01—Abstract
Summary
Summary of the 10-K filed February 24, 2022. Cited figures are marked; the original filing is the authoritative source.
United Therapeutics Corporation (Nasdaq: UTHR) reported net product sales of $1.69 billiona for 2021, up from $1.48 billion in 2020, with net income of $475.8 million compared with $514.8 million in 2020.
Tyvaso led growth at $607.5 millionb (up from $483.3 million), reflecting the March 2021 approval of Tyvaso for pulmonary hypertension associated with interstitial lung disease (PH-ILD). Remodulin sales were roughly flat at $513.7 million, Orenitram rose to $306.1 million, Unituxin increased to $202.3 million, and Adcirca declined to $55.9 million amid generic competition. Operating expenses rose, driven by a $107.3 million impairment of in-process R&D tied to discontinuing U.S. development of Trevyent, a $105.0 million priority review voucher purchase, and higher litigation expenses.
The company completed its conversion to a Delaware public benefit corporation on September 30, 2021. As of December 31, 2021, it held $3.58 billionc in cash, cash equivalents and marketable investments against an $800.0 million outstanding balance under its $1.5 billion credit agreement. The company did not repurchase any equity in 2021 and has never paid cash dividends.
Key near-term catalysts include the FDA review of the Tyvaso DPI new drug application, with a decision now anticipated by May 2022 after a major amendment extended the review. The filing also discusses pending patent litigation with Liquidia over Yutrepia, a generic-competition challenge from Sandoz and RareGen over Remodulin, and a 340B contract pharmacy dispute with HRSA.
02—Key points
Key Highlights
- Total revenues of $1,685.5 million in 2021, up 14% from $1,483.3 million in 2020; Tyvaso was the largest product at $607.5 million, or 36% of total revenues.
- Tyvaso net product sales rose 26% to $607.5 million, driven by the March 2021 FDA approval for PH-ILD, the first and only approved therapy for that condition per the filing.
- Net income was $475.8 million (diluted EPS $10.06) in 2021, compared with $514.8 million (diluted EPS $11.54) in 2020.
- Research and development expense rose to $540.1 million, including a $107.3 million IPR&D impairment for Trevyent and a $105.0 million priority review voucher purchase.
- Tyvaso DPI NDA received a complete response letter in October 2021; after resubmission, the FDA review deadline was extended to May 2022.
- Cash, cash equivalents and marketable investments totaled $3.58 billion at year-end, against $800.0 million outstanding under the Credit Agreement, which matures in December 2025.
- Watson's generic Tyvaso may launch in January 2026 and Actavis's generic Orenitram in June 2027 under settlement agreements, subject to earlier entry in certain circumstances.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, United Therapeutics kept $0.28.
- Revenue$1.69B100.0%
- Cost of revenue−$122.5M7.3%
- Gross profit$1.56B92.7%
- Operating costs−$1.01B59.8%
- Operating income$555.9M33.0%
- Interest, other & tax−$80.1M4.8%
- Net income$475.8M28.2%
Where FY2021 revenue went
$1.69B- R&D: $540.1M, 32% of revenue
- Net income: $475.8M, 28% of revenue
- SG&A: $467.0M, 28% of revenue
- Cost of revenue: $122.5M, 7.3% of revenue
- Interest, other & tax: $80.1M, 4.8% of revenue
Kept 28% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 24, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $1.69B$1.48B | +13.6% |
| Cost of Revenue | $122.50M$108.10M | +13.3% |
| Gross Profit | $1.56B$1.38B | +13.7% |
| R&D Expenses | $540.10M$357.70M | +51.0% |
| SG&A Expenses | $467.00M— | — |
| Operating Expenses | $1.13B$889.70M | +27.0% |
| Operating Income | $555.90M$593.60M | −6.4% |
| Interest Expense | $18.60M$23.50M | −20.9% |
| Net Income | $475.80M$514.80M | −7.6% |
| EPS (Basic) | $10.60$11.65 | −9.0% |
| EPS (Diluted) | $10.06$11.54 | −12.8% |
| Shares Outstanding (Basic) | 44.90M44.20M | +1.6% |
| Shares Outstanding (Diluted) | 47.30M44.60M | +6.1% |
05—Questions
Frequently Asked Questions
What drove the increase in Tyvaso sales in 2021?
Tyvaso net product sales increased 26% to $607.5 million in 2021, primarily due to an increase in quantities sold following the PH-ILD label expansion approved in March 2021, and to a lesser extent, price increases.
Why did net income decline in 2021 despite higher revenue?
Net income fell to $475.8 million from $514.8 million. Operating expenses increased, including a $107.3 million impairment related to discontinuing U.S. development of Trevyent, a $105.0 million purchase of a pediatric disease priority review voucher, and an $11.6 million facility impairment. Income tax expense was $118.1 million compared with $124.1 million in 2020.
What is the status of Tyvaso DPI?
The FDA issued a complete response letter in October 2021 citing a single deficiency related to an open inspection issue at a third-party analytical testing facility. The NDA was resubmitted in December 2021 and accepted in January 2022. In February 2022 the FDA requested additional information on pulmonary safety, and the company's response was treated as a major amendment, extending the anticipated review deadline to May 2022.
How much debt does the company have and when is it due?
The company had $800.0 million outstanding under its unsecured revolving Credit Agreement, which provides up to $1.5 billion and matures in December 2025. The balance was classified as non-current, and the company stated it has no intention to repay any portion during 2022.
What generic competition does the company face?
Generic Adcirca launched in 2018 and has had a material adverse impact on Adcirca sales. Generic Remodulin is available in the United States and has produced minimal erosion of U.S. sales through December 31, 2021, while international Remodulin revenues have come under pressure. Watson may launch a generic Tyvaso starting January 2026 and Actavis a generic Orenitram starting June 2027, both subject to earlier entry in certain circumstances. The company is also in patent litigation with Liquidia over Yutrepia and with ANI over a generic Orenitram.
06—Continue