We recently downgraded United Therapeutics (UTHR">UTHR) to Neutral. United Therapeutics is focused on the development and commercialization of therapeutic products for patients with chronic and life-threatening diseases.

The company's lead product is Remodulin (treprostinil), indicated for the treatment of pulmonary arterial hypertension (PAH) in patients with New York Heart Association (NYHA) Class II-IV symptoms. Remodulin is approved for both subcutaneous (SC) and intravenous (IV) use.

The company received approval for an inhaled version of treprostinil, which is being marketed under the trade name Tyvaso. In May 2009, United Therapeutics received US Food and Drug Administration (FDA) approval to market Adcirca (tadalafil) for the treatment of PAH. The company licensed certain exclusive rights to tadalafil from Eli Lilly (LLY">LLY) in November2008.

We believe United Therapeutics is well-positioned to gain share in the PAH market. Lead product, Remodulin, continues to look very strong in both the intravenous and subcutaneous forms. With the approval of Adcirca and Tyvaso, the company has a varied range of therapies available for the treatment of PAH. We believe United Therapeutics’ PAH product portfolio will drive strong top-and bottom-line growth.

The company is working on strengthening its PAH franchise further through the FDA approval of an oral version of treprostinil. United Therapeutics filed for approval of oral treprostinil in late December 2011. Acceptance of the new drug application by the FDA could lead to a final decision being delivered in the second half of 2012. However, we are not too bullish on the company’s chances of gaining approval for oral treprostinil, given the mixed data on the candidate.

Moreover, United Therapeutics’ weak late-stage pipeline concerns us. We were disappointed to hear that the company has suspended its plans to commence phase III studies with its most advanced pipeline candidate, beraprost-MR, in December 2011.

With beraprost-MR failing to meet its primary and secondary endpoints in a phase II study, United Therapeutics has decided to review the data before commencing phase III development. Given the early stage nature of the rest of the pipeline, we do not see any near-term pipeline catalysts that could drive the stock.

Given the lack of significant near-term catalysts, we expect the stock to remain range bound in the coming months and are moving back to a Neutral recommendation. United Therapeutics carries a Zacks #3 Rank (short-term Hold rating).