United Therapeutics Corporation (NASDAQ:UTHR) Q4 2023 Earnings Call Transcript

United Therapeutics Corporation (NASDAQ:UTHR) Q4 2023 Earnings Call Transcript February 21, 2024

United Therapeutics Corporation beats earnings expectations. Reported EPS is $4.36, expectations were $3.92. United Therapeutics Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to the United Therapeutics Corporation Fourth Quarter 2023 Earnings Webcast. My name is David, and I will be your conference operator today. All participants on the call — the webcast will be in a listen-only until the question-and-answer portion of the earnings call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Dewey Steadman, Head of Investor Relations at United Therapeutics.

Dewey Steadman: Thank you, Dave, and good morning. It’s my pleasure to welcome you to the United Therapeutics Corporation’s Fourth Quarter 2023 Earnings Webcast. Remarks today will include forward-looking statements representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings, including Forms 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update those forward-looking statements. Today’s remarks also may discuss the progress and results of clinical trials or other developments with respect to our products and these remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision-making or to suggest that any products are safe and effective for any unapproved or investigational uses.

Full prescribing information for the products are available on our website. Accompanying me on today’s call are Dr. Martine Rothblatt, our Chairperson and Chief Executive Officer; Michael Benkowitz, our President and Chief Operating Officer; James Edgemond, our Chief Financial Officer and Treasurer; Dr. Leigh Peterson, our Executive Vice President of Product Development and Xenotransplantation; and Pat Poisson, our Executive Vice President of Technical Operations. Note that James and I will be participating in one-on-one meetings at the 2023 UBS European Healthcare conference on February 27th in London. Michael, James and I’ll participate in a fireside chat and one-on-one meetings at the TD Cowen Healthcare conference on March 5 in Boston and Pat Poisson and I will participate in a fireside chat and one-on-one meetings at the Leerink Partners Global Biopharma Conference on March 12 in Miami.

Our scientific, commercial and medical affairs teams will present at the American College of Cardiology 73rd scientific sessions, April 6 through 8 in Atlanta; the International Society for Heart and Lung Transplantation, April 10 through 13 in Prague; and the American Thoracic Society International Conference on May 17 through 22 in San Diego. And now, I will turn the call or the webcast over to Dr. Rothblatt for an overview of our fourth quarter 2023 financial results and the business activities of United Therapeutics. Martine?

Martine Rothblatt: Thank you, Dewey. Good morning, everyone and a good day to those who are on the other side of the oceans. Congratulations to the 1,200 Unitherians who worked tirelessly every day to help us achieve our third straight quarter of record revenue and our second straight year of record revenue. We yet again achieved 20% plus quarterly and annual revenue growth for the fourth quarter and the full year 2023. On top of our record performance in the fourth quarter of 2023 earlier this year, we received important external validation of the value of our Tyvaso DPI business through a royalty transaction executed by our partners at MannKind Corporation. To put it simply, MannKind sold a-tenth of their 10% royalty payment stream from us, which equates to 1% of Tyvaso DPI sales and they sold it to Sagard Healthcare Partners for $150 million, plus other milestones.

That implies an external valuation of the entirety of the Tyvaso DPI revenue stream of $15 billion before even factoring in the additional potential milestones. That’s well above the current market cap for our entire business. And importantly, this transaction valuation is far above The Wall Street valuation of our entire company as a whole, and is for only one of our many products. At United Therapeutics, we talk about being positioned for three waves of growth and let’s dive into the many reasons why we’re so confident in our business. Our first wave of growth will come through our existing commercial business, led by Tyvaso in PH-ILD. We continue to post solid growth in our current business with our third consecutive quarter of record revenues for Tyvaso and revenue growth for our US Remodulin business, despite the presence of competition in the market for the past five years.

Our growth in PH-ILD and continued leadership in pulmonary arterial hypertension also known as PAH has led our nebulized Tyvaso and our Tyvaso DPI products combining to become the most prescribed prostacyclin therapy in the United States. Michael will go into detail on these — this exciting aspect of our commercial business. Our second wave of growth will come from our near-term pipeline led by the TETON studies in pulmonary fibrosis and the ADVANCE OUTCOMES study of ralinepag in PAH. These programs should enable us to continue our double-digit annual growth trend through the second half of the decade. I will provide updates on the TETON and ralinepag programs shortly. Of course, both our first and second waves of growth are subject to clinical trial outcomes, regulatory approvals, new competitive entrants and the potential impacts of the Inflation Reduction Act, but we feel good about our prospects for meeting these revenue growth targets.

Our third wave of sustainable growth will come through the development manufacture and widespread use of manufactured organs and organ technologies to provide a solution to patients suffering from end-stage kidney, lung, heart and liver disease. Now moving to our near-term pipeline and second wave of growth. We have four key registration trials underway. Three, TETON studies for pulmonary fibrosis and the ADVANCE OUTCOMES study for ralinepag and oral therapy for Group 1 PAH. We also advanced our MiroliverELAP program towards the clinic with a recent and historic IND clearance by the FDA. Moving to TETON. We believe IPF represents a 100,000 patient opportunity in the United States with only two approved therapies that nearly slow lung function decline.

Both TETON 1 and TETON 2 are enrolling patients. And at this time, we are aiming for full enrollment in both studies with 576 patients each by the end of this calendar year. Likewise, we believe PPF or progressive pulmonary fibrosis represents a 60,000-patient opportunity in the US alone. And this disease is quite distinct from IPF or idiopathic pulmonary fibrosis. One of the two FDA approved IPF therapies is also approved for PPF and as in IPF, it only slows the decline of lung function in these fragile patients. The TETON PPF study dosed its first patients in the fourth quarter of 2023 right on schedule and we expect this trial to enroll 698 patients. We believe there is a high probability of success in the three TETON studies based on the IPF subset analysis of the INCREASE study of nebulized Tyvaso in PH-ILD patients.

Unlike the two IPF studies that are already on the market, nebulized Tyvaso in a safety endpoint showed an improvement — an actual improvement of lung function in the subset of patients that had IPF along with their pulmonary hypertension. That just gives so many people so much hope. Now let’s move on to ralinepag and our ADVANCE OUTCOMES study in Group I PAH, which continues to enroll patients and we expect completion of the study in 2025. We are in fact targeting 700 to 1,000 patients in this study depending on the pace of accruing clinical worsening events. Ralinepag is a next-generation selective and potent prostacyclin receptor agonist which we are developing as a once-daily oral therapy for PAH. We believe ralinepag’s once-daily dosing, sustained release profile, and titratability could position it favorably against the other oral prostacyclin receptor agonists on the market as well as other therapies for PAH patients.

Ralinepag provides 24-hour coverage with higher potency than the other oral prostacyclin agonists as demonstrated by in-vitro assays and ralinepag significantly demonstrated more than 20% improvement in pulmonary vascular resistance in a Phase 2 study. A long-term Phase 2 open-label study of ralinepag also showed sustained improvement in six-minute walk distance out to more than two years. A manuscript recently published in the journal Advances in Therapy describes these exciting findings. Now, while we and others have made progress at extending lives and improving patient outcomes through treprostinil and other therapies, the only known cure for PAH remains a lung transplant. That also is the case for IPF. The problem for PAH, IPF, and many other patients with end-stage organ disease is that there aren’t enough donors and transplantable organs available to address the need.

And for many organ donations, one life sadly must be lost to save another. We believe the best solution to this problem is to create a supply — an unlimited supply of tolerable transplantable manufactured organs even better with an unlimited supply of organs transplant can become a consideration for therapy in countless end-stage organ diseases for which there are few good treatment options. Accordingly, we have been developing several investigational approaches using multiple technologies with different organs all with this same goal in mind. The first is our ex vivo lung perfusion service or EVLP, which has led to over 380 lives saved with lungs that have undergone EVLP in our facilities in Silver Spring, Maryland and at the Mayo Clinic Jacksonville campus.

Beyond EVLP, we have four platforms xenotransplantation, regenerative medicine, 3D bioprinting, and bioartificial organs. These four platforms cover four key organs lung, heart, kidney, and liver. Starting with xenotransplantation, we continue to work with the FDA on the clinical path forward. We’re underway with what we call pivotal preclinical studies in baboons at the request of the agency. Specifically, for our 10-gene program, we expect the last preclinical xeno-kidney transplant to occur in the first half of 2024. We expect to meet with the agency later this year to discuss the IND and clinical protocol for human studies for 10-gene xeno organs. In parallel with the pivotal preclinical studies, the construction of our clinical scale Designated Pathogen-Free facility or DPF in Virginia is complete and we dedicated the facility earlier this month.

We expect the facility to begin receiving pigs this quarter and for the facility to grow its population through the balance of 2024 in preparation for clinical studies in humans for both xeno-kidneys and xeno-hearts. Super, super exciting and wow, just breathing so much hope into the entire transplant space. Last month, we received FDA clearance of our investigational new drug application that allows the miroliverELAP system to enter human clinical trials. By the way this non-registration study will be the first ever clinical study of a bioengineered organ. MiroliverELAP is an external liver-assist product or ELAP that is designed to provide liver support to — in the critical care setting. Acute liver failure is a devastating condition with no approved therapies.

A liver transplant is often the only way to save these patients. The ELAP is intended to give the patient’s liver a chance to heal itself, possibly reducing the need for liver transplantation. We look forward to providing more details on this program in the coming quarters. I’m thrilled that we’re in such a great position at United Therapeutics. We have a solid commercial business, posting record results with continued strong growth ahead, a pipeline of novel therapies that continue our strong double-digit revenue growth and a long-term plan to address one of the largest, critical, unmet medical needs in medicine all while helping our patients, employees and shareholders succeed. I’ll now turn the call over to our President, Michael Benkowitz, who will give an overview of our commercial performance and expectations for potential competition this year.

Michael?

Michael Benkowitz: Thank you, Martine, and good morning everyone. As Martine noted, today we reported our highest revenue quarter ever at $615 million, up 25% from the fourth quarter of 2022 and record annual revenues of more than $2.3 billion, up 20% over 2022. Importantly, we saw meaningful growth across our entire suite of products, like the Tyvaso franchise, Remodulin in the US, Orenitram and Unituxin. Starting with Orenitram, revenue of $84 million during the quarter was up 11% from the prior year. This growth reflects increases in volume, price and average dose. Following the publication of two peer-reviewed manuscripts in 2023, our medical affairs teams began providing education on data from the EXPEDITE study, which assessed the Orenitram dose achieved, after a rapid Remodulin titration and then transition to Orenitram.

Worldwide Remodulin revenue of $115 million for the fourth quarter was down 6% from last year, primarily impacted by International order timing. However U.S. Remodulin revenue of $106 million was up 9%, from the fourth quarter of 2022. Remodulin both intravenous and subcutaneous remains the most prescribed Parenteral Prostacyclin in the U.S. We expect this momentum to continue in the U.S., as we had a near record number of referrals and starts during the fourth quarter, driven in part by interest in the EXPEDITE study results. Worldwide Unituxin revenue of $54 million in the fourth quarter was up 48% from the prior year quarter and U.S. Unituxin revenue of $49 million was up 34%. U.S. growth was driven by pricing volume and these volume gains were driven primarily through a modest inventory build at our distributor.

International ordering driven by our partner in Japan, was strong over a comparably soft quarter in 2022. Finally, TYVASO, Worldwide TYVASO revenue was up 45% to $351 million, our highest quarter ever. U.S. revenue was up 40% to $337 million and was the highest quarter ever. U.S. growth in TYVASO was led by the continued uptake of TYVASO DPI. TYVASO nebulizer and TYVASO DPI remain the number one prescribed, prostacyclin treatment in the U.S. and they remain the only approved therapies for PH-ILD. We’re pleased to report that there were no material changes in inventories of TYVASO DPI, at our Specialty Pharmacy distributors during the fourth quarter and that both distributors remain within their contracted inventory levels. The expansion of our partner MannKind’s production capacity over the summer of 2023, continues to be sufficient to meet current demand and a further expansion at MannKind is expected to come online in the coming months, which will allow us to reach as many as 25,000 patients per year with TYVASO DPI.

Assuming normal production operations at MannKind, we do not expect any supply constraints moving forward. Interestingly after the launch of TYVASO DPI in May of 2022, and the subsequent expected decline in revenue for Nebulizer TYVASO, we are starting to see modest sequential growth in U.S. Nebulizer TYVASO revenue, a key reminder of the importance of the Nebulizer for patients with Pulmonary Hypertension. Some physicians and patients continue to prefer the Nebulizer, because of its use profile or for reimbursement reasons. In addition, we are aware that some Pulmonologists, prefer to start and titrate their PH-ILD patients, using the Nebulizer before switching to TYVASO DPI. This allows more precise titration, in one-breath increments, compared to the three-breath equivalent increments of TYVASO DPI.

We expect this platform strategy to emerge, as a competitive advantage over other potential DPI products should they reach the market. Now we’ve heard a lot about potential competition for TYVASO DPI and I’d like to share several reasons why we’re confident, we will have the preferred dry powder inhaler for patients with PAH and PH-ILD. First, TYVASO DPI requires only one-breath per cartridge, compared to two-breaths for the potential competitor. On top of that, our low flow design requires less patient breath than potential high flow devices that may reach the market. In patients with compromised lungs, we think that the less breath required through a low-flow device will be seen as a fundamental benefit by both patients and prescribers. Next, the low flow design of Tyvaso DPI allows for consistent deep lung delivery.

This means, we can achieve similar blood levels as the nebulizer with less treprostinil than high flow devices. The Dreamboat device for Tyvaso DPI requires no cleaning or maintenance, saving patients’ time and effort compared to other potential devices that may reach the market. Also Tyvaso DPI is labeled for room temperature storage by patients another important convenience point. There’s no maximum label dose for Tyvaso or Tyvaso DPI despite claims to the contrary by our potential competitors. And finally the BREEZE study also demonstrated 98% patient satisfaction with Tyvaso DPI. These factors coupled with the experience physicians have gained through the rapid uptake of Tyvaso DPI since launch lead us to believe that Tyvaso DPI will compete as effectively with similar product offerings in the inhaled market as Remodulin has competed with similar offerings in the parenteral market.

Moving to the other potential competitor this year, the PAH community is anticipating the March FDA action date for the first potential activin signaling inhibitor for the treatment of Group 1 PAH. While we understand that there is some excitement for this new pathway and we’ve seen this in the past with new offerings, it’s important to remember that PAH is a complex multi-factorial disease where polytherapy is the norm not the exception and treating multiple pathways of the disease aggressively and early is critical to patient outcomes. Based on the result of this new product’s clinical trial and our conversations with prescribers, it is not — it does not appear that an activin signaling inhibitor is either a cure for PAH or a replacement for prostacyclin therapy.

In fact in their pivotal trial, 70% of patients were on prostacyclin therapy with 40% on a parenteral prostacyclin Remodulin. Therefore, we see this therapy as additive to our existing prostacyclin patients. And if the activin signaling inhibitor helps further improve outcomes then these patients should stay on our therapies longer. For those patients not yet on a prostacyclin therapy, PAH is a progressive disease and the vast majority of these patients will eventually need a prostacyclin. Whether that’s before or after initiating activin signaling inhibitor will be case dependent. But given that polytherapy is becoming the norm, we believe Tyvaso DPI offers patients and prescribers a convenient way to cover the prostacyclin pathway earlier in a patient’s disease journey.

Finally, we want to remind investors that this launch will only be in Group 1 PAH and will not affect our growing PH-ILD business where the activin signaling pathway has not been studied. That brings us to the profile of treprostinil-based prostacyclins like Tyvaso Remodulin and Orenitram. We have over two decades of use and safety data to support the use of treprostinil in PAH patients. There’s a correlation between prostacyclin dose and patient outcomes. Treprostinil has demonstrated improvement across a wide array of key hemodynamic parameters and no regular blood testing is required for prostacyclin use. To wrap-up, while we’re entering a year of potentially increasing competition, we remain confident that we have the product portfolio, clinical data, support structures and expertise to succeed in the emerging competitive landscape.

We’re extremely proud of our continued record performance in this past quarter and the entire year and we think we’re in the early stages of sustainable growth for our current commercial portfolio. With that, I’ll turn the call back over to Martine to run the Q&A.

Martine Rothblatt: Thanks, Mike. And congratulations again to you and your entire sales, commercialization, marketing, strategic operations and allied health teams that have achieved sequential record on quarters and years of growth in these products. It’s just really beyond awesome. Thank you so much. Operator, you could now open up the lines for any questions.

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Q&A Session

Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Roanna Ruiz with Leerink Partners. Please go ahead.

Roanna Ruiz: Hey. Good morning, everyone. So, I was curious if you could talk a bit about the underlying patient demand in the quarter for Tyvaso, both the DPI and the nebulizer, and any other key drivers that you’re seeing. And I was curious, in terms of big picture, are you seeing anything interesting in the inventory dynamics going into first quarter this year?

Martine Rothblatt: Thanks Roanna for your question. It seems Mike would be the best person on the call to answer those questions. He did touch upon those points in his introductory remarks, but Mike maybe if you can provide a little bit more color.

Michael Benkowitz: Sure. Yes. I think from a demand standpoint for the Tyvaso franchise, we were really happy with the demand metrics in the fourth quarter. Referrals came in at or above I can say a record fourth quarter. New patient start, which is unusual given we talk a lot about the cyclicality or the seasonality, particularly in the fourth quarter with the holidays and the fewer shipping days. So, it’s really nice to see that we were able to really kind of buck that trend on the referral side. On the start side, we’re pulling those through. One of the phenomenon that I had — I’ve talked about in past years with respect to the fourth quarter is that, when referrals come in sometimes between — particularly between that Thanksgiving and really end of year time period as people are settling into their holiday routines, patients are sometimes reluctant to start therapy.

And so, they delay the start of the therapy until after the first of the year. And so, we did see a little bit of that on the start side, so record referrals but the percentage of those that converted to starts within the quarter as compared to prior quarters was maybe down a little bit, but we’re starting to see those pull through in the first quarter. So again, that’s not uncommon and we see that typically every year. So, from a demand standpoint just really, really happy with how the commercial teams are performing, the continued uptake of Tyvaso DPI, in both PAH and PH-ILD, and then generally the continued growth in the PH-ILD business. From an inventory standpoint, as Martine alluded to and as I said in my opening remarks, I think we feel really good about where we are from an inventory standpoint.

MannKind is — with the process and increased capacity improvements they made over the summer, they seem to be humming along. And so, we’re able to ensure that specialty pharmacy is staying within those contractual orders. And so that’s been true, I think for the last couple of quarters now. And with more capacity coming on later this year, as I said earlier, we don’t really expect there to be any type of supply constraints or anomalies on the inventory side.

Martine Rothblatt: Perfect. Michael, thank you so much. Operator, next question.

Operator: The next question comes from Ash Verma with UBS. Please go ahead.

Ash Verma: Hi. Congrats on the progress. Thanks for taking our questions. So, maybe just like starting off with the middle lever. Can you elaborate a little bit like what would the clinical study design look like? And then second, in terms of the DPI out-of-pocket cost with this year, with the IRA catastrophic limit implementation, would that normalize the out-of-pocket costs compared to the nebulizer? Or would we start to see more of that benefit in 2025? Thanks.

Martine Rothblatt: Okay. Ash, it sounds to me like you had one question on the clinical trial design for the Xeno program, and then flipped to a completely different topic on the IRA aspect. So, why don’t we start with Dr. Peterson, sharing her thoughts on the clinical development way forward for Xeno. And then, Mike can share some more thoughts about reimbursement issues. Dr. Peterson?

Leigh Peterson: Yes, sure. Yes, for the Xeno program, with regard to our 10-gene xenokidney and 10-gene xenoheart, we are continuing to conduct our IND-enabling studies with our partners at University of Maryland and John Hopkins. And we expect that these studies will finish and we will start having meetings with FDA to actually discuss the specific clinical protocols for those programs with the intent of starting the — at least the 10-gene xenokidney study in 2025 and as well as possibility of 10-gene xenoheart.

Martine Rothblatt: Okay. Thanks Dr. Peterson. And Ash, I think maybe I misheard a little bit on your trial question was with regard to the ELAP study. And there I would refer you to what’s posted at clinicaltrials.gov. It is the first time ever that the FDA has approved a bioengineered organ in clinical trials. That’s a humongous achievement and great credit goes to Jeff Ross and his team at Miromatrix for getting us to this point. So the details that’s a Phase 1 safety study you could read it on the FDA’s website. But we’re really excited too with so many pathways and platforms in our organ transplantation business to have the miroELAP to serve in some ways as a pathfinder, as we bring more and more types of manufactured organs into the clinic. Mike, do you want to chat on the IRA thing?

Michael Benkowitz: Sure, happy to. So Ash I think your question was with the changes to the IRA, the elimination of the catastrophic phase for patients and lowering of out-of-pocket costs, does that level the playing field from – at least from patient standpoint as – between DPI and nebulizer? And so there’s still some differences between DPI and nebulizer – between Part D and Part B in terms of out-of-pocket, whether a patient has supplemental insurance in Part B, et cetera. But I think what we feel comfortable saying is that to the extent that reimbursement was a barrier to starting DPI that will largely go away with the changes to the patient out-of-pocket in Part D. And we’re actually starting to see the benefit of that.

And so just as a – maybe a little bit of a quick backgrounder for everybody, the 5% out-of-pocket in the catastrophic phase goes away starting this year for the patients. So the out-of-pocket for a patient right now is I think it’s between around $3,000 to $3,500. And that covers all drugs. So that’s not per drug, that’s across all and any medications they are on. So that’s their out-of-pocket for this year. That – they have to spend that before Medicare kicks in in 2024. The nice thing about 2025 is that the patients are able to spread that spend out over the 12 months and that $3500 drops to $2000. So lower amount and they can spread it out over 12 months. So because of all of those factors lower out-of-pocket, eventually able to spread it out over 12 months and covers all of the drugs, I think what we’re going to see is a reduction in the utilization of our patient assistance program.

And in fact we’re already starting to see that. We had a surprising number of patients that were able to switch over from patient assistance to commercial drug in the first quarter. And I think once we get past the first quarter because many of our patients are on multiple therapies, I think the vast majority of these patients will have spent their out-of-pocket limit at moving into the second quarter. And so we would expect that as the year goes on fewer and fewer patients will need to come into our patient assistance program. And therefore, our PAP utilization will continue to decline over the balance of this year and then into 2025.

Martine Rothblatt: That’s great, Mike. So again, we have been well prepared for the IRA years ahead of time and all that great groundwork and preparation is certainly paying off. Is there a next question from the operator?

Operator: Yes, the next question comes from Jessica Fye with JPMorgan. Please go ahead.

Jessica Fye: Hey, guys. Good morning. Thanks so much for taking my question. You mentioned sotatercept not coming to market in PH-ILD. And I know it’s sort of tough to tell but just given the investor questions we get about the pending competition in PAH, can you give us your latest thinking on the mix of Tyvaso patients being treated for PAH versus PH-ILD and how that mix might evolve going forward as PH-ILD use continues to ramp? And then if that mix is not answerable, can you elaborate on which of your treprostinil products you see as perhaps least likely to see any disruption from sotatercept? And why? Thank you.

Martine Rothblatt: Yes. Thanks, Jess. Good to hear your voice this morning and Mike will take your question.

Michael Benkowitz: Sure. Yes. So I think in terms of mix of PAH and PH-ILD with Tyvaso, we talked at your conference earlier this quarter we had said that we believe it’s around 50-50. And it’s not a perfectly knowable answer just because of the way that the information comes in through the referral forms, but I think it’s reasonable and we feel pretty confident it’s in that 50-50 mix. And that should continue to — it should continue to increase in favor of PH-ILD as we continue to just get out and talk to prescribers. We’ve talked about the fact that we expanded our sales force in the second half of last year. That process is complete. Those sales representatives are training they’re out in the field. And so I think as we move into the rest of 2024, we’ll start to realize the benefits of the greater share of voice in PH-ILD.

Those subscribers becoming more I think diligent and comfortable in screening patients and either referring them to PAH clinics or starting to treat those patients themselves with Tyvaso nebulizer or DPI. So over time I think we continue to see PH-ILD as our big growth opportunity and that mix will trend in favor of PH-ILD as we move forward. I think in terms of the — your question on the drugs — on which drug in PAH is least likely to be impacted. Again, as I said, I have conviction that over the long-term really there’s not going to be much impact at all because all patients will need a prostacyclin at some point. So really I think it’s a question of sequencing and that’s going to be kind of case dependent on the patient. But coming out of the gate so to speak I would say Remodulin is probably the least likely to be impacted because patients that are on Remodulin tend to be more advanced patients more severe patients.

And if the patient is either presenting with severe pulmonary hypertension I think the vast, vast majority of physicians are going to reach for Remodulin first. And as I said in my opening remarks there’s really no evidence to suggest that patients are going to be switched off of a prostacyclin first to sotatercept.

Martine Rothblatt: Thanks, Mike. Great, great answers in fact a lot of insight. Thank you. Operator next question please?

Operator: Yes. The next question comes from Joseph Thome with TD Cowen. Please go ahead.

Joseph Thome: Hi, there. Good morning. Thank you for taking my question and congrats on the quarter. Maybe if you could tell us a little bit about how you expect to disclose some of the pivotal preclinical nonhuman primate data from the 10-gene transplantation program? Can you maybe talk a little bit about the translatability from the experience in baboons in humans or [Technical Difficulty] performance could be a little bit better in humans or I guess [Technical Difficulty]. Thank you.

Martine Rothblatt: Yes. Thanks for the question. Looking forward to speaking with at our conference. Ordinarily we — at UT we publish as much as we possibly can in the top journals in the field and as soon as we have new scientific data available to share. And for example there is going to be a review article covering all of our xenotransplantation activities in physiological reviews which is like a top five impact journal in the field coming out in just a month or two. And that will answer I think a great number of your questions in terms of the translatability of the data in the baboons, why the pig, why the 10-gene pig and how all of this will extend into human development. So you’ll be seeing that publication very shortly.

And like I said it’s a comprehensive review that includes a number of the leading experts in the field as well as our top experts such as Dr. Peterson. Beyond that every time the FDA clears us to move to the next stage in clinical development — we consider that as an important thing to share just like we shared in this call. The first time in the FDA’s 100-or-so year history that they cleared a bioengineered organ to be into I assume in human clinical trial was our Miromatrix ELAP and we shared that at the very next call afterwards. So as the FDA shares guidance with us in terms of how to move our xenokidney and xenoheart into the clinical trials we’ll positively share that with everybody in our SEC filings and on this call. And the exact protocols will as I mentioned earlier to Ash that will of course be listed on clinicaltrials.gov.

Next question operator?

Operator: The next question comes from Hartaj Singh with Oppenheimer. Please go ahead.

Hartaj Singh: Great. Thank you. Good morning everybody. Really nice quarter Martine and team, and just keep it going. I’ve got a question slightly differently. Martine you talked about enrolling the ralinepag studies by the end of this year, and a pretty comprehensive pipeline that seems to be filling out even more and more. Can you just talk a little bit about the cadence of events from ralinepag and the other programs through this year and next year? Not looking for any guidance, but can you just the cadence of events for enrollment potential readouts, et cetera, over the next essentially 12 to 24 months? Thank you.

Martine Rothblatt: Thank you for that great question, Hartaj good to hear your voice this morning. I really like the question, because a CEO probably shouldn’t have favorites among their drugs anymore than among their kids. But I would say that ralinepag is unbeatable in my view, as an amazing medicine. For somebody who has a family member with pulmonary hypertension, it’s pretty much of a dream drug, subject to the clinical trial outcomes, the regulatory approval, and whatever is supposed to be put on the label. But in terms of its — the dream characteristics pills are best. I think everybody in the industry would agree with that. Secondly, once a day is better than two times a day or three times a day, I think, everybody would agree with that.

Third, titratability is better than non-titratability. Everybody would agree with that. From a drug development standpoint, when you’re following in on a pathway that’s already been validated by the FDA that reduces risk tremendously. And then what we have is a more potent member of that same pathway. So I think everything is in favor of ralinepag. And in terms of the specifics of your question, Hartaj, of a time frame kind of expected events in terms of enrollment readout, et cetera, during 2024 and 2025, I’d like to turn the mic over to the head of the ralinepag program, our Executive Vice President for Product Development, Dr. Peterson. Leigh?

Leigh Peterson: Yes, sure. Thanks for the question. We’re expecting to complete enrollment where — I mean, as you well know this study is based on the accumulation of outcome events with regard to clinical worsening. And so what how the study is designed is that we complete enrollment and then we follow the patients for a six-month period for a standard follow-up time frame as well as until the pre-specified number of events are accumulated, which gives the best statistical significance to determine the difference between the active group and the placebo. So, given all of that, we are targeting enrollment to be completed this year. And — but really the driver for the study completion is accumulation of the required number of events.

Now these patients are on dual back — most of them are on dual background therapy. And so we’re tracking that very, very carefully as to the accumulation of these events. And again, we’re targeting that our events will be accumulated as well as completion of the six-month follow-up period during 2025.

Martine Rothblatt: Perfect. Thank you so much Dr. Peterson. Operator, are there any more questions?

Operator: Yes. One more question, Andreas Argyrides with Wedbush Securities. Please go ahead.

Andreas Argyrides : Good morning and thanks for squeezing our questions. And again, congrats on all the progress this quarter. Just two from us here. On the competitor front, how are you seeing safety playing a key role in adoption for new therapies? And then also as we get closer to TETON readouts, how are you thinking about the opportunity for Tyvaso in IPF and where it fits in the treatment landscape? And then just one more to squeeze in. You have quite a bit of cash. You were busy on the BD front last quarter. How are you thinking about business development opportunities and areas you pursue going forward? Thanks so much.

Martine Rothblatt: All right. Well, let’s see last and also the most questions. Okay. So, we’re going to have a kind of a roundtable talking about here. So we’re going to go back to front. Our — all capital allocation questions at United Therapeutics are under the management and guidance of our Chief Financial Officer, James Edgemond. So, I’m going to have him speak, first. And then with regard to, the competitive product positioning Mike, will have a few words to say. And finally, third and wrap up hitter here, Dr. Peterson, if you could share some thoughts about monitoring safety aspects in clinical trials. So that – maybe, you could share a little bit about the amazing job our clinical operations team does, in terms of ensuring safety and our stellar pharmaco vigilance and drug safety group. I think at United Therapeutics safety is I would say, our only priority. Nothing ever bumps safety. So James, can you speak about the capital allocation?