01—Abstract
Summary
Summary of the 10-K filed February 22, 2023. Cited figures are marked; the original filing is the authoritative source.
United Therapeutics Corporation (UTHR) reported total revenues of $1,936.3 milliona for 2022, up from $1,685.5 million in 2021 and $1,483.3 million in 2020.
Net income was $727.3 millionb in 2022, compared with $475.8 million in 2021, and diluted earnings per share were $15.00, versus $10.06 in 2021. Growth was led by Tyvaso, whose net product sales rose to $873.0 million, driven by the June 2022 commercial launch of Tyvaso DPI and continued growth following the March 2021 PH-ILD label expansion. Orenitram net product sales were $325.1 million, Remodulin $500.2 million, Unituxin $182.9 million, and Adcirca $41.3 million, which the company attributed to generic competition.
The company ended 2022 with cash, cash equivalents and marketable investments totaling $4,154.9 millionc, against $800.0 million outstanding under its 2022 Credit Agreement, which matures in March 2027. Management states that current liquidity is sufficient to fund operations. Key risks highlighted include generic competition (Watson/Nebulized Tyvaso from January 2026, Actavis/Orenitram from June 2027, ANI/Orenitram from December 2027), ongoing patent litigation with Liquidia over its proposed Yutrepia product, changes under the Inflation Reduction Act of 2022, and several pending legal matters including 340B program litigation, the Sandoz antitrust case, and RICO lawsuits related to patient assistance donations.
The filing also describes pipeline programs, including the TETON studies of Tyvaso in idiopathic pulmonary fibrosis, the phase 3 ADVANCE studies of ralinepag, and organ manufacturing research. The company also disclosed that it is a Delaware public benefit corporation, having converted in 2021.
02—Key points
Key Highlights
- Total revenues rose to $1,936.3 million in 2022 from $1,685.5 million in 2021, with Tyvaso net product sales of $873.0 million, up from $607.5 million, supported by the Tyvaso DPI launch in June 2022.
- Net income was $727.3 million in 2022 versus $475.8 million in 2021; diluted EPS was $15.00 compared with $10.06.
- Total operating expenses were $956.6 million in 2022, down from $1,129.6 million in 2021, which included $540.1 million of R&D expense that year, including a $107.3 million IPR&D impairment for Trevyent and a $105.0 million priority review voucher purchase.
- Cash, cash equivalents and marketable investments totaled $4,154.9 million at December 31, 2022, against $800.0 million of outstanding borrowings under the 2022 Credit Agreement, which matures in March 2027.
- Remodulin, Orenitram and Adcirca face generic competition; the filing discloses settlement-based entry dates of January 2026 for generic nebulized Tyvaso, June 2027 and December 2027 for generic Orenitram, and cites material adverse impact on Adcirca sales from generics.
- Patent litigation with Liquidia over Yutrepia remains pending; the district court barred FDA approval of Liquidia's product until expiration of the '793 patent in May 2027, and the PTAB issued an adverse final decision on the '793 patent that the company may appeal.
- The company has no share repurchases in 2022, has never paid cash dividends, and reports 46,032,064 common shares outstanding at December 31, 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, United Therapeutics kept $0.38.
- Revenue$1.94B100.0%
- Cost of revenue−$151.6M7.8%
- Gross profit$1.78B92.2%
- Operating costs−$805.0M41.6%
- Operating income$979.7M50.6%
- Interest, other & tax−$252.4M13.0%
- Net income$727.3M37.6%
Where FY2022 revenue went
$1.94B- Net income: $727.3M, 38% of revenue
- SG&A: $482.1M, 25% of revenue
- R&D: $322.9M, 17% of revenue
- Interest, other & tax: $252.4M, 13% of revenue
- Cost of revenue: $151.6M, 7.8% of revenue
Kept 38% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 22, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $1.94B$1.69B | +14.9% |
| Cost of Revenue | $151.60M$122.50M | +23.8% |
| Gross Profit | $1.78B$1.56B | +14.2% |
| R&D Expenses | $322.90M$540.10M | −40.2% |
| SG&A Expenses | $482.10M$467.00M | +3.2% |
| Operating Expenses | $956.60M$1.13B | −15.3% |
| Operating Income | $979.70M$555.90M | +76.2% |
| Interest Expense | $32.40M$18.60M | +74.2% |
| Net Income | $727.30M$475.80M | +52.9% |
| EPS (Basic) | $15.98$10.60 | +50.8% |
| EPS (Diluted) | $15.00$10.06 | +49.1% |
| Shares Outstanding (Basic) | 45.50M44.90M | +1.3% |
| Shares Outstanding (Diluted) | 48.50M47.30M | +2.5% |
05—Questions
Frequently Asked Questions
What drove the growth in United Therapeutics' revenue in 2022?
Total revenues increased $250.8 million, or 15 percent, to $1,936.3 million. The largest driver was Tyvaso, whose net product sales rose $265.5 million to $873.0 million. The filing attributes this to higher quantities sold following the June 2022 launch of Tyvaso DPI and continued growth after the March 2021 PH-ILD label expansion, with a price increase and lower gross-to-net deductions contributing to a lesser extent. Remodulin and Adcirca net product sales declined.
How much debt does the company carry and when does it come due?
The company had $800.0 million outstanding under its 2022 Credit Agreement, a revolving facility of up to $2.0 billion that matures in March 2027. The company borrowed $800.0 million on March 31, 2022 and used the proceeds to repay its 2018 Credit Agreement. The balance is classified as non-current because management does not intend to repay any portion within one year. A 100 basis point increase in the variable rate would increase annual interest expense by approximately $8.0 million.
What are the main threats to future revenue from generic competition?
Adcirca already faces generic competition, which the filing says has had a material adverse impact on its sales. Remodulin faces generic competition in the United States and in certain European countries. Under settlement agreements, Watson may launch a generic nebulized Tyvaso in January 2026, Actavis may launch a generic Orenitram in June 2027, and ANI in December 2027, each potentially earlier in certain circumstances. The company also faces possible competition from Liquidia's Yutrepia if it obtains final FDA approval.
What pipeline developments could add future revenue?
The TETON 1 and TETON 2 phase 3 studies are evaluating Tyvaso for idiopathic pulmonary fibrosis, with a primary endpoint of change in absolute FVC at week 52. If successful, the company plans to seek an IPF indication for Tyvaso and Tyvaso DPI. Ralinepag is in phase 3 ADVANCE studies for PAH, and RemoPro, a subcutaneous prodrug, is in phase 1. The company is also conducting organ manufacturing research, including xenotransplantation.
What significant legal matters are pending?
Several matters are pending: patent litigation with Liquidia over Tyvaso-related patents, with appeals ongoing; an antitrust and contract case brought by Sandoz and RareGen, where the trial on contract damages has no date set; RICO and state-law suits filed by MSP Recovery, Humana and United Healthcare over donations to a PAH patient-assistance fund; and an appeal in 340B contract pharmacy litigation. The filing states that the company cannot reasonably estimate a range of losses in the Sandoz matter.
06—Continue