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UT

UNITED THERAPEUTICS Corp (UTHR)·Q1 2025 Earnings Summary

Executive Summary

  • Strong Q1: revenue rose 17% YoY to $794.4M with diluted EPS of $6.63; both beat S&P Global consensus with revenue +$65.1M (+8.9%) and EPS +$0.35 (+5.6%). Drivers were Tyvaso DPI volume growth and stable PAH/PH-ILD demand; R&D and SG&A were higher on milestones and headcount . Consensus values marked with * are from S&P Global.*
  • Product momentum: Total Tyvaso reached $466.3M (+25% YoY), with Tyvaso DPI up 33% to $302.5M; nebulized Tyvaso +13% to $163.8M (international order timing). Remodulin (+8%) and Orenitram (+14%) also grew; Unituxin was roughly flat YoY .
  • Management tone confident: reiterated expectation to sustain double‑digit revenue growth on existing portfolio; sees Tyvaso DPI long‑term durability, with modest net impact from Medicare Part D redesign changes in Q1 vs Q4 dynamics .
  • Near‑term catalysts: first UKidney xenotransplant targeted around mid‑2025 (IND cleared), and top‑line TETON‑2 (IPF) in 2H25; TETON‑1 fully enrolled (top‑line 1H26). Positive outcomes could expand addressable markets and reinforce growth narrative .

What Went Well and What Went Wrong

  • What Went Well

    • Record revenue quarter with broad-based growth across treprostinil franchises; Total Tyvaso +25% to $466.3M driven largely by DPI quantity growth (+$97.4M) and some price, partially offset by higher gross‑to‑net .
    • Management emphasized durable competitive positioning in PAH/PH‑ILD and reiterated double‑digit revenue growth outlook on existing portfolio; DPI preferred for convenience/unlimited dosing; no payer incentives to prefer alternatives .
    • Strategic pipeline/catalysts advancing: UKidney IND cleared; TETON program fully enrolled in TETON‑1; multiple registration‑phase programs underway (e.g., ralinepag outcomes) .

  • What Went Wrong

    • Operating expense growth: R&D +43% YoY to $149.0M (milestones +$30M for device tech, contingent consideration +$6.6M, organ programs) and SG&A +18% to $170.1M (headcount); elevates near‑term opex run‑rate .
    • International demand visibility: nebulized Tyvaso growth partly from distributor order timing rather than underlying demand, adding noise to quarter‑to‑quarter inference .
    • Modest net benefit from IRA changes in Q1 versus Q4, with manufacturer catastrophic obligations (phase‑in) offsetting some utilization tailwinds; limits price/GTN leverage .

Financial Results

P&L snapshot and margins (oldest → newest)

MetricQ1 2024Q4 2024Q1 2025
Revenue ($M)$677.7 $735.9 $794.4
Operating Income ($M)$356.3 $357.7 $382.8
Operating Margin (%)52.6% 48.6% 48.2%
Net Income ($M)$306.6 $301.3 $322.2
Net Income Margin (%)45.3% 40.9% 40.6%
Diluted EPS ($)$6.17 $6.19 $6.63
Note: Margins computed from cited revenue/earnings.

Actual vs S&P Global consensus (Q1 2025)

MetricConsensus*ActualSurprise
Revenue ($M)729.3*794.4 +$65.1 (+8.9%)
Diluted EPS ($)6.28*6.63 +$0.35 (+5.6%)
Consensus values marked with * are from S&P Global.*

Product revenue breakdown (oldest → newest)

Product ($M)Q1 2024Q4 2024Q1 2025
Tyvaso DPI227.5 273.2 302.5
Nebulized Tyvaso145.0 142.7 163.8
Total Tyvaso372.5 415.9 466.3
Remodulin128.0 134.5 138.2
Orenitram106.2 107.8 120.7
Unituxin58.4 67.5 58.2
Adcirca6.4 4.7 6.0
Other6.2 5.5 5.0

Geography mix

($M)Q1 2024 USQ1 2024 ROWQ4 2024 USQ4 2024 ROWQ1 2025 USQ1 2025 ROW
Total Revenues641.5 36.2 705.7 30.2 749.6 44.8

KPIs

KPIQ1 2025
Tyvaso new patient starts mix~2/3 DPI, ~1/3 nebulizer; stable for several quarters
Effective Tax Rate~24%
Cash, cash equivalents & marketable investments$5,032.0M (3/31/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPSFY25None providedNone providedMaintained “no quantitative guidance”; qualitative double‑digit revenue growth reiterated on existing portfolio
Pipeline milestones2H25/1H26TETON‑2 2H25; TETON‑1 1H26Unchanged timelines reiteratedMaintained
UKidney clinical startMid‑2025IND pendingIND cleared; first transplant around mid‑2025Raised visibility/timing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24 / Q4’24)Current Period (Q1’25)Trend
Tyvaso as growth engineTyvaso remains biggest near‑term driver; record revenue run‑rate Tyvaso +25% YoY; DPI and nebulizer both growing; DPI convenience and dosing highlighted Strengthening
IRA impact / GTNIRA redesign cited as tailwind in prior commentary Modest net benefit in Q1 vs Q4; manufacturer catastrophic obligations phase‑in offset Normalizing/offsets
Competition in PAHConcern manageable; complementary therapies; demand expansion Prostacyclins under‑penetrated (~40% of PAH on class); confidence in double‑digit growth despite competition Constructive
Device/drug delivery innovationCommercial/device upgrades discussed; Remunity upgrades Remunity near universal adoption; planning Remunity D9; exploring once‑daily inhaled product Advancing
IPF/PPF opportunity (TETON)TETON data cadence flagged for 2025/26 TETON‑1 fully enrolled (n=598); TETON‑2 top‑line 2H25; potential label expansion pathway outlined On track
Xenotransplantation (organs)UKidney IND targeted; organ programs emphasized UKidney IND cleared; first transplant around mid‑2025; broader xeno‑organ pipeline advancing Accelerating
Legal/regulatorySandoz litigation accrual in 3Q/4Q No new accruals discussed for Q1 in release/callStable

Management Commentary

  • “How often can a CEO report… record revenue quarter. For United Therapeutics, it has been 9 quarters out of the past 12… double digits now for 11 quarters in a row.” — Martine Rothblatt, CEO .
  • “We expect to continue to grow revenues at double‑digit growth with our existing portfolio heading into this year and next year.” — Michael Benkowitz, President & COO .
  • “We’re planning for the first transplant in our UKidney clinical study… in the middle of this year… INDs for UThymoKidney and UHeart expected within the next year.” — Martine Rothblatt .
  • “This quarter’s record revenue performance reflects… strong referrals, starts and patient shipments for all of our treprostinil products.” — Michael Benkowitz .

Q&A Highlights

  • IRA/GTN dynamics: Management characterized any Q1 benefit vs Q4 as “very, very modest,” noting offset from new catastrophic obligations under Medicare Part D redesign (phase‑in) .
  • Tyvaso DPI vs nebulizer mix: New patient starts remain roughly two‑thirds DPI/one‑third nebulizer, a stable mix for several quarters; early‑year price increases on both; no incremental GTN impact beyond Part D obligations observed in Q1 .
  • Growth outlook despite competition: Under‑penetration of prostacyclins (~40% of PAH patients on class) supports continued double‑digit growth; ILD prescriber base depth expanding .
  • Device innovation/once‑daily: Company working on Remunity D9 and exploring once‑daily inhaled products; emphasizes “approve and then improve” culture .
  • UKidney/xenotransplantation: Lessons from EIND case inform immunosuppression; initial EXPAND cohort design and safety approach discussed; optimism on applying learnings to UThymoKidney program .

Estimates Context

  • UTHR beat both revenue and EPS vs S&P Global consensus for Q1 2025: revenue $794.4M vs $729.3M*, EPS $6.63 vs $6.28*; positive surprise driven by Tyvaso DPI volume growth, supportive pricing, and breadth across treprostinil franchises; international nebulized timing also helped . Consensus values marked with * are from S&P Global.*
  • Given the beat and reiterated double‑digit growth commentary, Street models may need higher Tyvaso DPI run‑rates and a slightly higher opex trajectory (R&D milestones), with limited change to GTN/IRA impact assumptions given management’s “modest” net effect framing .

Key Takeaways for Investors

  • Quality beat: Broad‑based product strength and Tyvaso DPI volumes delivered revenue/EPS upside; operating discipline kept operating margin near 48% despite elevated R&D/SG&A .
  • Tyvaso durability: DPI convenience, unlimited dosing, stable prescriber mix, and no payer incentives to switch underpin resilience versus emerging competitors .
  • Catalysts ahead: UKidney first‑in‑human around mid‑2025 and TETON‑2 IPF data in 2H25 are stock‑moving events that could expand the growth narrative beyond PAH/PH‑ILD .
  • Competitive landscape manageable: Management expects double‑digit revenue growth to continue even as new agents arrive, citing under‑penetrated prostacyclins and portfolio breadth .
  • Watch GTN/IRA mechanics: Q1 saw modest net benefit vs Q4; manufacturers’ catastrophic share is a structural headwind but appears largely offset by utilization/pricing dynamics .
  • Opex cadence: Near‑term R&D spend reflects milestone payments and organ‑program investment; investors should model higher variability in R&D tied to milestones/contingent consideration .
  • Balance sheet strength: ~$5.0B in cash/investments provides ample capacity for capex, BD, and potential additional buybacks, supporting multi‑year pipeline execution .

Appendix: Additional Data

  • Expense detail highlights: Cost of sales $92.5M (+27% YoY) on royalty/product costs (Tyvaso DPI growth); R&D $149.0M (+43% YoY) with $30M device milestone and $6.6M contingent consideration adjustments; SG&A $170.1M (+18% YoY) on headcount; ETR ~24% .
  • Revenue by geography: US $749.6M; ROW $44.8M (Q1 2025) .