01—Abstract
Summary
Summary of the 8-K filed July 31, 2024. Cited figures are marked; the original filing is the authoritative source.
United Therapeutics Corporation (Nasdaq: UTHR), a public benefit corporation, reported second quarter 2024 financial results in a press release dated July 31, 2024 (Exhibit 99.1).
Total revenues grew 20 percent year-over-year to $714.9 milliona, compared with $596.5 million in the second quarter of 2023, and management described it as the fifth straight quarter of record revenue. Net income rose 7 percent to $278.1 million, while diluted net income per share increased 12 percent to $5.85. Growth was led by Tyvaso, whose total net product sales rose 25 percent to $398.2 million, with Tyvaso DPI up 33 percent to $258.3 million and nebulized Tyvaso up 12 percent to $139.9 million.
Remodulin, Orenitram, and Unituxin also grew, while Adcirca declined 24 percent. Expenses rose faster than revenue in several areas. Total research and development expense increased 57 percent to $139.6 millionb, driven by upfront licensing payments for drug delivery devices and organ manufacturing projects, and total selling, general, and administrative expense increased 37 percent to $177.6 million, largely due to share-based compensation tied to a 39 percent rise in the stock price and higher litigation-related legal expenses.
Income tax expense was $77.2 millionc, with an effective tax rate of 22 percent versus 23 percent a year earlier. Cash, cash equivalents, and marketable investments totaled $4,301.9 million at June 30, 2024. The company also disclosed capital returns through an accelerated share repurchase agreement with Citibank entered in March 2024, under which it paid $1.0 billion upfront and received 3,275,199 shares initially.
The $300 milliond tranche settled in June 2024 with an additional 181,772 shares received, and final settlement of the $700 million second tranche is expected in the third quarter of 2024. Management stated it expects data from its clinical pipeline next year.
02—Key points
Key Highlights
- Total revenues rose 20 percent year-over-year to $714.9 million in Q2 2024, the fifth straight quarter of record revenue per management.
- Tyvaso total net product sales grew 25 percent to $398.2 million, with Tyvaso DPI up 33 percent to $258.3 million, driven by Tyvaso use in pulmonary hypertension associated with interstitial lung disease.
- Net income increased 7 percent to $278.1 million; diluted EPS rose 12 percent to $5.85.
- Research and development expense increased 57 percent to $139.6 million, reflecting upfront licensing payments for drug delivery devices and organ manufacturing projects.
- Selling, general, and administrative expense increased 37 percent to $177.6 million, including share-based compensation up 396 percent to $39.2 million on a 39 percent stock price increase and higher litigation-related legal expenses.
- Share repurchase: $1.0 billion accelerated share repurchase with Citibank; the $300 million tranche settled in June 2024, and the $700 million tranche is expected to settle in Q3 2024.
- Cash, cash equivalents, and marketable investments were $4,301.9 million at June 30, 2024, against total assets of $6,723.2 million and stockholders' equity of $5,697.2 million.
03—Questions
Frequently Asked Questions
How did United Therapeutics perform in the second quarter of 2024?
Total revenues grew 20 percent to $714.9 million, and net income rose 7 percent to $278.1 million. Diluted net income per share was $5.85, up 12 percent from $5.24 a year earlier.
Which products drove revenue growth?
Total Tyvaso net product sales rose 25 percent to $398.2 million, led by Tyvaso DPI at $258.3 million, up 33 percent. Remodulin rose 16 percent to $147.3 million, Orenitram rose 13 percent to $107.1 million, and Unituxin rose 17 percent to $51.7 million. Adcirca fell 24 percent to $5.7 million.
Why did operating expenses increase significantly?
Research and development expense rose 57 percent to $139.6 million, primarily due to upfront non-refundable licensing payments for drug delivery devices and higher spending on organ manufacturing projects. Selling, general, and administrative expense rose 37 percent to $177.6 million, mainly due to higher share-based compensation tied to a 39 percent stock price increase and increased legal expenses related to litigation matters.
What is the status of the accelerated share repurchase agreement?
Under the ASR agreement with Citibank entered in March 2024, the company paid $1.0 billion upfront and received 3,275,199 shares on March 27, 2024. The $300 million tranche settled in June 2024 with an additional 181,772 shares received. The final settlement of the $700 million tranche is expected in the third quarter of 2024, and the final share count depends on the average daily VWAP over the repurchase period, less a discount, and may in limited circumstances require a cash payment or share delivery by the company.
What did management say about future prospects?
CEO Martine Rothblatt said the company expects data from its innovative clinical pipeline next year and continues advancing its organ manufacturing programs. President and COO Michael Benkowitz cited continued traction for Tyvaso in pulmonary hypertension associated with interstitial lung disease and strong fundamentals for other products in pulmonary arterial hypertension and neuroblastoma.
04—Continue