01—Abstract
Summary
Summary of the 10-K filed February 24, 2021. Cited figures are marked; the original filing is the authoritative source.
United Therapeutics Corporation (Nasdaq: UTHR) reported net product sales of $1.48 billiona for 2020, compared with $1.45 billion in 2019, and net income of $514.8 million, compared with a net loss of $104.5 million in 2019.
The 2019 loss reflected an $800.0 millionb upfront payment to Arena for ralinepag, which was expensed as acquired in-process R&D. Revenue growth was led by Tyvaso ($483.3 million, up from $415.6 million) and Orenitram ($293.1 million, up from $225.3 million), which offset a decline in Remodulin ($516.7 million, down from $587.0 million) and a steep drop in Adcirca ($67.3 million, down from $107.2 million) due to generic competition. Remodulin's non-U.S. sales fell to $64.3 million from $120.9 million amid generic competition in Europe.
The company reported cash, cash equivalents and marketable investments of $2.98 billionc at December 31, 2020, up from $2.25 billion, while $800.0 million was outstanding under its $1.5 billion Credit Agreement. Management stated it expects revenue growth in 2021, driven mainly by Tyvaso for PH-ILD if the pending sNDA is approved, continued Orenitram patient growth, and modest price increases, partly offset by Adcirca erosion. The filing also describes the COVID-19 impact on new patient starts in the second quarter of 2020, which had recovered to pre-pandemic levels by the end of the year, and it notes that the Remunity Pump launched commercially in February 2021.
Pipeline timing has shifted in several programs. The Trevyent NDA resubmission is now expected to be delayed to 2022 after FDA feedback, and the Tyvaso DPI NDA is planned for April 2021 with a pediatric priority review voucher purchased for $105.0 milliond. The company also disclosed ongoing litigation with Sandoz/RareGen over subcutaneous Remodulin infusion devices and patent litigation with Liquidia over LIQ861, with a trial scheduled for March 2022.
02—Key points
Key Highlights
- Total revenues of $1,483.3 million in 2020, up from $1,448.8 million in 2019; Tyvaso ($483.3 million) and Orenitram ($293.1 million) grew, while Remodulin ($516.7 million) and Adcirca ($67.3 million) declined.
- Net income of $514.8 million ($11.54 diluted EPS) in 2020, versus a net loss of $104.5 million in 2019 that reflected the $800.0 million Arena ralinepag payment.
- Cash, cash equivalents and marketable investments totaled $2,984.6 million at December 31, 2020, up from $2,253.4 million, while $800.0 million was outstanding under the Credit Agreement.
- Management expects 2021 revenue growth driven by Tyvaso for PH-ILD (pending sNDA, decision expected April 2021), Orenitram patient growth and modest price increases, partly offset by Adcirca generic erosion.
- Trevyent NDA resubmission now expected to be delayed to 2022, and the Tyvaso DPI NDA is planned for April 2021 with a $105.0 million priority review voucher purchased in January 2021.
- Remodulin non-U.S. net product sales fell to $64.3 million from $120.9 million as generic treprostinil and COVID-19 pressured international sales.
- Remunity Pump commercially launched in February 2021 after a pandemic-related delay; Liquidia LIQ861 litigation and Sandoz/RareGen antitrust suit remain pending.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, United Therapeutics kept $0.35.
- Revenue$1.48B100.0%
- Cost of revenue−$108.1M7.3%
- Gross profit$1.38B92.7%
- Operating costs−$781.6M52.7%
- Operating income$593.6M40.0%
- Interest, other & tax−$78.8M5.3%
- Net income$514.8M34.7%
Where FY2020 revenue went
$1.48B- Net income: $514.8M, 35% of revenue
- Other operating costs: $423.9M, 29% of revenue
- R&D: $357.7M, 24% of revenue
- Cost of revenue: $108.1M, 7.3% of revenue
- Interest, other & tax: $78.8M, 5.3% of revenue
Kept 35% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 24, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $1.48B$1.45B | +2.4% |
| Cost of Revenue | $108.10M$117.60M | −8.1% |
| Gross Profit | $1.38B$1.33B | +3.3% |
| R&D Expenses | $357.70M$1.18B | −69.8% |
| Operating Expenses | $889.70M$1.64B | −45.6% |
| Operating Income | $593.60M-$187.60M | +416.4% |
| Interest Expense | $23.50M$44.20M | −46.8% |
| Net Income | $514.80M-$104.50M | +592.6% |
| EPS (Basic) | $11.65$-2.39 | +587.4% |
| EPS (Diluted) | $11.54$-2.39 | +582.8% |
| Shares Outstanding (Basic) | 44.20M43.80M | +0.9% |
| Shares Outstanding (Diluted) | 44.60M43.80M | +1.8% |
05—Questions
Frequently Asked Questions
Why was 2019 a net loss, and did 2020 return to profitability?
The 2019 net loss of $104.5 million reflected an $800.0 million upfront payment to Arena for ralinepag, which was expensed as acquired in-process R&D. In 2020, research and development expense fell to $357.7 million from $1,182.6 million, and net income was $514.8 million, or $11.54 per diluted share.
Which products drove revenue in 2020 and which declined?
Tyvaso rose to $483.3 million from $415.6 million and Orenitram rose to $293.1 million from $225.3 million. Remodulin fell to $516.7 million from $587.0 million, and Adcirca fell to $67.3 million from $107.2 million, mainly due to generic competition.
What are the key near-term catalysts for 2021?
The filing cites the FDA decision on the Tyvaso sNDA for PH-ILD expected in April 2021, the planned Tyvaso DPI NDA submission, continued Orenitram growth, and the commercial launch of the Remunity Pump in February 2021. Trevyent resubmission is now expected to be delayed to 2022.
How did COVID-19 affect the business?
New patient starts fell in the second quarter of 2020 because patients could not easily visit physicians, and clinical trial enrollment was paused in the first quarter. By the end of the third quarter, new patient starts had reached or exceeded pre-pandemic levels, a trend that continued through year-end 2020.
What litigation and patent risks should investors watch?
The company is in patent litigation with Liquidia over LIQ861, with a trial scheduled to begin March 28, 2022 and a PTAB final written decision on one IPR expected around October 2021. It is also defending a Sandoz/RareGen antitrust complaint, where no trial is expected before early 2022. The Tyvaso patent expires in 2027, and generic Tyvaso and Orenitram entry is permitted from January 2026 and June 2027 under settlements.
06—Continue