What drove the growth in revenue this quarter?

The increase was driven mainly by Tyvaso, whose revenues rose 56 percent to $372.5 million. Tyvaso DPI grew 92 percent on higher quantities sold following its June 2022 launch and continued utilization by patients with pulmonary hypertension associated with interstitial lung disease. Nebulized Tyvaso grew 21 percent, partly because distributors destocked inventory in the first quarter of 2023, which did not recur in 2024.

Why did operating expenses increase so much?

Selling, general, and administrative expense rose 65 percent to $144.4 million. Share-based compensation swung to $18.1 million from a $13.3 million benefit, and general and administrative expense excluding that item increased due to higher legal expenses tied to litigation and headcount growth. Cost of sales rose 39 percent to $72.9 million, primarily from higher Tyvaso DPI royalty expense and product costs. Research and development expense increased 26 percent, reflecting organ manufacturing projects and the TETON clinical studies of nebulized Tyvaso in idiopathic and progressive pulmonary fibrosis.

What is the accelerated share repurchase, and when will it be completed?

In March 2024 the company paid Citibank, N.A. an aggregate upfront payment of $1.0 billion and received an initial delivery of 3,275,199 shares on March 27, 2024, representing about 80 percent of the shares expected to be repurchased, based on the March 25, 2024 closing price. The final share count depends on the average daily volume-weighted average price over the repurchase period, less a discount. Final settlement is expected in the second quarter of 2024 for $300 million of the transactions and in the third quarter of 2024 for $700 million.

How did net income and tax expense change?

Net income increased 27 percent to $306.6 million from $240.9 million, and diluted EPS rose to $6.17 from $4.86. Income tax expense increased to $92.0 million from $51.0 million, and the effective tax rate was 23 percent versus 17 percent. The higher rate was primarily due to decreased excess tax benefits from share-based compensation. Other income, net was $1.8 million, compared with a $7.9 million expense a year earlier, mainly from net unrealized gains on equity securities.

UTHR 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 1, 2024. Cited figures are marked; the original filing is the authoritative source.

United Therapeutics Corporation furnished this Form 8-K under Item 2.02 (Results of Operations and Financial Condition) to report its financial results for the quarter ended March 31, 2024, via a press release attached as Exhibit 99.1.

Total revenues grew 34 percent year-over-year to $677.7 million^a, compared with $506.9 million in the first quarter of 2023. Net income rose 27 percent to $306.6 million, and diluted net income per share was $6.17, compared with $4.86. Management described the quarter as another record for revenue with double-digit growth.

Growth was led by Tyvaso, whose total revenues increased 56 percent to $372.5 million^b. Tyvaso DPI revenues rose 92 percent to $227.5 million, driven mainly by higher quantities sold following its June 2022 launch. Nebulized Tyvaso grew 21 percent, benefiting from the absence of distributor destocking that affected the prior-year quarter.

Orenitram, Remodulin, and Unituxin also grew, while Adcirca declined 12 percent. Operating expenses increased, with selling, general, and administrative expense up 65 percent to $144.4 million^c, largely due to share-based compensation tied to the stock price and higher legal expenses. Research and development expense rose 26 percent to $104.1 million.

In March 2024 the company entered into a $1.0 billion^d accelerated share repurchase agreement with Citibank, N.A., receiving an initial delivery of 3,275,199 shares on March 27, 2024. The final settlement is expected in the second quarter of 2024 for $300 million and in the third quarter of 2024 for $700 million. At March 31, 2024, cash, cash equivalents, and marketable investments totaled $4.2 billion, and stockholders' equity was $5.34 billion.

02—Key points

Key Highlights

Total revenues rose 34 percent year-over-year to $677.7 million for the quarter ended March 31, 2024, versus $506.9 million a year earlier.
Tyvaso revenues grew 56 percent to $372.5 million, with Tyvaso DPI up 92 percent to $227.5 million.
Net income increased 27 percent to $306.6 million; diluted EPS was $6.17 versus $4.86.
Operating income was $356.3 million versus $284.4 million, and income tax expense rose to $92.0 million with an effective tax rate of 23 percent versus 17 percent.
Selling, general, and administrative expense increased 65 percent to $144.4 million, and research and development expense increased 26 percent to $104.1 million.
A $1.0 billion accelerated share repurchase agreement with Citibank was entered in March 2024, with an initial delivery of 3,275,199 shares; final settlement is expected in Q2 and Q3 2024.
At March 31, 2024, cash, cash equivalents, and marketable investments were $4.2 billion and total stockholders' equity was $5.34 billion.

03—Questions

Frequently Asked Questions

What drove the growth in revenue this quarter?
The increase was driven mainly by Tyvaso, whose revenues rose 56 percent to $372.5 million. Tyvaso DPI grew 92 percent on higher quantities sold following its June 2022 launch and continued utilization by patients with pulmonary hypertension associated with interstitial lung disease. Nebulized Tyvaso grew 21 percent, partly because distributors destocked inventory in the first quarter of 2023, which did not recur in 2024.
Why did operating expenses increase so much?
Selling, general, and administrative expense rose 65 percent to $144.4 million. Share-based compensation swung to $18.1 million from a $13.3 million benefit, and general and administrative expense excluding that item increased due to higher legal expenses tied to litigation and headcount growth. Cost of sales rose 39 percent to $72.9 million, primarily from higher Tyvaso DPI royalty expense and product costs. Research and development expense increased 26 percent, reflecting organ manufacturing projects and the TETON clinical studies of nebulized Tyvaso in idiopathic and progressive pulmonary fibrosis.
What is the accelerated share repurchase, and when will it be completed?
In March 2024 the company paid Citibank, N.A. an aggregate upfront payment of $1.0 billion and received an initial delivery of 3,275,199 shares on March 27, 2024, representing about 80 percent of the shares expected to be repurchased, based on the March 25, 2024 closing price. The final share count depends on the average daily volume-weighted average price over the repurchase period, less a discount. Final settlement is expected in the second quarter of 2024 for $300 million of the transactions and in the third quarter of 2024 for $700 million.
How did net income and tax expense change?
Net income increased 27 percent to $306.6 million from $240.9 million, and diluted EPS rose to $6.17 from $4.86. Income tax expense increased to $92.0 million from $51.0 million, and the effective tax rate was 23 percent versus 17 percent. The higher rate was primarily due to decreased excess tax benefits from share-based compensation. Other income, net was $1.8 million, compared with a $7.9 million expense a year earlier, mainly from net unrealized gains on equity securities.

04—Continue

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