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United Therapeutics (UTHR) Q3 Earnings Up Y/Y, Revenues Beat

United Therapeutics Corporation UTHR reported earnings of $6.27 per share in the third quarter of 2017, substantially higher than $3.50 per share in the year-ago quarter. The Zacks Consensus Estimate stood at $4.01 per share.

However, adjusted earnings, excluding share based compensation expenses, impairment costs and other items, came in at $4.69 per share for the same period, which increased 11% compared with the year-ago quarter.

Revenues for the reported quarter were $446 million, beating the Zacks Consensus Estimate of $431 million. Revenues also grew 9.3% year over year. Stronger sales across the pulmonary arterial hypertension (PAH) franchise improved the top line in the quarter.

Shares of United Therapeutics has underperformed the industry so far this year, having declined 14.3%. While the industry has decreased 1.9% during the period.

 

Quarter in Detail

United Therapeutics markets four products for the treatment of PAH — Remodulin, Tyvaso, Adcirca and Orenitram.

The company reported Orenitram sales of $52.5 million in the quarter, up 29% year over year. Adcirca sales were $99.8 million, up 4% year over year. Remodulin sales were $187.3 million, up 23% year over year. Tyvaso sales totaled 88.9 million, down 13% year over year. Sales of Tyvaso also declined sequentially in the quarter. Unituxin (for treatment of pediatric patients with high-risk neuroblastoma) sales of $17 million were down 2% year over year.

Research and development (R&D) expenses escalated 20% to $55 million due to higher costs to support the company’s pipeline of cardiopulmonary and cancer drugs and to develop its organ manufacturing projects.

Selling, general and administrative (SG&A) expenses plunged 53% to $47.2 million as lower consulting and marketing costs offset higher legal costs.

Pipeline Update

United Therapeutics is working with medical device maker Medtronic, Inc. MDT, to get an implantable pump for delivering Remodulin (RemoSynch), approved by the FDA. In order to launch RemoSynch in the United States, both companies are pursuing parallel regulatory filings related to the device and the drug.

We remind investors that in April, United Therapeutics announced that regulatory issues will delay the planned U.S. launch of RemoSynch. The company now expects to launch the same sometime in 2018 instead of the first half of this year, as expected previously. United Therapeutics is also working with DEKA technology company for developing a pre-filled, semi-disposable pump system for the subcutaneous delivery of Remodulin (RemUnity). Clinical studies on RemoPro, a pain-free new chemical entity version of treprostinil, are expected to begin this year.

Other phase III pipeline programs include an oral combination therapy of Orenitram — OreniPlus (FREEDOM-EV study), Tysuberprost (esuberaprost in combination with Tyvaso), Tyvaso-ILD (Tyvaso being evaluated in patients with PAH, associated with idiopathic pulmonary fibrosis) and OreniLeft (PAH with left ventricular diastolic dysfunction).

The company has also begun clinical development of dinutuximab, an active ingredient in Unituxin, for small cell lung cancer (phase III DISTINCT study).

Zacks Rank & Key Picks

United Therapeutics carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector include Ligand Pharmaceuticals Inc. LGND and Novo Nordisk A/S NVO. While Ligand sports a Zacks Rank #1 (Strong Buy), Novo Nordisk carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up from $3.68 to $3.70 for 2018 over the last 30 days. The company delivered positive earnings surprises in two of the trailing four quarters with an average beat of 6.19%. The share price of the company has surged 40.4% year to date.

Novo Nordisk’s earnings per share estimates have inched up from $2.37 to $2.39 for 2017 and from $2.51 to $2.54 for 2018 over the last 60 days. The company came up with positive earnings surprises in three of the trailing four quarters with an average beat of 3.63%. The share price of the company has rallied 39.8% year to date.

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