UNITED THERAPEUTICS CORPORATION SILVER SPRING, Md., Oct. 28, 2014 /PRNewswire/ -- United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the third quarter ended September 30, 2014.
"We are pleased with our overall core operating results for the third quarter," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "We are also happy with the progress of the Orenitram launch, and look forward to building on the momentum we have established."
Total revenues for the quarter ended September 30, 2014 were $330.0 million, up from $302.2 million for the quarter ended September 30, 2013. Net loss for the quarter ended September 30, 2014 was $25.2 million or $0.53 per basic share, compared to net income of $62.7 million or $1.25 per basic share for the same quarter in 2013. Gross margin from sales was $287.5 million for the quarter ended September 30, 2014, compared to $269.3 million for the same quarter last year. Non-GAAP earnings((1)) for the quarter ended September 30, 2014 were $207.9 million, compared to $149.3 million for the same quarter in 2013.
________________________
((1) )See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.
Financial Results for the Three Months Ended September 30, 2014
Revenues
The table below summarizes the components of net revenues (dollars in thousands):
Three Months Ended Percentage
September 30, Change
------------- ------
2014 2013
---- ----
Cardiopulmonary products:
Remodulin $142,877 $132,322 8.0%
Tyvaso 119,685 120,306 (0.5)%
Adcirca 51,247 47,378 8.2%
Orenitram 14,460 - 100.0%
Other 1,681 2,219 (24.2)%
-----
Total net revenues $329,950 $302,225 9.2%
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Revenues for the quarter ended September 30, 2014 increased by $27.7 million, compared to the same quarter in 2013. The growth in product revenues reflects the continued increase in the number of patients being treated with our products and the launch of Orenitram (treprostinil) Extended-Release Tablets.
Expenses
The table below summarizes research and development expense by major project and non-project components (dollars in thousands):
Three Months Ended Percentage
September 30, Change
------------- ------
2014 2013
---- ----
Project and non-
project
component:
Cardiopulmonary $28,423 $28,777 (1.2)%
Share-based
compensation
expense 82,513 30,551 170.1%
Other 7,940 13,421 (40.8)%
-----
Total research and
development
expense $118,876 $72,749 63.4%
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Share-based compensation. The increase in share-based compensation of $52.0 million for the quarter ended September 30, 2014, compared to the same quarter in 2013, resulted principally from the increase in the price of our common stock.
Other. The decrease in other research and development expenses of $5.5 million for the quarter ended September 30, 2014, compared to the same quarter in 2013, was primarily attributed to the decrease in expenditures for development of our monoclonal antibody, ch14.18, for high-risk neuroblastoma.
The table below summarizes selling, general and administrative expense by major categories (dollars in thousands):
Three Months Ended Percentage
September 30, Change
------------- ------
2014 2013
---- ----
Category:
General and
administrative $53,781 $33,253 61.7%
Sales and
marketing 19,719 18,101 8.9%
Share-based
compensation
expense 129,007 42,757 201.7%
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Total selling,
general and
administrative
expense $202,507 $94,111 115.2%
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General and administrative. The increase in general and administrative expense of $20.5 million for the quarter ended September 30, 2014, compared to the same quarter in 2013, was driven by increases in professional and consulting fees, salaries and related expenses and grants to non-affiliated, not-for-profit organizations.
Share-based compensation. The increase in share-based compensation of $86.3 million for the quarter ended September 30, 2014, compared to the same quarter in 2013, resulted primarily from the increase in the price of our common stock.
Income Taxes
The provision for income taxes was a $10.6 million benefit as a result of the net loss for the quarter ended September 30, 2014, compared to a $38.5 million expense for the same quarter in 2013. Our estimated annual effective tax rates were 36 percent and 34 percent as of September 30, 2014 and September 30, 2013, respectively. Our 2014 estimated annual effective tax rate increased as of September 30, 2014, primarily due to a reduction in the amount of business tax credits we expect to generate during 2014 compared to our estimate at September 30, 2013.
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for the following charges, as applicable: (1) interest; (2) license fees; (3) depreciation and amortization; (4) impairment charges; and (5) share-based compensation (stock option, share tracking award and employee stock purchase plan expense).
A reconciliation of net income to non-GAAP earnings is presented below (in thousands, except per share data):
Three Months Ended
September 30,
-------------
2014 2013
---- ----
Net (loss) income, as
reported $(25,237) $62,685
Adjust for the following
charges:
Interest expense 4,709 4,540
License fees - -
Depreciation and
amortization 8,107 7,661
Impairment charges - -
Share-based compensation
expense 220,326 74,385
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Non-GAAP earnings $207,905 $149,271
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Non-GAAP earnings per
share:
Basic $4.40 $2.98
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Diluted $3.91 $2.78
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Weighted average number of
common shares
outstanding:
Basic 47,297 50,014
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Diluted 53,208 53,688
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Conference Call
We will host a half-hour teleconference on Tuesday, October 28, 2014, 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: 11694570.
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 unique 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 expectations about continued increases in the number of patients using our therapies and our expectations regarding Orenitram's potential. 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 the date of this press release, 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 Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 2014 2013
---- ---- ---- ----
(Unaudited) (Unaudited)
Revenues:
Net product sales $328,269 $300,006 $934,152 $820,647
Other 1,681 2,219 8,004 7,320
----- ----- ----- -----
Total revenues 329,950 302,225 942,156 827,967
Operating expenses:
Research and
development 118,876 72,749 171,067 177,796
Selling, general
and administrative 202,507 94,111 300,753 236,832
Cost of product
sales 40,803 30,716 110,113 92,349
Total operating
expenses 362,186 197,576 581,933 506,977
Operating (loss)
income (32,236) 104,649 360,223 320,990
Other (expense) income:
Interest expense (4,709) (4,540) (14,065) (13,496)
Other, net 1,112 1,070 4,258 3,039
----- ----- ----- -----
Total other
(expense) income,
net (3,597) (3,470) (9,807) (10,457)
(Loss) income
before income
taxes (35,833) 101,179 350,416 310,533
Income tax benefit
(expense) 10,596 (38,494) (126,277) (105,659)
------ ------- -------- --------
Net (loss) income $(25,237) $62,685 $224,139 $204,874
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Net (loss) income per common
share:
Basic $(0.53) $1.25 $4.63 $4.10
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Diluted $(0.53) $1.17 $4.12 $3.90
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Weighted average number of common
shares outstanding:
Basic 47,297 50,014 48,427 50,007
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Diluted 47,297 53,688 54,360 52,570
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SELECTED CONSOLIDATED BALANCE SHEET DATA
September 30, 2014
(Unaudited, in billions)
Cash, cash equivalents and
marketable securities (excluding
restricted amounts) $0.97
Total assets 2.07
Total liabilities and temporary
equity 0.89
Total stockholders' equity 1.18
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SOURCE United Therapeutics Corporation
