Participants

Dewey Steadman; Head of Investor Relations; United Therapeutics Corp

Martine Rothblatt; Chairman of the Board, Chief Executive Officer; United Therapeutics Corp

Michael Benkowitz; President, Chief Operating Officer; United Therapeutics Corp

Leigh Peterson; Executive VP of Product Development & Xenotransplantation; United Therapeutics Corp

Roger Song; Analyst; Jefferies LLC

Jessica Fye; Analyst; JPMorgan Chase & Co

Ash Verma; Analyst; UBS Investment Bank

Joseph Thome; Analyst; TD Cowen

Roanna Ruiz; Analyst; Leerink Partners

Andreas Argyrides; Analyst; Oppenheimer & Co., Inc

Presentation

Operator

Good morning and welcome to the United Therapeutics Corporation, fourth quarter 2024 corporate update. My name is Cindy, and I will be your conference operator today. (Operator Instructions) Please note, this call is being recorded.
I would now like to turn the conference -- the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics. Please go ahead.

Dewey Steadman

Thank you, Cindy, and good morning. It's my pleasure to welcome you to the United Therapeutics fourth quarter 2024 corporate update webcast.
Remarks today will include forward-looking statements representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings, including Forms 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update these forward-looking statements.
Also today's remarks may discuss the progress and results of our clinical trials or other developments with respect to our products. These remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision making or to suggest that any products are safe and effective for any unapproved or investigational uses. Full prescribing information for the products are available on our website.
Accompany me on today's call are Dr. Martin Rothblatt, our Chairperson and Chief Executive Officer; Michael Benkowitz, our President and Chief Operating Officer; James Edgemond, our Chief Financial Officer and Treasurer; Dr. Leigh Peterson, our Executive Vice President of Product Development and Xenotransplantation; and Patrick Poisson, our Executive Vice President of Technical Operations.
I note that Michael Benkowitz and my colleague Carrie Silvers will participate in a fireside chat and one-on-one meetings at the TD Cowan.
45th annual healthcare conference in Boston on March 3, and along with Gil Golden, our Chief Medical Officer, I will be at the UBS European Healthcare Conference on March 4, in London. And finally, James Edgemond, Carrie, and I will be at the Leerink Global Healthcare Conference in Miami on March 11.
Then our scientific, commercial, and medical affairs teams will present at the 20th annual John Wayne Memorial Symposium in London on March 7, and 8, and at the International Society for Heart and Lung Transplantation conference in Boston on April 27, to the 30.
And now I'll turn the webcast over to Martine for an overview of our development pipeline and business activities. Martine.

Martine Rothblatt

Thank you, Dewey, and good morning, everyone. We have slides available for reference and I encourage you to review those at your leisure. I'm not going to speak directly to the slides.
Congratulations to the more than 1,300 Unitarians and to you, our shareholders for supporting yet another record revenue year for United Therapeutics in 2024. In fact, 2024 was our third year in a row of record setting revenue. This amazing performance was driven by our relentless drive to deliver patients with rare and underserved diseases a broad array of solutions to help them improve their lives.
Beyond our stellar commercial performance, we have now begun our three-year cascade of clinical and regulatory events, starting with the recent IND clearance for our new kidney clinical trial. This trial is the first FDA cleared registration supporting clinical trial of a xenoorgan and could provide an opportunity to put an end to dialysis for the hundreds of thousands of patients with end stage renal disease who cannot qualify for a human kidney transplant or who have little chance of obtaining one before their health declines. We expect the first transplant in the middle of this year.
Last month we completed enrollment of the inhaled Treprostinil TETON 1 study in idiopathic pulmonary fibrosis. We expect top-line data from the TETON 2 study in the second half of this year and TETON 1 top-line data in the first half of 2026.
Treprostinil, which has been scientifically demonstrated to be anti-fibrotic, anti-proliferative, and anti-inflammatory, is far more than just a vasodilator. We believe its multifactorial mechanisms of action could be complementary to existing approved IPF agents and even to many of the potential IPF drugs in late stage development.
IPF is extremely hard to treat, but we are encouraged with the success we saw in a post hoc analysis of IPF patients with pulmonary hypertension in the increased study. Our goal is to bring this potential innovation to market as quickly as possible to patients in need of something additional to existing therapies on the market.
And that's not all. We're tremendously excited for the potential of ralinepag to be the first true once a day oral prostacyclin antagonist for pulmonary arterial hypertension patients. If successful, ralinepag could fundamentally change the positioning of prostacyclins in the PAH treatment paradigm, potentially leading to the upfront use of prostacyclins in PAH.
As an example of the potential for ralinepag, [flexapag], a twice daily oral prostate antagonist, logs more than $1.5 billion in annual US sales, and this is for a twice daily oral product with a dose ceiling. Unlike ralinepag. We expect to conclude enrollment in the advanced outcome study later this year, allowing for top line data in 2026.
Literature has long suggested that earlier prostacyclin use leads to better results, and a once a day oral would complement traditional ERA and PDE 5 orals that PAH patients generally use for first line therapy. Any one of these potential products, UKidney inhaled proprostinil for IPF or ralinepag could fundamentally change how patients with ESRD, IPF, or PAH respectively are treated. And each represents a multibillion dollar revenue opportunity for us.
We've posted record revenue performance, progressed several registration studies, and launched the first revolutionary trial of a xenoorgan. We remain focused on the needs of you, our shareholders, through a disciplined financial algorithm and capital allocation philosophy.
In the past five quarters we have touched on all three areas of our capital allocation philosophy across both our commercial and development portfolios. We've invested in CapEx to support our new Tyvaso DPI manufacturing facility and acquired additional real estate to support future commercial manufacturing needs. We also commissioned the world's first clinical scale DPF in Virginia and planned to complete two others.
On corporate development, we acquired IVIVA and Miromatrix to enhance our organ alternative development expertise, and we've licensed in new technologies to support our Treprostinil business.
And with all this, we still returned $1 billion to you, our shareholders through an accelerated share repurchase program that was universally well received. We will continue to evaluate all three core areas of our capital allocation philosophy on an ongoing basis.
Record performance, progress with our innovative and revolutionary development programs, disciplined financial management and capital allocation. We've never been in a better position at United Therapeutics, and we're excited to forge ahead in 2025.
And with that, I'll now turn the call over to our President, Mike Benkowitz, who will give an overview of our commercial performance for the quarter, Mike.

Michael Benkowitz

Thank you, Martine, and good morning everyone. Today, as Martine mentioned, we are pleased to report another year of record breaking revenue driven by double digit percent revenue growth for all our major revenue contributors Tyvaso, US Remodulin, Orenitram, and Unituxin, leading to almost 24% growth over a full year 2023.
For the quarter, we saw 20% revenue growth from the fourth quarter of 2023 and saw record total (inaudible) referrals and patient shipments along with near record total starts. Our fourth quarter total net revenue was down slightly sequentially, while our gross revenues for the fourth quarter was record setting.
The modest decline in net revenue is due in part to our recent contracting efforts for Tyvaso, which I will discuss in a moment.
Total Tyvaso revenue for the fourth quarter was $416 million a 19% increase over the previous year. This continued strong commercial execution in what is normally a seasonally challenging quarter was driven by record patient shipments and near record referrals and starts, largely on par with the previous quarter.
The sequential decline in Tyvaso revenue from 3Q to 4Q was primarily driven by a larger gross to net deduction associated with our recent contracting efforts that we've been highlighting for the last few quarters. Our investment in these contracting efforts was conducted to help position nebulized Tyvaso and Tyvaso DPI at parity with current and potential future competitor products.
As we have previously noted, these new contracts became effective over the third and fourth quarters of 2024, and we saw this impact primarily in the fourth quarter.
At this point, we believe these additional investments and rebates have largely been pulled through, creating a new base from which Tyvaso can continue to grow. Moving to our renter term, we reported 28% revenue growth in the fourth quarter of 2024 to $108 million largely in line with the third quarter of 2024, and again what is normally a seasonally weak fourth quarter for specialty pharmacy ordering.
In the fourth quarter we saw record patient shipments for Orenitram, close to 50% of our Orenitram starts are now coming from Remodulin transitions, indicating to us that our educational efforts around use with intermediate high risk patients needing additional PAH treatment, along with scientific discussions about the expedite study are influencing Orenitram use.
Moving to a Remodulin. We reported fourth quarter worldwide revenue of $135 million up 17% from the prior year period. US revenue grew 11%, setting another record for patient shipments. We continue to see strong referral and start trends for moduling.
In January, our partner Deka received FDA clearance for the new Remmunity Pro pump. Remmunity Pro is the next generation of subcutaneous pump technology optimized and designed for patients with PAH.
Remmunity Pro builds on our unique Remmunity pump platform with features designed with input from PAH practitioners and patients to further simplify daily use. Compared to Remmunity, Remmunity pro offers broader accessibility through intuitive technology and incorporates a touchscreen remote with step by step guidance, streamlined alerts, simplified patient filling, and automatic pump driven priming. We expect to launch Remmunity Pro later this year.
Finally, Unituxin achieved record revenue of $68 million for the fourth quarter, up 25% from the prior year quarter. US revenue for Unituxin was $62 million driven by both price and volume increases. This growth demonstrates the product's strong market presence and the effectiveness of our commercial strategies.
To wrap up, we are extremely proud of our team's accomplishments this quarter as the underlying dynamics of our business remain very strong. And with the recent investment in our commercial contracting efforts, we believe we are well positioned to continue providing our important medicines to patients while delivering value to our shareholders.
Martine, I'll turn things back to you to run the Q&A.

Martine Rothblatt

Thank you very much, Mike. Operator, please open the lines to any questions.

Question and Answer Session

Operator

(Operator Instructions) Roger Song, Jefferies.

Roger Song

Great. Congrats for the quarter. Maybe start with the top line commercial franchise given you don't provide a 2025 sales guidance, so we understand the growth trajectory for the year. And then also you mentioned some seasonality for Q. And then how should we think about this year in the upcoming quarters? And then I have you on two pipeline questions.

Martine Rothblatt

Thank you, Roger, for the kudos, and I'll bounce that question to Mike.

Michael Benkowitz

Sure. So I think as you kind of think about 2025 and beyond as it relates to our -- what we call our foundational business, which is our existing commercial portfolio of products. I think we've been saying for the last few quarters -- last couple of years, really, is that we expect to continue to grow double digits out into the mid-decade and then obviously, with expected ralinepag and IPF approval for Tyvaso, we can -- that growth reduction should inflect in a meaningful way.
So really, even with the contracting efforts, we employed over the last couple of quarters, or that went to effect over the last couple of quarters. We really see no change in that perspective in terms of the base business for the next two years. So we can continue to execute commercially. And like I said, deliver that double-digit revenue growth performance.

Martine Rothblatt

Perfect answer, Michael. Thank you.

Operator

Jessica Fye, JPMorgan.

Jessica Fye

Great. So with the first transplant for the UKidney clinical trial expected midyear, can you talk about what you'll be looking for to support proceeding to the next transplant? I think there's a waiting period in between the first and the second. And then just talk about what proof points in that program would on at larger scale investment in additional DPF facilities?

Martine Rothblatt

Jessica. Nice to hear your voice this morning, and I'll flip that question over to Dr. Peterson, our EVP, Xeno.

Leigh Peterson

Yeah. So as you mentioned, we have -- this is a single phase list study, and it starts with a cohort of six participants. And then we have a 12-week review period where we will be involving. Well, we're actually involving our DSMB, which is our independent data safety monitoring committee as well as our steering committee throughout the study because it's open label, but we'll have a formal review of all of the data, safety data and as well as patient and graft survival data. At that point and determine the risk-benefit ratio of going forward into the remainder of the what we have a plan of up to 50 patients.
And as far as the endpoints or the demonstration of success, we're going to be looking again at a six-month graft survival rate, patient survival rate as well as several parameters of kidney function and then, of course, of safety, which includes transmission of infections, including potential zeonatic infections.

Martine Rothblatt

Leigh, that's a great answer. And just in terms of additional spending on DPS facilities, it's premature to speculate on that, but it will just be something that we'll consider as the trial proceeds.

Operator

Ash Verma, UBS.

Ash Verma

I wanted to understand how you view the Hyperion impact from innerwear to your business. This study finished earlier than expected. And in the past, I understand that you've talked about that the winner late line and combo therapy used with some of your products was kind of insulating your PAH position, but now that Windover moves earlier line and faster than expected, can Tyvaso still grow on the PAS side?

Martine Rothblatt

Thank you, Ash, for dialling in this morning. Mike, I think that would be the best person to answer that question.

Michael Benkowitz

Sure. So I think in terms of the Hyperion study, I mean, obviously, we'll see how that plays out over the next couple of quarters. As I said in the answer to the first question, we still expect that we're going to continue to grow double digits across our franchise. I do not think -- as we said all along, [Windover] is not a -- it's not a cure. It's definitely in addition to the PAH treatment armamentarium.
Which is great for patients. It doesn't replace prostacyclin. I think what we've seen until now is that's being eased in combination with prostacyclin. I think that will continue to be the case if for whatever reason physicians start to move use [Windover] ahead of prostacyclin over the long term, I think that's immaterial because PAH continues to be a progressive disease and whether patients start on prostacyclin before or after wherever eventually, they're going to get to a prostacyclin.
So as we kind of think about our business over the long term, we think the impact is going to be really be immaterial.

Martine Rothblatt

Excellent, Michael.

Operator

Joseph Thome, TD Cowen.

Joseph Thome

Congrats on the progress. Maybe another on the Xeno transplant. Can you put into context the baseline disease severity of the first patients that will be enrolled maybe as it relates to kind of the baseline disease severity of Towana.
And then related to that, we've obviously been able to follow these patients progress through either press releases from the hospitals themselves or new sources. I guess, do you expect this to continue in the formal clinical study as early as yesterday, it seems like Ms.Looney was able to return home, and we can kind of watch this as it happens. Is that going to be the case in the formal study as well?

Martine Rothblatt

Thank you, Joe. I think Dr. Peterson could give you a very good answer on that question.

Leigh Peterson

Yeah. So I think your second question was about how we will follow our clinical study patients with regard to the news and what's been shown with Ms. Looney. We will not be doing that. Our -- for clinical studies, the data are -- there's patient privacy that we -- it will not be the same as what you've seen with this EIND case.
It will be more like a traditional clinical study where you don't have names to follow that. As far as the eligibility, it will -- our eligibility includes two populations of patients. One or patients who are not eligible for the current kidney transplant wait list.
And -- but they don't have several comorbidities, like they're not very, very sick patients, probably like you're asking specifically about the first two heart patients. patients won't have severe cardiovascular comorbidities as well as several other.
So -- but again, they won't be eligible for the list due to medical reasons. And then we also have a second population, which probably Ms. Looney would fall into, which is that they are not expected to get an Halo transplant do to things such as HLA sensitization or other factors, type O blood or a combination of these factors are not expected to get an Halo transplant for at least five years.
And so this is a second population where, again, they're on the list, but they're not expected to really -- to have a good chance of receiving an Halo transplant. So I hope that gives you a little bit of an indication, again, in comparison to Ms. Looney, where you've really been able to follow her status, which is really great. We're really, really happy to help patients like her. And probably the second category is very similar to -- of patients is very similar to where -- what you understand and what we understand where she is.

Martine Rothblatt

Thank you, Dr. Peterson. Superb 360-degree answer.

Operator

Roanna Ruiz, Leerink.

Roanna Ruiz

So a question about Tyvaso in PH-ILD specifically. Could prescribing growth on the ILD side plus increase in commercial volumes under Part D redesign possibly outweigh some seasonality trends from 1Q going to 2Q? Just curious if there's any color on that?

Martine Rothblatt

Very interesting question, Roanna. Michael, can you answer that?

Michael Benkowitz

Sure. I think in terms of the first part of the question around PH-ILD growth, as you recall, we expanded our sales force coming into 2024 really to try and drive -- prescribing dry prescribing growth in the PH-ILD or -- in the ILD treaters. Those physicians that are seeing the PH-ILD patients.
So prior to that, or at least at launch and up until that, I think what we were seeing is the vast majority of PH-ILD patients were being referred to pulmonary hypertension clinics and it was those physicians that were prescribing Tyvaso. And so -- but as you kind of think of the patient population, that really wasn't a sustainable model going forward if we really were going to have an impact and to be able to penetrate the market.
So that was really sort of the idea behind the expansion was to really start to continue to educate the ILD treaters on not only the disease but how to use Tyvaso how to start to manage these patients. So I will say that that so far has paid off in spades.
If you look at our growth over the course of 2024. The majority of that growth is in the ILD treating community. So we are starting to get -- we're starting to get the breadth of prescribers and in that group and then actually starting to get -- make some inroads on the depth.
I talk often about the three-plus factors that get to three-plus patients, then they quickly jump up to 6, 7, 8, 9, 10 patients. So we're having a lot of success both in terms of the growth of -- the breadth of the prescribers and starting to get more depth among those prescribers.
And so I think we just expect that to continue as we go and beyond. And I was just looking at calculating if you look at patient growth between PH-ILD and PAH. The nice thing is with Tyvaso is we're actually growing in both indications. So in 2024, we grew roughly -- I think it was about 37%, 35% to 40%. And in PH-ILD, still mid-teen growth in PAH.
So it's nice to see that we're growing in both indications. So I think hopefully, that addresses the first part of your question around prescriber growth and growth in PHL versus PAH. As it relates to Part D impact, I think, as we said for the last couple of quarters, I think that largely played out last year.
As we saw in Q1, we saw more PAP patients or patient assistance patients convert over to commercial paying patients in Q1 of 2024, and then that continued over the course of the year. We kind of set a bit about roughly 90% of our patients are commercial pain patients and then 10% are in our roughly 10% are in our PAP program.
I would expect that that's going to be kind of the new normal or new baseline going forward. Could shift bounce around a little bit quarter-to-quarter just depending on the type of patients we're getting in. But generally, I would expect to kind of settle in around that.
So I'm not expecting to see much of an impact in Q1 or Q2 as a result of the Part D redesign.

Martine Rothblatt

Excellent. Michael, your encyclopedic knowledge is the benefit to all of us. Thank you so much. Really appreciate it. Operator, we only have time for one last question.
And whoever that may be, maybe there'll be a question for our Chief Financial Officer since this is an earnings call.

Operator

Andreas Argyrides.

Andreas Argyrides

Thanks for taking our question. And Martin, apologies, you put me on the spot on the financial question. I don't think I had that one teed up here. But first of all, kudos to the great year and also to the milestone on getting IND clearance and you're leading the way and it's pretty fascinating and interesting going forward here. And following to one of progress here hearing this resume daily activities and kudos to the team.
My question was really just quickly around Tyvaso in IPF getting a sense of the intellectual property moat that you've built around that, how long you can expect exclusivity? And then quickly on contracting and some of the competitive dynamics behind that. I don't know if I squeeze too in there, but apologies for that?

Martine Rothblatt

Yeah. Okay. Well, thank you, Andreas. We appreciate your kudos; you're off the hook on the question for James. We don't really like to discuss publicly the issues relating to IPF and whatnot.
And we're about out of time, so I'm going to ask just Michael if he could talk about the contracting aspects of our anticipated launch into IPF. Michael?

Michael Benkowitz

Yeah. So Andreas, I'm not sure if it was -- the question was related directly to contracting and IPF or just contracting generally or what we've done thus far. But really, I think the philosophy that we -- and the strategy we employed last year was to start to lock in payers with some additional rebates in anticipation of future competitors.
And then the idea behind that is if we start to have those rebate dollars flowing through, then regardless of where the potential competitor comes in with rebates, we have dollars flowing through. And so that puts us, I think, we think, in a stronger position.
It keeps us at parity. I think payers will be less reluctant -- or less likely, more reluctant to enter into contracts that would disadvantage us because at that point, they basically be turning off the spigot of the rebate dollars.
So that was really the idea behind the payer strategy, which is get the rebates in place, start to get those dollars flowing keep us at parity with competitors. And then we feel like if we're really -- and then have the discussion with the clinicians around what's the better product for their patients, and we feel very strongly that we're better positioned and very well positioned to succeed on that front.

Martine Rothblatt

Thank you, Mike. Perfect answer. Operator, you may now wrap up the call.

Operator

Thank you for participating in today's United Therapeutics Corporation earnings webcast. A rebroadcast of this webcast will be available for replay for one-week by visiting the Events & Presentation section of the United Therapeutics Investor Relations website at ir.unither.com. You may now disconnect. Thank you.