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United Therapeutics (UTHR) Down on Q4 Earnings & Sales Miss
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United Therapeutics Corporation (UTHR - Free Report) reported adjusted earnings of $2.64 per share (including after-tax impact of stock-based compensation expense) for fourth-quarter 2016, which missed the Zacks Consensus Estimate of $3.62 by 27.1%. Adjusted earnings, excluding stock-based compensation expense, were $4.12 per share, up 8.4% year over year.
Revenues for the reported quarter increased 1% year over year to $409 million but fell short of the Zacks Consensus Estimate of $424 million.
The Quarter in Detail
United Therapeutics markets four products for the treatment of pulmonary arterial hypertension (PAH) – Remodulin, Tyvaso, Adcirca and Orenitram.
Orenitram reported sales of $38.3 million in the quarter, up 3% year over year. Adcirca reported sales of $112.7 million, up 23.2% year over year. Tyvaso sales totaled $93.6 million, down 21.5% year over year. Remodulin sales were $151.2 million, up 7.6% year over year. However, Remodulin sales slightly declined sequentially. Unituxin (for the treatment of pediatric patients with high-risk neuroblastoma) reported sales of $13.2 million, down 16.5% year over year.
At the call, the company said that growth of its PAH drugs Orenitram, Tyvaso and Remodulin was slower than expected due to increased competitive pressure. The company said that patients were staying longer on oral PAH therapies like Adcirca and Gilead Sciences Inc.’s (GILD - Free Report) Letairis (ambrisentan), and Actelion Ltd.’s latest PAH drug, Uptravi (selexipag).
Research and development (R&D) expenses (including stock-based compensation expense) in the fourth quarter declined 11.9% from the year-ago quarter to $66.9 million. Selling, general and administrative (SG&A) expenses (including stock-based compensation expense) also declined 6.2% from the year-ago quarter to $100.1 million as higher grants were offset by lower share-based compensation expenses.
2016 Results
Full-year sales improved 9% to $1.6 billion, missing the Zacks Consensus Estimate of $1.616 billion.
Adjusted earnings, excluding stock-based compensation expense, were $16.00 per share, up 29.8% year over year.
Our Take
United Therapeutics’ fourth-quarter results were disappointing, with both earnings and sales missing estimates. Shares declined 12.5% on Wednesday, in response to the weak quarterly results and probably management’s commentary about increased competitive pressure from oral therapies. A look at United Therapeutics’ share price movement shows that the stock has underperformed the Zacks classified Medical - Drugs industry this year so far. United Therapeutics gained 2.5% during this period, while the industry rose 6.9%.
Competition in the PAH market is on the rise. Nonetheless, the company is working on new delivery mechanisms for Remodulin and expanded indications for its other marketed products, which might drive long-term growth.
The company is working with Medtronic plc (MDT - Free Report) to get an implantable pump for delivering Remodulin, called RemoSynch, approved by the FDA. Medtronic’s catheter, which is necessary for the RemoSynch system to work is under FDA review (PDUFA date Apr 10, 2017). United Therapeutics expects to launch the RemoSynch system in the first half of 2017. The company is also working on the development of a pre-filled, semi-disposable pump system for subcutaneous delivery of Remodulin, RemUnity, which is expected to be approved in 2018.
United Therapeutics Corporation Price, Consensus and EPS Surprise
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United Therapeutics (UTHR) Down on Q4 Earnings & Sales Miss
United Therapeutics Corporation (UTHR - Free Report) reported adjusted earnings of $2.64 per share (including after-tax impact of stock-based compensation expense) for fourth-quarter 2016, which missed the Zacks Consensus Estimate of $3.62 by 27.1%. Adjusted earnings, excluding stock-based compensation expense, were $4.12 per share, up 8.4% year over year.
Revenues for the reported quarter increased 1% year over year to $409 million but fell short of the Zacks Consensus Estimate of $424 million.
The Quarter in Detail
United Therapeutics markets four products for the treatment of pulmonary arterial hypertension (PAH) – Remodulin, Tyvaso, Adcirca and Orenitram.
Orenitram reported sales of $38.3 million in the quarter, up 3% year over year. Adcirca reported sales of $112.7 million, up 23.2% year over year. Tyvaso sales totaled $93.6 million, down 21.5% year over year. Remodulin sales were $151.2 million, up 7.6% year over year. However, Remodulin sales slightly declined sequentially. Unituxin (for the treatment of pediatric patients with high-risk neuroblastoma) reported sales of $13.2 million, down 16.5% year over year.
At the call, the company said that growth of its PAH drugs Orenitram, Tyvaso and Remodulin was slower than expected due to increased competitive pressure. The company said that patients were staying longer on oral PAH therapies like Adcirca and Gilead Sciences Inc.’s (GILD - Free Report) Letairis (ambrisentan), and Actelion Ltd.’s latest PAH drug, Uptravi (selexipag).
Research and development (R&D) expenses (including stock-based compensation expense) in the fourth quarter declined 11.9% from the year-ago quarter to $66.9 million. Selling, general and administrative (SG&A) expenses (including stock-based compensation expense) also declined 6.2% from the year-ago quarter to $100.1 million as higher grants were offset by lower share-based compensation expenses.
2016 Results
Full-year sales improved 9% to $1.6 billion, missing the Zacks Consensus Estimate of $1.616 billion.
Adjusted earnings, excluding stock-based compensation expense, were $16.00 per share, up 29.8% year over year.
Our Take
United Therapeutics’ fourth-quarter results were disappointing, with both earnings and sales missing estimates. Shares declined 12.5% on Wednesday, in response to the weak quarterly results and probably management’s commentary about increased competitive pressure from oral therapies. A look at United Therapeutics’ share price movement shows that the stock has underperformed the Zacks classified Medical - Drugs industry this year so far. United Therapeutics gained 2.5% during this period, while the industry rose 6.9%.
Competition in the PAH market is on the rise. Nonetheless, the company is working on new delivery mechanisms for Remodulin and expanded indications for its other marketed products, which might drive long-term growth.
The company is working with Medtronic plc (MDT - Free Report) to get an implantable pump for delivering Remodulin, called RemoSynch, approved by the FDA. Medtronic’s catheter, which is necessary for the RemoSynch system to work is under FDA review (PDUFA date Apr 10, 2017). United Therapeutics expects to launch the RemoSynch system in the first half of 2017. The company is also working on the development of a pre-filled, semi-disposable pump system for subcutaneous delivery of Remodulin, RemUnity, which is expected to be approved in 2018.
United Therapeutics Corporation Price, Consensus and EPS Surprise
United Therapeutics Corporation Price, Consensus and EPS Surprise | United Therapeutics Corporation Quote
United Therapeutics carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>