Good morning, and welcome to the United Therapeutics Corporation First Quarter 2022 Earnings Webcast. My name is Abby, and I will be your conference operator today. And I will now turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics.

Thanks, Abby, and good morning. It’s my pleasure to welcome you to the United Therapeutics Corporation First Quarter 2022 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 Pat Poisson, our Executive Vice President of Technical Operations; 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, and we assume no obligation to update these forward-looking statements. Today’s remarks may discuss the progress and results of clinical trials or other developments with respect to our products. And 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 webcast over to Dr. Rothblatt for an overview of the first quarter 2022 financial results and business activities of United Therapeutics.

Thank you, Dewey, and good morning, everyone. Welcome to our first quarter 2022 financial results call. In my opinion, this is the best quarter we have ever reported, considering not only profits, patients, and our contributions to our planetary community. At $462 million in revenues, we are now on the cusp of a $2 billion revenue run rate. This is a major milestone achievement for us. This $2 billion revenue run rate is what we expect based on the strong trends that are evidenced in this quarter as well as what we expect in coming quarters. Importantly, we see strength across our entire product portfolio. As a public benefit company, we focus on three Ps: profitable cash flow, patient care, and planetary community. With respect to profits, that approximately $2 billion revenue run rate was accompanied by nearly $0.25 billion in quarterly profits. We are making more money than we spend, which is one of our key financial metrics. But with respect to patient care, we are spending a lot. Seven Phase III studies are underway. A new Phase I study in RemoPro is just starting, and an exciting Phase IV study called ARTISAN is designed to prove that strong dosing on Remodulin, followed by a rapid switch to Orenitram, allows patients long-term good results for the treatment of pulmonary hypertension. They will be able to live with pulmonary hypertension more than die from pulmonary hypertension. Finally, with respect to our planetary community, we continue to lead by example with zero carbon healthcare facilities that are amongst the best in our entire industry. For example, our clinical development operations work in the world’s largest zero carbon building in Silver Spring, Maryland. We are now building a first-of-its-kind, zero carbon footprint pharmaceutical inventory warehouse in North Carolina to store our ever-expanding production of pharmaceutical intermediates and pharmaceutical products. Speaking of products, I think that is a good opportunity for me to pass the baton to our President and Chief Operating Officer, Michael Benkowitz.

Thanks, Martine, and good morning, everyone. In the first quarter, we continued our trend of year-over-year revenue growth, and we saw the highest quarterly revenue for Tyvaso as well as our overall Treprostinil business. I’d like to dive into the underlying performance of our three treprostinil products: Tyvaso, Remodulin, and Orenitram. As usual, I’m going to focus more on our patient metrics, and I’ll remind everyone that our quarterly treprostinil revenue does not always track exactly with quarterly underlying patient demand due to specialty pharmacy ordering patterns. Starting with Tyvaso, we increased our active patients to about 4,400 as of the end of the first quarter, putting this approximately halfway toward the goal we set last year of doubling the number of Tyvaso patients from 3,000 to 6,000 by the end of this year. As I do in every setting like this, I want to remind everyone that achieving this goal assumes no COVID-related impact to healthcare practitioner access and patient initiation of therapy, and the path to doubling will not be linear. Uptake in January and February was a little more gradual than in prior months, but this is not atypical for a serious, chronic, life-threatening condition where doctors want to be extra cautious about adding therapies. Having said that, in March, we saw a nice acceleration of patient additions with historically strong referrals and new starts along the lines of what we saw in Q2 and Q3 of last year, and this momentum has continued into April. Our continued path to 6,000 patients will be aided by three factors. First, assuming approval later this month, the launch of Tyvaso DPI, which we believe will expand Tyvaso’s use in both Group 1 and Group 3 pulmonary hypertension for the reasons I mentioned earlier. The recent CMS coverage update to include Tyvaso for PH-ILD is our second factor. Despite the availability of our patient access programs for Medicare patients before a coverage decision, we are aware that many physicians were waiting for a CMS coverage decision before referring their PH-ILD patients on Medicare for Tyvaso therapy. And third, continued growth in the Tyvaso prescriber base, particularly among ILD treaters. As I’ve mentioned on prior calls, many of these physicians have been on the front lines treating COVID patients. Now that COVID cases and hospitalizations hopefully seem to be on the decline, and with Tyvaso DPI and a CMS coverage decision, we expect to see more growth in prescriptions from these physicians over the next few quarters and beyond. Moving to Orenitram, we saw yet another quarter of record patient count as of the end of the first quarter. As we’ve discussed before, we believe this uptick is driven by the FREEDOM-EV label expansion now that we’re able to have more robust interactions with prescribers about the data. Finally, moving on to Remodulin, in the first quarter, we saw the highest level of our module referrals since 2014 and relative resilience and stability in the business despite the launch of a subcutaneous form of generic aprotinin last year. The relaunch of the Remunity pump is proceeding well, and we’re accepting referrals for starting patients on Remunity, and we’ve been doing that since about mid-March. We expect Remunity starts to pick up through the balance of the year and into 2023. To wrap up, we’re pleased with the continued momentum in the Orenitram modular business and progress with Tyvaso and PH-ILD, expected second quarter events such as CMS coverage and PH-ILD, the Tyvaso DPI launch approval, not to mention the increased buzz around PH-ILD we’re seeing at HCP conferences, particularly now that these are in person again, have us well positioned to achieve our 6,000-patient goal by the end of the year. With that, I’ll turn the call over to Martine for answers to your questions.

Thanks so much, Mike. That was perfect. Operator, you may open the lines.

And we will take our first question from Eun Yang with Jefferies.

Great quarter. Question on Tyvaso DPI side, we await FDA approval. Once approved on time, what do you think the conversion rate to DPI from Tyvaso would be? Whether you think that it will just help to expand into new patients?

Thanks so much, Eun. Nice to hear your voice after it’s been a while since we’ve been able to see each other face-to-face. So thanks for dialing in. That question is something that I think on this call, Mike would be the one to have the most detailed ability to address. So Mike, can you give us a response on that one?

Sure, happy to. Yes, I think you’ll see this play out over a little bit of time. As I said in my opening remarks, we’re dealing with chronic, life-threatening diseases here. And I think patients – or I’m sorry, physicians and patients can be a little bit cautious in terms of switching therapy, switching delivery devices, whatever it may be. We do see and we hear a lot of excitement among both physicians and patients for the Tyvaso DPI. So we do believe that there will be a lot of interest in switching over to Tyvaso DPI. I think as this plays out, as we expand the use of Tyvaso into Group 1 and Group 3, over time, my estimate is that we’ll probably see somewhere around 60% of the patients on Tyvaso DPI and about 40% on the nebulizer. I’d say that’s a pretty good estimate for Group 1. I think Group 3 may be a little bit more 50-50 just because of the disease we’re talking about and the severity, and some patients, for whatever reason, decide that the nebulizer is a better option for them than the DPI.

Thanks, Mike. Eun, just to give you a little bit more color, as you know, my daughter has pulmonary hypertension. So I meet with a lot of parents and even their adult children with pulmonary hypertension. I’m astonished that when I have a lunch or something with them, one of them will tell me that their daughter or their son is still taking Flolan from the old legacy pump, which weighs as much as maybe a small brick. Not a brick, but a small brick. And we’re just talking, and I’m obviously not selling. I’m just talking parent to parent. But I say like there are much smaller devices available and ones that can go subcutaneously. And I know you’re aware of this. I’m just curious why your daughter or son has never transitioned. And they always give the same answer, which is very resonant with what Mike just said: they said, 'this has kept our child alive.' This legacy Flolan brick, if you will, has kept our daughter alive or kept our son alive. And we just don’t – if it’s not broken, we don’t want to fix it. And so that just gives you a little bit more color on what Mike was saying that when patients have this type of condition, if the nebulizer is – I don’t want to say keeping them alive because I don’t think that’s in the label. But if the nebulizer is what they feel has made their pulmonary hypertension livable, it’s just human nature to be very cautious about switching to a different therapeutic option. Now for new patients, it’s a totally different story. If you tell somebody you want a big thing or a small thing, almost everybody will take a small thing.

Our next question comes from Joseph Thome with Cowen & Company.

Congratulations on the quarter. It was interesting that you mentioned there was an uptick in PH-ILD, either patients or referrals to what you mentioned in March, continuing into April. Just a little bit of color in terms of why do you think maybe this was the case? And are you seeing an increased number of conventional ILD physicians using the therapy?

Thanks, Joseph. Mike, hand off to you.

Sure. Yes, great question. I think there's a number of factors at play, Joe. I mean, one is, yes, we are continuing to, day by day, week by week, grow our Tyvaso prescriber base in the ILD community. And that will just continue to play out over really, I think, years this year into next year and beyond. So we're really focused on the breadth of the prescribing community. And that is certainly a contributing factor to that. I think the other things that have contributed to that are, I know Martine talked a little bit about the impact of COVID on clinical trial enrollment in the market generally. I think in hindsight, looking at Omicron and the impact, I think it had an impact more than maybe we realized at the time just in terms of us being able to get in and talk to physicians and physicians willing to really take the time to understand PH-ILD, think about Tyvaso, think about their patients, and move them to Tyvaso. I think what we've seen really in the last, I would say, six to eight weeks is, as I said, with cases coming down, hospitalization coming down, physicians have a lot more time to really dig into this. And so we’re starting – I think that’s contributing to the increase in the referral and the starts that we’ve seen in the last two months. I think the third factor too is, I mentioned this in my opening remarks about the conferences. Again, none of these are just by themselves, I think, driving it. It’s a combination of a number of things, but I was at the ISHLT conference last week, which was very well attended in person. Just the fact that physicians were there, they were able to attend presentations live in person, there were a lot of really nice discussions around PH-ILD, around the use of Tyvaso in PH-ILD. You're able to have those hallway or coffee conversations. We’re able to get out in front of these physicians and have really, I think, detailed conversations with them about the state and the drug. I think peer-to-peer interactions, our interactions, will continue into the balance of the spring and the summer. I think ATS is, from what I understand, going to be even better attended than ISHLT, and we've got a lot of, I think, great presentations going on there. It’s just really a combination of all of those things have led to a return to the strong referral and start patterns that we saw in the middle of last year. And then you layer on top of the factors that I mentioned in my opening remarks, particularly this coverage, which everybody I talked to said is really important, and that is going to increase through use of Tyvaso along with the DPI, as I said, I think have us really well positioned to hit our goal by the end of the year.

Our next question comes from Jessica Fye with JP Morgan.

And I have a backup if you can't answer this. But with the Tyvaso DPI PDUFA approaching, can you say if you’ve seen an updated draft label at this point?

And what's your backup so we have them all queued up.

What are your latest expectations for enrollment completion and data for the PERFECT AMT-TON trials?

Okay. So first, Jess, and nice to hear your voice again. I’m excited to speak further about what Mike mentioned on the in-person presence. I’m excited to hear that JPMorgan will be fully in person this year. So congratulations on meeting our industry back to face-to-face healthcare conferences. So we really try to stay away from talking about decisions within the FDA and even decisions that are imminent. So we'll just leave it at that, and we'll issue the press release as soon as we get the good news. We are successfully enrolling all of our different clinical trials. It's really not possible to predict when any given trial will be completely enrolled. They are all enrolling, as we mentioned at the beginning of the remarks. Maybe just to provide a little bit of color around your question of what kind of factors are affecting enrollment in our clinical trials, I'd like to turn the microphone over to our Head of Product Development, Dr. Leigh Peterson. Leigh?

Thank you for the question. So we do have – actually, we were able to progress. We do – as Michael said, we probably were impacted by COVID for enrollment of the trials a little bit more than we had realized, as we learn more and more about sites that were closed due to the pandemic. But they're opening now. We're getting more and more. We're getting boluses of patients coming in that we hadn't had before. We're really looking forward to completing the enrollment. Again, we can't really give you a specific timeline. But we really haven’t been inhibited from following our patients either. I mean there's a little bit of – once we get the patients in the study, it's obviously critical that we continue to watch what happens, follow, and make sure that the sites are open, have access to the medicine, and everything. We've actually had no problems with that. We even have a site in Ukraine that has active patients that we're able to continue to follow and get medicine to in our study. So I hope that’s the type of color you’re looking for. Again, apologies, we can't really give you the specific enrollment dates as isn't possible for any clinical study.

Thanks so much, Dr. Peterson. To provide a little more color to your question, Jess, I think it has been proven over and over that clinical trial enrollment is a core competency at United Therapeutics. It's something that we do very, very well. Two examples that are out of many I could give—I'm blown away at how our team successfully during COVID, early days, delivered our medicines to patients in Wuhan, China, the epicenter of COVID, yet we continue delivering medicines. We were able to have local clinical trial monitors continue to take all the measurements like Dr. Peterson said. And then a more recent example, as Dr. Peterson just said, we have the center in Ukraine, and it's part of our outcome study. Fortunately, they are not in the part that's actively under bombardment from the Russians, but it's not far from there. It's just amazing to me that our team is able to work to conduct these studies even in places of very, very difficult circumstances. Of course, here in the U.S., we're able to do much better. Things are peaceful, and we've even worked out backup measures with the FDA. For example, in PERFECT, we can take endpoint measurements using things like altimetric, which measures how much you're walking; it's a kind of thing that measures a 6-minute walk endpoint study. We’ve adapted to doing clinical trials during COVID, and I think we've adapted very, very well, as you can see from, for example, the outcomes of the INCREASE trial and the FDA approval of INCREASE and our ongoing— all 7 of our Phase III trials are enrolling. As I mentioned, we're now beginning to enroll a new Phase I trial for RemoPro. We're enrolling a Phase IV trial, Artisan. It’s a core competency of our company to carry these things out even during difficult times. Next question, please.

Our next question comes from Andreas Argyrides with Wedbush Securities.

Assuming approval, can you elaborate on the initial launch dynamics for DPI, given that it will be a first-to-market product? Also, what is the time frame to achieve the previously described breakdown between DPI and nebulizer? And then lastly, just an update on the xeno programs?

Thanks, Andreas. While Mike is queuing up some answers to the first two questions that you asked, I would like to have the xeno question addressed by Dr. Peterson because she is now also in charge of our xeno heart and xeno kidney clinical development. So she can give you a general overview of the type of things that we're doing on xeno. Before I leave the introductory part of your answer, please give our best to Already. Leigh, would you—while you're thinking about the xeno response, so Mike do you want to start with the first two questions he asked?

Sure. So in terms of launch dynamics or launch timing, our expectation is that if we receive an approval this month, in accordance with our action date, we’ll be able to commence promotional activities immediately. We have all of our promotional materials queued up and ready to go, and our sales reps are trained. They’ll be able to go out and start talking to physicians immediately. There’ll be a little bit of a lag just in terms of getting product to specialty pharmacy and being able to start patients, but we would expect that patients will be able to start off therapy sometime in June. You’re just talking about a few weeks of lag there, which is actually faster than normal between an approval and a launch. So for us, it’s doing what we do from a sales and marketing standpoint, communicating with physicians, communicating with patients, and helping physicians identify the appropriate patient to either start de novo or transition over to the DPI. In terms of the timing for the breakdown that I mentioned earlier, I hesitate to put a timeline on that because it always seems to move a little bit slower than what we think for the reasons that Martine—the example that Martine gave—because of the types of patients we’re dealing with. I am optimistic that this will happen maybe quicker than what we typically see in this space just because of all the prelaunch or preapproval buzz and excitement that surrounds this product.

Awesome, Mike. Totally, totally awesome. All right. Leigh, people are interested in what we can expect next on xeno.

Yes. As everyone knows, the world is very, very excited about what's going on here. We have reports of institutions doing work in humans. One case that's coming out where the xeno heart was placed into a human patient, and that work—the case study of that’s coming out in a major medical journal. Please look for those details in that report. We’re excited for that to come out soon. What we are really interested in is doing the clinical studies that prove if a product is efficacious as we expect. To do the more formal Phase I sponsored clinical studies, we’re required to continue to do some preclinical work per the FDA, and we’re working with the FDA to understand specifically what we should do in order to prepare ourselves for the IND. This is an entirely new field, and we’re working closely together to make sure that we do this right. We’re spending time now working with our academic partners on doing the nonclinical work and ensuring everything is in order for our Phase I and everything being the specific immunosuppression regimen that will be used, the specific product, and all the procedures associated with that. Once we have that completed, we’ll be submitting our IND to start the Phase I studies with the xeno organs.

Excellent. Thank you so much, Leigh. I'm going to call on one more person, Pat Poisson, who is our Executive Vice President for Technical Operations. Those of you who know me know that I kind of geek out on pharma biologic manufacturing things, and it’s amazing to manufacture a xeno kidney and xeno heart. It is biologic, obviously, but it requires manufacturing facilities, really the likes of which have not existed before. Under Pat Poisson, who is our EVP, Technical Operations, we are building the manufacturing facility for the clinical trials that Dr. Peterson just referred to because for a clinical trial, whether it's a small molecule, biologic, or a whole organ, you need to have a higher level of attention and care to GMP-type processes. So Pat, would you give us an overview of the kinds of things that you're overseeing in terms of preparing clinical trial material or organ for Dr. Peterson's trial?

Yes. Thanks, Martine. Certainly, us in operations are very excited about the prospects of xeno. We are building a clinical manufacturing facility that will produce organs for the trials that Dr. Peterson will run. This will be a first-of-its-kind greenfield facility in Western Virginia, and it will be state-of-the-art as we do with all our facilities, working closely with the FDA. We’re taking that program off and doing design work as we speak. We will be prepared to supply organs when these trials start.

Thank you so much, Pat. Operator, it's been a wonderful call. Like I said at the beginning, in my opinion, this is the best quarter we've ever had the pleasure to share with everybody considering revenues, pipeline, and even these amazing manufacturing activities. So operator, you may now wrap up the call.

Thank you. And 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 and Presentations section of the United Therapeutics' Investor Relations website.