On July 29, 2020 United Therapeutics Corporation (Nasdaq: UTHR) reported its financial results for the quarter ended June 30, 2020 (Press release, United Therapeutics, JUL 29, 2020, View Source [SID1234562492]).

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"I am pleased with our performance during the second quarter, and feel that we are well positioned for a return to revenue growth in the near term as our prescriptions and new patient starts have been approaching pre-pandemic levels," said Martine Rothblatt, Ph.D., Chairman and Chief Executive Officer of United Therapeutics. "Orenitram continues to grow following our FREEDOM-EV label update, and we believe the INCREASE study results will lead to significant Tyvaso growth. In addition, our new subcutaneous Remunity Pump and intravenous Implantable System for Remodulin products, while delayed, are nevertheless forthcoming in the near term as manufacturing and regulatory requests get resolved."

The reduction in Remodulin revenue was driven primarily by a reduction in quantities sold in Europe, which we believe resulted from generic competition and the impact of COVID-19, and to a lesser extent, by a reduction in quantities sold in the United States, which we believe resulted from COVID-19 related reductions in new patient prescriptions and new patient starts due to access restrictions at physician offices. The growth in Orenitram revenue resulted primarily from an increase in quantities sold, as the number of patients being treated with Orenitram has grown following the update to Orenitram’s labeling to reflect the FREEDOM-EV clinical trial results. The decrease in Adcirca revenues was driven by continued erosion of market share due to generic competition.

The increase in share-based compensation expense for the three months ended June 30, 2020, as compared to the same period in 2019, was primarily due to an increase in STAP expense driven by a 28 percent increase in our stock price for the three months ended June 30, 2020, as compared to a 33 percent decrease in our stock price for the same period in 2019.
Other (Expense) Income, Net. The change in other (expense) income, net for the three months ended June 30, 2020, as compared to the same period in 2019, was primarily due to net unrealized and realized gains and losses on equity securities.

Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for: (i) share-based compensation expense (including expenses relating to stock options, restricted stock units, share tracking awards, and our employee stock purchase plan); (ii) net unrealized and realized losses (gains) on equity securities; (iii) impairment charges; (iv) license-related fees; and (v) tax impact on non-GAAP earnings adjustments.

Recorded within operating expenses on our consolidated statements of operations.

Recorded within "other (expense) income, net" on our consolidated statements of operations.

Recorded within research and development on our consolidated statements of operations.
NEW PRODUCT COMMERCIALIZATION UPDATE
In our near-term time horizon, we plan to launch Tyvaso for a new indication, and to launch three new products for pulmonary arterial hypertension (PAH): the Remunity Pump, the Trevyent system, and the Implantable System for Remodulin.
Tyvaso in pulmonary hypertension due to interstitial lung disease (PH-ILD) — INCREASE. On February 24, 2020, we reported that the INCREASE study of Tyvaso in patients with PH-ILD met its primary endpoint of demonstrating improvement in six-minute walk distance (6MWD). Tyvaso also showed benefits across several key subgroups, including etiology of PH-ILD, disease severity, age, gender, baseline hemodynamics, and dose. Significant improvements were also observed in each of the study’s secondary endpoints, including reduction in the cardiac biomarker NT-proBNP, time to first clinical worsening event, change in peak 6MWD at Week 12, and change in trough 6MWD at week 15. Treatment with Tyvaso of up to 12 breaths per session, four times daily, in the INCREASE study was well tolerated and the safety profile was consistent with previous Tyvaso studies and known prostacyclin-related adverse events.
We presented these and other highlights of the INCREASE data at a recent virtual session of the American Thoracic Society entitled "Inhaled Treprostinil in Interstitial Lung Disease-Associated Pulmonary Hypertension: The INCREASE Study." We expect to make the full results of the study available through upcoming journal publications. In addition, we recently submitted the INCREASE study results to the U.S. Food and Drug Administration (FDA) in support of an efficacy supplement to the Tyvaso new drug application (sNDA), which we expect to result in revised labeling reflecting the outcome of the INCREASE study.

Remunity Pump for Remodulin. We commenced launch activities for the Remunity Pump for Remodulin, including shipping training devices to specialty pharmacies and certain health care practitioners, and entering into agreements with specialty pharmacies to purchase Remunity Pumps and accessories and to pre-fill the Remunity cartridges exclusively with Remodulin. We also confirmed with the relevant Centers for Medicare & Medicaid Services Pricing, Data Analysis, and Coding Contractor that the Remunity Pump will be treated as durable medical equipment under the Medicare Part B Durable Medical Equipment program, and will share the same billing codes and billing guidance as existing subcutaneous pumps currently used with Remodulin. We started working with large PAH medical centers to identify patient candidates for the Remunity Pump, and have been training staff at these centers on how to use the product. However, the timing of our ability to commence commercial sales has been delayed due to pandemic-related issues impacting the ability of our partner, DEKA Research & Development Corp. (DEKA), to secure certain components and raw materials necessary to manufacture a continuous supply of pumps, pump disposables, and pump controllers. We are working closely with DEKA to build safety stock of these components and raw materials to a level that would allow us to withstand a significant supplier disruption without adverse impact to our patient base. We implemented this strategy due to the increasing COVID-19 infection rates observed in the United States during the second quarter of 2020, as many of the Remunity Pump component suppliers are located domestically. We are working to commence commercial sales of the Remunity Pump in the near-term, but we cannot predict the precise timing due to the factors described above, as well as the potential for additional pandemic-related constraints that physicians and patients may experience.
Trevyent. We submitted a 505(b)(1) new drug application (NDA) to the FDA for our Trevyent disposable treprostinil pump system in June 2019. In April 2020, the FDA issued a complete response letter (CRL) related to our NDA indicating that some of the deficiencies previously raised by the FDA had not yet been addressed to its satisfaction. We have one year from the date of the CRL to resubmit our NDA to the FDA, which is expected to trigger a six-month review period by the FDA. We are preparing our NDA resubmission, which we expect to file in 2021.
Implantable System for Remodulin (ISR). Developed in collaboration with Medtronic, Inc. (Medtronic), the premarket approval application (PMA) for the ISR was approved by the FDA in December 2017. However, our ability to launch the product is subject to Medtronic satisfying various conditions to its PMA approval. Medtronic continues to work toward satisfying these conditions, but in December 2019, due to FDA communications, Medtronic informed us that these conditions will not be satisfied in 2020. As such we expect a delay in the ISR launch until 2021.
RESEARCH AND DEVELOPMENT UPDATE
Our clinical studies remain open, and enrollment of new patients has resumed at select study sites for certain studies. Most of our ongoing clinical studies paused enrollment during the first quarter of 2020 due to the pandemic, but patients already enrolled in studies continue to receive the study drug and complete necessary clinical evaluations as appropriate.
The following studies have since re-opened enrollment at select sites:

the BREEZE and pivotal pharmacokinetics studies of Treprostinil Technosphere;

the ADVANCE OUTCOMES study of ralinepag;

the SAPPHIRE study of Aurora-GT;

our phase I study of Unexisome for bronchopulmonary dysplasia; and
•our phase I study of OreniPro.
We have also recommenced startup activities for the ADVANCE CAPACITY study of ralinepag. While enrollment of the PERFECT study of Tyvaso in pulmonary hypertension associated with chronic obstructive pulmonary disease (PH-COPD) remains paused, we are continuing new clinical site startup activities for this study.
Although we re-opened enrollment of certain studies at a limited number of clinical trial sites, it is difficult to predict when we will be able to reopen enrollment at additional sites for these studies, and whether we will experience further disruptions as the pandemic unfolds. In addition, it is unclear what impact the pandemic may have on the timing of future studies, such as TETON. As such, we expect that completion and data readouts for several of our ongoing and planned studies will be delayed, but we do not currently expect delays of our near-, medium-, and long-term windows for product launch plans. To mitigate potential delays, we are expanding our efforts to enter into contracts with additional clinical study sites and complete other site activation activities for certain studies where practicable so that we may rapidly resume enrollment of our clinical studies at the appropriate time.

Treprostinil Technosphere dry powder inhaler — BREEZE. The BREEZE study (NCT03950739) seeks to evaluate 45 patients on a stable dose of Tyvaso after switching to our new dry powder inhaler (DPI) form of treprostinil, which we licensed from MannKind. The primary endpoint of the study is the number of subjects with treatment-emergent adverse events after three weeks of treatment with the DPI. In March 2020, we commenced a second clinical study in healthy volunteers to compare the pharmacokinetics of Treprostinil Technosphere to Tyvaso. We expect results of these two studies, combined with long-term stability studies of the DPI product, will form the basis of a 505(b)(1) NDA to the FDA.
Unituxin in relapsed/refractory neuroblastoma — ANBL1221. We are pursuing an indication expansion for Unituxin for the treatment of pediatric patients with relapsed or refractory neuroblastoma based on the results of the Children’s Oncology Group’s ANBL1221 study (NCT01767194). We met with the FDA in April of this year to discuss the content needed to support a supplemental biologics license application (BLA). We are working with Children’s Oncology Group to secure additional information ahead of a potential supplemental BLA.
Tyvaso in PH-COPD — PERFECT. The PERFECT study (NCT03496623) seeks to evaluate Tyvaso in patients with PH-COPD. In a 30-week crossover study, 136 subjects will be randomized between inhaled treprostinil and placebo for a 26-week treatment period. The primary endpoint of the study is the change in 6MWD from baseline to week 12 on active treatment compared to placebo. A contingent design for the study allows for the evaluation of 314 patients in two parallel groups.
Tyvaso in patients with chronic fibrosing interstitial lung disease (CFILD) — TETON. We are commencing a new phase III registration study called TETON, which is a randomized, double-blind, placebo-controlled, 24-week, phase III study of Tyvaso in subjects with CFILD (which includes patients with idiopathic interstitial pneumonias, chronic hypersensitivity pneumonitis, and environmental/occupational lung disease). Subjects will be randomized in a 1:1 ratio to receive inhaled treprostinil or placebo. The primary endpoint of this study is planned to be the change from baseline to week 24 in absolute forced vital capacity (FVC). This study was prompted by data from the INCREASE study, which demonstrated improvements in parameters of lung function in pulmonary hypertension patients with fibrotic lung disease (FVC and reduced exacerbations of underlying lung disease).
Ralinepag phase III development program — ADVANCE CAPACITY and ADVANCE OUTCOMES. We have two ongoing phase III clinical studies to support the potential registration of oral ralinepag for PAH.

ADVANCE CAPACITY. The phase III ADVANCE CAPACITY study (NCT04084678) seeks to evaluate 193 subjects with PAH, randomized between oral ralinepag and placebo at a 2:1 ratio, along with PAH background therapy, for 28 weeks. The primary endpoint of the study is the change from baseline to week 28 in peak oxygen consumption assessed by cardiopulmonary exercise testing.

ADVANCE OUTCOMES. The phase III ADVANCE OUTCOMES study (NCT03626688) seeks to evaluate approximately 700 PAH patients, randomized 1:1 between oral ralinepag and placebo along with background therapy. The primary endpoint is the time from randomization to the first adjudicated protocol-defined clinical worsening event.
Autologous cell therapy for PAH — SAPPHIRE. Conducted by our Canadian affiliate Northern Therapeutics, Inc., the phase II SAPPHIRE study seeks to evaluate the use of autologous endothelial progenitor cells (EPCs) genetically engineered to express endothelial nitric oxide synthase in patients with PAH taking conventional PAH treatments. The study seeks to enroll 45 PAH patients in one of three arms: (i) placebo for six months followed by autologous EPCs for six months; (ii) autologous EPCs for six months followed by placebo for six months; and (iii) autologous EPCs for 12 months. The primary endpoint is the change in 6MWD from baseline to month six.
INDUCEMENT RESTRICTED STOCK UNITS
On July 24, 2020, we granted a total of 916 restricted stock units under our 2019 Inducement Stock Incentive Plan to three newly hired employees. These restricted stock units vest in three equal installments on July 31, 2021, 2022, and 2023, assuming continued employment on such dates, and are subject to the standard terms and conditions we filed with the SEC as Exhibit 10.2 to our Current Report on Form 8-K on March 1, 2019. We provide this information in accordance with Nasdaq Listing Rule 5635(c)(4).

CONFERENCE CALL
We will host a teleconference on Wednesday, July 29, 2020, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing (866) 209-9943 in the United States, with international callers dialing +1 (825) 312-2282. A rebroadcast of the teleconference will be available for one week and can be accessed by dialing (800) 585-8367 in the United States, with international callers dialing +1 (416) 621-4642, and using access code: 2886748.