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Inside United Therapeutics’ Growth Plans for Tyvaso

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Tyvaso’s sales

Despite the launch of its oral pulmonary arterial hypertension (or PAH) therapies, Orenitram and Uptravi, United Therapeutics (UTHR) expects Tyvaso, a therapy administered through proprietary Tyvaso inhalation system, to witness strong growth in 2016.

In 2015, Tyvaso accounted for about 32% of the company’s total revenues. Tyvaso’s demand is expected to continue because it’s an end-stage PAH drug and will be required by around 90% of patients using Orenitram and Uptravi, who should witness significant disease progression.

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Wall Street analysts expect that in 2016, Tyvaso’s sales will rise YoY (year-over-year) by about 5.7% and reach $497.1 million. The drug was approved by the FDA (US Food and Drug Administration) in 2009 and was granted orphan drug designation in June 2010. This enabled Tyvaso to enjoy exclusivity until July 2016.

According to a report by the FDA, “Exclusivity is exclusive marketing rights granted by the FDA upon approval of a drug and can run concurrently with a patent or not. It prevents the submission or effective approval of ANDAs or applications described in Section 505(b)(2) of the Act, and was designed to promote a balance between new drug innovation and generic drug competition.” Additionally, orphan drug exclusivity is further explained in the report as the one that “Bars FDA from approving any other application (ANDA, 505(b)(2) or “full” NDA or BLA) for the same drug for the same orphan disease or condition for seven years.”

United Therapeutics is currently involved in submitting an application for the approval of Tyvaso in the European Union.

Tyvaso competition

Similar to Remodulin, Tyvaso also contains the prostacyclin analogue trepostinil. Tyvaso faces competition from another inhaled prostacyclin analogue, Ventavis, which contains the active ingredient, iloprost. Tyvaso also competes with GlaxoSmithKline’s (GSK) PAH drug, Flolan, and Gilead Sciences’ (GILD) Letairis. Tyvaso’s revenues may further be impacted if Teva Pharmaceutical (TEVA) launches its generic version of Remodulin in 2018.

In addition to patents related to the active ingredient trepostinil, United Therapeutics (UTHR) also holds two additional patents in the US specifically related to Tyvaso. But the company is currently involved in a lawsuit against Watson laboratories to prevent the latter from marketing its generic Tyvaso prior to the expiration of the drug’s patents.

If United Therapeutics proves successful in safeguarding Tyvaso’s revenues from generic erosion, it could have a positive impact on the company’s share price and the iShares S&P Mid-Cap 400 Growth ETF (IJK). United Therapeutics makes up about 0.71% of IJK’s total portfolio holdings.

Now let’s analyze United Therapeutics’ earlier-stage oral PAH drug, Orenitram.

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