United Therapeutics Corporation ($UTHR)

This morning as well armoring as well as to here -- thanks so much for joining us today. How are you both doing?

Good morning. Thank you, Lisa, and really thanks RBC for hosting United Therapeutics this morning. Harry and I are really glad to be here. I'm going to turn it over to Harry to do an opening statement. -- looking statements before we start, if that's okay.

Thanks for having this Lisa -- just to remind investors in the crowd and listening in, we may make forward-looking statements. And for any risks and uncertainties associated with those statements, please review our latest filings on Form 10-K and Q.

Well, James here, maybe just to kick things off, could you just give us a big picture overview on what's going on with the company and the base business and when things stand with expansion, label expansion of Tyvaso into IPF.

Yes, Lisa, thank you. It's a great question. And I think you'll be hard-pressed as Martin talked about on the last earnings call to find a mid-cap biotech company with as many projects and initiatives that are ongoing inside UT. And I think as an example, we just proved beyond the shadow of a doubt in 2 separate clinical trials of clinical efficacy in 2 different disease states that had better clinical outcomes than really any other clinical trial and those being the TETON 2 clinical trial using Tyvaso, nebulized Tyvaso for idiopathic pulmonary fibrosis. As well as the advanced outcomes trial, which is using ralinepag an oral once-a-day formulation for PAH. And these indications and opportunities have revenue potential that exceeds what we're expecting as a revenue run rate at the end of 2027, basically to double the revenue run rate with these 2 indications once they're approved and on the market. So between these 2 clinical trials and all the other stealth programs that we've talked about, we feel the long-term opportunity from a growth perspective at United Therapeutics is significant.

Thanks for that, James. Well, I do want to dive into IPF and some of the data that you shared at ATS over the weekend. But maybe a big picture question for both of you. So there's been some regulatory volatility, the commissioner of the FDA has stepped down and I'm just wondering if there can be any impact to any of your regulatory plans either for IPF or some of your stealth products like the SMI? .

Yes. Thank you, Lisa. It's a good question. From our perspective, and we have interactions and ongoing conversations with FDA, even to the extent as of last Friday, we did a press release that announced the advancement of our EU Heart clinical trial for our organ manufacturing products which is pretty revolutionary. And including that clinical trial for the UHD, we have 3 clinical trials in organ manufacturing. And just to bring it back to your question, we've had great dialogue with the FDA. Even with transitions at the top of the organizations, we're really working with divisions within the FDA, cardiopulmonary, et cetera. And our relationships, our conversations have actually been extremely good, extremely consistent -- and the reason why I went back to this manufactured Oregon Heart discussion is the our dialogue with them has been very great. And so we're advancing projects and programs on our own and in conversations with the FDA, and it's been a very healthy dialogue. So no disruptions on our part.

Great. That's great to hear. Well, James Harry, you were both American Thoracic Society Meeting weekend. United had a bunch of presentations -- but maybe you could share some color on how the presentations for ralinepag, the advance outcome study that you alluded to earlier, as well as the TTM studies for IPF. How were those received by the medical community?

Yes. Lisa, I'll let Harry actually was there live and in person. So if you don't, I'm going to defer to Harry on this one. .

Yes. Thanks for the question. I'm Preston from Orlando. First of all, it's great to see at ATS, the community come together in pursuit of better outcomes for patients. Just a really great energy there overall. -- and particularly in our 2 breaking news sessions, which were accepted in the clinical trial section on Sunday. The receptivity really, I think, mirrors our own excitement in the large opportunities ahead in both IPF and ralinepag for PAH. When you think about the -- just the magnitude of the results that were presented, providing better options for patients that may currently be available.

Harry. Let's talk in IPF a little bit more. So the to studies really showed unprecedented results in the IPF patient population. And they were really convincing benefits with Tyvaso not only as a monotherapy, but also as add-on to current standard of care, the antifibrotic drugs. But maybe starting with the regulatory question, kind of the next steps kind of question. What is gating for the sNDA package that you're planning to submit before the end of the summer?

Yes. It's sort of a regular process, putting together the clinical study reports. We also have to do the integrated analysis report because there were 2 separate trials, TETON 1, and TETON 2 and just submitting all the regular requirements for the draft package inclusion. So we're on track for a filing by the end of the summer.

And Harry, should we expect to see priority review.

It's a good question, 1 that we get opt-in. What we think is that the magnitude of the data combined with just the still unmet need of this disease state, could warrant priority our view, and we're hopeful to get that.

I could assure you internally and the regulatory team are looking at every opportunity they can. One is to get the filing done right. We always have time to get it done right. But then two, is looking for the opportunity to advance it because of the benefit that you saw in the clinical trials, we really want to make sure we can get that to patients.

Does the commissioners national priority review voucher count is looking at every angle of the opportunity?

Any insight, but we look at every opportunity.

Well, I like to joke that it was called colocally the McCary voucher. And well, we all know he's not around anymore. So it's kind of ambulance, I think.

Fair enough -- maybe let's talk about a potential launch in which patients would be the low-hanging fruit here? Should we think of refractory patients who are already on an oral antifibrotic pill, those who maybe cannot tolerate the oral therapies.

Yes. I would say it's pretty clear from the data just based on the magnitude of the benefit observed, the consistency across all the subgroups in the safety and tolerability profile, which is well known. that almost any patient could and should benefit from this therapy.

So do you think doctors are interested in using Tyvaso as a first-line monotherapy. I mean, we saw with the combined TETON results that it was statistically significant as a monotherapy. So is that something that doctors are talking about at ATS maybe?

Yes, absolutely. You certainly hear the that bubble up in the conversations. And we ourselves have said the same thing. Kind of, again, marrying my first answer, it's very clear from the data when you look across every patient in this study really seems that they could benefit. So -- and you think about the first -- the existing orotic agents, too, like -- they're so untolerable and the efficacy really is -- seems to be waning over time for those drugs. So I think positioning this ahead of those could be beneficial. And certainly, you'll probably see doctors try that.

And are any doctors interested in trying Tyvaso as an add-on to cascade the most recent IPF antifibrotic that was launched.

So obviously, there's no clinical data that TETON studies did not contemplate near and Domlast. But I think there is a very clear scientific reasonableness to try out the combo and suspect doctors would do that.

Got it. That's helpful. And maybe just a last 1 here on IPF. You announced during the first quarter that there was going to be plans to develop not just nebulized Tyvaso, but Tyvaso DPI for IPF. So given that you have the TETON results in hand with the nebulized formulation, what do you need to do to get the DPI formulation across the line and get it to IPF patients?

Yes. Again, a question that we're getting a lot. And we certainly can appreciate the opportunity in terms of the convenience of the DPI. What I would say is we're still working out the clinical development pathway when you think about branching out into the fibrotic disease with entirely new compound into that space, entirely new device into that space. We certainly look forward to sharing more as we finalize those plans.

Got it. Well, I do want to talk and spend a little bit more time talking about the Q1 results as well as some of your forward-looking guidance, like the $4 billion run rate and beyond. And maybe for you, James, we can just dive in here. So if you want the Tyvaso franchise came in a little bit light versus consensus estimates, but it sounded like this was partially due to the awful winter weather that we had and maybe some challenges at 1 of your specialty pharmacies, yet you are continuing to guide double-digit top line growth for 2026. So my question is, how do we get there? How do we get the double-digit growth for this year?

Yes. Thank you, Lisa. It's a good question. So at a top level, we do remain very confident in the long-term growth of Tyvaso DPI. And we say that with conviction. We believe that as a device it is very simple, easy to use. From a dosing perspective, it has unlimited dosing. And we think the benefit that has already been realized by the thousands of patients and prescribing physicians sets it up for the long-term growth opportunity. It's a space that we know extremely well, and it's a network of prescribing physicians that we feel we're going to continue to grow in that space. So as you alluded to, there were some anomalies that occurred in the first quarter. That is something that we have addressed internally. And we really look to the long-term opportunity that Tyvaso provides to the patient population including better tolerability, for example, over the long term. So there's many attributes and reasons why I believe this. It's for us to own -- and over the long term, we still believe at the end of the day, we're going to be the best process licin prescribed for Tyvaso DPI in the market.

And do you think now that the TETON data is widely available now? You have 2 New England Journal of Medicine publications. You have all these presentations just this weekend at -- could we perhaps start to see doctors try to find PH diagnosis in their IPF patients to essentially get them to a true PH-ILD diagnosis and get more patients on to Tyvaso.

Yes. So from an approved product perspective, PAH and PH-ILD are the approved indications, PH, ILD is obviously the growth driver for us. and will continue to be until these 2 new indications, 1 being Tyvaso nebulized and IPF. I think you're right, though, from an awareness perspective with all the presentations, publications, I think physicians are highly aware of it. Now how they diagnose and look at their patient populations, will be really up to them, but we think the awareness and the opportunity to improve the patient outcomes is there, for sure.

And do you want to talk about your competition, your competitor, Liquidia. They -- in Q1, they beat estimates and their product, Utrepia, arguably now has about 30% of the inhaled chipospital market. I guess we could debate that number on a revenue basis. And so hearing in terms of feedback from doctors in terms of how their experience compares with Utrepia versus how it compares with Tyvaso? And where can user win and PH-ILD patients with Type.

Yes. I think where we win is, to some extent, leawhat I just mentioned to I think this is a long game. I think our device, the delivery mechanisms, the deep into the lung penetration. Things we've talked about is benefits with the device itself. In the long term will resonate with physicians and will actually be a benefit, we think, to patients. So there is some internal, as you alluded to, logistics, shocking things going around right now with competition. . But we do think from a product perspective, we do have a superior product. And we think over the long term, that's going to resonate with patients and physicians. So we're confident in that regard and I think time will tell. I think the sales force that Michael talked about is they should see some expansion later this summer as we onboard new sales teams for in advance of the IPF launch. They're going to be specifically focused on PH ILD, will give us more voice kind of feet on the street, again, to raise awareness. But I think in the long term, what I think will resonate best is really the product profile of Tyvaso DPI as a product and benefit for the patients long term.

So I do want to touch on the 2027 $4 billion run rate that has been reiterated multiple times now. And that means you're going to reach at least 1 quarter with $1 billion in revenue that year. So what are the key drivers? How do we get there? And is this mostly going to be driven by the IPS launch as well as the ralinepag launch in PAH?

Yes. Thanks. Good question. So, what we've talked about now for some time is that by the end of 2027, Lisa, we'll be on a quarterly revenue run rate of $1 billion. So it will be a $4 billion run rate. When we started talking about this, the basis for that was really going to be driven off the commercial business, so the existing business, which would be obviously the growth in for us, Tyvaso DPI and in the indication of PH-ILD. So that's really the commercial foundation, the commercial footprint of our current commercial products to get to a $4 billion run rate. The doubling of revenue to get to the $8 billion run rate that we've talked about would be with the approved indications for ralinepag in PAH and for Tyvaso nebulized in IPF. So right now, this $4 billion run rate is off the commercial portfolio, driven primarily off PH-ILD and Tyvaso DPI.

Got it. That's really helpful. And the $8 billion run rate, does that include also some of your other products like CSM or ralinepag DPI?

It could, but I think primarily, it's going to be off the indications of Tyvaso nebulized and IPF as well as ralenipag, and PH. Certainly, if there's any contributions from other products that are in development and in stealth mode and some not in stealth mode actually anymore because they came out on the last call, there could be revenue contributions, but the real focus has been to get to the $4 billion to $8 billion on IPF as well as PH for lean.

Well, maybe this is a good segue to talk about some of those new products that have been released into the open of TreSMI and RPI -- on TreSMI first, is everything on track for the FDA filing later this year and potential launch in 2027?

Yes. To be clear, so you're talking about pros Yes, our expectation is later this year, we'll be filing for the indications for Tyvaso is currently approved, so PAH and PLD.

Got it. And when or if could -- TreSMI be expanded into IPS?

Yes. Kind of similar to earlier when we talked about Tevaso-DPI into IP -- we're still working out the clinical development pathway. It's an entirely different division of the FDA than we typically work with. So cardiorenal division covers the pulmonary hypertension indications and the pulmonary division covers the fibrotic diseases. They have less familiarity with treprostinil with some of the bridging studies that we've done before. So -- it's possible a birding study may look different and less expeditious than what we're seeing in PAH and PHD, but we're still working on those plans and excited to share more.

Got it. And rolanopag-DPI, this is your once-daily inhalable answer to Insmed's TPIP. This has brought out a stealth-mode during Q1. There's a lot of excitement about this. When can we get our first look at clinical results of ronapag-DPI?

Nothing to commit to right now on timing for when you might see any data we are planning to move into Phase I later this year in the PAH indication with ralinepag DPI. .

Got it. And maybe what are the goals here with roronopag-DPI? Should we -- just think of this as a convenience play, is this life cycle management? Is this a hedge, just versus the competitors out there? Or could this be a in-class inhalable prostacyclin agent? .

Well, I think we can start where you ended. It could be a best-in-class for sure. I think 1 thing you'll find the data with relenepag in the advanced outcomes was so compelling that it does set up the opportunity to go into other indications as we talked about. As an organization, what you find with UT is we actually have the concept, what we call multiple shots on goal. So -- going back to your earlier question, ralinepag DPI, it's not necessarily response to anybody, but it's more our own innovation going forward of how we want to develop our products to satisfy the multitude of what Michael Baker, what's called on the earnings call, every patient is like a snowflake. They are very different in kind -- and we want to make sure we're developing not only therapies but platforms and delivery devices to best suit and satisfy the needs of the patient ultimately and their relationships with the prescribing physicians. So whether it's ralinepag or whether it's your prior questions around TreSMI, so SMI, it's just really a philosophy and a development program where you're seeing the outcomes of the product development team and the clinical development teams actually accomplishing an enormous amount of work. They're taking us to levels new heights and new levels at United Therapeutics that we haven't seen yet. So a lot of kudos to them. And I think, Lisa, coming back to your question, we're really going to take the opportunity based upon our product set, things you know about, some things you don't know about that are still in stealth mode, to ultimately provide the best opportunity for treatment for our patients for the long term. Again, it goes to the platforms we talked about in organ manufacturing. So you just saw or heard about last Friday, this press release on the advancement in organ manufacturing. -- for the U Heart, Again, these are opportunities for us to think about ways to satisfy what we call the corridors of indifference overall, where we have a lot of opportunity to run very little competition and we can help them support and serve the patients the best we can.

Maybe I'm not note on the Zeno transplant program. You have the transplant program going on the EXPAND study in kidney and of course, the heart program, which was just launched into the clinic last Friday, which you announced. So I guess when should we expect to hear any updates on these programs going forward?

Yes. So I think going forward, we'll get what the disclosure strategy looks like. The way the studies are designed, at least the ones that are currently enrolling right now between the 10-gene kidney and the 1 gene kidney with the Timisattach. It's cohort-based with the first cohort of 6 patients after which time you meet with the FDA to get a green light on the second cohort, which becomes registrational. So there may be a now to point in time after their first cohort where we could have a data package to share, but nothing to commit to at this time in terms of when, where or in what format you might see data. .

And maybe a bigger picture question for the Zeno transplant program. Is the goal for instance, in kidney, is the goal to delay dialysis is the goal to bridge patients to potentially receiving a transplant with a human kidney -- or is the goal to get a new kidney as needed because these are off the shelf and you could possibly do that. .

We think in the long term, it would be a replacement, for example, to an allograft. So we don't want to be in a situation for somebody to live to only be -- have that opportunity if somebody passed away. So this is a chance to provide an unlimited supply of organs to patients that could have similar duration in terms of length as allografts that you currently see or even longer. So this is an opportunity, we think, to be able to provide and satisfy this huge demand. As we sit here today, there's 500,000 patients on dialysis who are needed a kidney. We think that we could give them -- ultimately, if this is successful in kidney that would last as long as an allograft or longer, just as a comparison to maybe not need a new one. But should they need one, we would be ready to provide them 1 as well should the program be successful?

Well, James, on that note, we are out of time. So we'll end things there. James, Harry, Pleasure to have you both this morning. Thanks so much for joining us. .

Lisa, thanks for having us. Thank you.