United Therapeutics Corporation

Good morning and welcome to the United Therapeutics Corporation second quarter 2025 corporate update. My name is Steve and I will be your conference operator today. All participants on the call portion of this upcast will be in the listen only mode until the question and answer portion of this earnings call. If you would like to ask a question during this time simply press star then the number one on your telephone keypad. If you would like to withdraw a question simply press star then two on your telephone keypad. Please note this call is being recorded. I will now like to turn the upcast over to the US statement head of investor relations at United Therapeutics. Please go ahead.

Thank you Steve and good morning. It's my pleasure to welcome you to the United Therapeutics Corporation second quarter 2025 corporate update webcast. Remarks today will include forward looking statements representing our expectations or beliefs regarding future events. These statements will involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings including forms 10K and 10Q contain additional information on these risks and uncertainties. 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. These remarks are intended solely to educate investors and are not intended to service 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 our products are available on our website. Accompanying me today on today's call are Dr. Martine Rothlott our chairperson and chief executive officer, Michael Benkowitz our president and chief operating officer, James Edgemond our chief financial officer and treasurer, Dr. Lee Peterson our executive vice president of product development and xenotransplantation, Pat Poisson our executive vice president of technical operations, Dr. Gil Golden our executive vice president and chief medical officer, and CQ Ding our senior vice president of biostatistics, statistical programming and data management. Note that James Edgemond, my colleague, Kerry Silvers and I will participate in a fireside chat and -on-one meetings at the Morgan Stanley Global Healthcare Conference in New York on September 8th. Along with Martine Rothlott, Harry and I will be at the Bernstein's second annual healthcare forum in New York on September 23rd for fireside chat and -on-one meetings. Additionally, our scientific, commercial and medical affairs team will present at the World San Francisco August 2nd through 6th, the European Respiratory Society Congress in Amsterdam on September 27th through October 1st, the 18th Congress of the International Xenotransplantation Association in Geneva September 30th to October 3rd, and the American College of Chest Physicians meetings at CHESS 2025 in Chicago October 19th through 22nd. Now I'll turn the webcast over to Martine for an overview of our development pipeline and business activities. Martine?

Thank you, Dewey, and good morning, everyone. We have slides available for reference and I encourage you to review those at your leisure. Today we're proud to report that United Therapeutics has achieved another record quarter of earnings, marking 12 consecutive quarters of double-digit -over-year revenue growth. Our performance is a testament to our unwavering strategic approach, which has allowed us to consistently drive sustainable growth while improving the lives of the patients we serve. Our strong foundational business is supported by our robust Tyvaso franchise, which continues to achieve record results underpinned by our -in-class Tyvaso DPI device and enduring market fundamentals that we expect will propel future growth. Additionally, Arenatram, Remodulin, and Unituxen remain integral components of our commercial portfolio and continue to deliver strong performance. Our next wave of growth, which we call our innovation wave, consists of our Teton studies in idiopathic pulmonary fibrosis and our advanced outcome study in pulmonary arterial hypertension, which are on the cusp of reporting results, starting with Teton 2 in September of this year. Each of these catalysts has the potential to fundamentally change our revenue profile and deliver growth well into the next decade. Our largest potential wave of growth, our revolution wave, continues to make progress and we are on track to conduct the first transplant in our Expand-Hue Kidney Clinical Study shortly. Concurrently, with this first-ever phaseless study and as part of our multiple shots on goal approach, we're also proud to announce that we have filed an investigational new drug application for our Extend study evaluating our euthymokidney and we expect to file for our Express study evaluating our UHeart. Additionally, last month we announced that we enrolled and treated the first patient in our Mural Liver Elapsed study. Recently, our Investor Relations team launched a new pipeline website at .unifair.com that contains detailed information and links to publications about our pipeline candidates. I encourage you to take a look. Our ability to deliver such remarkable growth and pipeline innovation is matched only by our commitment to financial prudence. The exceptional operating efficiency that we have cultivated has allowed us to generate nearly $1.5 billion in annual operating cash flow. Our disciplined approach allows us to strategically allocate capital, ensuring that United Therapeutics remains flexible, resilient, and well positioned for sustained success in the years ahead. Given the strength of our commercial business, our robust balance sheet, and confidence in our upcoming catalysts, we believe that the recent dislocation in our share price presents a particularly compelling investment opportunity and as such, our Board of Directors has authorized the repurchase of up to $1 billion in our shares through March of next year. We will continue to regularly evaluate our capital needs and deploy cash for the highest and best uses. Even after the potential repurchase of shares as authorized by our Board, we remain well As we approach these meaningful and potentially value creating catalysts across pulmonary fibrosis and pulmonary arterial hypertension, we could not be more confident in the future of our business. To conclude, we expect to sustain growth in our foundational business, which continues to drive significant cash flow and opportunity while also progressing our innovative small molecule pipeline and our platform of organ alternative technologies. We're excited about our current business and our growth potential and we appreciate the feedback and support from our shareholders. We have a number of different presentations this morning with Michael Benkowitz addressing our commercial performance, Lee Peterson outlining our TITON2 study for which we expect to report data in September, CQ Deng, our chief biostatistician, to talk about the recent InSmed phase two data, and then Dr. Gil Golden, our chief medical officer, who will outline the expected limited impact we believe TPIP will have on the market if it is approved. Mike?

Thank you, Martine, and good morning, everyone. Today we are pleased to report record total revenue of $799 million, reflecting 12% growth over the second quarter of 2024. This is our 12th consecutive quarter of double digit year over year total revenue growth driven by robust results across our commercial portfolio. Under penny miss performance, Tivesa DPI achieved a record total revenue of $315 million, representing 22% growth over the second quarter of 2024. This quarter also marked a record for patient shipments for Tivesa DPI, as well as the total Tivesa franchise. The underlying dynamics remain strong, with referrals and starts each reaching record levels for Tivesa DPI during the quarter. We also saw year over year double digit revenue growth for nebulized Tivesa, Arenatram, and Umatopsin. For Arenatram, this quarter represented a record in both total revenue and patient shipments. Touching briefly on remodulin performance, we are still seeing strong demand for remodulin, which knocks to a top five quarter in total patient shipments, and we are confident that parental process cyclones will continue to play a meaningful role in the marketplace. We look forward to the launch of our next generation pump, Immunity Pro, later this year. With the recent launch of a competing traprosanol dry powder inhaler, I'd like to address several areas of misinformation in the marketplace about Tivesa DPI. The Quiddy is attempting to differentiate their product in the areas of dosing, tolerability, particle deposition, and ease of use. First, there is no maximum dose for Tivesa DPI, and there is no commercial available traprosanol DPI that has published data at higher doses than Tivesa DPI. Recall in the brief study of Tivesa DPI, we saw patient exposure up to 33 nebulized breath equivalents, or 176 micrograms at 51 weeks. Next, tolerability. Clinical data for Tivesa DPI shows that key tolerability factors like cough and throat irritation decreased meaningfully over time. Contrary to that, clinical data for the Quidya's product shows that cough and throat irritation actually increase over time. Now turning to deposition. It has been previously shown in peer-reviewed publications that the optimal particle size for pulmonary deposition is 1 to 5 microns, thus leading to effective delivery and absorption to more peripheral areas of the lungs. Tivesa DPI particles at 2.6 microns are in the optimal size range to promote efficient medication delivery. This feature, coupled with our low flow and low inspiratory effort device, has been shown to allow for the deep deposition of Tivesa DPI in the lung. Finally, there's ease of use and convenience, and we believe that Tivesa DPI is the better all-around package for patients. Tivesa DPI only requires one breath per cartridge four times a day. With administering Tivesa DPI, patients can hold their head in a normal neutral position, and Tivesa DPI requires no daily cleaning, or patients could potentially come in contact with DPI powder, causing unwanted effects. As we begin our competitive journey with Tivesa DPI, we understand that physicians and patients may want to try new product offerings. However, we believe that over the long term, with Tivesa DPI's product profile, along with the deep experience we've built in the pulmonary hypertension marketplace over the last three years, we are positioned for continued growth. I'll now turn the call over to Lee to discuss the T-TUN studies.

Thanks, Michael, and good morning, everyone. As we look ahead to the expected September data readout for our T-TUN II registration study, we wanted to spend some time today providing a brief landscape of idiopathic pulmonary fibrosis, or IPF. I'll cover the biological rationale behind traprosinal as a therapeutic approach, provide details regarding our clinical trials, and set the stage for interpreting the forthcoming results. So, IPF is a progressive scarring disease of the lungs of unknown cause. It's most common after age 50, and it's linked to risk factors like smoking, genetics, and certain environmental exposures. It affects approximately 100,000 people in the US. And currently, there's only two approved therapies for IPF, nintenonab and profanidone. And these drugs only slow lung function decline. They're used by about 30% of the US patients, largely due to their unpleasant side effects. Yet, together, they generate over $4 billion globally. As mentioned, these two therapies only showed a decrease in the rate of decline in FVC at 52 weeks in their registration studies. The mean FVC change from baseline for nintenonab was approximately 111 milliliters for placebo and 148 milliliters for profanidone. However, the studies had very different placebo effects, with over 200 milliliters of FVC loss in nintenonab study and more than 300 milliliters for profanidone, demonstrating the wide variety in the placebo responses that have plagued development efforts in IPF. Many investors and even physician experts in the space believe that traprosanol is just a vasodilator. And that's likely because traprosanol has become, it's much more than a vasodilator. It's likely because traprosanol has become widely used in pulmonary hypertension. But it also has activity on the IP, EP2, DP1, and PPAR receptors, collectively inhibiting fibroblast proliferation and migration, fibroblast to myofibroblast differentiation, extracellular matrix deposition, and inflammation, all of which contribute to fibrosis. These findings are supported by a post-hoc analysis from our increased study, where a subset of pulmonary hypertension patients with IPF treated with Tyveso showed an improved FVC and reduced exacerbations of underlying lung disease. This, along with traprosanol's anti-fibrotic properties, makes us optimistic that Tyveso may benefit IPF patients by improving lung function through multiple pathways beyond those typically associated with pulmonary hypertension. The Teton program is made up of three studies. Teton 1 is a 598-patient study of nebulized Tyveso and IPF for participants in the US and Canada. Teton 2 is a 597-patient study, identical to Teton 1, but evaluating participants outside the US and Canada. The Teton PPF is a worldwide study evaluating the use of nebulized Tyveso in PPF, or progressive pulmonary fibrosis. As we've been saying, we expect Teton 2 to report data in September, while Teton 1, which was fully enrolled in January of 2025, should report data in the first half of 2026. And our focus today is on Teton 2. So again, Teton 2 is a 597-patient, multi-center, randomized, double-blind, placebo-controlled, phase 3 study evaluating nebulized Tyveso in IPF patients over 52 weeks outside the US and Canada. Full enrollment was reached in July of 24. Participants were randomized to Tyveso or placebo, starting at three breaths, four times daily, or QID, titrated as tolerated up to 12 or more breaths, QID. The primary endpoint is a change in FBC at 52 weeks. And the secondary endpoints include time to clinical worsening, time to acute IPF exacerbation, overall survival, percent predicted FBC, quality of life measured by the King's Brief ILD questionnaire, and change in lung-diffusing capacity. Safety is assessed via adverse events, labs, vital signs, and ECGs. Key inclusion criteria of note include subjects who are 40 or more years of age, have a predicted FBC of 45% or more, be on a stable dose of Nintenonib or profanidone, if using one, and have a diagnosis of IPF confirmed by HRCT within the last 12 months. The inclusion criteria of note include obstructive diseases, high supplemental oxygen use, use of exacerbation or pulmonary infections. For the Teton 1 and 2 protocols, we reviewed the blended blinded data and adjusted the sample size, considering the FBC variability, discontinuation rate, background therapy use, and regulatory feedback. And in 2024, we expanded each of these studies from 396 to 576 participants to account for observed data, patient retention, and better alignment with the other major IPF tribes. At APS this year, we presented fully enrolled baseline data for Teton 1 and Teton 2, reflecting the full populations of both studies. The baseline demographics of Teton 1 and 2 are largely similar and compare favorably with the recently reported Fibonir IPF study and earlier clinical programs for Nintenonib and profanidone. While our statistical analysis plan is very long and detailed, we've been getting some questions in four key areas that I'd like to address. First, the study is 80% powered to detect an 80 milliliter change in FBC. This compares to a 90% percent power to detect a 74 milliliter change in FBC for the recent Fibonir IPF study. Next, deaths in the study will be penalized with an FBC value at the 2.5 percentile of observed values across arms. This is based on recent feedback from the FDA. This is more conservative than the tenth percentile value used in the Fibonir IPF study. Discontinuation for other reasons will be handled through statistical models like the mixed model repeated measures or multiple imputation. Finally, we've had five data monitoring committee reviews that evaluated safety over the studies. The last one occurred in February of this year, which covered more than 1,100 patients between the two studies. To close, our expectation is that our Teton 2 study will report top line data in September of this year, as said, and Teton 1 will report top line data in the first half of 2026. If both trials are successful, we intend to use the data from the studies to support a regulatory filing with the FDA to add IPF to the labeled indications for nebulized Tyveso and setting up a commercial launch by 2027. And with that, I'll now turn the call over to CQ to discuss TPIP.

Thank you, Lee. It's a pleasure to speak with you today about the questions we have concerning the TPIP phase 2B PAH data that was recently presented. Of course, our discussions are based on publicly available information. First, we believe the patient population in the recently announced phase 2B PAH study was imbalanced between the active and placebo groups that may have favored the treatment effect in the active group. Second, we believe appropriate study analysis was conducted in the PAH study, again favoring the active arm of the study and potentially over-examinating the treatment effect. And finally, we did not see any data in the phase 2A PAH IOD study that give us confidence that TPIP can be successful in phase 3 PAH IOD study. We think the study population in the phase 2B PAH study was imbalanced and not reflective of PAH patients who present today that are more heavily pretreated and less symptomatic than when we first developed and stabilized the type of vessel. The combined baseline 6-meter working distance in the phase 2B study was a meaningful lower, at least 45 meters lower relative to the recent clinical studies in PAH, potentially favoring a treatment effect. Most, if not all, recent PAH studies conducted this decade have had the baseline 6-meter working distance of 400 meters or more reflecting improvement in the standard of care of this patient population globally. Further, there was an imbalance between the two arms of the study with baseline 6-meter working distance. The 23-meter difference in baseline 6-meter working distance between the active and the placebo arms is more than three times that of previous well-controlled studies in PAH. Of course, this favors the treatment arm of the study, potentially leading to a great treatment effect. Moving to study discontinuation, we also saw a imbalance that could favor the active arm with 10% of active participants discontinued the study versus no discontinuation in the control group. The high discontinuation level imbalance, especially relative to the control group, could influence how missing relics should be imputed. Moving to statistical analysis, the change from baseline to week 16 data is not symmetric, and it's skewed to opposite directions. In the T-Paper group, the mean value was approximately 20% higher than the median, suggesting that the data was right skewed or positively skewed. In the placebo group, the mean was 40% lower than the median, suggesting that the data was left skewed or negatively skewed. The non-parametric method used to report this data, in the case, in this case, Rankin and Kovar and the Hodges-Lemann estimate relied on the data to be symmetric or at least skewed toward the same direction. However, the right skewed data in the active arm and the left skewed data in the control arm is likely causing the overestimation of the treatment effect by a Hodges-Lemann estimate or making the Hodges-Lemann estimate of the location in the median not as interpretable. Finally, there were eight subjects or 12% with missing data at week 16 in the active group and zero in the control group. A severe imbalance in dropout rate suggests that the data is not missing at random. The multiple imputation method relies on the data actually being leaving at random, which is not the case here. As such, we think this analysis may have overestimated the treatment effect of the TPEC in PH, PAH. Beyond the concerns with the recent phase 2B PAH data, we continue to question the earlier phase 2A PH IOD data, and it may not be an indicator of potential phase 3 success in this indication. First, the study was extremely small in sample size with a 3 to 1 randomization ratio. There were only 10 patients in the placebo arm, so it's difficult to draw any efficacy conclusion from the study. In addition, the baseline 6-minute working distance was given, and the 6-minute working distance result was not statistically significant. Further, the IOD subtypes observed in the PH IOD study were not balanced between arms. For example, only two CPFE patients were randomized into the study, but were all randomized to placebo group on a 3 to 1 TPEC to placebo randomization ratio. CPFE is known to be a category in which inherent triple sternum is less effective. Finally, the safety data in the PH IOD uncovered additional imbalance between arms as the 5 subjects or 17% of active subjects had a Diffinia compared to only one subject or 10% of subjects in the control group. Diffinia is not across the cycling class at a rough event, and we saw more Diffinia in the control group than the active group in the increase study. As you can tell, we think that investors have overreacted to the TPEC phase 2B PH data. The baseline imbalance skewed the data in the opposite direction, and aggressive statistical analysis based on the missing of the random assumption may all contribute to the potential overestimation of the treatment effect. And we still have no convincing data in PH IOD. I will now hand the call to Jill Golding, our Chief Medical Officer, to outline the expected limited impact that we believe TPEC will have on the market if it's approved.

Thank you, CQ. We believe that investors have overreacted to the TPIP data and misunderstand the opportunity or lack thereof in the marketplace. Specifically, we do not see a near-term path to market an IPF. Long-term safety has not been proven. A potential launch, even if it happens, is many years away, and our business profile will look very different if and when TPIP reaches the market. So first, TPIP lacks a clear path to approval an IPF before 2034 if Tiveso gains approval in 2027 due to orphan drug exclusivity. Further, as an Ester Pro drug, TPIP would need to show clear clinical superiority over Tiveso or a meaningful improvement in patient care, and less frequent dosing may not qualify. The slide lists an example for Loomrize from Avidel that was the only recent declaration of meaningful improvement in patient care by FDA that was of the same dosage form. Next, long-term safety data for a Liposomal Pro drug and pulmonary hypertension is lacking, with the longest studies covering only 16 weeks. For progressive diseases like PAH, PHILV, and IPF, robust long-term data is essential. Recent experience with Sotatarsep, for example, shows that even after FDA approval, unexpected safety issues can arise over time, highlighting the need for caution. So if TPIP were to pass through all these remaining hurdles, it's still the end of the decade, or even the next decade, before the product will reach the market. Recent Phase III studies in PH have taken an of three years to complete, with clinical outcome studies taking even longer to complete. So if everything works perfectly, we could see a product on the market in late 2029 or 2030. Looking ahead to 2030, then, the market landscape will likely shift significantly. If the true, if the advanced outcome study succeeds next year, Rilinopag may become the first true once-daily oral prostate cyclin for PAH, potentially reducing the need for inhaled therapies like TPIP. We're also working on our own once-daily inhaled prostate cyclin, which is on a similar development timeline as TPIP and could serve both PAH and PHILV. Additionally, in line with our approved and improved strategy, we're developing new tibaso devices and combinations to enhance convenience for patients. And lastly, by 2030, our organ development programs could begin generating revenue, making competition from small molecule drugs relatively minor compared to our broader long-term opportunities. So to close, with no near-term path to market and IPF, unproven safety, and many, many years before reaching the market, we have little reason to be concerned about our prospects in the face of TPIP. And with that, I'd like to turn the call back to Martin to start our Q&A session. Martin?

Thank you, Gil. Operator, you can open up the phones for Q&A.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one, on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Olivia Brewer from Canton Fitzgerald. Please go ahead.

Operator, are you on mute?

Operator, maybe you should proceed to the next question.

Yes, Ms. Olivia, can you hear us?

Yep. Can you guys hear me?

Yeah, please go ahead. Yep, we can.

Okay, perfect. Sorry about that. Hi, good morning. Thank you for the question. Any comments on what you're seeing in terms of eutropia uptake in both pH and ILD so far? I mean, it looks like you're not really seeing any impact on DPI, but I appreciate anything you can tell us. And any color on why nebulized Tyvaso was down sequentially, whether that had more to do with ordering patterns or any sort of demand trend that you're seeing. And then I've got one follow-up question on Teton, if you don't

mind. Olivia, there's no more. There's so many people in the cube. There's not going to be time for a follow-up question. Sorry. The marketing question, Michael will handle. Sure.

Thanks for the question, Olivia. Based on the visibility we have into what's going on, which admittedly is not perfect, things are going about as we expected in terms of launch. And we finished Q2 really strong in terms of shipments and orders in June, July based on what we're seeing so far looks really good. Really from our standpoint, no surprises in terms of what we're seeing in terms of the launch. As I said in my opening remarks, we know that docs are curious people. There's a new kid on the block, a new product, and some of them are going to want to try it out and see what it could potentially do for patients, particularly in light of some of the claims that liquidity is making about their product. We're seeing a little bit of that. But as I said, to really wrap up my opening remarks, I think we're really confident that with Tideso's DPI product profile plus the associated support that we provide to physician offices and patients, along with the really deep experience, you know, more than 10,000 patients have used DPI. You've got almost 3,000 prescribers for Tideso DPI. So we thank you over the long term. That's going to support continued growth of Tideso DPI well into the future.

Thank you, Michael. Operator, next question.

Operator? The next question comes from the line of Joseph Thom with TD.com. Please go ahead.

Hi, there. Good morning. Congrats on the progress, and thank you for taking my question. Lee called out the variability seen in FDC decline in placebo arms of IPF studies. Is there a way in the T10 trials that you attempted to standardize this, or is there a way to make this predictable? And when we think about any considerations in clinical practice between your US experience, what should we think about when we see the first data in September and translatability into the US trial in the first half of next year? Thank you.

Thank you, Joe. Questions relating to T10 will be answered by Dr. Cleavishon.

Thanks, Marcine. Yeah, so that's, again, as you noticed, there's wide, very wide variability in FDC measures, and this really shows in the placebo arms, especially of the two approved drugs. What we've done to really narrow that is we have a central readers of our FDC results, and we've also made very huge attempts at each, at the site level in order for training and for, you know, on the procedures and to make sure that people are doing everything consistently with regard to the pulmonary function testing. And so, you know, that's really been at the top of our list as far as management of these studies. And so hopefully we will see that we have less variability, which will, you know, show better, a true result.

Thank you very much, Dr. Peterson. Operator, next question,

please. The next question is from the line of Jessica Faye from JPMorgan. Please go ahead.

Hey, guys. Good morning. Thanks for taking my question. Another one for Dr. Peterson, which is really a question that we hear from investors, and that is how to read across from the compelling increase IPF subgroup where the patients saw improvement in FDC, but they also all had pulmonary hypertension. And so the question is, how do we read that across to an IPF population where presumably, you know, the majority of folks are not going to have pulmonary hypertension? Can you address that kind of question on the read across? And if I can ask one more, it would be just whether you can touch on the circumstances under which you would deploy the Share Repo authorization. Thank you.

Thank you, Jess. Dr. Peterson, it's another ketone question for you.

Yeah, sure. Yeah. So, I mean, as I discussed in my script earlier, Teprosanol has very, you know, multiple mechanisms of action. It works through multiple receptors. And so an increase, of course, we'd already seen, I mean, TIVASO had already been approved for PAH. And we believe, and some non-clinical studies support, that that really is, you know, for PAH, the main mechanism, as I also discussed, is through maybe a vasodilation function. And that tends that at least the non-clinical studies have shown that really is working through the IP receptor to do that. But on top of it, there's other receptors, EP2 receptor, DP1, PPAR receptors, that they have additional functions that they basically, you know, as I went through, they can inhibit IVF activity and extracellular matrix deposition and really work on the fibrosis end of the disease. And so, while, you know, Teprosanol does work on IP, working through these other receptors, we believe that it can work on fibrosis, which means it would be effective in IPF and PPS. So again, multiple mechanisms of action would lead to efficacy in multiple indications.

Superb answer, Dr. Peterson. James Edgeman, could you kindly address Jess's question regarding the buyback?

Yes, thanks, Martine. And Jess, thanks for the question. Good to hear your voice this morning. We did announce this morning that our board of directors authorized a share repurchase of up to ,000,000. It's a little bit of background, maybe as to why now. It really is given the continued strength of our commercial business, our robust balance sheet, our confidence in our upcoming catalysts, and our belief in our share price potential, we and the board of directors concluded that now was the right time to authorize this share repurchase. And like many shareholders we've met with, we believe the return of capital represents confidence in our near term, as well as long term business prospects. And we share the view of many shareholders that our stock is an excellent investment opportunity. So Jess, thanks for the question, and Martine, back to you.

Thank you so much for that great response, James. Operator, you may take the next question.

The next question is from the line of Roger Song from Jeffries. Please go ahead.

Great, congrats for the progress, and thank you for taking our question. Also a question related to QITOM. So given the increased subgroup data and then the powering assumption 80% to detect the 80 milliliter difference, so what will be considered clinically for FVC results from that trial, and what will be the home run scenario from that trial? And then also follow up on the Jessica's question earlier. So do you have a sense or any cop level comment on how many patients from the QITOM is actually having the pulmonary hypertension with the ITF versus the pure ITF? Thank you.

Thank you, Roger, for that concatenated question. It's all basically in the domain of biostatistics, so I'll ask Dr. Deng to kindly answer that question.

Since the QITOM study, we are testing the anti-fibrolic effect, not the vector dialect effect. So we designed our study to ensure the patient is similar to other ITF studies, not try to design the study similar to previous PH ILD studies. So we actually did not perform the hemodynamic measure to actually determine if the subject had pulmonary hypertension or not.

Thank you, CQ, for responding to Roger's question. Operators, you can open the line for the next question.

The next question is on the line of Andreas Argeris from Oppenheimer. Please go ahead.

Good morning. Thanks for taking our question. Congrats on the corner, all the positive updates. Appreciate the additional color here. I wanted to ask about Rolenepeg. With the PH space moving towards more convenient dosing, can you share your thoughts more on the Rolenepeg opportunity with once daily oral dosing and the powering assumptions from the advanced outcome study? And then just a quick question for Dr. Peterson. You mentioned the refined imputation for TITON2. Can you expand on how that method aligns with the FDA expectations and whether this adds confidence and strength of the upcoming readout? Thank you.

All right, Andreas. Thanks for the kudos on the quarter. And both of those questions are早 q p vo avoided. Since we to Rolenepeg,

there are aing no reports for outstanding shots. I am sorry. I guess they received a report little early an exaggerated route forward perhaps on that report. I think even Rolenepeg feelshooutilized events and we're on target to achieve the number of clinical worsening events to be able to see a difference and to detect a treatment difference by the end of the year. And so I think that was your question about the powering and then you had a Teton question and I didn't quite get all of that. I'm sorry. Andreas,

can you repeat your Teton question? He's out of the queue now. Okay, well, I'm sure IARS can follow up with him. Operator, can you answer the next question?

Oh, yes. The next question is from the line of Ash Verma from UBS. Please go ahead.

Yeah, thanks for taking my question. So I wanted to ask about the design of Teton studies specifically about the potential amputation of measurement for discontinuation for the protocol. So in this case, based on your protocol, would these be reported as a missing or a zero or excluded from the analysis? So that's one. And then secondly, to the extent like there is -2-induced cough in the study, wouldn't that mean functional unblinding if patients are only seeing that in the IVF alarm? Thanks.

Okay, thank you, Ash, for that question. I'd like to ask CQ if he could answer the first part of the question, CQ if you got it all, and then Dr. Peterson to answer the second part of the question on the unblinding.

So I'll address that potential unblinding due to the cough event. Actually, based on the previous study, even the patients who are randomized to the placebo group, they will also experience some cough events. So it's a lot that just once you see there's a cough event, you can guess that the subject will be in the active arm. So you probably see a little more cough in the active group than placebo group, but placebo patients also experience the cough events. So we don't think that unblinding, potential unblinding is an

issue there. Thank you, CQ. Dr. Peterson, since you answered kind of the second question, do you want to comment on the first question?

Yeah, so we talked quite a bit about the deaths, how they'll be penalized with the FVC value at 2.5 percentile of observed values. And then discontinuations for other reasons will be handled through statistical models like the mixed model repeated measures or multiple imputation. And yeah, and I agree with what CQ said. I mean, it's just like any study where there's a known AE that can be associated with the treatment, but very often, you know, there's a similar AE that's seen with the placebo. And we, I mean, we generally are, we definitely are surprised at the end of the day sometimes where we see things we think, oh yeah, maybe that's not active because of cough. It's definitely not. So I would say there's no risk, and especially in the study of cough, because people cough a lot just by inhaling placebo. So no worries,

sir. Perfect. Dr. Peterson, thank you so much. Operator, can you take the next question, please?

The next question is from the line of Jason Gerberi from Bank of America. Please go ahead.

Hey, guys. Thanks for taking my question. Mine's also just on IPF. And I guess the physician KOL seemed to think that the Neurondomal S data at ATS were pretty underwhelming, just the neutral benefit on exacerbation as a secondary endpoint and the lack of a p-value in the monotherapy subgroup. So I'm just kind of curious, you know, how important is it in your view to show a meaningful improvement on the exacerbation as well as sort of establish with stats a benefit maybe in a pooled manner in the monotherapy subgroup?

Thank you so much for the question. And Dr. Peterson, I think you'd be the best person to answer it.

Okay, yeah. So I mean, yeah, there was definitely a positive study for the fibroneer IPF and PPS. But and they met their endpoints. They had 90% power to detect a 74-milliliter change in FVC. We're 80% power to detect 80-milliliter change. But we, you know, obviously we look forward to seeing events or seeing results where, you know, there's, ideally we would see that our FI-VASO is disease modifying and that patients don't decline. However, we may see a slight decline or more decline. But we fully anticipate having a clinically meaningful effect, which would be greater than 80-milliliter change in FVC. So again, but blinded, we will know in September.

Well, thank you so much, Dr. Peterson. That's an excellent answer. And operator, you can take the next question.

The next question is from the line of Terence Flynn from Morgan Stanley. Please go ahead.

Great. Thanks so much for taking the question. I'll stick to one. Just on Teton, when you look at background therapy from the increased study, it looked like there was maybe a difference in terms of patients that were on background TKI versus those that were on no background TKI. And so maybe you could just talk through that dynamic. And then as we think about the Phase 3, the mix there and how that might impact the overall treatment effect that you're expecting to see. Thank you so much.

Thank you, Terence. Good to hear your voice this morning. Dr. Peterson, you'd be the best person.

So we, I mean, definitely versus increase, we see more background therapy use in both Teton 1 and Teton 2 as shown on one of the slides that I went through today. Teton 1 and Teton 2 have 77% background therapy use and 75%. So it's more, I mean, it can, just like any, again, any study when you have effective background therapy, then it can mute your efficacy of your investigational drug. But again, we're right in there. Fibernear IPF also had 78% use of background therapy. And there's a lot of room for improvement. I mean, I also showed the slide that the patients even on the active background therapies have, you know, have a significant decline in FVC. So there's a lot of room for improvement. And this is exactly what we expected as far as the use of background therapy. So again, stay tuned in September, but that doesn't, it's not a concern.

Dr. Peterson, thank you so much. Just because you've been on the phone so much answering these questions, I do want to toot your horn for a moment to make sure these questioners understand your expertise, that you are the lead author on the New England Journal of Medicine publication on our increased study, in addition to being the lead author of our physiological reviews publication on xenotransplantation. So folks on the phone, your privilege really to hear from such an expert sources, Dr. Peterson. Operator, I think we're ready to take the second questions from people. So next question.

Oh, Martin, there's no more questions in the queue, but I do have Andreas's follow up question. And he was asking, can you expand on how the FVC imputation method in Teton aligns with FDA expectations and whether this adds confidence in the strength of the upcoming readout? So it relates to the recent change in how we handle deaths in that study.

Sure. Well, since we have the New England Journal of Medicine lead author in this field on the line, we'll ask Dr. Peterson to answer.

Yeah, and I must, I must correct. I'm not lead, but I'm one of them. But for that one. But thank you, Martin. I think you

are the boss. You are the boss of the lead.

Okay. What was the question? Yeah, so we have our statistical analysis plan is very lengthy and very long. And all of that is submitted to FDA for their feedback. And so, and often they and they have and given us feedback. Again, we've talked extensively about the death penalty with them. This is what this is the current feedback as just, you know, just a few weeks ago. So that's already set. And then CQ and his group have been in conversations with FDA about as was true for increase, the these studies where, you know, what specific statistical models should be used and how to impute the measures again, the mixed model repeated measures or multiple imputation.

Perfect. Thank you so much, Dr. Peterson. Thank you, folks on the call. Operator, you can wrap up the call now.

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