We recently reiterated a Neutral recommendation on
While the company reported strong third-quarter results,
United Therapeutics suffered a major blow in October with the US
Food and Drug Administration (FDA) issuing a complete response
letter (CRL) for its new drug application for oral Remodulin
(treprostinil). The company was looking to get oral Remodulin
approved for the treatment of pulmonary arterial hypertension
Although United Therapeutics said that it intends to gain
approval for the candidate within four years, we have low
visibility on the company's development plans for the
The company's lead product is Remodulin, an injectable
formulation of treprostinil, indicated for the treatment of PAH
in patients with New York Heart Association (NYHA) Class II-IV
symptoms. Remodulin is approved for both subcutaneous (SC) and
intravenous (IV) use. The other two PAH products in the company's
portfolio are Adcirca (tadalafil) and Tyvaso.
United Therapeutics holds a strong position in the PAH market
with three approved products targeting this indication. Lead
product Remodulin continues to look very strong in both the IV
and SC forms. EU approval for the IV formulation, received in
late December 2011, should drive sales further. The company is
looking to launch Remodulin in new territories including Japan
and China. The Japanese market could bring in incremental sales
of about $100 million.
Although we believe United Therapeutics' existing PAH product
portfolio will drive strong top-and bottom-line growth, we remain
concerned about the company's dependence on Remodulin for
Remodulin, which accounted for 57.9% of total sales in 2011,
is currently facing a generic challenge from Sandoz,
) generic division. The company needs to develop products that
could help make up for the loss of revenues in the event of
genericization of Remodulin.
United Therapeutics currently holds a Zacks #2 Rank (Buy).
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