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United Therapeutics (UTHR) Q4 Earnings & Sales Miss Estimates

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United Therapeutics‘ (UTHR - Free Report) fourth-quarter 2022 adjusted earnings of $2.67 per share missed the Zacks Consensus Estimate and our model estimate of $4.12 and $3.73, respectively. Earnings rose 13.6% year over year.

Revenues in the reported quarter were $491.5 million, which slightly missed the Zacks Consensus Estimate of $492.4 million. Revenues rose 18% year over year, driven by Tyvaso. The reported revenues, however, beat our model estimate of $475.6 million.

Shares of United Therapeutics were down 4.5% in response to the lower-than-anticipated earnings reported by the company. Yet, the stock has risen 45.3% in the past year period againstthe industry’s decline of 11.8%.

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Quarter in Detail

United Therapeutics markets four products for pulmonary arterial hypertension (PAH) — Remodulin, Tyvaso, Adcirca and Orenitram. It also markets Unituxin for the treatment of pediatric patients with high-risk neuroblastoma.

Tyvaso sales totaled $242.3 million, up 46% year over year, gaining from higher sales volume driven by the launch of Tyvaso dry powder inhalation (DPI) formulation last year in June. Net sales also rose on account of increased product uptake following label expansion of the drug in pulmonary hypertension associated with interstitial lung disease (PH-ILD) indication in 2021.

Management also announced that it achieved its goal of doubling the number of Tyvaso patients following the PH-ILD approval in early 2021.

United Therapeutics developed the Tyvaso DPI in partnership with MannKind Corporation (MNKD - Free Report) . Per anexisting commercial supply agreement, MannKind Corporation is responsible for manufacturing and supplying Tyvaso DPI to United Therapeutics.

Remodulin (including Remunity Pump) sales were up 4% year over year to $122.5 million, while Orenitram sales rose 5% year over year, amounting to $75.8 million.

Unituxin sales reached $36.7 million, down 27% year over year on account of lower sales volume during the fourth quarter.

Adcirca sales were $10.4 million, up 28% year over year.

Please note that United Therapeutics bought the exclusive rights to commercialize Adcirca (tadalafil) for PAH in the United States from Eli Lilly (LLY - Free Report) in November 2008. Eli Lilly markets tadalafil as Cialis for erectile dysfunction. The Eli Lilly-partnered drug lost exclusivity in 2018 and generic versions are available.

Research and development expenses were $93.9 million in the quarter, up 13% year over year. Selling, general and administrative expenses rose 28% to $163.2 million in the quarter.

Full-Year Results

United Therapeutics reported total revenues of $1.94 billion, up 15% year over year. Sales were driven by growth in sales of Tyvaso and Orenitram.

Based on the rapid patient uptake for Tyvaso products, the company is projecting to double its revenue projections to $4.0 billion by the end of 2025.

The company’s reported earnings for 2022 were $15.00 per share, up 49.1% from the year-ago period.

Pipeline Update

United Therapeutics is working on expanded indications for Orenitram and Tyvaso. Multiple phase III studies are ongoing across various forms of PH and pulmonary fibrosis indications.

Key phase III programs include Tyvaso in patients with various forms of chronic fibrosing interstitial lung disease (TETON studies) and oral ralinepag in PAH (ADVANCE CAPACITY and ADVANCE OUTCOMES studies). Management expects to complete all these studies in 2025.

The late-stage TETON 1 study in patients with idiopathic pulmonary fibrosis (IPF) is currently enrolling patients at sites located in the United States and Canada. The second phase III study of Tyvaso in IPF patients, TETON 2, initiated in October 2022, is being conducted outside of the United States and Canada. If the drug is approved for IPF indication, management expects Tyvaso sales in IPF indication will exceed the drug’s sales in PAH indication.

 

Zacks Rank & Key Pick

United Therapeutics currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same sector is eFFECTOR Therapeutics (EFTR - Free Report) , carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

eFFECTOR Therapeutics’ loss estimates for 2023 have narrowed down from 96 cents per share to 88 cents over the past 60 days. Shares of eFFECTOR have plunged 90.2% in the past year.

Earnings of EFTR beat earnings estimates in each of the trailing four quarters, delivering an average earnings surprise of 104.56%. In the last reported quarter, EFTR earnings beat estimates by 14.81%.

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