United Therapeutics Corp.
) reported second-quarter earnings of $1.43 per share, well above
the year-ago earnings of $1.19 and the Zacks Consensus Estimate of
$1.12. Higher revenues led to the year-over-year improvement in
Including one-time items, earnings came in at $1.34 per share,
up 13.6% from the year-ago period.
Second quarter revenues increased 22.8% to $225.6 million and
exceeded the Zacks Consensus Estimate of $213 million.
The Quarter in Detail
Net product revenues, consisting of Remodulin, Tyvaso, Adcirca
and other sales, increased 20.9% to $221.8 million in the reported
quarter. Revenues increased primarily due to the continued increase
in the number of patients being prescribed Remodulin, Tyvaso and
Adcirca. United Therapeutics derives the majority of its product
revenues from Remodulin, which posted sales of $110.4 million, up
5.2%. Remodulin sales should benefit from the approval of the IV
formulation in Europe.
The company is working on developing Remodulin for the Japanese
and Chinese markets which would bring in incremental sales.
Remodulin could be launched in Japan in 2014.
Meanwhile, Tyvaso and Adcirca contributed $81.2 million and
$30.2 million, respectively, to second quarter revenues.
United Therapeutics is currently seeking US approval for oral
Remodulin for the treatment of pulmonary arterial hypertension
(PAH). A response on the approvability of oral Remodulin should be
out by October 27, 2012.
We note that the company is facing a patent challenge for
Remodulin (treprostinil) injection. Sandoz,
) generic unit, is seeking approval for its generic version of
Remodulin (10 mg/mL). United Therapeutics has filed a patent
infringement lawsuit against Sandoz.
R&D expenses for the second quarter increased 53% to $37.1
million mainly due to higher share-based compensation expense.
SG&A spend increased 123.2% from the year-ago quarter to
$53.3 million due to higher share-based compensation costs.
United Therapeutics maintained its revenue guidance for 2012.
The company expects 2012 revenues to be about $875 million with a
plus/minus margin of 5%.
Outperform on United Therapeutics
We currently have an Outperform recommendation on United
Therapeutics, which carries a Zacks #2 Rank (short-term 'Buy'
rating). We believe the company is well-positioned to gain share in
the PAH market. Lead product, Remodulin, continues to look very
strong in both the intravenous (IV) and subcutaneous (SC) forms.
With the approval of Adcirca and Tyvaso, the company has a varied
range of therapies available for the treatment of PAH. We believe
the company's PAH product portfolio will drive strong top-and
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