United Therapeutics Corporation

Good morning and welcome to the United Therapeutics Corporation third quarter 2023 earnings webcast. My name is Rocco and I will be your conference operator today. All participants on the call portion of this webcast will be in 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 then the number one on your telephone keypad. If you would like to withdraw your question, simply press star then the number two on your telephone keypad. Please note, this call is being recorded. I will now turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics. Please go ahead.

Thank you, Rocco, and good morning, everyone. It's my pleasure to welcome you to the United Therapeutics Third Quarter 2023 Earnings Webcast. Accompanying me today are Dr. Martine Rochlat, our Chairperson and Chief Executive Officer, Michael Binkowitz, our President and Chief Operating Officer, James Edgman, our Chief Financial Officer and Treasurer, Pat Cuisant, our Executive Vice President of Technical Operations, and Dr. Lee Pearson, our Executive Vice President of Product Development and Xenotransplantation. 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 filing, including Forms 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update these forward-looking statements. Also, today's remarks may discuss the progress and results of clinical trials or other developments with respect to our products. 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 unapproved or investigational uses. Full prescribing information for these products are available on our website. Note that Pat Poisson and I will be presenting in a fireside chat session in one-on-one meetings at the 2023 UBS Biopharma Conference on November 8th. And Martine Rothblatt will participate in a fireside chat in one-on-one meetings at the J.T. Morgan Healthcare Conference in early January. Now I'll turn the call over to Dr. Rothblatt for an overview of our third quarter 2023 financial results and the distance activities of United Therapeutics. Martine?

Thank you, Dewey. First off, I'd like to congratulate our team as we had an amazing third quarter. For the second quarter in a row, I'm thrilled to report our highest quarterly revenue ever, along with double digit revenue growth as compared to the third quarter of 2022. On top of that, our operational efficiency in the third quarter resulted in one of our highest quarterly net incomes and earnings per share ever. At United Therapeutics, we're uniquely positioned for three waves of growth with a profile that's unique in BioSteps. Our first wave of growth will come through our existing commercial business, led by Tyveso and pulmonary hypertension associated with interstitial lung disease, or PHILD. We continue to post solid growth in our current business, with record quarterly revenue and patients on therapy for terprocinal products as a whole. Our growth in PHILD and continued leadership in pulmonary arterial hypertension, or PAH, has led to nebulized Tyveso and Tyveso DPI products combining to become the most prescribed prostacyclin therapy in the U.S. Michael will go into detail on our commercial business later in this call. We believe this growth will continue in the near term and we expect at least a $4 billion annual revenue run rate by mid-decade, doubling our revenue from 2022 and implying a double-digit compound annual growth rate. Our second wave of growth will come from our near-term pipeline led by the Teton program in pulmonary fibrosis and Relenopag in PAH. These two products, if approved, could lead our revenue to double again to $8 billion by the end of the decade. I will provide updates on the Teton and Relenopag program shortly. Of course, both of our first and second waves of growth are subject to clinical trial outcomes. regulatory approvals, new competitive entrants, and the potential impacts of the Inflation Reduction Act. But we feel good about our prospects for meeting these revenue aspirations. Our third wave of sustainable growth will come through the development, manufacture, and widespread use of manufactured organs and organ technologies to provide a solution to patients experiencing end-stage kidney, lung, heart, and liver disease. Moving to our near-term pipeline and second wave of growth, we have two key registration programs underway, TETON for pulmonary fibrosis and RELENOPEG, an oral therapy for group 1 PAH. TETON now consists of three registration studies, TETON1 and TETON2 for idiopathic pulmonary fibrosis, or IPF, and now TETON-PPF for progressive pulmonary fibrosis. We believe IPF represents a 100,000 patient opportunity in the United States with only two approved therapies that just slow lung function declines. Both TCON1 and TCON2 are enrolling patients, and at this time, we are aiming for full enrollment in both studies with 576 patients each by the end of 2024. Likewise, we believe PPF represents up to a 60,000 patient opportunity in the U.S., which is distinct from IPF. One of the two FDA-approved IPF therapies is also approved for PPF, and like in IPF, it only slows the decline of lung function in these fragile patients. As we reported earlier this week, the Teton PPF study has dosed its first patient. We expect this trial to enroll 698 patients. We believe there is a relatively high probability of success in the three TITAN studies based on an IPF subset of the increased study of nebulized tibeso in pH ILD patients. Unlike the two IPF therapies on market, nebulized tibeso in a safety endpoint showed an improvement of lung function in the subset of patients that had IPS along with pulmonary hypertension. We're also encouraged by a recent review by the Data Safety Monitoring Committee of data from 550 patients in the TITAN1 and TITAN2 studies. The committee completed a routine, unblinded safety review of data from these patients and unanimously recommended continuation of both trials without complication. Our advanced outcome study of Relenopeg in group one PAH continues to enroll patients and at this time we are targeting completion of the study in 2025. Relenopeg is a next generation selective and potent prostacyclin receptor agonist and we are developing it as a once daily oral therapy for PAH. We believe Relenopeg's once daily dosing sustained release profile, and titrate ability could position it favorably against the other oral prostacyclin receptor agonist, as well as other therapies currently available for PAH patients. Relenopeg provides 24-hour coverage with six and a half to 10 times the potency of the other oral prostacyclin receptor agonist on the market.