Good morning and welcome to the United Therapeutics Corporation Third Quarter 2021 Earnings Webcast. My name is Audra and I will be your conference operator today. All participants on the call portion of this webcast will be in listen-only mode until the question-and-answer portion of this earnings call. I will now turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics. Please go ahead, sir.

Good morning. It's my pleasure to welcome you to the United Therapeutics Corporation third quarter 2021 earnings webcast. Accompanying me on today's call are Dr. Martine Rothblatt, our Chairperson and Chief Executive Officer; Michael Benkowitz, our President and Chief Operating Officer; James Edgemond, our Chief Financial Officer and Treasurer; and Dr. Leigh Peterson, Senior 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 these forward-looking statements. Today's remarks may also include financial measures that were not prepared in accordance with U.S. Generally Accepted Accounting Principles. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in our earnings release available on our website. Today's remarks may discuss the progress and results of clinical trials or other developments with respect to our products. These remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision-making or to suggest 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 the third quarter 2021 financial results and business activities of United Therapeutics. Dr. Rothblatt?

Thank you very much, Dewey. Good morning, everyone and welcome to our third quarter 2021 financial results call. We've had an absolutely fantastic quarter and I really have only great news to share with you this morning. For example, we have experienced double-digit growth in revenues, double-digit growth in non-GAAP earnings. Within our revenues, we've experienced double-digit growth in Tyvaso, double-digit growth in Orenitram, double-digit growth in Unituxin. It's just amazing; all the way across the board, we've had a fantastic quarter. In fact, in no product category have sales decreased from last year. So like I said, all good news to date. In addition to these operating results, we also are making really great progress with all of our Phase III clinical trials. We have a number of Phase III clinical trials going on. We've got in the area of pulmonary hypertension, our gene therapy trial called Sapphire. We also have our ralinepag two trials, all those in pulmonary hypertension. In pulmonary fibrosis, we have two Phase III trials. We call them TETON 1 and TETON 2. And in COPD, at least a type of COPD associated with pulmonary hypertension, we have another Phase III clinical trial going on called Perfect. We also are just now wrapping up a Phase III trial in our organ transplantation area dealing with ex-vivo lung perfusion. So really, just a huge amount of pipeline activity going on. In addition to all of that, we have some very exciting earlier-stage activity, where we are developing next-generation forms of our parenteral, inhaled and oral products. So all the way across the board. The one which we expect to launch the soonest will be the next-generation product for our inhaled product, that's our dry powder inhaler. We just recently launched our next-generation product for Remodulin which is Remunity and in our pipeline, we have even next-generation improvements on that product. And we are working on our next-generation better-dosing product for our Orenitram PO. And then following that, as noted earlier, we expect ralinepag to make a huge difference in the oral treatment of pulmonary hypertension. So it's kind of like a best-case situation here at United Therapeutics. We love what we're doing. We love that we're doing it all so well. And on that note, let me turn the podium over to our President and Chief Operating Officer; Mike Benkowitz, who is responsible for so much of this great news.

Thanks, Martine and good morning, everyone. As Martine said, we're very pleased to have posted a strong third quarter highlighted by year-over-year double-digit growth for total revenue, treprostinil revenue and three of our products, Tyvaso, Orenitram and Unituxin. At the same time, we continue to progress toward our 25x25 goal, which is to reach 25,000 patients with our therapies by the end of 2025. At the end of the third quarter, we had approximately 9,000 patients on our treprostinil products in the U.S. which, when coupled with the approximately 1,000 patients on our treprostinil products outside the U.S., puts us at about 10,000 patients toward our 25,000-patient goal. This quarter, I'd like to dive into the underlying performance of our three treprostinil products, Tyvaso, Remodulin and Orenitram. So I'll begin with Tyvaso. Earlier this year, in anticipation of the PH-ILD approval that we ultimately received last April, we established a goal to double the number of patients on Tyvaso from 3,000 to 6,000 by the end of next year. This assumes no COVID-related impact to health care practitioner access and a patient initiation of therapy and, importantly, recognizes that the path to doubling may not be linear. The third quarter was our second quarter of the PH-ILD launch and we're very pleased with the progress thus far. We continued growing the number of Tyvaso-active patients during the quarter, ending with approximately 4,000 patients on Tyvaso putting us one-third of the way toward our goal of doubling the number of patients on Tyvaso by the end of 2022. I also want to mention that during the third quarter, the CMS comment period regarding Medicare reimbursement for Tyvaso in PH-ILD commenced and is open through mid-November. We can't predict the timing of a coverage decision. But in the meantime, federal health care patients can apply to our patient assistance program to access Tyvaso prior to the coverage decision if they are eligible. Once we obtain CMS coverage, we will be able to transition these patients to a reimbursement model over time. To that end, we anticipate three near-term drivers for Tyvaso growth over the next few quarters. The first driver is the approval of Medicare reimbursement of Tyvaso and PH-ILD. Even though federal health care patients may be eligible for patient assistance, we are hearing through the channel that many physicians are waiting for CMS coverage before prescribing Tyvaso to their PH-ILD patients. The second driver, and somewhat related to the first, is that we expect to see growth in prescriptions from ILD treaters. To date, the vast majority of prescriptions have been from our historical PAH writers. And then the final growth driver is the approval of Tyvaso DPI, which we expect no later than the summer of 2022. Moving on to Remodulin, last quarter, we learned that a generic form of subcutaneous treprostinil became available. This launch so far has played out almost exactly like the IV generic launch we saw in 2019. There has been an initial bolus of subcu Remodulin patients, similar in quantity to what we saw with IV and which are primarily these dual-eligible Medicare and Medicaid patients that have been forced to switch to generic treprostinil. Since the generic subcu launch, generic transitions have tapered off to a negligible amount as we enter Q4 and in fact, our new patient starts remain at or above our long-term trend levels and we are now adding back patients to our active patient census. Finally, I'll provide some color around Orenitram. We've mentioned in previous calls and investor conferences that while we saw an uptick on Orenitram following the FREEDOM-EV label expansion, the launch trajectory was blunted by COVID. In the second quarter of this year and continuing into the third quarter, we were able to have consistently more robust interactions with prescribers about the FREEDOM-EV data. And we're receiving positive feedback from these physicians about the Orenitram value proposition, especially regarding its efficacy. And this has translated into strong new patient start momentum over the last two quarters and the highest number of patients on Orenitram as of the end of the third quarter. So in conclusion, we're pleased with the progress we're making in the ongoing Tyvaso launch in PH-ILD and that we're on track to achieve 6,000 patients on Tyvaso by the end of next year, the continued momentum around Orenitram and appreciation of its value proposition, and returning to Remodulin patient growth. And so with that, I'll turn the call back over to you, Martine.

Thanks, Mike. Amazing details and amazing progress and kudos to you and the entire sales and marketing team. Operator, we can now take the callers.

We'll go first to Joseph Thome at Cowen and Company.

Thank you for taking my question and congrats on the progress. Just on the continued growth for Tyvaso, one of the points mentioned was increasing the number of physicians that are predominantly ILD writers. Can you just dive a little bit more into how this will happen? Are you experiencing any consideration for this physician population thus far that you're working through?

Thanks for the question, Joe. And Mike, would you be able to answer that question?

Sure. Thanks, Joe. Yes, no concerns thus far. I think it's just taking some time to bring these treaters online. So keep in mind that the diagnosis process for these physicians is very different than I think what they're used to. They have to screen the patients. They have to do echocardiograms, those things I think they're accustomed to doing. The right heart cath is new to them. I wouldn't say it's a barrier; I just think it tends to slow things down. So a couple of things are happening there. In some cases, they're referring these patients to PAH clinics even though they have said over the long term, they intend to treat these patients. They are, in a lot of cases, these patients reside with physicians and community practices and so they don't have a right heart cath readily accessible. So they're having to figure out where to send these patients to get a right heart cath. I think the third thing to keep in mind is a lot of these physicians are the same physicians that are also on the front line of treating COVID patients. And then finally, as I mentioned in my opening remarks, I do think that there is a little bit of waiting for CMS coverage before really kind of diving in and digging in and starting to write for Tyvaso. So we are adding new prescribers. It's not like we're not adding. They're starting to come online. I think we probably would have expected that it would have been a little bit faster than what we're seeing but they are coming in and I think that will continue to come as we move into next year.

Fantastic, Mike. Thanks so much for that answer. And operator, you can now call up the next questioner.

We'll go next to Jessica Fye with JPMorgan.

Thanks for taking my question. Can you talk about how many of the now, I guess, 1,000 PH-ILD patients you've added since the launch. How many of those are on Medicare and basically getting free drug until that coverage is finalized?

Yes. It's good to hear you this morning, Jessica. Mike, I think that question would also be in your bailiwick.

Sure. So, thanks, Jess. So even prior to PH-ILD, I mean we've always had a patient assistance program that has, let's say, some small percentage of patients in it receiving free drug. I think with the PH-ILD launch and not having the CMS covered, we have seen that tick up I would say in the grand scheme of things, it's still a relatively small percentage. So you've gone from like a small percentage that's effectively doubled but it's still - you're talking about low single-digit or sorry, low double-digit percentages of patients that are in the patient assistance program right now. As I said, I think we continue to hear this anecdotally in talking with physicians. I think there is this sort of warehousing effect that's going on, particularly with the ILD treaters where I think they're waiting for the CMS coverage to go through the process of writing the referral because even if you're going through the patient assistance program, there is still a process that you have to go through to see if the patient is eligible and apply. Our sense is that a lot of these physicians don't want to have to go through that process twice and, like I said, are waiting until we get the CMS coverage.

Super, Mike, thanks so much for that answer and Jess, for your question. Operator, who would be the next analyst on the call?

Next, we have Hartaj Singh with Oppenheimer.

Thank you for the question today and the really nice update. Just a question on - this is the first time I've heard you provide an actual number of patients ex-U.S. Martine, Mike, the 1,000, you also are now starting a Phase III study with TETON ex-U.S. So have there been any thoughts on kind of the use of business model ex-U.S. and how interesting that market is to you?

Yes. Thanks a lot for the question, Hartaj and good hearing your voice this morning. I think we are more interested in the ex-U.S. opportunity for IPF and possibly as well for ILD. There seems to be a much greater unmet medical need, especially with regard to IPF, where we believe we can have a disease-modifying agent. So we definitely are opening up our bandwidth, if you will, to look at more activities ex-U.S. We also have a terrific partner in Europe, Grupo Ferrer, which we've been working with and other partners in other parts of the world. So your intuition, Hartaj, as always, is right on target and we are ramping up activities outside the U.S. Thanks. Operator, you can bring on the next analyst.

We'll go to Eun Yang with Jefferies.

Thank you. A quick question on Tyvaso DPI, so when you address the single deficiency that was identified in the complete response letter. Would that be the resubmission that we classified as a Class 1 or Class 2?

Yes. Eun, nice to hear you this morning and very, very interesting question. Fortunately, we have Dr. Peterson on the call and she is our expert in matters that kind of transcend scientific and regulatory affairs. So Dr. Peterson, could you provide some insight?

Yes. So basically, we do have some meetings that we will be having with FDA to address your specific question on the resubmission and the timeline. But again, we're very confident that we will get approval by the summer of '22 or earlier to address, again, the single deficiency.

Thanks so much, Leigh. Well, that seems to be the end of the Q&A questions. And once again, I'd like to say that it's just super, super exciting for me as a person who likes to sort of set goals that set everybody up for winning and then see such really strong progress towards those goals. For example, it was all plus or minus like a year ago that Mike and I set up these goals of doubling the number of Tyvaso patients by the end of '22, 25,000 treprostinil patients by the end of '25 and as you heard from the numbers we shared today, we're making amazing progress on both of those goals with the double-digit growth in revenues and obviously, on patient count as well and now 40% of the way already to the 2025 goal. So it's just - it's really, really gratifying for me as CEO to see our company delivering so strongly on the forecast that we had made. Thanks again to everybody joining us this morning. I believe Mike will be speaking at Credit Suisse very shortly. So feel free to attend that conference and learn more. Operator, you can now wrap up the call.

Thank you for participating in today's United Therapeutics Corporation Earnings Webcast. A rebroadcast of this webcast will be available for replay for one week by visiting the Events & Presentations section of the United Therapeutics' Investor Relations website.