UNITED THERAPEUTICS CORPORATION SILVER SPRING, Md. and RESEARCH TRIANGLE PARK, N.C., Feb. 24, 2015 /PRNewswire/ -- United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the fourth quarter and year ended December 31, 2014.
"Our overall revenues and profits grew significantly from 2013 to 2014, and we are pleased to see continued growth in the number of patients helped by each of our products," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Co-Chief Executive Officer. "The fourth quarter was especially distinguished by Orenitram(®) exceeding 25% of Adcirca(®) sales and 17% of Tyvaso(®) sales, despite the fact that December was only the seventh month after Orenitram's launch, whereas the other products were launched in 2009. This affirms our belief that Orenitram is on track to become our best-selling product."
Key financial highlights include (in thousands, except per share data):
Three Months Ended Year Ended
December 31,
December 31,
------------
2014 2013 2014 2013
---- ---- ---- ----
Revenues $346,363 $289,017 $1,288,519 $1,116,984
Net income (loss) $115,935 $(30,314) $340,074 $174,560
Non-GAAP earnings(1) $171,709 $160,203 $590,956 $544,663
Net income (loss), per diluted share $2.17 $(0.60) $6.28 $3.28
Non-GAAP earnings, per diluted share(1) $3.21 $2.88 $10.91 $10.23
________________________
(1) See definition of non-GAAP
earnings, a non-GAAP financial
measure, and a reconciliation
of net income to non-GAAP
earnings below.
Operating Results
Revenues
The table below summarizes the components of net revenues (in thousands):
Three Months Ended Year Ended
December 31,
December 31,
------------
2014 2013 2014 2013
---- ---- ---- ----
Cardiopulmonary products:
Remodulin(R) $136,591 $119,865 $553,728 $491,179
Tyvaso 115,070 114,385 463,067 438,793
Adcirca 73,546 52,047 221,471 176,972
Orenitram 20,174 - 41,267 -
Other 982 2,720 8,986 10,040
--- ----- ----- ------
Total net revenues $346,363 $289,017 $1,288,519 $1,116,984
======== ======== ========== ==========
Revenues for the quarter ended December 31, 2014 increased by $57.3 million, compared to the quarter ended December 31, 2013. The growth in revenues corresponded to the continued increase in the number of patients being treated with our cardiopulmonary products and the commencement of Orenitram sales in 2014.
Expenses
The table below summarizes research and development expense by major project and non-project components (in thousands):
Three Months Ended Year Ended
December 31,
December 31,
------------
2014 2013 2014 2013
---- ---- ---- ----
Project and non-project component:
Cardiopulmonary $46,858 $32,242 $131,843 $116,137
Share-based compensation expense 15,729 76,422 72,714 134,706
Other 8,895 12,888 37,992 48,505
----- ------ ------ ------
Total research and development expense $71,482 $121,552 $242,549 $299,348
======= ======== ======== ========
Cardiopulmonary. The increase in cardiopulmonary project expenses of $14.6 million for the quarter ended December 31, 2014, compared to the quarter ended December 31, 2013, resulted from an increase of $15.7 million in expenses related to our esuberaprost program, offset by a decrease of $2.8 million in expenses relating to our sustained-release, self-injectable product development program, which was terminated in 2014.
Share-based compensation. The $60.7 million decrease in share-based compensation expense for the quarter ended December 31, 2014 over the same quarter in 2013 reflects the one percent appreciation in the price of our common stock during the quarter ended December 31, 2014, compared to the 43 percent increase in the price of our common stock during the same quarter in 2013.
The table below summarizes selling, general and administrative expense by major categories (in thousands):
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
Category:
General and administrative $41,493 $38,112 $186,312 $140,235
Sales and marketing 21,313 21,038 82,000 73,871
Share-based compensation expense 17,728 98,028 112,975 179,904
------ ------ ------- -------
Total selling, general and administrative expense $80,534 $157,178 $381,287 $394,010
======= ======== ======== ========
Share-based compensation. The $80.3 million decrease in share-based compensation expense for the quarter ended December 31, 2014 compared to the same quarter in 2013 reflects the one percent appreciation in the price of our common stock during the quarter ended December 31, 2014, compared to a 43 percent increase in the price of our common stock for the same period in 2013.
Cost of Product Sales
Cost of product sales for the quarter ended December 31, 2014 were $15.8 million, compared to $38.8 million for the quarter ended December 31, 2013. The decrease of $23.0 million corresponded primarily to the expiration of our royalty obligation to GlaxoSmithKline PLC on sales of our treprostinil-based products.
Income Taxes
We recognized income tax expense of $58.8 million for the quarter ended December 31, 2014, compared to a $1.3 million tax benefit for the quarter ended December 31, 2013 that primarily resulted from our net loss for the quarter ended December 31, 2013.
Non-GAAP Earnings
Non-GAAP earnings is defined as net income (loss), adjusted for the following charges, as applicable: (1) interest; (2) license fees; (3) depreciation and amortization; (4) impairment charges; and (5) share-based compensation expense (stock option, share tracking award and employee stock purchase plan).
A reconciliation of net income to non-GAAP earnings is presented below (in thousands, except per share data):
Year Ended December 31, Three Months Ended
December 31,
------------
2014 2013 2012 2014 2013
---- ---- ---- ---- ----
Net income (loss), as reported $340,074 $174,560 $304,442 $115,935 $(30,314)
Adjust for the following charges:
Interest expense 17,592 18,058 16,639 3,527 4,562
License fees 10,991 - - 10,991 -
Depreciation and amortization 32,245 31,259 27,145 8,932 7,753
Impairment charges - - 4,839 - -
Share-based compensation expense 190,054 320,786 30,115 32,324 178,202
------- ------- ------ ------ -------
Non-GAAP earnings $590,956 $544,663 $383,180 $171,709 $160,203
======== ======== ======== ======== ========
Non-GAAP earnings per share:
Basic $12.27 $10.88 $7.36 $3.62 $3.19
====== ====== ===== ===== =====
Diluted $10.91 $10.23 $7.19 $3.21 $2.88
====== ====== ===== ===== =====
Weighted average number of common shares outstanding:
Basic 48,176 50,076 52,093 47,431 50,281
====== ====== ====== ====== ======
Diluted 54,155 53,231 53,280 53,548 55,648
====== ====== ====== ====== ======
Conference Call
We will host a half-hour teleconference on Tuesday, February 24, 2015, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533. A rebroadcast of the teleconference will be available for one week by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406 and using access code 73843546.
This teleconference is also being webcast and can be accessed via our website at http://ir.unither.com/events.cfm.
About United Therapeutics
United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions.
Non-GAAP Financial Information
This press release contains a financial measure, non-GAAP earnings, that does not comply with United States generally accepted accounting principles (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.
We use non-GAAP earnings to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources in an effort to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) assessing our capacity to fund capital expenditures and expand our business. We believe this non-GAAP financial measure improves investors' understanding of our financial results by excluding certain expenses that we do not consider when evaluating and comparing the performance of our core operations and making operating decisions. However, there are limitations in the use of this non-GAAP financial measure in that it excludes certain operating expenses that are recurring in nature. In addition, our calculation of this non-GAAP financial measure may differ from the methodology used by other companies. The presentation of this non-GAAP financial measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of net income, the most directly comparable GAAP financial measure, to non-GAAP earnings can be found in the table above under the heading, Non-GAAP Earnings.
Forward-looking Statements
Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, our expectation regarding Orenitram's potential to become our best-selling product. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from anticipated results. Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in our periodic reports and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We are providing this information as of February 24, 2015, and assume no obligation to update or revise the information contained in this press release whether as a result of new information, future events or any other reason. [uthr-g]
Orenitram, Remodulin and Tyvaso are registered trademarks of United Therapeutics Corporation.
Adcirca is a registered trademark of Eli Lilly and Company.
UNITED THERAPEUTICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
2014 2013 2014 2013
---- ---- ---- ----
Revenues:
Net product sales $345,381 $286,297 $1,279,533 $1,106,944
Other 982 2,720 8,986 10,040
--- ----- ----- ------
Total revenues 346,363 289,017 1,288,519 1,116,984
Operating expenses:
Research and development 71,482 121,552 242,549 299,348
Selling, general and administrative 80,534 157,178 381,287 394,010
Cost of product sales 15,771 38,778 125,883 131,127
------ ------ -------
Total operating expenses 167,787 317,508 749,719 824,485
Operating income (loss) 178,576 (28,491) 538,800 292,499
Other (expense) income:
Interest expense (3,527) (4,562) (17,592) (18,058)
Other, net (285) 1,423 3,972 4,462
---- ----- ----- -----
Total other (expense) income, net (3,812) (3,139) (13,620) (13,596)
Income (loss) before income taxes 174,764 (31,630) 525,180 278,903
Income tax (expense) benefit (58,829) 1,316 (185,106) (104,343)
Net income (loss) $115,935 $(30,314) $340,074 $174,560
======== ======== ======== ========
Net income (loss) per common share:
Basic $2.44 $(0.60) $7.06 $3.49
===== ====== ===== =====
Diluted $2.17 $(0.60) $6.28 $3.28
===== ====== ===== =====
Weighted average number of common shares outstanding:
Basic 47,431 50,281 48,176 50,076
Diluted 53,548 50,281 54,155 53,231
====== ====== ====== ======
SELECTED CONSOLIDATED BALANCE SHEET DATA
(In billions)
December 31,
------------
2014 2013
----
Cash, cash equivalents and
marketable securities (excluding
restricted amounts) $0.8 $1.1
Total assets 1.9 2.1
Total liabilities and temporary
equity 0.6 0.8
Total stockholders' equity 1.2 1.3
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SOURCE United Therapeutics Corporation
