Tyvaso product sales were supported by a growing patient base following the product launch, including those with pulmonary hypertension associated with interstitial lung disease, and enhanced commercial use due to the redesigned Medicare Part D benefit under the Inflation Reduction Act. In addition, international sales of nebulized Tyvaso contributed positively to revenue expansion.
United Therapeutics Corporation, founded in 1996 and headquartered in Maryland, US, is the first publicly traded biotech or pharmaceutical company to take the form of a public benefit corporation. The group 's primary goal has been to find a cure for pulmonary arterial hypertension (PAH) and other diseases. Accordingly, the company is focused on the development of novel pharmaceutical therapies and technologies that expand the availability of transplantable organs. It has over 1,300 employees.
To treat PAH, the company markets and sells the following products in the US: Tyvaso DPI, nebulized Tyvaso, Remodulin, Orenitram, and Adcirca. In addition, Tyvaso DPI and nebulized Tyvaso are approved to treat pulmonary hypertension associated with interstitial lung disease (PH-ILD). United Therapeutics also market and sell an oncology product, Unituxin, approved for the treatment of high-risk neuroblastoma, and the Remunity® Pump for Remodulin (Remunity).
Outside the US, the group generates revenue from sales of nebulized Tyvaso, Remodulin, and Unituxin.
Sales uplift from key products
Tyvaso recorded the highest revenue quarter during the period, helped by record patient shipments. In addition, it is the most prescribed US prostacyclin. Remodulin sales rose 8% to $138m, and the product was registered as the most prescribed parenteral prostacyclin in the US. Revenue from Orenitram increased 14% to $121m in Q1 25, achieving 13th sequential quarter of y/y revenue growth. Sales from Unituxin remained flat at $58m, however, it remained the most prescribed antibody therapy for high-risk neuroblastoma in the US.
Encouraged by the success of the foundational wave of growth in the commercial business, the management plans to progress its innovation and revolution waves of growth through TETON 2 in idiopathic pulmonary fibrosis and the planned commencement of the company’s UKidney first in human clinical study, respectively. In addition, the company is focused on advancing its approach to create an unlimited supply of transplantable organ alternatives with anticipated filings of investigational new drug applications with the FDA for its UHeart and UThymoKidney products.
Solid fundamental trajectory
United Therapeutics reported a solid revenue CAGR of 19.5% over FY 21-24, reaching $2.9bn. Operating income surged ahead at a CAGR of 28.2% to $1.5bn, with margins expanding by 9.5% to 50.3% in FY 24. Net income therefore rose at a CAGR of 36% to $1.2bn in FY 24.
Positive earnings trajectory led to an increase in cash and equivalent from $895m at end-FY21 to $1.7bn at end-FY 24. Overall, the company has maintained a healthy balance sheet with a net cash position of $4.4bn at end-FY 24.
In comparison, Merck & Co., a local peer, posted a lower revenue CAGR of 9.6% over the same period, reaching $64.2bn in FY 24. Operating income rose at a CAGR of 21.5% to $24.9bn in FY 24, with margins expanding by 6.2% to 38.8%.
Attractive valuation levels
Over the past 12 months, the company's stock has delivered muted returns of 0.2%. In comparison, Merck & Co.’s stock recorded a fall of 37% over the same period.
The company is trading lower compared to its historical average. United Therapeutics is currently trading at a P/E of 10.4x, based on the FY 25 estimated EPS of $27.6, which is lower than its 3-year historical average of 14.6x. However, it is trading at par with that of Merck & Co. (10.4x).
The stock is currently trading at 6x in terms of EV/EBITDA, based on the FY 25 estimated EBITDA of $1,661m, which is lower than its 3-year historical average of 9.1x and Merck & Co.’s valuation of 7.3x.
United Therapeutics is monitored by 15 analysts, nine of whom have ‘Buy’ ratings and six have ‘Hold’ ratings for an average target price of $382.1, implying 35% upside potential. Their views are further supported by an anticipated EBITDA CAGR of 5.89% over FY 24-FY27, reaching $1,722m, with margins of 48.4% in FY 27. In addition, analysts estimate a net profit CAGR of 5.9%, reaching $1,419m with margins of 39.8% in FY 27, with EPS expected to increase to $29.5 in FY 27 from $24.6 in FY 24. Likewise, analysts estimate an EBITDA CAGR of 7.9% and a net profit CAGR of 12% for Merck & Co.
Overall, the company appears set to post long-term growth, supported by its continued execution of foundational products and promise of a pipeline of innovation and revolution products. In addition, United Therapeutics would look to expand and solidify its position in the pulmonary hypertension marketplace as the prostacyclin products of choice. However, the company is subject to some risks, including losing market share to stiff competition, risk of dependence on a few products, and risks of R&D failure.
