SILVER SPRING, Md. and
RESEARCH TRIANGLE PARK, N.C.,
Feb. 22, 2017 /PRNewswire/ -- United Therapeutics
Corporation (NASDAQ: UTHR) today announced its financial results
for the fourth quarter and year ended December 31, 2016.
"Our annual 2016 financial results reflect continued growth as
net revenues reached $1.6 billion and
earnings exceeded $700 million," said
Martine Rothblatt, Ph.D., United
Therapeutics' Chairman and Chief Executive Officer. "These
financial results strengthen our ability to develop and advance our
growing product pipeline, which includes seven phase III
programs and multiple second generation Remodulin drug delivery
systems."
Key financial highlights include (in millions, except per share
data):
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
409.0
|
|
$
|
404.9
|
|
$
|
1,598.8
|
|
$
|
1,465.8
|
|
Net income
|
|
$
|
110.3
|
|
$
|
104.6
|
|
$
|
713.7
|
|
$
|
651.6
|
|
Non-GAAP
earnings(1)
|
|
$
|
187.2
|
|
$
|
189.1
|
|
$
|
748.6
|
|
$
|
631.7
|
|
Net income, per
diluted share
|
|
$
|
2.43
|
|
$
|
2.10
|
|
$
|
15.25
|
|
$
|
12.72
|
|
Non-GAAP earnings,
per diluted share(1)
|
|
$
|
4.12
|
|
$
|
3.80
|
|
$
|
16.00
|
|
$
|
12.33
|
|
|
|
|
|
|
|
|
(1)
|
See definition of
non-GAAP earnings, a non-GAAP financial measure, and a
reconciliation of net income to non-GAAP earnings below.
|
Revenues
The table below summarizes the components of total revenues
(dollars in millions):
|
|
Three Months Ended
December 31,
|
|
Percentage
|
|
Year Ended
December 31,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Net product
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remodulin®
|
|
$
|
151.2
|
|
$
|
140.5
|
|
7.6%
|
|
$
|
602.3
|
|
$
|
572.8
|
|
5.2%
|
|
Tyvaso®
|
|
93.6
|
|
119.2
|
|
(21.5)%
|
|
404.6
|
|
470.1
|
|
(13.9)%
|
|
Adcirca®
|
|
112.7
|
|
91.5
|
|
23.2%
|
|
372.2
|
|
278.8
|
|
33.5%
|
|
Orenitram®
|
|
38.3
|
|
37.2
|
|
3.0%
|
|
157.2
|
|
118.4
|
|
32.8%
|
|
Unituxin®
|
|
13.2
|
|
15.8
|
|
(16.5)%
|
|
62.5
|
|
20.5
|
|
204.9%
|
|
Other
|
|
—
|
|
0.7
|
|
(100.0)%
|
|
—
|
|
5.2
|
|
(100.0)%
|
|
Total
revenues
|
|
$
|
409.0
|
|
$
|
404.9
|
|
1.0%
|
|
$
|
1,598.8
|
|
$
|
1,465.8
|
|
9.1%
|
|
Revenues for the quarter ended December 31, 2016 increased
by $4.1 million as compared to the
same period in 2015. The growth in revenues primarily resulted
from: (1) a $21.2 million
increase in Adcirca net product sales; (2) a $10.7 million increase in Remodulin net product
sales; and (3) a $1.1 million
increase in Orenitram net product sales, partially offset by:
(1) a $25.6 million decrease in
Tyvaso net product sales; and (2) a $2.6 million decrease in Unituxin net product
sales.
Revenues for the year ended December 31, 2016 increased by
$133.0 million as compared to the
same period in 2015. The growth in revenues primarily resulted from
the following: (1) a $93.4
million increase in Adcirca net product sales; (2) a
$42.0 million increase in Unituxin
net product sales; (3) a $38.8
million increase in Orenitram net product sales; and
(4) a $29.5 million increase in
Remodulin net product sales, partially offset by a $65.5 million decrease in Tyvaso net product
sales.
Expenses
Cost of product sales. The table below summarizes cost of
product sales by major category (dollars in millions):
|
|
Three Months Ended
December 31,
|
|
Percentage
|
|
Year Ended
December 31,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product
sales
|
|
$
|
19.5
|
|
$
|
19.3
|
|
1.0%
|
|
$
|
72.1
|
|
$
|
60.2
|
|
19.8%
|
|
Share-based
compensation expense(1)
|
|
8.9
|
|
6.0
|
|
48.3%
|
|
0.6
|
|
8.8
|
|
(93.2)%
|
|
Total cost of product
sales
|
|
$
|
28.4
|
|
$
|
25.3
|
|
12.3%
|
|
$
|
72.7
|
|
$
|
69.0
|
|
5.4%
|
|
|
|
|
|
|
|
|
(1)
|
Refer to
Share-based compensation expense below for
discussion.
|
Cost of product sales. The increase in cost of product
sales of $11.9 million for the year
ended December 31, 2016, as compared to the same period in
2015, was primarily attributable to increased sales.
Research and development expense. The table below
summarizes research and development expense by major category
(dollars in millions):
|
|
Three Months Ended
December 31,
|
|
Percentage
|
|
Year Ended
December 31,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Project and
non-project:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expense
|
|
$
|
46.6
|
|
$
|
45.6
|
|
2.2%
|
|
$
|
157.6
|
|
$
|
157.4
|
|
0.1%
|
|
Share-based
compensation expense (benefit)(1)
|
|
20.3
|
|
30.3
|
|
(33.0)%
|
|
(10.0)
|
|
87.7
|
|
(111.4)%
|
|
Total research and
development expense
|
|
$
|
66.9
|
|
$
|
75.9
|
|
(11.9)%
|
|
$
|
147.6
|
|
$
|
245.1
|
|
(39.8)%
|
|
|
|
|
|
|
|
|
(1)
|
Refer to
Share-based compensation expense below for
discussion.
|
Selling, general and administrative expense. The table
below summarizes selling, general and administrative expense by
major category (dollars in millions):
|
|
Three Months Ended
December 31,
|
|
Percentage
|
|
Year Ended
December 31,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
$
|
45.9
|
|
$
|
42.9
|
|
7.0%
|
|
$
|
210.7
|
|
$
|
174.6
|
|
20.7%
|
|
Sales and
marketing
|
|
17.5
|
|
24.7
|
|
(29.1)%
|
|
84.6
|
|
94.3
|
|
(10.3)%
|
|
Share-based
compensation expense(1)
|
|
76.1
|
|
81.1
|
|
(6.2)%
|
|
21.5
|
|
183.8
|
|
(88.3)%
|
|
Total selling, general
and administrative expense
|
|
$
|
139.5
|
|
$
|
148.7
|
|
(6.2)%
|
|
$
|
316.8
|
|
$
|
452.7
|
|
(30.0)%
|
|
|
|
|
|
|
|
|
(1)
|
Refer to
Share-based compensation expense below for
discussion.
|
General and administrative. The increase in general and
administrative expenses of $36.1
million for the year ended December 31, 2016, as
compared to the same period in 2015, primarily resulted from:
(1) a $20.0 million increase in
grants to a non-affiliated, non-profit organization that provides
financial assistance to patients with PAH; and (2) $9.3
million in expenses in connection with the disposition and
write-down of various properties.
Share-based compensation expense. The table below
summarizes share-based compensation expense (benefit) by major
category (dollars in millions):
|
|
Three Months Ended
December 31,
|
|
Percentage
|
|
Year Ended
December 31,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share tracking awards
plan
|
|
$
|
101.3
|
|
$
|
114.6
|
|
(11.6)%
|
|
$
|
(15.2)
|
|
$
|
274.2
|
|
(105.5)%
|
|
Stock
options
|
|
3.1
|
|
2.4
|
|
29.2%
|
|
24.8
|
|
4.9
|
|
406.1%
|
|
Other(1)
|
|
0.9
|
|
0.4
|
|
125.0%
|
|
2.5
|
|
1.2
|
|
108.3%
|
|
Total share-based
compensation expense
|
|
$
|
105.3
|
|
$
|
117.4
|
|
(10.3)%
|
|
$
|
12.1
|
|
$
|
280.3
|
|
(95.7)%
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes expense
related to restricted stock units for the year ended
December 31, 2016 and employee stock purchase plan for the
years ended December 31, 2016 and 2015.
|
Share-based compensation. The decrease of $12.1 million and $268.2
million, respectively, during the quarter and year ended
December 31, 2016, as compared to the same periods in 2015,
was primarily due to changes in our stock price and number of share
tracking awards and stock options outstanding during the
periods.
Gain on Sale of Intangible Asset
In September 2015, we sold for $350.0 million in cash the Rare Pediatric
Priority Review Voucher (PPRV) that we received from the U.S. Food
and Drug Administration in connection with the approval of
Unituxin. The proceeds from the sale of the PPRV were recognized as
a gain on the sale of an intangible asset, as the PPRV did not have
a carrying value on our consolidated balance sheet at the time of
sale.
Income Taxes
The provision for income taxes was $346.5
million for the year ended December 31, 2016 compared
to $392.8 million for the same period
in 2015. The decrease in the provision for income taxes
corresponded primarily to a decrease in non-deductible compensation
related to our share tracking awards plan, which in turn resulted
from the decrease in our stock price. For the years ended
December 31, 2016 and 2015, the effective tax rates were
approximately 33 percent and 38 percent, respectively.
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for:
(1) interest expense; (2) license fees;
(3) depreciation and amortization; (4) impairment
charges; (5) share-based compensation expense (benefit), net
(including expenses relating to stock options, share tracking
awards, restricted stock units and our employee stock purchase
plan); and (6) tax impact on non-GAAP earnings adjustments.
For 2015, we also adjusted non-GAAP earnings to eliminate the gain
resulting from the sale of the PPRV in September 2015.
A reconciliation of net income to non-GAAP earnings is presented
below (in millions, except per share data):
|
|
Three Months Ended
December 31,
|
|
Year Ended December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net income, as
reported
|
|
$
|
110.3
|
|
$
|
104.6
|
|
$
|
713.7
|
|
$
|
651.6
|
|
Adjust for the
following charges:
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
2.2
|
|
0.5
|
|
3.9
|
|
4.7
|
|
Depreciation and
amortization
|
|
7.8
|
|
8.0
|
|
31.6
|
|
32.9
|
|
Impairment
charges
|
|
4.3
|
|
—
|
|
4.3
|
|
—
|
|
Share-based
compensation expense
|
|
105.3
|
|
117.4
|
|
12.1
|
|
280.3
|
|
Gain on sale of
intangible asset
|
|
—
|
|
—
|
|
—
|
|
(350.0)
|
|
Tax (benefit)
expense(1)
|
|
(42.7)
|
|
(41.4)
|
|
(17.0)
|
|
12.2
|
|
Non-GAAP
earnings
|
|
$
|
187.2
|
|
$
|
189.1
|
|
$
|
748.6
|
|
$
|
631.7
|
|
Non-GAAP earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
4.44
|
|
$
|
4.14
|
|
$
|
17.09
|
|
$
|
13.73
|
|
Diluted
|
|
$
|
4.12
|
|
$
|
3.80
|
|
$
|
16.00
|
|
$
|
12.33
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
42.2
|
|
45.7
|
|
43.8
|
|
46.0
|
|
Diluted
|
|
45.4
|
|
49.7
|
|
46.8
|
|
51.2
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-GAAP earnings
adjustments are presented net of the impact of our actual effective
income tax rates of approximately 36
percent and 33 percent for the quarters ended December 31,
2016 and 2015, respectively and 33 percent and 38 percent for
the
years ended December 31, 2016 and 2015, respectively. We
changed the presentation of our non-GAAP earnings in the first
quarter of 2015 for all periods presented to reflect the impact of
our estimated effective income tax rates on each component.
The sum of non-GAAP earnings in each of the quarters in 2016 and
2015, respectively, will not equal non-GAAP earnings for
the full year if there are differences between the estimated
effective income tax rate applied to each quarter and the
actual
effective tax rate for the full year.
|
Conference Call
We will host a half-hour teleconference on Wednesday,
February 22, 2017, at 9:00 a.m. Eastern Time. The
teleconference is accessible by dialing 1-877-351-5881, with
international callers dialing 1-970-315-0533. A rebroadcast of the
teleconference will be available for one week by dialing
1-855-859-2056, with international callers dialing 1-404-537-3406
and using access code 59599305.
This teleconference is also being webcast and can be accessed
via our website at http://ir.unither.com/events.cfm.
About United Therapeutics
United Therapeutics Corporation is a biotechnology company
focused on the development and commercialization of innovative
products to address the unmet medical needs of patients with
chronic and life-threatening conditions.
Non-GAAP Financial Information
This press release contains a financial measure, non-GAAP
earnings, which does not comply with United States generally accepted accounting
principles (GAAP). This measure supplements our financial results
prepared in accordance with GAAP as reported below.
We use non-GAAP earnings to assist us in: (1) planning,
including the preparation of our annual operating budget;
(2) allocating resources in an effort to enhance the financial
performance of our business; (3) evaluating the effectiveness
of our operational strategies; and (4) assessing our capacity
to fund capital expenditures and expand our business. We believe
this non-GAAP financial measure improves investors' understanding
of our financial results by excluding certain expenses that we do
not consider when evaluating and comparing the performance of our
core operations and making operating decisions. However, there are
limitations in the use of this non-GAAP financial measure in that
it excludes certain operating expenses that are recurring in
nature. In addition, our calculation of this non-GAAP financial
measure may differ from the methodology used by other companies.
The presentation of this non-GAAP financial measure should not be
considered in isolation or as a substitute for our financial
results prepared in accordance with GAAP. A reconciliation of net
income, the most directly comparable GAAP financial measure, to
non-GAAP earnings can be found in the table above under the
heading, Non-GAAP Earnings.
Forward-looking Statements
Statements included in this press release that are not
historical in nature are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, among others, statements
relating to our ability to develop and advance products
within our pipeline. These forward-looking statements are subject
to certain risks and uncertainties, such as those described in our
periodic reports filed with the Securities and Exchange
Commission, that could cause actual results to differ materially
from anticipated results. Consequently, such forward-looking
statements are qualified by the cautionary statements, cautionary
language and risk factors set forth in our periodic reports and
documents filed with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on
Form 8-K. We claim the protection of the safe harbor contained
in the Private Securities Litigation Reform Act of 1995 for
forward-looking statements. We are providing this information as of
February 22, 2017, and assume no obligation to update or
revise the information contained in this press release whether as a
result of new information, future events or any other reason.
[uthr-g]
Orenitram, Remodulin, Tyvaso and Unituxin are registered
trademarks of United Therapeutics Corporation.
Adcirca is a registered trademark of Eli Lilly and Company.
UNITED
THERAPEUTICS CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Net product
sales
|
|
$
|
409.0
|
|
$
|
404.2
|
|
$
|
1,598.8
|
|
$
|
1,460.6
|
|
Other
|
|
—
|
|
0.7
|
|
—
|
|
5.2
|
|
Total
revenues
|
|
409.0
|
|
404.9
|
|
1,598.8
|
|
1,465.8
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of product
sales
|
|
28.4
|
|
25.3
|
|
72.7
|
|
69.0
|
|
Research and
development
|
|
66.9
|
|
75.9
|
|
147.6
|
|
245.1
|
|
Selling, general and
administrative
|
|
139.5
|
|
148.7
|
|
316.8
|
|
452.7
|
|
Total operating
expenses
|
|
234.8
|
|
249.9
|
|
537.1
|
|
766.8
|
|
Operating
income
|
|
174.2
|
|
155.0
|
|
1,061.7
|
|
699.0
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2.2)
|
|
(0.5)
|
|
(3.9)
|
|
(4.7)
|
|
Gain on sale of
intangible asset
|
|
—
|
|
—
|
|
—
|
|
350.0
|
|
Other, net
|
|
(0.5)
|
|
1.5
|
|
2.4
|
|
0.1
|
|
Total other (expense)
income, net
|
|
(2.7)
|
|
1.0
|
|
(1.5)
|
|
345.4
|
|
Income before income
taxes
|
|
171.5
|
|
156.0
|
|
1,060.2
|
|
1,044.4
|
|
Income tax
expense
|
|
(61.2)
|
|
(51.4)
|
|
(346.5)
|
|
(392.8)
|
|
Net income
|
|
$
|
110.3
|
|
$
|
104.6
|
|
$
|
713.7
|
|
$
|
651.6
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.61
|
|
$
|
2.29
|
|
$
|
16.29
|
|
$
|
14.17
|
|
Diluted
|
|
$
|
2.43
|
|
$
|
2.10
|
|
$
|
15.25
|
|
$
|
12.72
|
|
Weighted average
number of common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
42.2
|
|
45.7
|
|
43.8
|
|
46.0
|
|
Diluted
|
|
45.4
|
|
49.7
|
|
46.8
|
|
51.2
|
|
SELECTED
CONSOLIDATED BALANCE SHEET DATA
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2016
|
|
2015
|
|
Cash, cash
equivalents and marketable securities
|
|
$
|
1,053.1
|
|
$
|
991.8
|
|
Total
assets
|
|
2,325.6
|
|
2,184.4
|
|
Total liabilities and
temporary equity
|
|
474.3
|
|
595.8
|
|
Total stockholders'
equity
|
|
1,851.3
|
|
1,588.6
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/united-therapeutics-corporation-reports-2016-fourth-quarter-and-annual-financial-results-300411068.html
SOURCE United Therapeutics Corporation