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Why Is United Therapeutics (UTHR) Up 5% Since Last Earnings Report?
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It has been about a month since the last earnings report for United Therapeutics (UTHR - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is United Therapeutics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
United Therapeutics Q1 Earnings & Sales Beat
United Therapeutics reported earnings of $3.12 per share for the first quarter of 2020 against a loss of $11.32 per share in the year-ago quarter. The Zacks Consensus Estimate was pegged at $2.43.
The above-mentioned earnings included the impact of share-based compensation expenses, impairments of investments, unrealized gains/losses on equity securities/privately held company and other items. Excluding these items, adjusted earnings were $3.61 per share, up 1% year over year.
Revenues for the reported quarter were $356.3 million, which beat the Zacks Consensus Estimate of $348 million. However, revenues fell 2% year over year due to generic competition for Adcirca.
The company clarified that new patient starts for Remodulin, Tyvaso, and Orenitram were not impacted by coronavirus outbreak in the quarter. However, most prescriptions in the quarter for new patients were issued before the outbreak in the United States. Importantly, the company said it noticed a decline in new prescriptions and new patients starts for the three products in the month of April as patients were unable to visit their doctors. As such the company expects a reduction in new patient starts in the future quarters. The company said that due to challenges posed by the pandemic, it cannot predict whether its revenues will grow year over year in 2020 as there is lack of visibility regarding its prospects and product development plans.
However, in April, the company recorded a larger order from a specialty pharmacy which may offset the softening in new patient starts in future quarters.
The company said that its inventory of Remodulin, Tyvaso, and Orenitram was sufficient to supply the market for two years and that they have three years’ worth of API in hand.
Quarter in Detail
Adcirca sales were $12.5 million, down 38% year over year as generic competition resulted in lower volumes in the quarter.
Orenitram sales amounted to $69 million in the reported quarter, up 18% year over year due to new patient growth and price hike. The expanded Orenitram label reflecting the FREEDOM-EV results also contributed to revenue growth. Tyvaso sales totaled $102.9 million, down 1% year over year due to higher gross-to-net revenue deductions and lower volumes which offset the impact of price increase. Remodulin sales were $145.3 million, down 7% year over year due to lower volumes and price reductions. Remodulin lost exclusivity in June 2018 and generic versions have been launched. However, the company specified that despite generic availability, U.S. patients’ demand for Remodulin remained stable. Lower international sales hurt Remodulin sales in the quarter.
At the call, the company said that transition of patients to generic Remodulin was negligible in the quarter, with approximately 15% of those transitioned to generic earlier having returned to Remodulin
Unituxin’s (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $26.6 million were up 7% year over year as price increases offset the impact of decrease in the number of vials sold.
Research and development (“R&D”) expenses were $68.6 million in the quarter, down 92% year over year as last year’s R&D costs included an $800 million upfront payment to Arena and $12.5 million to MannKind per collaboration deals signed last year. General and administrative expenses rose 2% to $55 million in the quarter while sales and marketing costs declined 4% to $13 million.
Pipeline Update
Along with the earnings release, the company said that the INCREASE filing remains on track by mid-2020 despite the coronavirus pandemic. Regarding its other clinical studies, the company said that the patients already enrolled in studies continue to receive the study drug. However, it has stopped new patient enrollment in most ongoing studies and said that completion and data readouts for several ongoing and planned studies will be delayed.
Meanwhile, though the company is on track to launch RemUnity in July, it warned that COVID-19 may delay this timeline and could slow the launch.
United Therapeutics’ Trevyent disposable treprostinil pump system is under review with the FDA. In April, however, the FDA issued a complete response letter (“CRL”) to the NDA indicating that some of the issues previously raised by the FDA have not yet been addressed to its satisfaction.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -11.49% due to these changes.
VGM Scores
Currently, United Therapeutics has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
United Therapeutics has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is United Therapeutics (UTHR) Up 5% Since Last Earnings Report?
It has been about a month since the last earnings report for United Therapeutics (UTHR - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is United Therapeutics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
United Therapeutics Q1 Earnings & Sales Beat
United Therapeutics reported earnings of $3.12 per share for the first quarter of 2020 against a loss of $11.32 per share in the year-ago quarter. The Zacks Consensus Estimate was pegged at $2.43.
The above-mentioned earnings included the impact of share-based compensation expenses, impairments of investments, unrealized gains/losses on equity securities/privately held company and other items. Excluding these items, adjusted earnings were $3.61 per share, up 1% year over year.
Revenues for the reported quarter were $356.3 million, which beat the Zacks Consensus Estimate of $348 million. However, revenues fell 2% year over year due to generic competition for Adcirca.
The company clarified that new patient starts for Remodulin, Tyvaso, and Orenitram were not impacted by coronavirus outbreak in the quarter. However, most prescriptions in the quarter for new patients were issued before the outbreak in the United States. Importantly, the company said it noticed a decline in new prescriptions and new patients starts for the three products in the month of April as patients were unable to visit their doctors. As such the company expects a reduction in new patient starts in the future quarters. The company said that due to challenges posed by the pandemic, it cannot predict whether its revenues will grow year over year in 2020 as there is lack of visibility regarding its prospects and product development plans.
However, in April, the company recorded a larger order from a specialty pharmacy which may offset the softening in new patient starts in future quarters.
The company said that its inventory of Remodulin, Tyvaso, and Orenitram was sufficient to supply the market for two years and that they have three years’ worth of API in hand.
Quarter in Detail
Adcirca sales were $12.5 million, down 38% year over year as generic competition resulted in lower volumes in the quarter.
Orenitram sales amounted to $69 million in the reported quarter, up 18% year over year due to new patient growth and price hike. The expanded Orenitram label reflecting the FREEDOM-EV results also contributed to revenue growth. Tyvaso sales totaled $102.9 million, down 1% year over year due to higher gross-to-net revenue deductions and lower volumes which offset the impact of price increase. Remodulin sales were $145.3 million, down 7% year over year due to lower volumes and price reductions. Remodulin lost exclusivity in June 2018 and generic versions have been launched. However, the company specified that despite generic availability, U.S. patients’ demand for Remodulin remained stable. Lower international sales hurt Remodulin sales in the quarter.
At the call, the company said that transition of patients to generic Remodulin was negligible in the quarter, with approximately 15% of those transitioned to generic earlier having returned to Remodulin
Unituxin’s (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $26.6 million were up 7% year over year as price increases offset the impact of decrease in the number of vials sold.
Research and development (“R&D”) expenses were $68.6 million in the quarter, down 92% year over year as last year’s R&D costs included an $800 million upfront payment to Arena and $12.5 million to MannKind per collaboration deals signed last year. General and administrative expenses rose 2% to $55 million in the quarter while sales and marketing costs declined 4% to $13 million.
Pipeline Update
Along with the earnings release, the company said that the INCREASE filing remains on track by mid-2020 despite the coronavirus pandemic. Regarding its other clinical studies, the company said that the patients already enrolled in studies continue to receive the study drug. However, it has stopped new patient enrollment in most ongoing studies and said that completion and data readouts for several ongoing and planned studies will be delayed.
Meanwhile, though the company is on track to launch RemUnity in July, it warned that COVID-19 may delay this timeline and could slow the launch.
United Therapeutics’ Trevyent disposable treprostinil pump system is under review with the FDA. In April, however, the FDA issued a complete response letter (“CRL”) to the NDA indicating that some of the issues previously raised by the FDA have not yet been addressed to its satisfaction.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -11.49% due to these changes.
VGM Scores
Currently, United Therapeutics has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
United Therapeutics has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.