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United Therapeutics Annual Report, Year Ended Dec 31, 2004

Filing Date
Filed February 25, 2005
Period End
December 31, 2004
Security
UTHR
In the record · 2016–202610-K1110-Q338-K152

UTHR filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 152 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’17May ’17
  2. Leadership change8-K · Jun ’19Jun ’19
  3. Material agreement8-K · Apr ’22Apr ’22
  4. Leadership change8-K · Jan ’26Jan ’26

01—Abstract

Summary

Summary of the 10-K filed February 25, 2005. Cited figures are marked; the original filing is the authoritative source.

United Therapeutics Corporation (UTHR), a Silver Spring, Maryland biotechnology company, filed its 10-K for fiscal 2004 on February 25, 2005.

The company reported 2004 revenues of $73.6 milliona, up from $53.3 million in 2003, and net income of $15.4 million, compared with a net loss of $10.0 million in 2003. Growth was driven primarily by Remodulin, which generated $66.1 million in 2004 revenue and accounted for approximately 90% of total revenues. Net income was $15.4 million, but the company still reported an accumulated deficit of $180.3 million at December 31, 2004.

The filing's central risk is the FDA-required Phase IV post-marketing study for Remodulin. Only 15 of the 39 required patients had been enrolled, and the company stated it was not enrolling within the FDA's timeframe, leaving it at risk of a public hearing to withdraw marketing approval. The company has proposed that the FDA evaluate results based on enrollment through September 15, 2005, and the FDA was reviewing that proposal.

Intravenous Remodulin was approved in November 2004, subject to the same Phase IV condition. The pipeline showed setbacks: UT-231B did not demonstrate efficacy against hepatitis C in patients who previously failed conventional treatment, and critical limb ischemia development was ended after difficulty recruiting patients. Balance sheet strength improved modestly.

Cash, cash equivalents and marketable investments totaled $139.1 millionb at December 31, 2004, up from $117.3 million, and stockholders' equity rose to $191.6 million. The company said its resources would be adequate to fund operations through 2007. It also entered a synthetic operating lease with Wachovia to fund a laboratory facility of up to $32.0 million, with a guaranteed minimum residual value of approximately $27.5 million, and filed a shelf registration for up to five million shares of common stock.

02—Key points

Key Highlights

  1. Revenues rose to $73.6 million in 2004 from $53.3 million in 2003, with Remodulin revenue of $66.1 million.
  2. Net income of $15.4 million in 2004 versus a net loss of $10.0 million in 2003; accumulated deficit reduced to $180.3 million.
  3. Remodulin accounted for approximately 90% of 2004 total revenues, creating significant concentration risk.
  4. Phase IV post-marketing study is behind schedule: only 15 of 39 planned patients enrolled, creating risk of an FDA hearing to withdraw Remodulin approval.
  5. Intravenous Remodulin was approved November 24, 2004 for patients unable to tolerate subcutaneous infusion, conditioned on the Phase IV trial.
  6. UT-231B failed to show efficacy against hepatitis C in patients who previously failed conventional treatments; critical limb ischemia study was ended early.
  7. Cash, cash equivalents and marketable investments of $139.1 million; company expects resources to fund operations through 2007; shelf registration filed for up to five million shares.

03—Questions

Frequently Asked Questions

  1. What is the main risk to Remodulin sales?

    The FDA requires a post-marketing Phase IV study as a condition of continued approval. Only 15 of the 39 required patients had been enrolled, and the company is not enrolling within the FDA's timeframe, so the FDA could institute a public hearing to withdraw marketing approval. The company has proposed evaluating results based on enrollment through September 15, 2005, and the FDA was reviewing that proposal.

  2. Has the company become profitable?

    Yes, for 2004. Net income was $15.4 million compared with a net loss of $10.0 million in 2003, and the company was profitable in each quarter from June 30 through December 31, 2004. However, it had incurred net losses from inception through March 31, 2004 and still had an accumulated deficit of $180.3 million.

  3. How strong is the company's cash position?

    Cash, cash equivalents and marketable investments totaled $139.1 million at December 31, 2004, up from $117.3 million. The company stated that its existing revenues and capital resources would be adequate to fund operations through 2007. Operating cash flow was $20.8 million in 2004.

  4. What happened with the pipeline programs?

    UT-231B did not demonstrate efficacy against hepatitis C in patients who previously failed conventional treatments, and the company is planning a trial in patients who responded to conventional treatment. The critical limb ischemia pre-pivotal study was ended before full enrollment due to recruiting difficulties. OvaRex remains in two Phase III trials for ovarian cancer, with about 210 of 354 patients enrolled at December 31, 2004.

  5. What is the Wachovia laboratory arrangement?

    The company entered a synthetic operating lease with Wachovia Development Corporation to fund a laboratory facility in Silver Spring, Maryland, with Wachovia funding up to $32.0 million of construction. Lease rent is tied to 30-day LIBOR plus about 55 basis points, the lease term ends in May 2011, and the company guaranteed a minimum residual value of approximately $27.5 million. The company pledged $10.1 million of marketable investments and cash as collateral.

04—Continue

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