United Therapeutics - Earnings Call - Q3 2025

Executive Summary

• Record Q3 revenue of $799.5M (+7% y/y) and diluted EPS of $7.16 (+12% y/y). EPS beat consensus by ~+2.9% while revenue missed by ~-1.6% as product mix and higher gross-to-net deductions offset strong Tyvaso DPI growth. Estimates marked with * are from S&P Global.*
• Tyvaso franchise grew 10% y/y to $478.0M, led by Tyvaso DPI (+22% y/y). Management stated there was “no material impact” from the competitor Eutrepia launch and announced an imminent 80 mcg DPI cartridge to drive higher-dose convenience and share.
• Orenitram rose 16% y/y; Remodulin was modestly lower; Unituxin declined 22% y/y. Cost of sales increased 22% y/y and the effective tax rate rose to 23% from 20% y/y, tempering operating leverage.
• Strategic catalysts: “breakthrough” TETON‑2 results in IPF (management: “best…ever reported”), ralinepag outcomes data expected 1H26, and first UKidney xenotransplant in EXPAND study (Nov 3) support medium-term growth optionality and investor interest.

What Went Well and What Went Wrong

What Went Well

• Tyvaso ecosystem resilience and innovation: management highlighted “no material impact” from Eutrepia; patient shipments and prescriber breadth strengthened into October; 80 mcg DPI cartridge launching “very soon” to simplify higher dosing.
• Pipeline momentum and expansion: TETON‑2 in IPF described by CEO as “the best results…ever reported” for the condition, with potential to “significantly broaden” reach; leadership guided to a $4B revenue run-rate by 2027.
• Capital allocation: company executed additional accelerated share repurchases (~$1.0B in Aug-25) under its ASR framework ($2.0B aggregate 2024–2025), signaling confidence in valuation and cash generation.

What Went Wrong

• Revenue slightly below Street: $799.5M vs $812.9M* consensus (~-1.6%), with higher gross-to-net deductions in Tyvaso nebulized and mix effects offsetting DPI strength. Estimates from S&P Global.*
• Unituxin and Tyvaso nebulized headwinds: Unituxin down 22% y/y on volume; nebulized Tyvaso down 11% y/y from higher gross‑to‑net and lower volumes, partly offset by DPI gains.
• Cost/tax pressure: cost of sales up 22% y/y; ETR rose to 23% from 20%, limiting flow-through despite revenue growth; ongoing litigation accrual stood at $73.3M as of 9/30/25.

Transcript

Operator (participant)

Good morning everyone and welcome to the United Therapeutics Corporation third quarter 2025 corporate update. My name is Jamie and I will be your conference operator today. All participants on the call portion of this webcast will be in a listen-only mode until the question-and-answer portion of this earnings call. If you'd like to ask a question during that time, please press star and the number one on your telephone keypads. If you'd like to withdraw your questions, you may press star and the number two on your telephone keypads. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Harrison Silvers, Investor Relations Manager at United Therapeutics.

Harrison Silvers (Investor Relations Manager)

Thank you, Jamie. Good morning. It is my pleasure to welcome you to the United Therapeutics Corporation third quarter 2025 corporate update webcast. Remarks today will include forward-looking statements representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings, including Forms 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update forward-looking statements. Today's remarks may discuss the progress and results of clinical trials or other developments with respect to our products. These remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision making or to suggest that any products are safe and effective for any unapproved or investigational uses. Full prescribing information for the products is available on our website.

Accompanying me on today's call are Dr. Martine Rothblatt, our Chairperson and Chief Executive Officer; Michael Benkowitz, our President and Chief Operating Officer; James Edgemond, our Chief Financial Officer and Treasurer; Dr. Leigh Peterson, our Executive Vice President of Product Development and Xenotransplantation; and Pat Poisson, our Executive Vice President of Strategic Development. Note that Pat Poisson and I will participate in a fireside chat and one-on-one meetings at the UBS Global Healthcare Conference in Palm Beach on November 10th. Additionally, James and I will be at the Jefferies Global Healthcare Conference in London on November 18th for a fireside chat and one-on-one meetings. Finally, Martine Rothblatt will present at the 44th annual JPMorgan Healthcare Conference in San Francisco in January of next year. Our scientific, commercial, and medical affairs teams will be present at Phenomenal Hope 2025 on December 5th in Boston and at the Pulmonary Vascular Research Institute Annual Congress in Dublin in late January next year. Now I will turn the webcast over to Martine for an overview of our development pipeline and business activities. Martine.

Martine Rothblatt (Founder, Chairman, and CEO)

Thank you, Harry, and good morning everyone. United Therapeutics had a great quarter helping more patients and earning more revenues than ever before. In addition, this past quarter our pipeline made more progress than ever before. We fully enrolled three Phase III trials and we've shared the unblinded results for pulmonary fibrosis. In fact, the best results for that condition ever reported by anyone, anywhere, anytime. We feel confident we'll be able to help tens of thousands of IPF patients live better lives. United Therapeutics is a public benefit company and I'm sometimes asked, what exactly does that mean? One thing that it means is to defy the odds and invest millions of dollars over several years to develop a historically unmatched product portfolio for pulmonary fibrosis. Being a public benefit company means providing a framework of trust for patients, doctors, payers, and employees.

Being a public benefit company also means having shareholder interest as the hands on the helm. For example, we've repurchased millions of our shares, including quite a few this quarter at a bargain price. For example, we are now guiding that we'll be at a $4 billion revenue run rate not later than 2027. Finally, I'll point out that we are actively engaged in all manner of business development. In fact, I can predict that great companies such as Merck, J&J, or Novartis with strong pulmonary disease franchises will be very keen to partner with us, given our best-in-class data released for IPF this quarter with long-lived IP, and also given the very near-term result of ralinepag with its 2040 patent life. Indeed, I'd love to see a trial of ralinepag combined with Winvir and I bet it would be super synergistic. Let's now give Michael Benkowitz a chance at the microphone so he can give us a deep dive into our great and better than ever numbers this quarter. Michael.

Michael Benkowitz (President and COO)

Thank you, Martine, and good morning everyone. Today we are pleased to report another quarter of record total revenues of $800 million, representing 7% growth from the third quarter of 2024. This quarter's performance was driven by continued year-over-year growth in total Tyvaso and Orenitram sales, reflecting patient demand and the resilience of our commercial strategy and execution. Continued double-digit revenue growth for total Tyvaso demonstrates that we are realizing no material impact from the launch of Eutrepia. Our continued revenue growth also reinforces our belief that competition drives additional disease awareness, which in turn increases the overall opportunity in the large addressable pulmonary hypertension market. We remain confident that Tyvaso DPI is the best positioned inhaled treprostinil product and can sustain long-term growth due to the convenience of our DPI device, its unlimited dosing potential, the thousands of prescribers and many thousands of patients who have experienced Tyvaso DPI since launch, and the fact that there are no payer incentives to prefer an alternative product.

On dosing and convenience, our Tyvaso DPI platform is driving a meaningful shift in treprostinil dosing behavior. Historically, patients averaged nine breaths per treatment using nebulized Tyvaso delivery. With Tyvaso DPI, that average has increased to a 12-breath equivalent or 64 micrograms. I'm pleased to announce that we will soon be launching Tyvaso DPI 80-microgram cartridges to provide added convenience for patients being treated at higher doses. This new cartridge will allow patients to reach the equivalent of 15 nebulized breaths with one single breath as compared to four breaths for Eutrepia. This is the highest dose ever delivered in one breath via one cartridge, offering a clear competitive edge in dosing flexibility and reinforcing the clinical and commercial value of higher dose treprostinil.

This innovation positions us to provide greater patient benefit, capture greater market share, and unlock new revenue potential in the growing pulmonary hypertension space. At the same time we launch the 80 micrograms cartridge, we will also be launching 96 micrograms and 112 micrograms combination kits, which we believe will facilitate access and affordability for patients requiring even higher doses of Tyvaso DPI. On tolerability, we're looking forward to sharing abstracts at the PBRI Annual Congress in January that compare real-world data from United Therapeutics Safety Database to clinical trial evidence from Eutrepia's Inspire study. These analyses show, among other things, a lower incidence of cough in both Tyvaso and Tyvaso DPI.

Finally, on access, we have secured multiple favorable coverage decisions with major payers supporting a clear validation that Tyvaso DPI is well-positioned in the marketplace. Our confidence in the growth profile of Tyvaso is further supported by the recent TETON 2 study which, as Martine said, demonstrated an unprecedented treatment benefit for inhaled treprostinil in patients with idiopathic pulmonary fibrosis. We are excited about the TETON 2 data which have the potential to significantly broaden our therapeutic reach into respiratory disease and further accelerate our growth. Lastly, turning to Remodulin, we're pleased to have launched our new Remunity Pro pump during the third quarter which we designed based on feedback from healthcare providers and patients to enhance the overall experience of our parenteral therapy. Our Remunity Pro pump is small and discreet and features a user friendly remote with guided instructions, automated priming and easy filling.

Additionally, its lower flow rates may enable more patients to initiate Remodulin therapy at home instead of requiring a hospital stay. In closing, we are extremely proud of our team's steadfast dedication which has driven these remarkable innovations and results and enables us to offer critical therapies to our patients who rely on them. We are confident that our strong foundation positions us to maintain our momentum and continue delivering success for many years to come. With that, I'll turn things back to Martine.

Martine Rothblatt (Founder, Chairman, and CEO)

Michael, that was an amazing overview. Thank you so much for sharing all that information and for all of your leadership. Operator, you may now open the lines to any questions.

Operator (participant)

Ladies and gentlemen, at this time we'll begin the question-and-answer session. To ask a question, you may press star and then one using a touchtone telephone. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys. To withdraw your questions, you may press star and two. At this time, we'll pause momentarily to assemble the roster. Our first question today comes from Lisa Walter from RBC. Please go ahead with your question.

Lisa Walter (Senior Associate and Biotechnology Analyst)

Oh great. Thanks so much for taking our questions and congrats on the quarter. I'm just curious, given the TETON 2 results in IPF, are you perhaps seeing an uptick in diagnoses of IPF patients and if so, do you think this could positively impact Tyvaso sales over the next few quarters? Any color here would be helpful. Thanks.

Martine Rothblatt (Founder, Chairman, and CEO)

Thanks for the question, Lisa. I'm going to refer that to Michael, under his overall leadership, which includes all of the different parts of United Therapeutics that are interacting with physicians and patients, such as Global Medical Affairs and our commercialization teams, our regional nurse specialists. Mike would have a lot of input on that. Michael, sure.

Michael Benkowitz (President and COO)

Thanks for the question. Yeah, it's an interesting question. It's actually one the opportunity to attend both the European Respiratory Society where we unblinded the TETON 2 data, as well as the CHESS conference last week in Chicago. It's actually every physician I talk to, I ask them that exact question just to try and get a sense of whether that data would maybe create an incentive or prompt them to be more aggressive in screening for pulmonary hypertension in their IPF patients.

And so, they all said yes. Whether that plays out yet, I think it's still too early because we only unblinded the data just a few weeks ago. I can't point to an uptick directly towards that or directly towards the TETON 2 study. It's certainly something I think that we're chatting with physicians about and monitoring very closely. I think it's logical that this will play out over time. Whether it does, when it does, to what degree, I think remains to be seen.

Martine Rothblatt (Founder, Chairman, and CEO)

Perfect. Thank you, Michael. Operator, next question, please.

Operator (participant)

Our next question comes from Andreas Argyrides from Oppenheimer. Please go ahead with your question.

Andreas Argyrides (Managing Director and Senior Biotech Analyst)

Good morning and thanks for taking our question and congrats on another solid quarter here. Martine, you mentioned in your remarks Ralinepag potential for combination. Can you just give us a sense of where you see the market opportunity for ralinepag and expectations for advanced outcomes next year? Appreciate it. Thank you.

Martine Rothblatt (Founder, Chairman, and CEO)

Sure. Absolutely. Ralinepag is just, you know, just blowing the doors off of expectations in everywhere we look. First of all, the enrollment of the outcomes trial, which is just about the largest trial ever enrolled in pulmonary hypertension, has gone extraordinarily well. Even some of the open-label results have been announced by some doctors that for patients who have already exited the trial and the six-minute walk distances that are maintained even a year after these patients have left the trial are best-in-class. Six-minute walk distances, then, as I mentioned, the long patent life for ralinepag is a very significant factor as well from a business standpoint with the patent.

I'm not the expert on all the dates, but it's roughly 2040, so it has a very, very long patent life. As you know, it's a pill that you just take once a day. It seems to be the most potent prostacyclin type of drug that has been identified yet. Patients have an opportunity to just take one pill once a day and be able to keep their pulmonary hypertension managed as well as, you know, could be the case with any other prostacyclin type therapy. On top of all of that, we were very impressed with the synergy that was shown in the data released by Merck between sotatercept and treprostinil. We've continued to see that synergy in the marketplace subsequent to the sotatercept launch. Our sales have just continued to grow. There seems to be a really nice synergy between those two drugs.

If one could leverage that synergy with a once-a-day pill, wow, that would be even better. In addition to that, there turns out to be tremendous formulation flexibility with ralinepag, which opens up a number of opportunities that are more in our stealth catalog, things such as combination oral treatment and so on. Ralinepag is, while IPF as a disease is front and forward for us as a company, ralinepag is our number one course. Next question, Operator.

Operator (participant)

Our next question comes from Joseph Thome from TD Cowen. Please go ahead with your question.

Joseph Thome (Managing Director and Senior Research Analyst)

Hi there. Good morning. Congrats on the progress and thank you.for taking my question. Martine, in addition to that combination partnership potential, it sounds like you also mentioned some large pharma partnership related to or in light of the recent Tyvaso IPF data. If you could go a little bit more into what you were thinking about there, what would an ideal kind of partner look like or partnership? Is this related to European rights or just any additional clarity around that? That seemed like a little bit of an update from the prior quarter, obviously, given the recent data. Thank you.

Martine Rothblatt (Founder, Chairman, and CEO)

Yeah, it was only. You know, it's so funny that you say that because before we released this data, I would say that, I don't know, these are just heuristic numbers, but like 90% of people seems like they didn't really believe that our drug would work in pulmonary fibrosis, which seemed odd to us. We have a computational biology lab which has an extraordinary digital model of the lung and all of the key diseases that we focus on in the lung. We use a large learning model based on all of the previous studies that have been done in pulmonary fibrosis and pulmonary hypertension to develop this digital lung model. We are able to run new NCEs, new drugs, through this model to get the results of standard endpoint measurements.

For example, we ran the TETON 2 study, the entire, like, you know, 100 clinical trials modeled as the TETON 2 study, 100 clinical trials in 62 hours. Compare that to the years and years that it takes, like, you know, slugging around the world enrolling these trials. The results of that digital clean trial were that by comparison to the roughly 95 mL improvement over baseline that we showed with the clinical trial, we had estimated our median estimate of these 100 trials was like 130 mL, which is fascinating because the difference between the digital trial and the physical trial was closer than the effect size from the pirfenidone and nintedanib trials. What that tells you is that the digital trial very closely modeled the disease. We know what we're doing here.

I think that augurs really, really well for some companies that might have been a bit skeptical about the antifibrotic effects of treprostinil in pulmonary fibrosis, kind of, you know, waking up and paying a little bit of attention. Now, United Therapeutics is very much a United States company. It's not that we don't do things in other countries in the world. We do. In fact, the TETON 2 trial was enrolled throughout all of the rest of the world. If you look at our financials, you'll see that the overwhelming portion of our revenues are derived from the United States. All of our medicines are manufactured in the United States. All of our devices for delivering our medicines are manufactured in the United States.

There were partners in other parts of the world that wanted to help bring the amazing benefits of Tyvaso to patients in those other parts of the world. I think that would be a good thing for everybody concerned. Thanks for the great question, operator. Next question.

Operator (participant)

Our next question comes from Olivia Breyer from Cantor. Please go ahead with your question.

Olivia Breyer (Senior Equity Analyst)

Hi, good morning. Thank you for the question. Can you talk through some of the commercial dynamics you're seeing for Tyvaso over these last few months and maybe even into October? I'm curious whether most of the share gains for Tyvaso DPI are in PAH versus ILD. I have to ask the obvious question, whether you're seeing any competitive impacts in either indication, or if you are, maybe it's weighted more towards one versus the other. Sorry to sneak this in, but, Martine, I did just want to ask for a quick point of clarification. You're now guiding to a $4 billion run rate by 2027, which I think is well ahead of where some numbers are today. Does that mean you expect to hit $1 billion in a quarter sometime in 2027? Just to kind of clarify, and I assume that's in light of the very strong IPF results. Thank you so much.

Martine Rothblatt (Founder, Chairman, and CEO)

Yes. We do expect to hit $1 billion in the quarter in 2027, and we're very happy for you poking around all the different whys and wherefores of our revenue growth. No problem. Michael will take it away on that question.

Michael Benkowitz (President and COO)

Yeah, thanks for the question. I think in terms of what we're seeing over the course of the third quarter and then even early into the fourth quarter, as I said, I think we're confident that there's really no material impact from the launch of Eutrepia. In fact, what we see, and we've seen this in the past with other competitors' launches, actually it really kind of grows the high, but the addressable patient population, because you now have another sales force out there talking about these diseases. You've got doctors thinking about pulmonary arterial hypertension group one as well as PH-ILD in group three. That's a great thing for patients and it's a great thing for the companies that are providing these drugs.

Invariably what happens is, I think, we saw this even with the sotatercept launch, as Martine alluded to in her opening remarks, we continue to grow through that and that's what we expect to happen here as we move into 2026, is continued growth in Tyvaso in both PAH and PH-ILD. When I look at, really from, let's say, beginning of September through halfway through October, the things I look at, right, the underlying metrics, patient shipments, prescriber breadth and depth, referrals and starts, and I think on the patient shipments, super strong and really headed into October, like exceptionally strong so far. A couple weeks in, prescriber, the number of prescribers grew quarter-over-quarter and we're still maintaining depth in those three, the three plus writers, which is sort of our key metric. Referrals and starts kind of bounced around a little bit in the quarter.

Again, since September, a pretty consistent upward trend. We're almost back at where we were pre-Eutrepia launch. This has played out about like we expected. There has been some trialing with their products. We've had some patients transition. A lot of those have come back. As I said in my remark, as we look out into 2026 and beyond, we think we're really positioned well for continued growth in both PAH and PH-ILD.

Martine Rothblatt (Founder, Chairman, and CEO)

Perfect. Michael, thank you so much. Wow, that's a great covering of all 360 degrees of that question. Thanks, operator. Next question, please.

Operator (participant)

Our next question comes from Roger Song from Jefferies. Please go ahead with your question.

Roger Song (Stock Analyst)

Oh great. Congrats for the record quarter again and thank you for taking our question. Quick ones. One is on the PPF. Just curious about the data timing on the enrollment and then more interesting question could be given the TETON 2 data, how's the read through to the IPF. Any new updated thoughts from physicians and scientists regarding the MOA? Also quickly on IPF and the Phase II meeting. Believe you are having a meeting with the FDA around year end and just curious about the potential outcome scenario, any upside case you can have earlier approval. Thank you.

Martine Rothblatt (Founder, Chairman, and CEO)

Okay, that's a whole pancake stack of questions you got there. Basically, I'm going to refer all three of those questions, and hopefully she's been taking notes, to Dr. Leigh Peterson, who would be the best person to opine in this instance on the enrollment progress with the PPF, or maybe we could call it TETON 3 trial, and then walk through the mechanism of action that's increasingly being understood as she's attended all of the major chest pulmonary respiratory conferences and she's talked with all of the major KOLs. She's also right in the loop on the major top tier, top of the top tier type of peer-reviewed publication that's about to come out. There's a lot of interest in the MOA question there. Finally, she works very closely with our regulatory group to give you some insight on the kind of cadence of what we can expect in terms of filing. Dr.Peterson, could you take all those questions away and that'll probably make you the last answer because that was a lot of questions.

Leigh Peterson (EVP of Product Development and Xenotransplantation)

Thank you. Yes, I did take notes. Regarding TETON PPF, we're about halfway through enrollment, a little bit more. That study in design, as you well know, is very similar to those for the TETON 1 and TETON 2 in that there's a 52-week follow-up period. We can't really speak in detail about when we would expect unblinding, but that gives you an idea, and you all know that that's being run in basically the U.S., Canada, as well as rest of the world. Most importantly, really based on the similarities of the underlying fibrosis and disease progression between IPF and PPF, these results suggest that inhaled treprostinil would potentially offer a treatment option for these patients with PPF.

With regard to the mechanism of action, the specific mechanism of action, again with the similarities in the underlying fibrosis, and as we've discussed, both the in vitro results, the preclinical results demonstrating an anti-fibrotic effect of treprostinil as it works through the various receptors, the IP receptor, EP2, DP, all of that in addition to having a vasodilation effect, we expect that to play out in both of these indications. As far as the regulatory path, we have had agreed with FDA that we're using both the data from TETON 2 and TETON 1. You all know that we are expected to have the TETON 1 results, report those in the first half of 2026. In fact, we are meeting with the FDA before the end of this year to discuss ways to potentially expedite that regulatory review process when the TETON 1 results are available.

All of that is really positive, really, really exciting and definitely pointing in the right direction of consistent results among these various TETON trials.

Martine Rothblatt (Founder, Chairman, and CEO)

Thank you so much, Dr. Peterson. Great responses. You collapsed that so elegantly that we have time for one last question. Operator.

Operator (participant)

All right, our next question comes from Roanna Ruiz from Leerink. Please go ahead with your question.

Roanna Ruiz (Senior Research Analyst)

Great morning, everyone. I wanted to ask about the 80 micrograms cartridge for Tyvaso DPI. Could you give a little bit more color on the launch plans for that? Any strategies to drive more durable patient use, possible switching from the prior cartridge, etc?

Martine Rothblatt (Founder, Chairman, and CEO)

Sure. Let me turn that question initially and perhaps comprehensively to Pat Poisson, who's our Executive Vice President for Technical Operations and has been keen in the design of that incredible Tyvaso product from the very beginning. Pat?

Pat Poisson (EVP of Strategic Development)

Yeah, happy to. Thanks, Martine. I didn't catch the whole question. Could you just repeat it for me? Just make sure I answer it correctly. Sure.

Roanna Ruiz (Senior Research Analyst)

For the new 80 micrograms cartridge, just curious about launch plans for that, the strategies to drive patient use, switching, etc.

Pat Poisson (EVP of Strategic Development)

Sure. With DPI, we've seen patients able to titrate higher. For their convenience, we've developed this 80 micrograms cartridge to allow them to take 15 breaths in one single dose. That'll be added convenience, whereas to get there before, they had to combine two cartridges. We are anticipating launching that very soon, certainly in the next, say, 30-60 days, that'll be out there.We're really just looking to add convenience and easier dosing for patients

Martine Rothblatt (Founder, Chairman, and CEO)

Excellent, Pat. Thank you so much. I'm going to wrap up the call now. We've reached our allotted time, but I want to thank everybody for the congratulations that they offered us on this best quarter that we've ever had commercially, clinically, really across the board. We're super excited about the United Therapeutics product portfolio. Just if there's some newbies on the call, just to remember that the opportunity in pulmonary fibrosis is more than twice the size of the opportunity in pulmonary hypertension. We're still continuing to go and grow like gangbusters in pulmonary hypertension itself. It's truly best of times at United Therapeutics. Thank you for your interest and operator, you can wrap up the call.

Operator (participant)

Thank you for participating in today's United Therapeutics Corporation earnings webcast. A rebroadcast of this webcast will be available for replay for one week by visiting the Events and Presentations section of the United Therapeutics Investor Relations website at ir.unither.com. Again, that's ir.unither.com. We thank you for participating. You may now disconnect your lines.