UNITED THERAPEUTICS Corp (UTHR)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered strong growth: total revenues rose 20% year-over-year to $735.9M, net income increased 39% to $301.3M, and diluted EPS was $6.19 versus $4.36 in Q4 2023 . Sequentially, revenue declined from Q3’s $748.9M due to higher gross-to-net deductions tied to Tyvaso contracting, despite record gross revenues and record product shipments, positioning a higher base for future growth .
• Tyvaso franchise remained the primary driver: total Tyvaso revenue reached $415.9M (+19% YoY), with DPI at $273.2M (+28% YoY) and nebulized at $142.7M (+4% YoY), supported by PH-ILD prescriber breadth/depth and Part D dynamics .
• Strategic pipeline catalysts: FDA cleared the IND for the UKidney xenotransplantation clinical trial (first transplant expected mid-2025), and TETON IPF program achieved full enrollment in TETON 1 with top-line data timelines (TETON 2 H2’25; TETON 1 H1’26) .
• Management reiterated confidence in double-digit growth for the foundational business and reinforced payer contracting strategy to defend parity ahead of potential competition; no formal 2025 sales guidance provided .
• Wall Street consensus estimates from S&P Global were unavailable at the time of this analysis due to API limits; beat/miss assessment could not be performed (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

• Tyvaso execution: Q4 Tyvaso revenue grew 19% YoY to $415.9M, driven by record patient shipments and near-record referrals/starts; management highlighted strengthened ILD prescriber penetration and continued growth in both PH-ILD and PAH indications .
• Broad product strength: Orenitram (+28% YoY to $107.8M), Remodulin (+17% YoY to $134.5M), and Unituxin (+25% YoY to $67.5M) all posted solid Q4 growth, with Unituxin’s U.S. revenue at $62M on price and volume .
• Pipeline momentum: UKidney IND clearance (phaseless study up to 50 patients); TETON 1 fully enrolled (598 patients), TETON 2 top-line expected H2’25, supporting IPF label expansion efforts and potential DPI bridging thereafter .

Quotes:

• “Congratulations…another record revenue year…third year in a row of record-setting revenue…we have now begun our 3-year cascade of clinical and regulatory events, starting with…IND clearance for our UKidney clinical trial.” – Martine Rothblatt .
• “Our fourth quarter total net revenue was down slightly sequentially…due in part to our recent contracting efforts for Tyvaso…creating a new base from which Tyvaso can continue to grow.” – Michael Benkowitz .
• “Completing enrollment in [TETON 1] brings us one step closer to potentially delivering a transformative…treatment option for…IPF.” – Peter Smith .

What Went Wrong

• Sequential revenue softness: Q4 net revenue declined versus Q3 due to higher gross-to-net deductions from Tyvaso contracting, even as underlying gross revenues were record-setting .
• SG&A step-up: Selling, general, and administrative expense increased 27% YoY in Q4 to $168.5M, with a $6.0M litigation accrual (Sandoz), and share-based compensation nearly doubling YoY, pressuring opex .
• Adcirca headwind: Q4 Adcirca revenue fell 31% YoY to $4.7M, continuing to be a small drag within the portfolio .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

Note: Sequential decline in Q4 2024 revenues vs Q3 largely due to gross-to-net impacts tied to Tyvaso contracting .

Segment Breakdown (Net Product Sales)

Geographic Revenue Split

Margins (Computed from reported figures)

Note: Gross margin computed using total cost of sales; EBIT margin uses operating income; margins are derived from company-reported financials with cited inputs.

Guidance Changes

Management did not issue formal revenue, margin, or EPS guidance; commentary reiterated confidence in double-digit growth for the foundational portfolio.

Earnings Call Themes & Trends

Management Commentary

• Strategic positioning: “Record performance…innovative and revolutionary development programs…disciplined financial management and capital allocation…we’ve never been in a better position” – Martine Rothblatt .
• Contracting rationale: “Lock in payers with additional rebates…keep us at parity…payers less likely to disadvantage us as rebate dollars are flowing” – Michael Benkowitz .
• Foundational growth outlook: “Expect to continue to grow double digits out into the mid-decade…no change in perspective despite contracting” – Michael Benkowitz .
• UKidney study design: “Six-participant cohort, 12-week review…endpoints include graft survival, patient survival, kidney function, and safety including zoonotic infections” – Leigh Peterson .

Q&A Highlights

• Growth trajectory without formal guidance: Management expects continued double-digit revenue growth for the foundational business in 2025–2026, even after contracting impacts; no formal sales guidance provided .
• Xenotransplantation program: Cohort-based “phaseless” clinical design; privacy protocols in formal study; progression contingent on DSMB review at 12 weeks between first and second transplant .
• Competitive dynamics (sotatercept): Management views impact as immaterial over long term; PAH’s progressive nature implies eventual prostacyclin use; combination therapy already observed .
• Tyvaso PH-ILD prescriber strategy: Sales force expansion led to meaningful breadth/depth gains in ILD treating community; Tyvaso growing in both PH-ILD (~35–40% in 2024) and PAH (mid-teen growth) .
• Contracting and IPF launch prep: Preemptive payer contracts establish rebate flows and parity; clinicians to decide best product, with UT believing it’s well positioned .

Estimates Context

• S&P Global Wall Street consensus estimates for Q4 2024 EPS and revenue were unavailable at the time of analysis due to API request limits; beat/miss analysis versus consensus could not be performed. Users should expect potential updates once S&P Global data access is restored.

Key Takeaways for Investors

• Sequential softness in Q4 was driven by intentional Tyvaso contracting (gross-to-net) rather than demand; underlying KPIs (shipments, referrals, starts) remained robust, suggesting a reset to a higher base for 2025 growth .
• Tyvaso remains the core near-term growth engine across PH-ILD and PAH; ILD prescriber breadth/depth is improving, reinforcing runway ahead of IPF readouts .
• High-impact pipeline catalysts: UKidney first transplant mid-2025 and TETON timelines (TETON 2 H2’25; TETON 1 H1’26) represent material optionality for IPF label expansion and broader organ innovation narrative .
• Portfolio breadth supports resilience: Orenitram, Remodulin, and Unituxin all delivered double-digit YoY growth; Remunity Pro pump clearance may further support Remodulin uptake .
• Margin quality remains strong with expanding EBIT margin versus prior periods; opex elevated due to SG&A and litigation accrual, but operating leverage evident on higher revenue base .
• Payer strategy reduces competitive risk: Preemptive contracting creates parity and ongoing rebate flows, positioning UT favorably if new entrants arrive; expect gross-to-net normalization from Q4 levels .
• Trading lens: Near-term stock catalysts include UKidney milestones and TETON 2 topline in H2’25; watch for incremental updates on payer dynamics, PH-ILD prescriber expansion, and any signals on ralinepag timelines .