01—Abstract
Summary
Summary of the 10-K filed February 21, 2024. Cited figures are marked; the original filing is the authoritative source.
United Therapeutics Corporation (Nasdaq: UTHR) reported total revenues of $2,327.5 milliona for 2023, up from $1,936.3 million in 2022, with net income of $984.8 million and diluted EPS of $19.81.
Growth was driven by Tyvaso DPI, which launched commercially in June 2022 and generated $731.1 millionb in net product sales in 2023, while combined Tyvaso net product sales (Tyvaso DPI and nebulized Tyvaso) reached $1,233.7 million, or 53 percent of total revenues. Nebulized Tyvaso is approved for PH-ILD in the U.S., and the company is running Phase 3 TETON studies in idiopathic pulmonary fibrosis and a TETON PPF study in progressive pulmonary fibrosis. Other products include Remodulin ($494.8 million), Orenitram ($359.4 million), Unituxin ($198.9 million) and Adcirca ($28.9 million), with Adcirca facing generic competition.
The balance sheet ended 2023 with cash, cash equivalents and marketable investments of $4,903.9 millionc against $700.0 million outstanding under the 2022 Credit Agreement, of which $400.0 million is classified as current. Operating cash flow was $978.0 million. The company recorded no share repurchases in 2023.
Ralinepag is in the Phase 3 ADVANCE OUTCOMES study, and the company acquired IVIVA Medical and Miromatrix Medical in the fourth quarter of 2023 to expand its manufactured organ programs. Key risks disclosed include generic competition for Remodulin, nebulized Tyvaso and Orenitram, ongoing patent litigation with Liquidia over Yutrepia, the Inflation Reduction Act's effect on Part D revenues, 340B and Medicaid rebate compliance matters, and dependence on a small number of U.S. distributors, which accounted for 51 percent and 34 percent of total revenues in 2023 for Distributors 1 and 2. The company is a Delaware public benefit corporation.
02—Key points
Key Highlights
- Total revenues rose 20 percent to $2,327.5 million in 2023 from $1,936.3 million in 2022.
- Tyvaso DPI net product sales reached $731.1 million in its first full year after the June 2022 launch, while total Tyvaso sales grew 41 percent to $1,233.7 million.
- Net income was $984.8 million, or $19.81 per diluted share, compared with $727.3 million in 2022.
- Cash, cash equivalents and marketable investments totaled $4,903.9 million at year-end, against $700.0 million of outstanding credit facility borrowings.
- Pipeline catalysts include TETON 1 and TETON 2 Phase 3 studies of nebulized Tyvaso in IPF, the TETON PPF study, and the Phase 3 ADVANCE OUTCOMES study of ralinepag.
- Liquidia's Yutrepia faces a court judgment barring FDA approval until the '793 patent expires in May 2027, and the company filed a suit against the FDA on February 20, 2024 over Liquidia's PH-ILD amendment.
- The company acquired IVIVA Medical and Miromatrix Medical in late 2023, and it did not repurchase any equity securities during 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, United Therapeutics kept $0.42.
- Revenue$2.33B100.0%
- Cost of revenue−$257.5M11.1%
- Gross profit$2.07B88.9%
- Operating costs−$885.1M38.0%
- Operating income$1.18B50.9%
- Interest, other & tax−$200.1M8.6%
- Net income$984.8M42.3%
Where FY2023 revenue went
$2.33B- Net income: $984.8M, 42% of revenue
- SG&A: $477.1M, 20% of revenue
- R&D: $408.0M, 18% of revenue
- Cost of revenue: $257.5M, 11% of revenue
- Interest, other & tax: $200.1M, 8.6% of revenue
Kept 42% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 21, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $2.33B$1.94B | +20.2% |
| Cost of Revenue | $257.50M$151.60M | +69.9% |
| Gross Profit | $2.07B$1.78B | +16.0% |
| R&D Expenses | $408.00M$322.90M | +26.4% |
| SG&A Expenses | $477.10M$482.10M | −1.0% |
| Operating Expenses | $1.14B$956.60M | +19.4% |
| Operating Income | $1.18B$979.70M | +20.9% |
| Interest Expense | $59.30M$32.40M | +83.0% |
| Net Income | $984.80M$727.30M | +35.4% |
| EPS (Basic) | $21.04$15.98 | +31.7% |
| EPS (Diluted) | $19.81$15.00 | +32.1% |
| Shares Outstanding (Basic) | 46.80M45.50M | +2.9% |
| Shares Outstanding (Diluted) | 49.70M48.50M | +2.5% |
05—Questions
Frequently Asked Questions
What drove revenue growth in 2023?
Total revenues increased $391.2 million to $2,327.5 million. Management attributed the Tyvaso increase mainly to higher quantities sold following the June 2022 launch of Tyvaso DPI and continued utilization by PH-ILD patients. Orenitram sales rose 11 percent on a price increase and higher volume, and Unituxin rose 9 percent on a price increase, while Remodulin declined 1 percent and Adcirca declined 30 percent.
How much debt does the company carry and when is it due?
Outstanding principal under the 2022 Credit Agreement was $700.0 million at December 31, 2023, down from $800.0 million a year earlier. The facility matures in March 2028, but $400.0 million was reclassified as a current liability because management intends to repay that amount within one year. The filing states that a 100-basis-point increase in variable rates would raise annual interest expense by about $7.0 million.
What are the main risks to future revenue?
The filing identifies generic competition for Remodulin, nebulized Tyvaso and Orenitram, with Watson's generic nebulized Tyvaso permitted from January 2026 and Actavis's generic Orenitram from June 2027. It also cites potential competition from Liquidia's Yutrepia and Merck's sotatercept, IRA Part D discounts beginning in 2025 that the company expects to affect Tyvaso DPI and Orenitram revenue, and reliance on two U.S. distributors, Accredo and CVS Specialty.
What is the status of the company's pipeline?
Two Phase 3 TETON studies of nebulized Tyvaso in idiopathic pulmonary fibrosis are enrolling, with a target of 576 patients in each, and the TETON PPF study targets 698 patients. Ralinepag is in the Phase 3 ADVANCE OUTCOMES study, which targets 700 to 1,000 patients. The company also reports that its xenotransplantation program has a clinical-scale designated pathogen-free facility in Virginia and that the Miromatrix liver assist product received IND clearance in January 2024.
Did the company return capital to shareholders?
No. The company stated it has never paid and has no present intention to pay cash dividends, and it did not repurchase any of its outstanding equity securities during 2023. Cash of $4,903.9 million on the balance sheet was largely held in cash equivalents and marketable investments, and the company stated it plans to fund its 2024-2026 capital expenditure budget of approximately $500 million from cash on hand.
06—Continue