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United Therapeutics Annual Report, Year Ended Dec 31, 2006

Filing Date
Filed February 28, 2007
Period End
December 31, 2006
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 28, 2007. Cited figures are marked; the original filing is the authoritative source.

United Therapeutics Corporation (UTHR) reported that its lead product, Remodulin (treprostinil), drove 2006 results.

Total revenues were $159.6 milliona in 2006, up from $115.9 million in 2005, with Remodulin sales of $152.5 million, or about 96% of total revenues. Net income was $73.97 million, or $3.06 per diluted share, which includes a $34.1 million income tax benefit from a roughly $45.7 million reduction in the deferred tax asset valuation allowance. The company reported an accumulated deficit of approximately $41.4 million at December 31, 2006, and said it had been profitable in every quarter since March 31, 2004.

The company issued $250.0 millionb of 0.50% Convertible Senior Notes due 2011 in October 2006, with net proceeds of about $242.0 million. It used about $112.4 million of those proceeds to repurchase about 1.8 million shares, paid about $35.4 million for convertible note hedge and warrant transactions, and began a broader repurchase program of up to 4.0 million shares. Cash, cash equivalents and marketable investments were $303.2 million at year-end 2006, and stockholders' equity fell to $204.6 million because of share repurchases.

Key pipeline and risk items include the TRIUMPH-1 inhaled treprostinil (Viveta) Phase III trial, the FREEDOM-C and FREEDOM-M oral treprostinil trials, two Phase III OvaRex ovarian cancer trials with 367 patients enrolled, and the UT-231B hepatitis C program, which did not demonstrate efficacy. The filing also flags a February 2007 CDC inquiry into bloodstream infections among patients on intravenous Remodulin and the Pulmonary Hypertension Association's guidance in response, along with pending distributor consolidation in the United States and the expected generic availability of Flolan from May 2007.

02—Key points

Key Highlights

  1. Total revenues rose to $159.6 million in 2006 from $115.9 million in 2005, driven mainly by Remodulin sales to distributors of $152.5 million.
  2. Net income was $73.97 million ($3.06 per diluted share) in 2006, compared with $65.0 million in 2005, and included a $34.1 million income tax benefit tied to a roughly $45.7 million valuation allowance reduction.
  3. The company issued $250.0 million of 0.50% Convertible Senior Notes due 2011 in October 2006, with net proceeds of about $242.0 million, and used $112.4 million to repurchase about 1.8 million shares.
  4. Stock repurchases totaled $157.7 million in 2006, and stockholders' equity declined to $204.6 million from $275.1 million.
  5. Cash, cash equivalents and marketable investments totaled $303.2 million at December 31, 2006, up from $191.0 million a year earlier.
  6. Research and development expense increased to $57.6 million from $36.1 million, mainly due to treprostinil programs, and selling, general and administrative expense rose to $54.0 million from $24.7 million, including $14.2 million of stock option expense.
  7. A February 2007 CDC inquiry into bloodstream infections among patients on intravenous Remodulin and the related Pulmonary Hypertension Association guidance is a disclosed risk, and the company plans a multi-center prospective sepsis study.

03—Questions

Frequently Asked Questions

  1. How dependent is United Therapeutics on Remodulin?

    Very dependent. Remodulin sales accounted for 96% of total revenues in 2006, and the filing notes that most U.S. Remodulin sales flow through three distributors: Accredo, CuraScript and Caremark.

  2. What drove the 2006 net income, and was it operating or tax-related?

    Both. Income from operations was $29.0 million, down from $42.9 million in 2005, while net income of $74.0 million was boosted by a $34.1 million income tax benefit from reducing the deferred tax asset valuation allowance.

  3. What are the main pipeline catalysts mentioned in the filing?

    The filing cites the TRIUMPH-1 inhaled treprostinil (Viveta) trial, which had about 175 patients enrolled as of February 20, 2007, the FREEDOM-C and FREEDOM-M oral treprostinil trials, and two Phase III OvaRex ovarian cancer trials with 367 patients enrolled. Results are not yet reported.

  4. What new risks did the company disclose about its intravenous Remodulin?

    A CDC retrospective inquiry, described in February 2007, examined bloodstream infections among PAH patients on intravenous Remodulin compared with Flolan. The Pulmonary Hypertension Association's guidance said the observations were hypothesis-generating, and the company plans a prospective sepsis study and label revisions. The filing states that concern could adversely affect prescribing and Remodulin sales.

  5. Is the company profitable and what is its capital position?

    The company has been profitable every quarter since March 31, 2004, but still reports an accumulated deficit of about $41.4 million at December 31, 2006. Year-end cash and marketable investments were $303.2 million, against $250.0 million of convertible notes outstanding.

04—Continue

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