What was the most important regulatory event for United Therapeutics in 2002?

On May 21, 2002, the FDA approved Remodulin (treprostinil sodium) Injection for pulmonary arterial hypertension in patients with NYHA class II-IV symptoms to diminish symptoms associated with exercise. The approval requires a post-marketing Phase IV study of 100 patients that must be completed within 24 months, and continued approval depends on its completion and outcome.

How did the company's financial results change in 2002?

Total revenues increased to $30.1 million from $5.7 million, and the net loss decreased to $23.7 million from $37.3 million. Remodulin sales to distributors were approximately $21.2 million. Cash, cash equivalents and marketable investments declined to $132.7 million from $172.3 million, and the company used $22.3 million in operating activities.

Does management expect the company to become profitable?

No. The filing states that United Therapeutics has incurred net losses each year since inception, expects to continue incurring net losses, and cannot provide assurances that it will become profitable. Management also believes Remodulin sales at current levels, with existing capital, will be adequate to fund operations through 2006.

What are the main risks to the Remodulin franchise?

Key risks include loss of FDA approval if the Phase IV study results are unfavorable, competition from Flolan, Tracleer and other products in development, reimbursement by third-party payers, dependence on a limited number of distributors and suppliers, and patent protection for the method of treating pulmonary arterial hypertension, which expires in 2009.

What are the company's other product programs?

OvaRex, an immunotherapeutic monoclonal antibody for ovarian cancer, began two Phase III trials in January 2003. UT-231B, a glycobiology antiviral agent for hepatitis C, completed Phase I dosing studies in early 2003, with a Phase II proof-of-concept study expected to begin in 2003. Remodulin for critical limb ischemia is in pre-pivotal studies expected to finish by late 2003.

UTHR 10-K FY2002 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed March 19, 2003. Cited figures are marked; the original filing is the authoritative source.

United Therapeutics Corporation (Nasdaq: UTHR), a biotechnology company focused on cardiovascular, infectious and oncological diseases, reported its 10-K for the fiscal year ended December 31, 2002.

The most important development was FDA approval of Remodulin (treprostinil sodium) Injection on May 21, 2002, for pulmonary arterial hypertension in NYHA class II-IV patients. Revenues rose to $30.1 million^a in 2002 from $5.7 million in 2001, driven primarily by approximately $21.2 million of Remodulin sales, while the net loss narrowed to $23.7 million from $37.3 million. Continued FDA approval is conditioned on completion and outcome of a 100-patient Phase IV study, of which four patients had been enrolled as of March 2003.

The balance sheet shows cash, cash equivalents and marketable investments of $132.7 million^b at December 31, 2002, down from $172.3 million, with an accumulated deficit of $185.8 million. Management states that net cash from Remodulin sales together with existing capital resources is expected to be adequate to fund operations through 2006, based on estimated average annual revenue of approximately $36 million from about 410 reimbursable patients. The company also disclosed that it began two Phase III trials of OvaRex in ovarian cancer in January 2003, and that the FTC is reviewing advertising claims for the HeartBar product line.

The filing carries substantial risk factors, including dependence on continued Remodulin approval, reliance on third-party manufacturers and distributors, patent expirations (the Remodulin method patent expires in 2009), and the company's history of losses. Management expects to continue incurring net losses.

02—Key points

Key Highlights

FDA approved Remodulin on May 21, 2002 for pulmonary arterial hypertension (NYHA class II-IV); approval is conditioned on a 100-patient Phase IV study, with four patients enrolled as of March 2003.
2002 total revenues were $30.1 million, up from $5.7 million in 2001; Remodulin sales were approximately $21.2 million and pumps and supplies approximately $3.7 million.
Net loss narrowed to $23.7 million ($1.15 per share) in 2002 from $37.3 million ($1.84 per share) in 2001.
Cash, cash equivalents and marketable investments were $132.7 million at December 31, 2002, down from $172.3 million; the accumulated deficit was $185.8 million.
Management expects cash from Remodulin sales plus existing resources to fund operations through 2006, based on estimated average annual revenue of about $36 million from roughly 410 reimbursable patients.
Pipeline activity includes two identical Phase III trials of OvaRex in advanced ovarian cancer started in January 2003 and a Phase II hepatitis C study of UT-231B planned for 2003.
Risk factors include reliance on third-party distributors and manufacturers, a Remodulin method patent expiring in 2009, and an FTC review of HeartBar advertising claims.

03—Questions

Frequently Asked Questions

What was the most important regulatory event for United Therapeutics in 2002?
On May 21, 2002, the FDA approved Remodulin (treprostinil sodium) Injection for pulmonary arterial hypertension in patients with NYHA class II-IV symptoms to diminish symptoms associated with exercise. The approval requires a post-marketing Phase IV study of 100 patients that must be completed within 24 months, and continued approval depends on its completion and outcome.
How did the company's financial results change in 2002?
Total revenues increased to $30.1 million from $5.7 million, and the net loss decreased to $23.7 million from $37.3 million. Remodulin sales to distributors were approximately $21.2 million. Cash, cash equivalents and marketable investments declined to $132.7 million from $172.3 million, and the company used $22.3 million in operating activities.
Does management expect the company to become profitable?
No. The filing states that United Therapeutics has incurred net losses each year since inception, expects to continue incurring net losses, and cannot provide assurances that it will become profitable. Management also believes Remodulin sales at current levels, with existing capital, will be adequate to fund operations through 2006.
What are the main risks to the Remodulin franchise?
Key risks include loss of FDA approval if the Phase IV study results are unfavorable, competition from Flolan, Tracleer and other products in development, reimbursement by third-party payers, dependence on a limited number of distributors and suppliers, and patent protection for the method of treating pulmonary arterial hypertension, which expires in 2009.
What are the company's other product programs?
OvaRex, an immunotherapeutic monoclonal antibody for ovarian cancer, began two Phase III trials in January 2003. UT-231B, a glycobiology antiviral agent for hepatitis C, completed Phase I dosing studies in early 2003, with a Phase II proof-of-concept study expected to begin in 2003. Remodulin for critical limb ischemia is in pre-pivotal studies expected to finish by late 2003.

04—Continue

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