Positive on United Therapeutics - Analyst Blog

We recently reiterated our Outperform recommendation on United Therapeutics ( UTHR ), which carries a Zacks #2 Rank (short-term Buy rating). United Therapeutics started 2012 on a strong note with first quarter earnings coming in well above expectations.

The company continued its impressive performance with second-quarter earnings coming in at $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 earnings.

With the huge earnings beat, earnings estimates for both 2012 and 2013 have gone up significantly. 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%.

We believe United Therapeutics is well-positioned to gain share in the pulmonary arterial hypertension (PAH) market. 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 intravenous (IV) and subcutaneous (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 (potential launch in 2014) and China (potential approval in 12 months). The Japanese market could bring in incremental sales of about $100 million.

The other two PAH products in the company's portfolio are Adcirca (tadalafil) and Tyvaso. Both products should contribute significantly to revenues as patient acceptance increases. We are positive on United Therapeutics' November 2008 deal with Eli Lilly ( LLY ) whereby it licensed US rights to tadalafil (Cialis) from Lilly.

We believe the company's PAH product portfolio will drive strong top-and bottom-line growth.

LILLY ELI & CO (LLY): Free Stock Analysis Report

UTD THERAPEUTIC (UTHR): Free Stock Analysis Report

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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 Nasdaq, Inc.

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

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