United Therapeutics third quarter total revenues increase to $171.0 million

United Therapeutics Corporation (Nasdaq: UTHR) today announced its results of operations for the quarter ended September 30, 2010.

Total revenues for the third quarter of 2010 were $171.0 million, up from $97.2 million for the same quarter in 2009. Net income for the third quarter of 2010 was $39.7 million, or $0.70 per basic share, compared to net income of $11.9 million, or $0.22 per basic share, for the same quarter in 2009. Gross margin from sales was $148.9 million for the third quarter of 2010, compared to $84.2 million for the same quarter last year. Earnings before non-cash charges, a non-GAAP financial measure, was $99.1 million for the third quarter of 2010 compared to $40.6 million for the third quarter of 2009.  

"We had a good quarter as the demand for our core products continues to grow," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "Having approvals for multiple products is making a positive difference in our growth rate and in the number of patients that we can help compared to last year."

Financial Results for the Three Months Ended September 30, 2010

Revenues

The growth in revenues for the three months ended September 30, 2010 reflects the continued increase in the number of patients being prescribed our products. The increase in sales of Remodulin also reflects approximately $9.1 million from the impact of U.S. and international price increases that became effective during March and April of 2010.

Research and Development Expense

Cardiopulmonary. The increase in expenses related to our cardiopulmonary programs for the quarter ended September 30, 2010 compared to the same quarter in 2009 was driven largely by increases in expenses associated with our FREEDOM-M and FREEDOM-C2 Phase III clinical trials and expenses related to our efforts to develop beraprost-MR.

Share-based compensation. The increase in share-based compensation for the quarter ended September 30, 2010 compared to the same quarter in 2009 resulted from increases in the price of our common stock, the number of outstanding awards issued under our share tracking awards plan and the time such awards had accrued toward vesting.

Other. For the quarter ended September 30, 2010, expenses incurred in connection with our investigational projects as well as personnel and overhead costs supporting our research increased primarily as a result of the opening of our new facilities in North Carolina and Maryland.

Selling, General and Administrative Expense

General and administrative. The increase in general and administrative expenses for the quarter ended September 30, 2010 compared to the same quarter in 2009 resulted largely from increases in the following: (1) grants to unaffiliated, not-for-profit organizations that provide therapy-related financial assistance to patients suffering from pulmonary arterial hypertension; (2) professional fees pertaining mainly to legal services provided in connection with ongoing litigation and prospective transactions; and (3) depreciation expense primarily associated with our new facilities in North Carolina and Maryland.

Sales and marketing. The decrease in sales and marketing expenses for the quarter ended September 30, 2010 compared to the same quarter in 2009 was attributable to a reduction in advertising and professional services. Marketing-related expenses were higher during the same quarter in 2009 as a result of our activities surrounding the commercial launch of Adcirca and Tyvaso.  

Share-based compensation. The increase in share-based compensation for the quarter ended September 30, 2010 compared to the same quarter in 2009 resulted from increases in the price of our common stock, the number of outstanding awards issued under our share tracking awards plan and the time such awards had accrued toward vesting.

Income taxes. The provision for income taxes was $18.0 million for the quarter ended September 30, 2010, compared to a $2.9 million benefit for the same quarter in 2009. The estimated annual effective tax rate was approximately 36 percent and 19 percent as of September 30, 2010 and 2009, respectively.  For the three months ended September 30, 2010, we had a higher projection of pre-tax earnings, as well as a lower estimate of business tax credits expected to be generated compared to the same period in 2009. These factors increased the estimated annual effective tax rate for the three months ended September 30, 2010 when compared to the same period in 2009.

Earnings before Non-Cash Charges

Earnings before non-cash charges is defined as net income, adjusted for the following non-cash charges, as applicable: (i) interest; (ii) income taxes; (iii) license fees; (iv) depreciation and amortization; (v) impairment charges; and (vi) share-based compensation (stock option and share tracking award expense).