense and missing on revenues. Although Tyvaso's performance was a bit disappointing, Remodulin improved significantly. We expect investor focus to remain on the commercialization of Orenitram, the Sandoz litigation and results on Actelion's ( ALIOF ) pulmonary arterial hypertension candidate, selexipag, which should be out shortly.

United Therapeutics is a Zacks Rank #3 (Hold) stock. A better-ranked stock in the health care sector is Gilead Sciences Inc. ( GILD ) which carries a Zacks Rank #1 (Strong Buy).



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ALIOF , GILD , MDT , UTHR

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