It has been about a month since the last earnings report for United Therapeutics (
UTHR Quick Quote UTHR - Free Report) . Shares have lost about 6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is United Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q3 Earnings & Sales Beat
United Therapeutics reported earnings of $3.42 per share for third-quarter 2021, beating the Zacks Consensus Estimate of $3.37 per share. However, earnings declined 11% year over year.
The abovementioned earnings include the impact of share-based compensation expenses, impairment charges and other items. Excluding these items, adjusted earnings were $4.16 per share, up 7% year over year driven by higher revenues. Revenues for the reported quarter were $444.7 million, which beat the Zacks Consensus Estimate of $416.0 million. Revenues rose 17% year over year driven by double-digit revenue growth of Tyvaso, Orenitram and Unituxin. United Therapeutics markets four products for pulmonary arterial hypertension (PAH) — Remodulin, Tyvaso, Adcirca and Orenitram. Quarter in Detail
Orenitram sales amounted to $85.2 million in the reported quarter, up 14% year over year due to higher volumes resulting from patient growth, following the FREEDOM-EV label expansion. A price increase also pulled up Orenitram sales in the third quarter. The company saw the highest number of new patients on Orenitram at the end of the third quarter.
Tyvaso sales totaled $164.2 million, up 27% year over year, gaining from higher volumes as a result of patient growth, following the label expansion approval for the PAH associated with interstitial lung disease (PH-ILD) indication in April. The approval was based on data from the phase III INCREASE study. With the approval for this indication, the company expects around 6,000 U.S. patients on Tyvaso therapy by the end of 2022. Approximately 4,000 U.S. patients were on Tyvaso therapy at the end of the third quarter. Remodulin sales were $125.4 million, up 1% year over year. A generic form of subcutaneous Remodulin was launched in the second quarter of 2021. After an initial bolus of subcutaneous Remodulin patients switched to the generic, generic transitions have tapered off to a negligible amount with the start of the fourth quarter. In fact, Remodulin’s new patient starts remain at or above the company’s long-term trend levels Unituxin’s (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $55.3 million surged 47% year over year driven by volume growth and price increase. The revenues included $9.0 million related to the launch of Unituxin in Japan. Adcirca sales were $14.6 million, up 6% year over year Research and development (R&D) expenses were $79.2 million in the quarter, up 15% year over year primarily due to increases in spending related to cardiopulmonary programs. Selling, general and administrative expenses rose 65% to $109.1 million in the quarter due to higher legal and consulting costs. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 12.4% due to these changes.
Currently, United Therapeutics has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, United Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.