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spk03: Good morning and welcome to the United Therapeutics Corporation first quarter 2022 earnings webcast. My name is Abby and I will be your conference operator today. All participants on the call portion of this webcast will be in a listen-only mode until the question and answer portion of this earnings call. If you would like to ask a question during that time, simply press star and then number one on your telephone keypad. If you would like to withdraw your question, simply press the star then the number one again on your telephone keypad. And I will now turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics.
spk06: Thanks, Abby, and good morning. It's my pleasure to welcome you to the United Therapeutics Corporation first quarter 2022 earnings webcast. Accompanying me on today's call are Dr. Martine Rothblatt, our Chairperson and Chief Executive Officer, Michael Bigowitz, our President and Chief Operating Officer, James Edgman, our Chief Financial Officer and Treasurer, and Pat Poisson, our Executive Vice President of Technical Operations, and Dr. Lee Peterson, Senior Vice President of Product Development. Remarks today will include forward-looking statements representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results to differ materially. Our latest FCC filings, including Forms 10-K and 10-Q, contain additional information on these risks and uncertainties, and we assume no obligation to update these forward-looking statements. Today's remarks may discuss the progress and results of clinical trials or other developments with respect to our products, and 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 unimproved or investigational uses. Full prescribing information for the products are available on our website. Now I'll turn the broadcast over to Dr. Rothbart for an overview of the first quarter 2022 financial results and business activities of United Therapeutics. Dr. Rothbart.
spk08: Thank you, Dewey, and good morning, everyone. Welcome to our first quarter 2022 financial results call. In my opinion, this is the best quarter we have ever reported, considering not only profits, patience, and our contributions to our planetary community. At $462 million in revenues, we are now on the cusp of a $2 billion revenue run rate. This is a major milestone achievement for us. This $2 billion revenue run rate is what we expect based on the strong trends that are evidenced in this quarter, as well as what we expect in coming quarters. Importantly, we see strength across our entire product portfolio. As a public benefit company, we focus on three P's, profitable cash flow, patient care, and planetary community. With respect to profits, that approximately $2 billion revenue run rate was accompanied by nearly a quarter billion dollars in quarterly profits. we are making more money than we spend, which is one of our key financial metrics. But with respect to patient care, we are spending a lot. Seven phase three studies are underway. A new phase one study in RemoPro is just starting, and an exciting phase four study called Artisan designed to prove that strong dosing on remodulin followed by a rapid switch to a Renitram allows patients long-term good results for their treatment of pulmonary hypertension. They will be able to live with pulmonary hypertension more than die from pulmonary hypertension. Finally, with respect to our planetary community, we continue to lead by example with zero carbon healthcare facilities that are amongst the best in our entire industry. For example, our clinical development operations work in the world's largest site zero carbon building in Silver Spring, Maryland. We are now building a first of its kind zero carbon footprint pharmaceutical inventory warehouse in North Carolina to store our ever expanding production of pharmaceutical intermediates and pharmaceutical products. Speaking of products, I think that is a good opportunity for me to pass the baton to our President and Chief Operating Officer, Michael Benkowitz.
spk09: Thanks, Martine, and good morning, everyone. In the first quarter, we continued our trend of year-over-year revenue growth, and we saw the highest quarterly revenue for Tyveso, as well as our overall tripostinal business. I'd like to dive into the underlying performance of our three tripostinal products, Tyveso, Remodulin, and Arenatram. As usual, I'm going to focus more on our patient metrics, and I'll remind everyone that our quarterly tripostonal revenue does not always track exactly with quarterly underlying patient demand due to specialty pharmacy ordering patterns. Starting with Tyveso, we increased our active patients to about 4,400 as of the end of the first quarter, putting this approximately halfway toward the goal we set last year of doubling the number of Tyveso patients from 3,000 to 6,000 by the end of this year. As I do in every setting like this, I want to remind everyone that achieving this goal assumes no COVID-related impact to healthcare practitioner access and patient initiation of therapy, and the path to doubling will not be linear. Uptake in January and February was a little more gradual than in prior months, but this is not atypical for a serious chronic life-threatening condition where doctors want to be extra cautious about adding therapies. Having said that, in March, we saw a nice acceleration of patient additions with historically stronger referrals and new starts along the lines of what we saw in Q2 and Q3 of last year. And this momentum has continued into April. Our continued path to 6,000 patients will be aided by three factors. First, assuming approval later this month, the launch of Tyvesa DPI, which we believe will expand Tyvesa's use in both Groups 1 and Group 3 pulmonary hypertension, for the reasons I mentioned earlier. The recent CMS coverage update to include Tyveso for PHILD, that's our second factor. Despite the availability of our patient access programs for Medicare patients before a coverage decision, we are aware that many physicians were waiting for a CMS coverage decision before referring their PHILD patients on Medicare for Tyveso therapy. And third, continued growth in the Tyveso prescriber base, particularly among ILD treaters. As I've mentioned on prior calls, many of these physicians have been on the front lines treating COVID patients. Now that COVID cases and hospitalizations hopefully seem to be on the decline, and with Tyveso DPI and a CMS coverage decision, we expect to see more growth in prescriptions from these physicians over the next few quarters and beyond. Moving to a renter term, we saw yet another quarter of record patient counts as of the end of the first quarter. As we've discussed before, we believe this uptake is driven by the FreedomEV label expansion now that we're able to have more robust interactions with prescribers about the data. Finally, moving on to remodulin, in the first quarter, we saw the highest level of remodulin referrals since 2014, and relative resilience and stability in the business, despite the launch of a subcutaneous form of generic terprocinol last year. The relaunch of the remunity pump is proceeding well, and we're accepting referrals for starting patients on remunity, and we've been doing that since about mid-March. We expect remunity starts to pick up through the balance of the year and into 2023. To wrap up, we're pleased with the continued momentum in the Arenatram and Remodulin business and progress with Tyveso and PHILD. Expected second quarter events such as CMS coverage in PHILD, the Tyveso DPI launch and approval, not to mention the increased buzz around PHILD we're seeing at HCP conferences, particularly now that these are in person again, have us well positioned to achieve our 6,000 patient goal by the end of the year. With that, I'll turn the call over to Martin to quarterback answers to your questions.
spk08: Thanks so much, Mike. That was perfect. Operator, you may open the lines.
spk03: Thank you. And at this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. And we'll pause for just a moment to compile the Q&A roster. And we will take our first question from Yun Yang with Jeffries. Your line is open.
spk01: Thank you very much. Great quarter. Question on Tyveso DPI. So as we await FDA approval, once approved on time, what do you think the conversion rate to DPI from Tyveso would be? Whether you think that it's going to help to expand into new patients? Thank you.
spk08: Thanks so much, Ian. Nice to hear your voice after it's been a while since we've been able to see each other face-to-face, so thanks for dialing in. That question is something that I think on this call Mike would have the most details and ability to address. So, Mike, can you give us a response on that one? Sure, happy to.
spk09: Yeah, I think what you'll see is you'll see this play out over a little bit of time. As I said in my opening remarks, you know, we're dealing with chronic life-threatening diseases here, and I think physicians and patients can be a little bit cautious in terms of switching therapy, switching delivery devices, what have you. We do see and we hear a lot of excitement among both physicians and patients for the Tyvesa DPI, so we do believe that there will be a lot of interest in switching over to Tyvesa DPI I think as this plays out, as we expand the use of Tyveso into group one and group three, over time, my estimate is that we'll probably see somewhere around 60% of the patients on Tyveso DPI and about 40% on the nebulizer. I'd say that's, I think that's a pretty good estimate for group one. I think group three, may be a little bit more 50-50 just because of the disease we're talking about and the severity. And some patients, for whatever reason, may decide that the nebulizer is a better option for them than the DPI.
spk08: Thanks, Mike. You know, Yim, just to give you a little bit more color, as you know, my daughter has pulmonary hypertension, so I meet with a lot of parents. and even their adult children with pulmonary hypertension. And I'm astonished, actually, that when I have a lunch or something with them, one of them will tell me that their daughter or their son is still taking Flolan from the old legacy pump, which weighs as much as maybe a small brick. Not a fat brick, but a small brick. And, you know, we're just talking, and I'm obviously not selling. I'm just talking, you know, parent to parent. But I say, like, you know, there are much smaller devices available and ones that can go subcutaneously. And, you know, I'm just, you know, I know you're aware of this. You know, I'm just curious, you know, why your daughter or son has never transitioned since. And they always give the same answer, which is very resonant with what Mike just said. They said, you know, this has kept our child alive. This, you know, legacy flow land, you know, brick, if you will, you know, has kept our daughter alive, kept our son alive. And we just don't, you know, if it's not broken, we don't want to fix it. And so that just gives you a little bit more color on what Mike was saying, that when patients have this type of condition, If the nebulizer is, you know, I don't want to say keeping them alive because I don't think that's in the label, but if the nebulizer is what they feel has, you know, made their pulmonary hypertension livable, it's just human nature to be very cautious about, you know, flipping that to a different therapeutic modality. Now, for new patients, totally different story. If you tell somebody you want a big thing or a small thing, almost everybody will take the small thing. Next question, please.
spk03: Our next question comes from Joseph Tone with Cowan and Company. Your line is open.
spk04: Good morning. Thank you for taking my question and congratulations on the quarter. It was interesting that you mentioned there is an uptick in PHILD, either patient starts or referrals. I forget what you mentioned in March and continuing into April. Just a little bit of color in terms of, you know, why do you think maybe this was the case? And are you seeing an increased number of conventional ILD physicians using the therapy. Thank you.
spk08: Thanks, Joseph. Mike, hand off to you.
spk09: Sure. Yeah, great question. I think there's a number of factors at play, Joe. I mean, one is, yes, we are continuing to, you know, day by day, week by week, continuing to grow our Tyvesia prescriber base in the ILD community, and that will just continue to play out over really, I think, years. this year and the next year and beyond. And so we're really focused on, you know, the breadth of the prescribing community. And so that is certainly a contributing factor to that. I think the other things that, you know, have kind of played into that are, you know, I know Martine talked a little bit about the impact of COVID on clinical trial enrollment in the market generally. I think, you know, in hindsight, looking at Omicron, And the impact, I think it had an impact more than maybe we realized at the time, just in terms of us being able to get in and talk to physicians. And physicians willing to really take the time to understand PHILD, think about Tyveso, think about their patients, and move them to Tyveso. And I think what we've seen really in the last, I would say, six to eight weeks is, as I said, with the cases coming down, hospitalizations coming down, I think the physicians have a lot more time to really dig into this. I think that's contributing to the increase in the referral and the starts that we've seen in the last two months. I think the third factor, too, is I mentioned this in my opening remarks about the conferences. Again, none of these are just by themselves, I think, driving it. It's a combination of a number of things. I was at the ISHLT conference last week, which was very well attended in person. And I think just the fact that physicians were there, they were able to attend presentations live in person. There were a lot of really nice discussions around PHILD, around the use of Tyveso and PHILD. We were able to have those hallway or coffee conversations. We were able to get out in front of these physicians and have really, I think, detailed conversations with them about the disease state and the drug. I think helps. I think that the peer-to-peer interactions, our interactions, that will continue into the balance of the spring and the summer. I think ATS is, from what I understand, going to be an even better attendant than ISHLT, and we've got a lot of, I think, great presentations going on there. So I think it's just really a combination of all of those things have led to kind of the return to where we, to return to the kind of strong referral and start patterns that we saw in the middle of last year. And then you layer on top the factors that I mentioned in my opening remarks, particularly the CMS coverage, which, you know, for everybody I talk to, that's really important and is going to increase their use of Tyveso, along with the DPI, as I said, I think have us really well positioned to hit our goal by the end of the year.
spk08: Thanks so much, Mike. Excellent, excellent. Operator, next questioner.
spk03: Our next question comes from Jessica Fye with J.P. Morgan. Your line is open.
spk10: Hey, good morning. Thanks for taking my question. And I have a backup if you can't answer this. But with the Tyveso DPI PDUFA approaching, can you say if you've seen an updated draft label at this point?
spk08: And what's your backup so we have them all queued up?
spk10: What are your latest expectations for enrollment completion and data for the PERFECT and TETON trials?
spk08: Okay, so first, Jess, good morning, and nice to hear your voice again. And I'm excited speaking further about what Mike mentioned on the in-person presence. I'm excited to hear that J.P. Morgan will be, you know, fully in person this year. So congratulations on leading our industry back to face-to-face healthcare conferences. So we really, you know, try to stay away from talking about decisions within the FDA and even decisions which are imminent. So we'll just, you know, we'll just leave it at that and we'll issue the press release as soon as we get the good news. We are successfully enrolling all of our different clinical trials. It's really not possible to predict, you know, when any given trial will be completely enrolled. They are all enrolling, as we mentioned in the beginning of the remarks. And maybe just to provide a little bit of color around your question of what kind of factors are affecting enrollment in our clinical trials, I'd like to turn the microphone over to our head of product development, Dr. Lee Peterson. Lee?
spk02: Yeah. Hi, everyone. Thank you for the question. So we do have, actually, we were able to progress. We do, as Michael said, we were probably impacted by COVID for enrollment of the trials a little bit more than we had realized as we learned more and more about sites were closing due to the pandemic. But They're opening now. We're getting more and more. We're getting boluses of patients coming in that we hadn't had before. And so we're really looking forward to completing the enrollment. Again, we can't really give you a specific timeline. But we haven't been inhibited to following our patients either. I mean, there's a little bit of once we get the patients in the study, it's obviously critical that we continue to watch what happens, follow, and make sure that the sites are open, have access to the medicine and everything. And we've actually had no problems with that. And we even have a site in the Ukraine that has active patients that we're able to continue to follow and get medicine to in our study. So... I hope that the type of color you're looking for, again, apologies, we can't really give you the specific enrollment dates as is impossible for any clinical study, really.
spk08: Thanks so much, Dr. Peterson. And just to provide a little more color to your question, Jess, I think it has been proven over and over that clinical trial enrollment is a core competency at United Therapeutics. It's something that we do very, very well. Two examples that are out of many I could give, I myself am blown away at how our team successfully, during COVID's early days, delivered our medicines to patients in Wuhan, China, the ground zero of COVID, yet we continue delivering medicines. We were able to have local clinical trial monitors continue to take all the measurements, like Dr. Peterson said. And then a more recent example, as Dr. Peterson just said, you know, we have this center in the Ukraine, and it's part of our outcome study. and it's a fortunately they are not in the part that's actively under you know um bombardment um from the russians but it's not far from there and i just it's it's just amazing to me that our team is able to work to conduct these studies um even in places of uh very very difficult circumstances of course here in the us we're able to do much better things are are peaceful And we've even worked out backup measures with the FDA, for example, in Perfect, where we can take endpoint measurements using things like actometrics. It's a kind of thing that measures how much you're walking. And it's an analogy to six-minute walk endpoint studies. So we have adapted to doing clinical trials during COVID. And I think we've adapted very, very well, as you could see from, for example, the outcomes of the increased trial and the FDA approval of increase. And our ongoing, all seven of our trials are phase three trials are enrolling. As I mentioned, we're now beginning to enroll a new phase one trial for RemoPro. We're enrolling a phase four trial, Artisan. So it's a core competency of our company to carry these things out, even during difficult times. Next question, please.
spk03: Our next question comes from Andreas Argarides with Wedbush Securities. Your line is open.
spk05: Good morning. Thanks for taking your question. Assuming approval, can you elaborate on the initial launch dynamics for DPI, given that it'll be a first-to-market product? Also, what the timeframe is to achieving the previously described breakdown between DPI and Nebulizer? And then lastly, just an update on the Xeno programs. Thanks.
spk08: Thanks, Andreas. While Mike is queuing up some answers to the first two questions that you asked, I'd like to have the Xeno question addressed by Dr. Peterson because she is now also in charge of our XenoHeart and XenoKidney clinical development. So she can give you a general overview of the type of things that we're doing on Xeno. And before I leave the introductory part of your answer, please give our best to Leanna. All righty. Lee, would you, while you're thinking about the Zeno response, Mike, do you want to start with the first two questions you asked? Sure.
spk09: So I think in terms of launch dynamics or launch timing, Our expectation is that if we receive an approval this month in accordance with our action date, we'll be able to commence promotional activities immediately. So we have all of our promotional materials queued up and ready to go and our sales reps trained. And so they'll be able to go out and start talking to physicians immediately. There'll be a little bit of a lag just in terms of getting... product to specialty pharmacy and be able to start patients, but we would expect that patients will be able to start out therapy sometime in June. So you're just talking about a few weeks lag there, which is actually faster than normal between an approval and a launch. And then for us, it's doing what we do from a sales and marketing standpoint, going out and communicating with physicians and communicating with patients and getting them to understand the the benefits of DPI and helping physicians and patients identify the appropriate patient to either start to NOVA or transition over to the DPI. In terms of the timing for the breakdowns that I mentioned earlier, sort of like the clinical trial question, I hesitate to put a timeline on that because it always seems to move a little bit slower than what we think for the reasons that Martine, the example that Martine gave. and because of the types of patients we're dealing with. I am optimistic that this will happen maybe quicker than what we typically see in this space just because of all of the pre-launch or pre-approval buzz and excitement there is around this product.
spk08: Awesome, Mike. Totally, totally awesome. All right, Lee, people are interested about what we can expect next on Zeno.
spk02: Yeah, so as everyone knows, the world is very, very excited on what's going on here. And we have reports of institutions doing work in humans. One case that's coming out where the xeno heart – was placed into a human patient. And the case study of that's coming out in a major medical journal. So please look for those details in that report. We're excited for that to come out soon. But what we do is we are really interested in doing the clinical studies that prove if a product is efficacious. as we expect. And so in order to do the more formal phase one sponsored clinical studies, we're required to continue to do some preclinical work per FDA. And we're working with FDA to understand specifically what we should do in order to prepare ourselves for the INDs. and prepare them. As everyone knows, this is an entirely new field, and so we're working really closely together to make sure that we do this right. So we're spending time now working with our academic partners and doing the non-clinical work and making sure everything is in order for our phase one and everything being the specific immune suppression regimen that will be used, the specific product, and all of the procedures that are associated with that. So once we have that completed, we will be submitting our IND to start the phase one studies with the xeno organs.
spk08: Excellent. Thank you so much, Lee. You know, I'm going to call on one more person, Pat Poisson, who is our Executive Vice President for Technical Operations. Those of you who know me know that I kind of geek out on pharma biologic manufacturing things. I just, you know, I just really love it. And it's amazing, you know, to manufacture a Xeno kidney and Xeno heart. That is a it's a biologic, obviously. But it requires manufacturing facilities, you know, really the likes of which, you know, have not existed before. And it is under Pat Poisson, our EVP technical operations, that we are building the manufacturing facility for the clinical trials that Dr. Peterson just referred to because, you know, for a clinical trial, whether it's a small molecule, a biologic, or a whole organ, you have to have a higher level of attention and care to GMP type of processes. So, um, Pat, we just have like about a minute left in the call, but if you could kind of give us an overview of, um, of the kind of stuff that you're overseeing in terms of preparing a clinical trial, if I could say material or, you know, organ for, uh, Dr. Peterson's trial.
spk07: Yeah. Thanks, Martine. Um, so certainly us in operations are very excited about the prospects of Zeno and, uh, We are undertaking building a clinical call it manufacturing facility that will produce organs for the trials that Dr. Peterson will run. And this is gonna be a first in kind Greenfield facility in Western Virginia. And it'll be state of the art as we do with all of our facilities, working closely with FDA. So we are kicking that program off, it's underway. And design work is happening as we speak. So we will be prepared to supply organs when these trials start.
spk08: Thank you so much, Pat. Operator, it's been a wonderful call. Like I said at the beginning, in my opinion, the best quarter we've ever had the pleasure to share with everybody considering revenues, pipeline, even these amazing manufacturing activities. So, operator, you may now wrap up the call. Thank you.
spk03: And thank you for participating in today's United Therapeutics Corporation earnings webcast. A rebroadcast 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.unither.com.
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