Q2 2024 Earnings Summary
- Strong Growth in Tyvaso DPI Prescriptions Due to Sales Force Expansion and Increased Prescriber Engagement: United Therapeutics is experiencing positive momentum with an increase in the number of ILD prescribers writing Tyvaso, driven by the impact of sales force expansion in the second quarter. Over the last six months, there has been growth in both the breadth and depth of ILD prescribers, leading to strong referrals and patient starts in both Group 1 PAH and PH-ILD.
- Robust PAH Business with Strong Demand Metrics Despite Potential Competition: The company's PAH business remains very solid, showing strong referral growth, strong start growth, and patient shipments, with all underlying demand metrics in line with expectations and reflected in the revenue. Even with potential competition from Merck's product, patients are using it in combination with prostacyclins, suggesting that United Therapeutics' products will continue to be essential in PAH treatment.
- Advancement in Clinical Trials for IPF Offering Potential Market Expansion: Enrollment for the TETON 2 study is complete, and final results are expected within a year, which could lead to approval and expansion into the IPF market. Previous success in bridging studies from Nebulized Tyvaso to Tyvaso DPI in PAH and PH-ILD indicates that the company is well-prepared to pursue approval efficiently for IPF, enhancing growth prospects.
- Regulatory uncertainty in the IPF program: The company acknowledges that the FDA typically requires two positive studies for registration of new therapies. There is uncertainty whether one successful TETON trial would suffice for approval, posing a risk if either trial fails. This could delay or hinder the approval of their IPF treatment.
- Potential competition from Merck's new product in the PAH market: While United Therapeutics reports strong performance in PAH, executives note that Merck's clinical trial involves patients using Merck's drug in combination with prostacyclins. This could impact United Therapeutics' market share and growth in the PAH segment.
- Possible delays and regulatory hurdles for Tyvaso DPI approval in IPF due to bridging study requirements: The company is still in discussions with the FDA regarding the necessary bridging studies to approve Tyvaso DPI for IPF. Different FDA divisions and potentially different requirements could lead to additional studies and delay approval, affecting the timeline for bringing Tyvaso DPI to the IPF market.
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IPF Filing Strategy
Q: Do both IPF studies need to succeed for filing?
A: Management said that while the FDA typically requires two positive studies for registration, they will discuss options if TETON 2 shows significant results. They expect TETON 2 results within a year since enrollment was completed early. -
DPI Approval and Data Readout
Q: What bridging study is needed for DPI approval in IPF?
A: They plan to confirm requirements with the FDA, possibly needing a small sub-study in the TETON OLE program. They will not conduct interim analyses but expect final TETON 2 results within a year after the follow-up period. -
Share Buyback Plans
Q: Any plans for another significant share buyback or ASR?
A: The company is focused on executing the existing $700 million ASR, in process until the end of September. They are committed to wise capital allocation, prioritizing R&D initiatives, corporate development, and the current share repurchase program. -
Tyvaso DPI Growth Drivers
Q: Can you elaborate on Tyvaso DPI drivers versus Nebulized Tyvaso?
A: Underlying demand continues strong with referrals and starts in both Group 1 PAH and Group III PH-ILD. The expanded sales force is showing impact, with an increase in ILD prescribers and more physicians treating patients directly due to education efforts. -
PAH Market Dynamics
Q: Have you noticed changes in PAH referrals or starts?
A: The PAH business remains solid and strong, with robust referral and start growth in line with expectations, reflected in revenue. While not commenting on Merck's product, they note that most patients in Merck's trial used sotatercept in combination with prostacyclins, aligning with current observations.