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An Investor's Guide to United Therapeutics in 2017

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Part 2
An Investor's Guide to United Therapeutics in 2017 PART 2 OF 3

Why United Therapeutics’ Revenue May Rise in 2017

Growth drivers

United Therapeutics (UTHR) has completed patient enrolment in its Phase 3 trial BEAT, which aims to evaluate the efficacy and safety of a combination regimen of oral esuberapros plus inhaled Tyvaso in patients with pulmonary arterial hypertension (or PAH). The company is also exploring effective therapies targeting indications such as pulmonary fibrosis and heart failure, and focusing on preserving lungs for transplantation to end-stage patients.

United Therapeutics is evaluating Unituxin as a treatment option for GD2-positive small-cell lung cancer. The company also aims to explore this drug in other GD2-positive soft tissue cancers such as sarcomas, breast cancer, and orphan cancers such as eye cancer.

The company’s research and development expenses were high in 1H17, due to the completion of enrolment in its BEAT and FREEDOM studies and ongoing enrolment in its SOUTHPAW and INCREASE studies. For more about these clinical trials, read United Therapeutics’ Orenitram May Show Revenue Growth in 2017. United Therapeutics makes up about 2.1% of the First Trust Health Care AlphaDEX ETF (FXH).

Why United Therapeutics&#8217; Revenue May Rise in 2017

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Small rise in revenue

Analysts expect United Therapeutics’ revenue to be around $1.6 billion in 2017, representing YoY (year-over-year) growth of about 1.8%. The company’s revenue, however, is expected to fall 19.7% YoY to $1.3 billion in 2018, due to to the anticipated entry of generic Remodulin in the market after June 2018. For more about these developments, refer to Could Generic Competition Impact United Therapeutics’ Remodulin Sales after June 2018?

Peers Jazz Pharmaceuticals (JAZZ), Ligand Pharmaceuticals (LGND), and BioMarin Pharmaceutical (BMRN) are expected to report revenue of $1.6 billion, $134 million, and $1.3 billion, respectively.

While patients have been increasingly using oral therapies in the initial stages of disease, the progression of the disease causes them to move to true prostacyclin analog therapy such as Tyvaso and Remodulin. As movement of the patients across regimens occurs in bulk, these drugs may see sudden revenue changes. In the next article, we’ll discuss United Therapeutics’ margin growth trends in greater detail.

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