Silver Spring Mar 7, 2020 (Thomson StreetEvents) — Edited Transcript of United Therapeutics Corp earnings conference call or presentation Wednesday, February 26, 2020 at 2:00:00pm GMT
* James C. Edgemond
* Martine A. Rothblatt
* Michael I. Benkowitz
Oppenheimer & Co. Inc., Research Division – Research Analyst
Good morning, and welcome to the United Therapeutics Corporation Fourth Quarter 2019 Earnings Call. My name is Kenzie, and I will be your conference operator today. (Operator Instructions)
I will now turn the conference call over to Mr. Dewey Steadman, Head of Investor Relations at United Therapeutics.
Thank you, Kenzie. Good morning. It’s my pleasure to welcome you to the United Therapeutics Corporation Fourth Quarter 2019 Earnings Call. Accompanying me on today’s call are Dr. Martine Rothblatt, our Chairman and Chief Executive Officer; Mr. Michael Benkowitz, our President and Chief Operating Officer; Mr. James Edgemond, our Chief Financial Officer and Treasurer; and Dr. Leigh Peterson, Vice President of Product Development.
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 Form 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update forward-looking statements. Today’s remarks also include financial measures that were not prepared in accordance with U.S. generally accepted accounting principles or GAAP. Reconciliations of non-GAAP measures, financial measures to the most directly comparable GAAP financial measures can be found in our earnings release available on our website at www.unither.com. Today’s remarks may discuss the progress and results of clinical trials or other developments with respect to our products, as these remarks are intended solely to educate investors and are not intended to service the basis for medical decision-making or to suggest any — that any products are safe and effective for any unapproved or investigational uses. Full prescribing information for the products is available on our website.
Now I’ll turn the call over to Dr. Rothblatt for an overview of fourth quarter and full year 2019 financial results and business activities of United Therapeutics. Dr. Rothblatt?
Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [3]
Thank you, Dewey. Good morning, everyone, and thank you for joining us on our fourth quarter and full year 2019 earnings call. We’re conducting this call from our organ-manufacturing laboratories up in Manchester, New Hampshire because last night, we had a blowout celebration with the DEKA Research & Development folks who are headquartered in Manchester for the FDA approval of our RemUnity product, which we released the news about that on Monday. And it was a tremendous accomplishment and a tremendous party. So we’re still here up in Manchester, New Hampshire and conducting our call from here.
I’m also pleased that Dr. Peterson is joining us on this call because another press release we issued on Monday was of the really grand slam home-run results that we had on our increased trial in Group III pulmonary hypertension. And Dr. Peterson was in charge of that clinical trial, which hit all of its primary and secondary endpoints, and she’s here on this call today to help answer any questions that may come up regarding the scientific and clinical aspects of that increased success.
So I’m going to start the call today first with having our president, Mike Benkowitz, explain a onetime distributor inventory issue. And then after that, we will open up the call lines for any questions that you may have regarding RemUnity, INCREASE, our pipeline, everything else. On the advice of our expert new Head of IR, Mr. Steadman, we’ve expanded this call to 45 minutes, so that there will be plenty of time to answer everybody’s questions and answers.
So, Mike, can you take it up from here?
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Michael I. Benkowitz, United Therapeutics Corporation – President & COO [4]
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Thanks, Martine. I want to spend a few minutes discussing our 2019 full year revenue, especially in light of an inventory destocking by one of our distributors in the fourth quarter, but unfortunately, clouds our underlying product performance. Overall, we are very pleased that total treprostinil net revenues represented by sales of Orenitram, Tyvaso and Remodulin increased in 2019, despite the launch of generics against Remodulin earlier this year. We are also pleased with the growth in Unituxin, our monoclonal antibody approved to treat pediatric neuroblastoma, and this product’s increasing contribution to our overall revenues. Unituxin now contributes almost as much revenue as our ex U.S. product sales. We believe these trends will continue into 2020, translating into total product revenue growth for the year.
The growth in treprostinil revenues reflects the strong demand and patient growth trends we have communicated on prior earnings calls,and at investor conferences throughout the second half of 2019 and into 2020. In 2019, we achieved the highest number of new patient starts on our treprostinil products, highlighted by the highest level of new Remodulin starts in 10 years and the highest number of new Orenitram and Tyvaso starts in nearly 4 years. This resulted in an all-time high number of active patients on a treprostinil product at the end of 2019. As we mentioned consistently in our public filings and periodically on these calls, our U.S. treprostinil revenues reflect sales of our products to specialty pharmacy distributors, who typically place monthly orders based on current patient utilization trends and contractual minimum and maximum inventory requirements.
As a result, sales of Remodulin, Tyvaso and Orenitram can vary quarter-to-quarter depending on the timing and magnitude of these orders and do not precisely reflect changes in patient demand for our products. In other words, these orders do not always track the volumes our distributors are dispensing to patients in given time period. This variance between distributor orders and patient demand was highlighted in the fourth quarter of 2019. One of our distributors identified a mistake in its utilization data, which led to larger-than-normal orders earlier in the year. This distributor addressed its heavy inventory by placing a smaller-than-normal order in the fourth quarter to normalize its inventory levels. To be clear, this was not reflective of a change in actual patient utilization of demand. And in fact, U.S. orders for our treprostinil products in the first 2 months of 2020 have returned to levels more in line with actual demand. We have a view into U.S. patient demand based on the data provided by our distributors regarding volumes dispensed to patients. It’s important to consider this data to understand the overall demand for our products, which remained strong in 2019. Specifically, Orenitram patient demand increased over the course of the year and, in the aggregate, was greater than 2018. Tyvaso demand was also consistent over the course of the year and, in the aggregate, relative to 2018. Remodulin demand in the U.S. experienced a slight decline in 2019 as compared to 2018. As we have communicated previously, a small percentage of higher-dose Remodulin patients transitioned to generic treprostinil when the first generic version became available early in the second quarter of 2019. But these transitions declined to a negligible amount in the fourth quarter and in fact, we only saw one such transition in December. After these initial transitions, U.S. patient demand for Remodulin remained very consistent across the remainder of the second, third and fourth quarters of 2019. As our new patients, who started Remodulin in 2019, titrate to their effective dose at a similar rate a patient transitions from Remodulin to generic treprostinil does not materially change, we expect to see a corresponding increase in both patient demand and our U.S. Remodulin revenues in 2020.
In conclusion, we are pleased with the growth of our treprostinil-based products in 2019 and believe this suite of products is poised for continued growth in 2020 as we grow the number of patients on therapy, leverage our expanded Orenitram label reflecting the FREEDOM-EV results and launch the RemUnity system for Remodulin. Importantly, we expect growth in total product revenue in 2020 over 2019 levels.
I’ll now turn the call back over to Martine.
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [5]
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Thank you so much, Mike. Following the positive results of the increased study of Tyvaso in pulmonary hypertension associated with interstitial lung disease, we’re looking forward to submitting a supplemental new drug application to expand the Tyvaso label midyear that, if approved, could expand Tyvaso’s addressable U.S. population by more than 30,000 patients and help patients with no available approved therapies to control the pulmonary hypertension associated with ILD. After increase, we’re looking forward to continued progress on 3 new infusion systems for delivery of parenteral treprostinil over the next 18 months, the launch of RemUnity system by July of this year, FDA action on Trevyent and the potential launch of the implantable system for Remodulin expected next year.
Coupling all of these results together, what you can see is that over the next 18 months, all things going well, and I’m definitely like knocking on wood here in the biotech arena, we should have 3 new product launches and approvals. We would have the Trevyent one is the one coming up next for FDA approval. And that should — we’re hoping that — to see that well within the next 18 months. And then the ISR system from Medtronic, that one we’ve guided toward looking for approval in early 2021. And then because of the fantastic results that Dr. Peterson’s team has delivered on INCREASE, we’ll be filing that by the summer and given normal 10-months-or-so turnaround time at the FDA, we would be able to also launch that product within this 18-month window.
So super excited to have 3 approvals/launches within the next 18 months on top of the RemUnity launch, which as noted on Monday, we are going to get that out to patients by Independence Day marking the freedom that RemUnity product will give to our patients compared to the older delivery systems.
Well, with that overview of our near-term pipeline activities and being conscious of the likely large question load, I’d like to ask our operator to kindly open the line and — for any questions, and then I will direct them to Mike, James or Dr. Peterson as appropriate. Operator?
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Questions and Answers
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Operator [1]
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(Operator Instructions)
Our first question comes from the line of Chris Shibutani from Cowen.
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Chris Shibutani, Cowen and Company, LLC, Research Division – MD & Senior Research Analyst [2]
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Hoping to get a little bit more clarity in terms of your expectation for 2020 over 2019 full year Remodulin growth. There seems to be several factors underpinning your assumption here. It’s also very difficult for us to track some of these nuances beyond your net reporting. You talk about new patient starts on an absolute basis increasing. You talk about sort of a slowing of the trend that you saw towards the end of the year of these patients switching to generics. Can you provide us with a little bit more quantitation of the forces that you expect to occur in 2020 that are guiding your expectation for the increased revenues?
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [3]
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Chris, good to hear your voice this morning. Thanks for the question. I’m going to ask Mike Benkowitz to address your question.
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Michael I. Benkowitz, United Therapeutics Corporation – President & COO [4]
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Sure. Well, Chris, I think, as you know, we don’t provide forward-looking guidance on revenues for the coming year. And so we’re not going to deviate from that policy. But just qualitatively, as I said in my opening remarks, the transitions from brand Remodulin to generic really declined to a trickle at the end of the year and definitely the first part of this year, we’ve not really seen a change in that trend.
Meanwhile, we continue to add new patients at a, I would say, a very healthy clip. And so when you sort of factor in the fact that we’re not losing patients, but we’re adding patients. And then when you have the launch of RemUnity later this year, which we think is going to be very attractive to new Remodulin patients and other patients with PAH. We just — we think that the combination of those factors lead us to growth on that product.
And then, again, with the EV label, I think we — I think the numbers are roughly about 20% higher starts in Q4 compared to the historical trend for Remodulin. And so as we continue to get the — communicate to the physicians and explain the data and the benefits of the EV data, we look for continued growth in Remodulin, and then Tyvaso continues to — discuss steadily, hold on and growing incrementally. But as Martine talked about, with the approval of — in ILD due to the increased data, probably first part of 2021. That will certainly provide a catalyst for that product.
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [5]
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Awesome, Mike, thanks so much for addressing that question.
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Operator [6]
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Our next question comes from the line of Liana Moussatos from Wedbush Securities.
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Vasiliana Vireen Moussatos, Wedbush Securities Inc., Research Division – MD of Equity Research [7]
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You just mentioned the first part of the INCREASE impact in the first part of 2021. Do you — Dr. Peterson, do you think physicians are going to wait that long since Tyvaso is already on the market, and there’s nothing else for these patients?
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [8]
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Well, thanks for your question, Liana. Nice to hear your voice this morning. Let’s have Dr. Peterson review the — some of the key outcomes from the INCREASE study. And then I think those — when she shares that data with you, the data, I think, will speak for itself in terms of what physicians are likely to do. Dr. Peterson?
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Leigh Peterson, [9]
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Great. Thank you. Yes. So as Martine mentioned, we’re extremely excited by these results. Tyvaso has been shown to be safe and effective in this additional population of ILD PH patients, which is about 30,000 Americans. So it’s larger than what we’ve been working in with PAH. And it’s really, really important because this is the only therapy that’s been shown to be effective out of like 5 others that have been tried. And they have not shown efficacy, and this one has with — I mean, this one showed to be effective with regards to the primary endpoint, which was the 6-minute walk p-value of 0.004. And also was positive with all of the secondary endpoints, including it showed a 39% decrease in the risk of clinical worsening. And that’s pretty huge in a study that’s this short. So — and also had a highly statistically significant decrease in NT-proBNP of less than 0.0001. So it’s a huge win for the patients. We’re really, really excited for this. And as you mentioned, this population has had nothing else, all of those — all of the other PAH meds trials have failed. Some even were terminated early due to safety concerns and this one really showed great tolerability and efficacious. As we know, Tyvaso is in PAH as well so.
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [10]
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Thank you very much, Dr. Peterson.
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Operator [11]
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Our next question comes from the line of Jessica Fye from JP Morgan.
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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division – Analyst [12]
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Can you talk about your expectations for patient and physician demand for RemUnity with the pharmacy-filled cartridges in light of the shelf life? Will you be able to give patients and physicians enough support to move over to that product without any concern about continuity, just given that shorter shelf life?
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [13]
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Yes, Jessica, thank you so much for the question. I’ll just add a brief introduction, while Mike is spooling up a more detailed response to your question. But when you see the RemUnity product, it is so elegant and nice. And I always try to put myself in the patient’s shoes. And they’ve been given terrible news that they have a potentially fatal illness, that once they are at the point of needing parenteral therapy, they understand that they have to be in some way or another connected to a catheter that is putting life-saving medicine into their bloodstream, 24 hours a day. And they are taught by the nurses, no matter what, don’t disconnect this for, in the case of subcutaneous, more than just for the time it takes to change it. And of course, intravenous, they have an — a continuous risk of sepsis until — except for those lucky few who are on our ISR product already. So when they see the rather bulky and it bulks out of their clothing and whatnot, current pump that’s used to deliver Remodulin, it’s intimidating. And it is so kind of intimidating that they’re told they need to have 2 of these in case 1 of them ever fails. So when you compare that with this elegant RemUnity product, which has the footprint of like a silver dollar, and it’s so intuitive and can interface with control devices wirelessly, it really is going to be, I think, for the patients and their physicians a breath of fresh air. And now it is absolutely true, Jessica, that whenever you transition patients, especially like New York Functional Class III and IV patients, who are most of the patients on this product from one device to another, you have to do that very cautiously and gradually. And every single aspect like the shelf life issues and whatnot that you mentioned all come into play. But the — there’s — we always try to look at any downside as a positive side, and this product did take a little bit longer to launch than we had hoped. And we did have like a kind of a heads up with the first approval a few months ago before we got to this pharma field. We do have excellent relationships with Accredo and CVS Caremark, who would be responsible for filling these.
So I do feel that we’ve done a very diligent job of making as graceful as a process as possible, the transition. But let me ask Mike who directly on manages that entire process to give you a little bit more color on why we think the transition process is going to be smooth and before too long, the great majority of subcutaneous patients will end up on RemUnity. Mike?
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Michael I. Benkowitz, United Therapeutics Corporation – President & COO [14]
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Sure. Thanks, Martine. Yes, Jess, I think, from a support perspective, from specialty pharmacy, there’s really no concerns. As you think about what specialty pharmacy currently does with Remodulin patients, it’s not like there’s a referral and a start and then they go away. I mean, they’re providing ongoing nursing support on an almost weekly basis during the first 60 to 90 days. And then as directed by the physician thereafter and then they’re at least going back I think once a quarter just to do a check-in and training and making sure that everything is going well with the patient. And then the actual pharmacist is connecting with the patient at least on a monthly basis to make sure that they have adequate supply and arranging for the next shipment.
So really the only difference here from an SP perspective is the frequency of the refills. So you’re looking at something like twice a month instead of once a month. And then the fact that they’re doing — the specialty pharmacy is doing the refill. The good news is, they’re already doing that for our IV premix. So that template is in place and exists. And so it’s really just leveraging what’s already in place for the premix and porting that over to the pharmacy fill. And that’s part of why we’re not launching today, we’re launching in July, as we’re working through all of those logistics with specialty pharmacy and make sure that they have their filling process down to a science. So there’s no issues there, but there’s no disruptions in terms of product going out to patients and that the nurses are experts in the use of the pumps when they’re going out and teaching the patients. The patients have the confidence that the nurses know how to work the pump. And so that, along with building inventory over the next couple of months is, well, we’re doing those things in parallel. So by the time July rolls around, it should be a pretty smooth running machine.
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [15]
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Thanks so much, Mike. And I know many people on this call have seen Mike or James show the RemUnity device at our one-on-one meeting at healthcare conferences, and I think everybody would agree it’s an elegant and attractive device. It’s — when you make such a nice medical device like this, what you’re really doing is you’re showing respect for the patients. And I believe that the physicians and the patients very much appreciate that respect.
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Operator [16]
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Our next question comes from the line of Hartaj Singh from Oppenheimer.
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Hartaj Singh, Oppenheimer & Co. Inc., Research Division – Research Analyst [17]
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With the increased — we’re getting a lot of increased focus from actually investors looking at United Therapeutics, both previous investors and new to the story investors, Martine, one question that comes up very frequently is that United Therapeutics ran a very disciplined P&L earlier in the decade, also did quite a few share buybacks. The capital allocation strategy was very tight and sort of well-executed on. So investors ask us how to think about that going forward? Is that something that is still high on the list of United Therapeutics priorities, especially in light of your full pipeline and pending launches? How to just think about your capital allocation, whether it’s share buybacks, potential dividend, et cetera, et cetera, going forward?
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [18]
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Awesome Hartaj. Nice to hear your voice this morning. That’s an excellent strategic question. And I’m going to ask our Chief Financial Officer, who oversees all capital allocation questions, James Edgemond, to respond.
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James C. Edgemond, United Therapeutics Corporation – CFO & Treasurer [19]
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Thank you, Martine. Good morning, Hartaj. Thank you for the question. It is something that we are continuing to evaluate. But at the moment, our capital allocation priorities remain unchanged and we’ll continue to be first investing in R&D opportunities that really support the business mission. For example, what Dr. Peterson talked about in terms of the INCREASE study.
The second leg of the capital allocation priority is going to be investing in value-creating business development activities, and third is share repurchase. With respect to investing in our R&D budget, our first capital allocation priority. Keep in mind that our annual expense budget algorithm, which we have consistently and continued to apply will not allow us to exceed 50% of our prior year revenue. And why this is important is that this methodology forces us to continually evaluate each opportunity on an ongoing and going-forward basis.
With regard to M&A, we place an emphasis on the strategic impact of targets in terms of the attractiveness of a therapeutic area, opportunity for near-term revenues and the incremental value that can be added by UT, among other items, and includes therapeutic areas like cardiology, pulmonology and oncology as well, although we’re not just limited to those areas. So, Hartaj, our capital allocation strategy is still the same. And I hope that gave you some background on how we frame it internally.
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [20]
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Thank you, James, for that great answer. Hartaj, I might provide, if I could like tag along on James Edgemond’s answer a little bit, and highlight an interesting interface between capital allocation and R&D, which has to do with our organ-manufacturing activities.
So we have been making quite good progress with our Xeno-Kidney effort, which aims to address the unmet medical needs of over 100,000 Americans on dialysis today. Unfortunately, many of them die daily, waiting for a kidney transplant that they won’t be able to receive. We’ve reached the point of — in our Xeno-Kidney effort that we’ve now optimized on a 10-gene pig which we believe will provide a repeatable, reliable survival that would be as good as what patients on dialysis could expect, but with a much better quality of life, not having to be tethered to dialysis centers.
So to give you a little bit more color on this, the FDA has guided us that a key threshold that they want to see before taking the Xeno-Kidneys into man is that they want to see what they have like kind of a 6×6 matrix, plus our GMP-like facility to produce the Xeno-Kidneys. So the 6×6 stands for 6 baboons, which is the standard model to use for this as a preclinical model. 6 xenografts put into 6 baboons, with the 6 baboon survival to at least 6 months without evidence of infection or other untoward safety consequences at the point of 6 months. The reason for 6 months is actually just practical. Baboons are quite small on the order of like 10-kilograms and the kidneys, which are designed to be human-sized after 6 months simply become too large for the baboon abdomen. So we have repeatedly demonstrated over 6 months survival with various versions of our Xeno-Kidneys, ones that are like 3-gene kidneys, 5-gene kidneys, 8, 9, and then we finally have like optimized on this 10-gene kidney, and we also — so now what we’re doing is 6 of the 10-gene kidney in the baboons during calendar year 2020.
In parallel with this, starting last year, we built up our first, what’s called in the xeno world parlance, designated pathogen-free facility, or DPF. It means like a clean space analogous to how we would manufacture drugs, but for the situation of an organ coming out of the pig. So it meets GMP-type of criteria so that the — everybody is confident that the Xeno-Kidney coming out of this pig does not contain any viruses that would give harm to a person. So we completed building the DPF facility. We’ve actually C-sectioned into that facility the first genetically modified pig so that should we be able to achieve our 6×6 goal in 2020, we have our DPF up and running, and we should be able to actually go into the first clinical trials with the Xeno-Kidneys in 2021.
So that’s tremendously exciting to us to see that it’s so near term. Now there’s — like they say, the consequence of a good deed is like people expect a whole lot more of you. So if we are, in fact, able successfully in 2021, 2022 to complete a clinical study with the Xeno-Kidney showing that we can successfully rescue people who are predicted to only have a half year of life or so left on dialysis with these Xeno-Kidneys, you can imagine that the demand is just going to explode with 100,000 people waiting for kidney in the United States. So we have to start thinking about building a facility, the scale of which could handle some appreciable proportion of 100,000 kidneys a year. And it’s not like 100,000. You whittle it down because, unfortunately, every year, more people end up with end-stage renal disease. So as many are rescued, more people are constantly being added. So a facility to support even, say, like 10% of that demand is certainly, a multi-hundred-million-dollar facility. It’s an expensive facility. So I just wanted to like tag on to James’ perfect explanation that one additional kind of R&D-ish like capital allocation destination will now be the manufacturing of — the completion of our organ-manufacturing facilities.
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Operator [21]
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Our next question comes from the line of Martin Auster with Crédit Suisse.
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Thomas Avery Deal, Crédit Suisse AG, Research Division – Research Analyst [22]
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This is Thomas on for Marty. Maybe just a quick follow-up on RemUnity. Given that launch these RemUnity purchases will be pre-filled by specialty pharmacies, it sounds like, can you give us some idea of what the gating steps are for getting this as part of the manufacturing process? And then how much control do you guys have over this versus your partner, DEKA? And can you give us any kind of idea for time line expectations on this?
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [23]
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Yes. Thanks, Thomas, and give our regards to Marty. We have a very close partnership with DEKA. We have spelled out in specific written agreements a production quantity per month. We and all of our QA, QC, manufacturing people have all been on the assembly line here in Manchester, where they are manufactured. And before we put into the press release quote that we would launch the product on July 4, pretty much everybody signed in blood that everything was queued up with adequate supply to be able to meet the demand for the RemUnity cartridges. Mike, do you want to add anything to that?
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Michael I. Benkowitz, United Therapeutics Corporation – President & COO [24]
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That’s all right.
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Operator [25]
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Our next question comes from the line of Eun Yang from Jefferies.
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Eun Kyung Yang, Jefferies LLC, Research Division – MD & Senior Equity Research Analyst [26]
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I have a question for Dr. Peterson. Now with the Tyvaso success in PH patients with ILD, what’s your view on another Phase III trial in PH patients with the COPD?
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [27]
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So, Eun, thank you for your question. And if I think I understood your question correctly, you’re asking based on the success of increase, what do you see as the probabilities of Tyvaso in another Group III population, which is COPD. Just to bring everybody on the call to the same level, then I’ll turn the question over to Dr. Peterson to answer in detail, we do have another Phase III study already going on in a COPD population. It’s called the PERFECT study. And I think one very good augur, if you will, if I’m using that word correctly, for the PERFECT study is that the same principal investigator, Dr. Waxman, who initiated the INCREASE study — and I want to simply, in public, provide a shout out to Dr. Waxman for his assistance and encouragement for United Therapeutics intriguing to this WHO Group III patient populations. He was also the prime mover behind the PERFECT study. So the same individual that was — has a dominant fingerprint and the dominant shaping of the trial design for INCREASE also had that same footprint in shaping on PERFECT. But with those introductory remarks, Dr. Peterson, could you provide more color on Tyvaso in COPD patients?
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Leigh Peterson, [28]
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Yes. So as you just mentioned, this is the PH COPD patients or subcategory of the Group III as is ILD PH. And so for the disease mechanism, there’s — it’s similar in that you have the lung disease and then the associated or the lung disease is actually complicated by pulmonary hypertension. And the theory behind why our inhaled Tyvaso would work and actually would hopefully not show the safety issues that we’re seeing in the systemic therapies in previous studies is that because of the whole — wanting to avoid the V/Q mismatch. And that’s essentially — you want to treat vasodilate the vasculature that is next to the healthy alveoli but not dilate those that are next to the unhealthy or damaged alveoli. And so — and that’s — not only was that true, it seems to have held up. We — and increased Tyvaso was very, very well tolerated relative to placebo. So we are very hopeful that, that will hold up also with the COPD PERFECT study, and we have every reason to believe it will. So we’re really, really excited for those results. It’s about 20% enrolled. And so that will be coming out in the relatively near future. And so more to come.
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [29]
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Yes. Thank you, Dr. Peterson, for that good scientific and physiological insight into the lung. It’s such an amazing organ. And one of the reasons that this has been such a corridor of indifference is because pulmonary hypertension affects the very, very back-end of that lung corridor. It’s not the artery to come right out of the heart. It’s those far distal arteries. And somehow you have to manage that disease without worsening the blood flow between the heart and the lung. And I just salute you and your entire team for figuring out how to do that. Thank you.
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Operator [30]
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The next question comes from the line of Geoff Meacham with Bank of America.
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Unidentified Analyst, [31]
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This is Jason on for Geoff. What are your expectations for the rates of adoption for RemUnity and potentially Trevyent? Are these primarily new starts or current users of the Smiths pump? And then is this going to be affected at all by payer dynamics with the availability of generics? And then I was hoping you could please give us a brief update on Orenitram, the FREEDOM-EV label? And how is that going? And how should we think about patient growth moving forward?
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [32]
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Thank you for your question. Mike, do you want to start with answering his questions on RemUnity? And then after that, I’ll provide — I or Dr. Peterson will provide a couple of remarks on Orenitram label.
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Michael I. Benkowitz, United Therapeutics Corporation – President & COO [33]
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Sure. So on RemUnity, in terms of the rates of adoption between existing patients and new patients, we believe that both populations will be interested and excited about transitioning over to — transitioning or starting on the RemUnity pump. And so we talked about earlier in the call, we expect to launch in July. And starting in July and over a period of time, we expect to see a pretty rapid adoption of those patients to RemUnity.
From a payer standpoint, there’s not really going to be a cost difference relative to the existing pump. It may actually be less expensive. We’re still working through the pricing. And today, we’re not seeing any pressure with respect to generics, and, yes, we’ll see if that changes, if another subcu pump becomes available on the market. But as things sit right now, we’re just not seeing a lot of payer pushback really on the IV side or the subcu side.
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Martine A. Rothblatt, United Therapeutics Corporation – Founder, Chairman & CEO [34]
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Thanks, Mike. So the Orenitram label was a great success for all of us, and we were very, very pleased to see it. Actually, Dr. Peterson was also in charge of that study, which just, again, to bring everybody on the call to a level playing field here, that study resulted in demonstrating that Orenitram, on top of background study, reduced morbidity and mortality in the patient population. It was something that everybody had long suspected. But it’s one thing to suspect it and another thing to scientifically prove it, and Dr. Peterson and her team did successfully prove it in the EV study. The FDA agreed, and hence, that is on the label. That is definitely supercharging the reputation of Orenitram among prescribers. We’re seeing prescribers prescribing Orenitram earlier and earlier in the patient’s natural history of their disease. So we do believe that, that new label has made a material impact in bending upwards the curve of Orenitram adoption, and we’re quite confident that Orenitram will be able to deliver $1 billion a year in revenue to United Therapeutics as a result of that new label. And the large number of patients with pulmonary hypertension who, unfortunately, don’t get treprostinil therapy early enough in their disease to save them.
I’d like to also mention that we have entered into the next stage of development of our once-daily formulation of Orenitram, and that’s an exciting pipeline product for us. And I think that it’s quite a reasonable expectation that within less than a handful of years, we should be able to launch that product commercially into the market and provide an even more convenient means for patients to take Orenitram. So we’ve got so many exciting things going on at United Therapeutics. I’m told that there are no more questions. So, operator, you can conclude the call. And everybody, thank you for joining us this morning.
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Operator [35]
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Thank you for participating in today’s United Therapeutics Corporation conference call.
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