SILVER SPRING, Md. and
RESEARCH TRIANGLE PARK, N.C.,
April 26, 2017 /PRNewswire/ -- United Therapeutics Corporation
(NASDAQ: UTHR) today announced its financial results for the first
quarter ended March 31, 2017.
"Our quarterly financial growth trends are slower than we would
like as we are seeing more patients stay longer on front-line
pulmonary arterial hypertension (PAH) therapies," said Martine Rothblatt, Ph.D., United Therapeutics
Chairman and Chief Executive Officer. "Due to the progressive
nature of this disease, we believe that this building backlog of
PAH patients ultimately will transition to more advanced therapies,
such as Orenitram, Tyvaso and Remodulin. As the PAH patient backlog
dynamics unfold, we are continuing to invest in our growing product
pipeline of late stage programs in cardiopulmonary diseases and
oncology and also in regenerative medicine and organ manufacturing
to ultimately find a cure for PAH."
Key financial highlights include (dollars in millions, except
per share data):
|
|
Three Months Ended
March 31,
|
|
Percentage
|
|
|
|
2017
|
|
2016
|
|
Changes
|
|
Revenues
|
|
$
|
370.5
|
|
$
|
369.0
|
|
—
|
%
|
Net income
|
|
$
|
178.6
|
|
$
|
235.5
|
|
(24)
|
%
|
Non-GAAP
earnings(1)
|
|
$
|
165.7
|
|
$
|
141.9
|
|
17
|
%
|
Net income, per
diluted share
|
|
$
|
3.89
|
|
$
|
4.84
|
|
(20)
|
%
|
Non-GAAP earnings,
per diluted share(1)
|
|
$
|
3.61
|
|
$
|
2.91
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
(1) See definition of non-GAAP earnings, a
non-GAAP financial measure, and a reconciliation of net income to
non-GAAP earnings below.
|
Financial Results for the Three Months Ended March 31,
2017 compared to the Three Months Ended March 31, 2016
Revenues
The following table presents the components of total revenues
(dollars in millions):
|
|
Three Months Ended
March 31,
|
|
Percentage
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
Net product
sales:
|
|
|
|
|
|
|
|
Remodulin®
|
|
$
|
145.8
|
|
$
|
139.8
|
|
4
|
%
|
Tyvaso®
|
|
87.4
|
|
102.2
|
|
(14)
|
%
|
Adcirca®
|
|
80.0
|
|
72.6
|
|
10
|
%
|
Orenitram®
|
|
39.3
|
|
40.2
|
|
(2)
|
%
|
Unituxin®
|
|
18.0
|
|
14.2
|
|
27
|
%
|
Total
revenues
|
|
$
|
370.5
|
|
$
|
369.0
|
|
—
|
%
|
Revenues for the three months ended March 31, 2017
increased by $1.5 million compared to
the same period in 2016. The growth in revenues resulted from the
following: (1) a $7.4 million
increase in Adcirca net product sales; (2) a $6.0 million increase in Remodulin net product
sales; and (3) a $3.8 million
increase in Unituxin net product sales. These increases were
partially offset by a $0.9 million
decrease in Orenitram net product sales and a $14.8 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
March 31,
|
|
Percentage
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
Cost of product sales
excluding share-based compensation
|
|
$
|
15.8
|
|
$
|
12.6
|
|
25
|
%
|
Share-based
compensation benefit(1)
|
|
(1.5)
|
|
(11.9)
|
|
87
|
%
|
Total cost of product
sales
|
|
$
|
14.3
|
|
$
|
0.7
|
|
1,943
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Refer
to Share-based compensation (benefit) expense below for
discussion.
|
Research and development expense. The table below
summarizes research and development expense by major category
(dollars in millions):
|
|
Three Months Ended
March 31,
|
|
Percentage
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
Research and
development expense excluding share-based compensation
|
|
$
|
41.3
|
|
$
|
36.8
|
|
12
|
%
|
Share-based
compensation benefit(1)
|
|
(5.1)
|
|
(37.2)
|
|
86
|
%
|
Total research and
development expense
|
|
$
|
36.2
|
|
$
|
(0.4)
|
|
9,150
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Refer
to Share-based compensation (benefit) 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
March 31,
|
|
Percentage
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
General and
administrative excluding share-based compensation
|
|
$
|
53.5
|
|
$
|
78.2
|
|
(32)
|
%
|
Sales and marketing
excluding share-based compensation
|
|
15.4
|
|
22.3
|
|
(31)
|
%
|
Share-based
compensation benefit(1)
|
|
(12.5)
|
|
(95.5)
|
|
87
|
%
|
Total selling, general
and administrative expense
|
|
$
|
56.4
|
|
$
|
5.0
|
|
1,028
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Refer
to Share-based compensation (benefit) expense below for
discussion.
|
General and administrative. The decrease in general and
administrative expense of $24.7
million for the three months ended March 31, 2017, as
compared to the same period in 2016, was primarily attributable to
a $32.0 million decrease in
charitable donations to non-affiliated, non-profit organizations
that provide financial assistance to patients with PAH.
Share-based compensation (benefit) expense. The table
below summarizes share-based compensation (benefit) expense by
major category (dollars in millions):
|
|
Three Months Ended
March 31,
|
|
Percentage
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
Share tracking awards
plan
|
|
$
|
(24.6)
|
$
|
(147.9)
|
|
83
|
%
|
Stock
options
|
|
4.6
|
|
3.1
|
|
48
|
%
|
Other(1)
|
|
0.9
|
|
0.2
|
|
350
|
%
|
Total share-based
compensation benefit
|
|
$
|
(19.1)
|
$
|
(144.6)
|
|
87
|
%
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
expense related to restricted stock units for the three months
ended March 31, 2017, and employee stock purchase plan for the
three months ended March 31, 2017 and 2016.
|
Share tracking awards plan. We re-measure the fair value
of share tracking awards at the end of each financial reporting
period. Changes in the liability associated with share tracking
awards resulting from such re-measurements are recorded as
adjustments to share-based compensation (benefit) expense.
Decreases in our stock price will generally result in a reduction
in the share tracking award liability. The decrease in share
tracking awards plan benefit of $123.3
million for the three months ended March 31, 2017, as
compared to the same period in 2016, was primarily due to the
smaller decrease in our stock price during the three months ended
March 31, 2017, as compared to the same period in 2016.
Income Tax Expense
The provision for income taxes was $85.0
million for the three months ended March 31, 2017 as
compared to $128.4 million for the
same period in 2016. The provision for income taxes is based on an
estimated effective tax rate for the entire year. The estimated
annual effective tax rate is subject to adjustment in subsequent
quarterly periods if components used to estimate the effective tax
rate are updated or revised. The estimated effective tax rate as of
March 31, 2017 and March 31, 2016, was approximately 32
percent and approximately 35 percent, respectively. Our 2017
estimated effective tax rate decreased compared to 2016 primarily
due to a decrease in non-deductible share-based compensation
expense, and the impact of ASU 2016-09 adoption requiring windfall
excess tax benefits to be recognized in income tax expense.
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for:
(1) share-based compensation expense (benefit), net (including
expenses relating to stock options, share tracking awards,
restricted stock units and our employee stock purchase plan); (2)
extraordinary, non-recurring and unusual items; and (3) tax
impact on non-GAAP earnings adjustments. Starting in the first
quarter of 2017, we will no longer adjust our non-GAAP results for
interest expense, depreciation and amortization. We believe these
changes will provide a better view of the company's regular and
on-going operations. Prior year amounts will reflect this change
for comparability purposes.
A reconciliation of net income to non-GAAP earnings is presented
below (in millions, except per share data):
|
|
Three Months Ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
Net income, as
reported
|
|
$
|
178.6
|
|
$
|
235.5
|
|
Adjusted
for:
|
|
|
|
|
|
Share-based
compensation benefit, net
|
|
(19.1)
|
|
(144.6)
|
|
Tax
expense(1)
|
|
6.2
|
|
51.0
|
|
Non-GAAP
earnings
|
|
$
|
165.7
|
|
$
|
141.9
|
|
Non-GAAP earnings per
share:
|
|
|
|
|
|
Basic
|
|
$
|
3.72
|
|
$
|
3.13
|
|
Diluted
|
|
$
|
3.61
|
|
$
|
2.91
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
|
44.5
|
|
45.4
|
|
Diluted
|
|
45.9
|
|
48.7
|
|
|
|
|
|
|
|
|
(1) Represents the total tax impact of the
quarterly non-GAAP earnings adjustments based on our actual
quarterly effective income tax rates of approximately 32 percent
and approximately 35 percent as of March 31, 2017 and 2016,
respectively.
|
Conference Call
We will host a half-hour teleconference on Wednesday,
April 26, 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: 7268729.
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, the calculation of our non-GAAP financial
measure may differ from the methodology used by other companies.
The presentation of our 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
regarding the transition of patients onto more advanced therapies,
such as Orenitram, Remodulin and Tyvaso, and statements regarding
our pipeline and efforts to find a cure for PAH. 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 April 26, 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
March 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
(Unaudited)
|
|
Revenues:
|
|
|
|
|
|
Net product
sales
|
|
$
|
370.5
|
|
$
|
369.0
|
|
Total
revenues
|
|
370.5
|
|
369.0
|
|
Operating
expenses:
|
|
|
|
|
|
Cost of product
sales
|
|
14.3
|
|
0.7
|
|
Research and
development
|
|
36.2
|
|
(0.4)
|
|
Selling, general and
administrative
|
|
56.4
|
|
5.0
|
|
Total operating
expenses
|
|
106.9
|
|
5.3
|
|
Operating
income
|
|
263.6
|
|
363.7
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
|
(0.8)
|
|
(0.6)
|
|
Other, net
|
|
0.8
|
|
0.8
|
|
Total other income,
net
|
|
—
|
|
0.2
|
|
Income before income
taxes
|
|
263.6
|
|
363.9
|
|
Income tax
expense
|
|
(85.0)
|
|
(128.4)
|
|
Net income
|
|
$
|
178.6
|
|
$
|
235.5
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
|
$
|
4.01
|
|
$
|
5.19
|
|
Diluted
|
|
$
|
3.89
|
|
$
|
4.84
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
|
44.5
|
|
45.4
|
|
Diluted
|
|
45.9
|
|
48.7
|
|
SELECTED
CONSOLIDATED BALANCE SHEET DATA
|
(Unaudited, in
millions)
|
|
|
|
March 31,
2017
|
|
Cash, cash
equivalents and marketable investments
|
|
$
|
1,300.8
|
|
Total
assets
|
|
2,561.3
|
|
Total liabilities and
temporary equity
|
|
496.0
|
|
Total stockholders'
equity
|
|
2,065.3
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/united-therapeutics-corporation-reports-first-quarter-2017-financial-results-300445558.html
SOURCE United Therapeutics Corporation