Third quarter 2009 financial results announced by United Therapeutics

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United Therapeutics Corporation (Nasdaq: UTHR) today announced its results of operations for the quarter ended September 30, 2009.

Revenues for the third quarter of 2009 were $97.2 million, up from $75.0 million for the third quarter of 2008. Net income for the third quarter of 2009 was $11.9 million, or $0.22 per basic share, compared to $11.0 million, or $0.24 per basic share for the same quarter last year. Gross margins from sales were $84.2 million for the third quarter of 2009, compared to $66.7 million for the third quarter of 2008. Earnings before non-cash charges, defined as net income before taxes and interest, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), were $38.3 million for the third quarter of 2009, compared to $37.4 million for the third quarter of 2008. All per share amounts appearing in this press release reflect the two-for-one split of our common stock effected during the quarter ended September 30, 2009.

Results for the third quarter of 2008 have been adjusted for the retrospective adoption of Financial Accounting Standards Board (FASB) Accounting Standards Codification(TM) 470-20, Debt with Conversion Options and Other Options (formerly FASB Staff Position No. APB 14-1) (FASB ASC 470-20), which became effective January 1, 2009.

"The commercial launches of our two new medicines to treat pulmonary arterial hypertension, Tyvaso and Adcirca, got off to a great start this quarter," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "Equally important, our flagship product, Remodulin, achieved its highest quarterly sales levels ever. Taken together, these therapies evidence our keen focus on helping people with PAH."

Third Quarter 2009 Financial Results

Revenues

The following table sets forth the components of net revenues (dollars in thousands):

Three Months Ended September 30, -------------------- Percentage 2009 2008 Change ---- ---- ---------- Cardiovascular products: Remodulin $87,400 $72,081 21.3% Tyvaso 5,113 - 100.0% Adcirca 1,514 - 100.0% Telemedicine services and products 2,904 2,373 22.4% Other 284 578 (50.9)% --- --- ----- Total revenues $97,215 $75,032 29.6%>The growth in revenues for the three months ended September 30, 2009, corresponded in large part to the continued increase in the number of patients being prescribed Remodulin (treprostinil sodium) Injection and to the commercial launches of both Tyvaso (treprostinil) Inhalation Solution (Tyvaso) and Adcirca (tadalafil) tablets (Adcirca).

 

Research and Development Expenses

The table below summarizes research and development expenses by significant component (dollars in thousands):

Three Months Ended September 30, -------------------- Percentage 2009 2008 Change ---- ---- ---------- Program: Cardiovascular $14,145 $11,678 21.1% Other 5,829 2,834 105.7% Share-based compensation 11,577 4,701 146.3% ------ ----- ----- Total research and development expenses $31,551 $19,213 64.2%>Cardiovascular. The increase in cardiovascular program expenses for the third quarter of 2009 was attributed to expenses related to the amended FREEDOM-M and FREEDOM-C2 Phase 3 clinical trials.

 

Share-based compensation. The increase in share-based compensation expenses for the quarter ended September 30, 2009, corresponded to the increase in compensation expenses recognized in connection with outstanding awards under the United Therapeutics Corporation Share Tracking Awards Plan.

Selling, General and Administrative Expenses

The table below summarizes selling, general and administrative expenses by major category (dollars in thousands):

Three Months Ended September 30, -------------------- Percentage 2009 2008 Change ---- ---- ---------- Category: General and administrative $15,369 $9,832 56.3% Sales and marketing 12,224 7,920 54.3% Share-based compensation 13,579 12,266 10.7% ------ ------ ---- Total selling, general and administrative expenses $41,172 $30,018 37.2%>General and administrative. The increase in general and administrative expenses for the quarter ended September 30, 2009, resulted from expenses incurred in connection with the operations of our newly constructed facility in North Carolina and increases in legal and professional fees.

 

Sales and marketing. The increase in sales and marketing expenses for the quarter ended September 30, 2009, corresponded principally to activities related to the commercial launches of Adcirca and Tyvaso.

Tax Benefit/Expense

We recognized an income tax benefit of approximately $2.9 million for the quarter ended September 30, 2009, as a result of the release of approximately $5.7 million of the valuation allowance maintained against certain state net operating losses. In addition, the estimated annual effective tax rate for the three months ended September 30, 2009, was 19 percent, which declined as a result of increasing our previous estimates of business tax credits expected to be generated and utilized this year.

Earnings Before Non-Cash Charges

The following table provides a reconciliation of net income to earnings before non-cash charges for the three-month periods ended September 30, 2009 and 2008 (in thousands, except per share data):

Three Months Ended September 30, ------------------------------ 2008 2009 As adjusted(1) ------- -------------- Net income, as reported $11,937 $10,970 Add non-cash charges: Amortization of debt discount and issue costs 3,331 2,624 Depreciation and amortization 2,505 1,143 Income tax (benefit) expense (2,891) 5,342 Impairment charges 399 353 Share-based compensation 23,020 16,989 ------ ------ Earnings before non-cash charges $38,301 $37,421>Conference Call

 

United Therapeutics will host a half-hour teleconference on Thursday, October 29, 2009, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-888-632-5007, with international callers dialing 1-913-312-9324. A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 888-203-1112, with international callers dialing 719-457-0820, and using conference code: 7459513.

This teleconference is also being webcast and can be accessed via United Therapeutics' website at https://ir.unither.com/corporate-profile/default.aspx.

SOURCE United Therapeutics Corporation

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