Good morning, and welcome to the United Therapeutics Corporation Third Quarter 2024 Earnings Webcast. My name is Dave, and I will be your conference operator today. Please note this call is being recorded. I would now like to turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics.

Thank you, Dave, and good morning. It's my pleasure to welcome you to the United Therapeutics Corporation Third Quarter 2024 Earnings Webcast. Remarks today will include forward-looking statements representing our expectations or beliefs regarding future events, and these statements involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings, including Forms 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. 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; Dr. Leigh Peterson, our Executive Vice President of Product Development & Xenotransplantation; and Pat Poisson, our Executive Vice President of Technical Operations. Note that Pat Poisson and I will participate in a fireside chat session and one-on-one meetings at the UBS Global Healthcare Conference outside of Los Angeles on November 12. Along with Harry Silvers from our Investor Relations team, I will be at the Oppenheimer Rare Disease Day in New York City on December 12. And finally, Martine Rothblatt will present at the 43rd Annual JPMorgan Healthcare Conference in San Francisco in January. Our scientific, commercial, and medical affairs teams will present at the Phenomenal Hope 2024 on December 6 in Boston and at the Pulmonary Vascular Research Institute Annual Congress in Rio de Janeiro in late January. Now I will turn the call over to Martine for an overview of our third quarter 2024 financial results and the business activities of United Therapeutics.

Thank you, Dewey, and good morning, everyone. We have slides available for reference, and I encourage you to review those at your leisure. I'm not going to speak directly to the slides. United Therapeutics is a momentum story. We continue to reach and exceed our goals quarter after quarter, year after year in all three waves of growth: foundation, innovation, and revolution. For our foundation wave, driven by our current commercial business, United Therapeutics posted its sixth consecutive quarter of record revenue, led by double-digit growth for Tyvaso, both nebulized and DPI Orenitram and Unituxin. We also had a record number of patients on Tyvaso DPI, Orenitram, and Remodulin. We remain confident in the potential for our current commercial business to continue to drive double-digit revenue growth in the near and midterm as our innovation wave starts to reach the market. Our innovation wave is on the cusp of generating significant registration phase data with the TETON 2 study of nebulized Tyvaso in idiopathic pulmonary fibrosis expected to report top line data in the second half of 2025. As we progress toward full enrollment for TETON 1 by the end of this year, data for that study will not be far behind. In 2026, we expect to complete our ADVANCE OUTCOMES study of Ralinepag in PAH. Finally, in 2025, we expect FDA action on our recently submitted premarket approval application for our Centralized Lung Evaluation System, or CLES, Ex Vivo Lung Perfusion technology. Beyond our record-setting commercial performance, we expect a steady stream of clinical data reads and regulatory actions through the next 36 months, setting our company up well for continued growth through the balance of the decade. Our Revolution Wave is also making tangible progress toward reality with our Phase I study for miroliverELAP now underway, the first clinical study of a bioengineered organ alternative. We expect data from this initial safety study in 2025. Also within our Revolution Wave, we recently received feedback from the FDA regarding our IND for our UKidney 10-gene edited porcine xenokidney, and we expect to file our IND shortly for what will be the first clinical study of a xenogen. We look forward to sharing more details on our clinical trial design and commercial opportunity in the future following acceptance of our IND. To close, I want to reiterate that our momentum is strong and growing. We have double-digit revenue growth from our thriving commercial business. We have several important data reads and potential regulatory decisions over the next 36 months, and we're moving into the clinic with revolutionary organ alternative technologies. In short, there is no other biotech with the vision, grit, and determination as United Therapeutics. I'll now turn the call over to Chief Financial Officer and Treasurer, James Edgemond, to give a summary of our recently completed accelerated share repurchase program and our capital allocation priorities.

Thank you, Martine. I'd like to provide an update on our capital allocation strategy, specifically regarding our accelerated share repurchase program, or ASR, that was announced in late March 2024 earlier this year. As you recall, we entered into an ASR agreement with Citi to repurchase $1 billion of UTHR common stock. During the third quarter, Citi successfully completed the overall ASR program having repurchased a total of approximately 3.5 million shares at an average repurchase price of approximately $282 which repurchase shares we are currently holding as treasury stock on our balance sheet. The approximately 3.5 million repurchased shares represent approximately 7% of our outstanding shares as of the program's initiation date. Despite this overall reduction in UT's outstanding share count, liquidity in our stock has increased as reflected by our average daily trading volume being at its highest level ever through the end of September. Since the program's announcement in late March 2024, our stock appreciated 47% through September 30. The completion of this ASR program demonstrates our commitment over the last 12 months to all of our capital allocation priorities. First, through our innovative clinical development pipeline, as well as CapEx to support our DPI manufacturing facility in North Carolina and our clinical scale xenotransplantation DPF facilities in Virginia and Minnesota. Second, through the acquisition of IVIVA and Miromatrix, as well as an in-licensing agreement to support our small molecule business; and finally, through successful completion of this ASR. Looking ahead, we remain committed to all three capital allocation priorities, which in order are, first, to invest in our commercial and R&D opportunities through P&L spend as well as capital outlays for our commercial and clinical facilities. Our second priority is to pursue intelligent business and corporate development opportunities that enhance our rare disease focus and complement our organ alternative initiatives like bolt-on M&A and in-license opportunities. And our third priority is to return capital to shareholders like share repurchases. And we'll continue to consider all three priorities when deploying our financial capital. Our healthy balance sheet and robust cash flow generation driven by our growing commercial portfolio, enable us to continue to pursue these capital allocation priorities in a thoughtful manner. Moreover, we remain in a strong position to meet our mid- and long-term goals that set ourselves up for future growth across our innovative pipeline with Tyvaso in pulmonary fibrosis and Ralinepag in pulmonary hypertension, and our revolutionary organ alternative program. On a separate note, in the third quarter, we recorded under selling, general and administrative expenses, a litigation accrual of $65.1 million in connection with a potential judgment in the Sandoz case. While this liability could be adjusted up or down in the future as the litigation progresses, it should not be considered a recurring expense. I'll now turn the call over to our President, Michael Benkowitz, who will give an overview of our commercial performance.

Thank you, James, and good morning, everyone. Today, we are excited and pleased to report another quarter of record-breaking revenue, achieving a remarkable $749 million, which represents a 23% growth from the third quarter of 2023. Achieving this $3 billion revenue run rate just eight quarters after surpassing the $2 billion run rate mark is a significant milestone for our company, something we have been really focused on hitting since the beginning of the year. Before I provide the usual product performance overview, I want to express my thanks and congratulations to my fellow Unitarians for their incredible effort and success. Total Tyvaso revenue for the third quarter was $434 million, marking a 33% increase over the previous year. This growth was driven by continued uptake of Tyvaso DPI, growth in utilization by PH-ILD patients, an increase in pricing, and enhanced commercial utilization following the implementation of the Part D redesign provisions under the Inflation Reduction Act. Tyvaso has solidified its position as the number one prescribed prostacyclin treatment in the U.S. across both nebulizer and dry powder inhaler delivery systems. Referral and start patterns remain very robust, and the franchise saw record commercial and total patients, reinforcing our confidence in the durability of our growth profile. We're also seeing the benefit of the sales force expansion and realignment that went into effect at the beginning of this year. Through the third quarter, we have grown our prescriber base by almost 15%, while still maintaining prescribing depth, measured as those physicians with three or more Tyvaso patients. 40% of these new prescribers are ILD physicians, which is important to grow the PH-ILD market and eventually the IPF and PPF markets if our clinical trials in those indications are successful. We also reported record revenue for Orenitram at $113 million for the third quarter, representing a 23% growth from the same period last year. This increase was driven by increased demand, higher commercial utilization, and pricing adjustments. As with Tyvaso, referral and start patterns remained strong, and we ended the quarter with a record number of commercial and total patients. We are seeing increased utilization of the expedite induction protocol where PAH patients initiate treprostinil therapy on Remodulin and then transition to Orenitram. Over time, we could see the average Orenitram dose per patient increase as patients are able to reach a therapeutic dose more quickly with this approach. Worldwide revenue for Remodulin was $128 million, a slight decline of 2% from last year due to international order timing. However, U.S. revenue grew by 3% year-over-year, setting a new record for total U.S. patients on therapy. And for the first nine months of the year, U.S. Remodulin revenue was up about 12% from the same period in 2023, reflecting the continued strength of the brand despite competition on multiple fronts. Looking deeper, U.S. Remodulin referral and start patterns remain very strong. Remodulin remains the most prescribed parental prostacyclin in the U.S. with sustained demand for both intravenous and subcutaneous administration. And this comes five years after the first launch of a generic version of Remodulin. Finally, Unituxin also achieved record revenue of $61 million for the third quarter, up 19% from the prior year quarter. U.S. revenue for Unituxin was $58 million, driven by both price and volume increases. This growth demonstrates the product's strong market presence and the effectiveness of our commercial strategies. To wrap up, we are extremely proud of our achievements this quarter driven by strong performance from each of our commercial products. We are well positioned to continue providing these important medicines to our patients and delivering value to our shareholders. Martine, I'll turn things back to you to run the Q&A. Martine, do we still have you?

We have lost connection with Martine. Okay, so, Dewey, you want to run the Q&A.

Yes, I'll run the Q&A. Operator, can we have our first question, please?

Our first question comes from Joseph Thome with TD Cowen. Please go ahead.

Hi there. Good morning. Congrats on the progress. And thank you for taking my question. Maybe a little bit of a follow-up to the expedite question. We have heard since when patients transition that some patients are able to deescalate from Remodulin down to oral Orenitram. I guess, is this something that you were seeing? Obviously, Orenitram was strong in the quarter. And patients that do kind of titrate off of Remodulin onto the Orenitram, are they going to higher doses like what we were seeing in expedite? Maybe how would you expect this to impact the revenue line maybe going forward?

Michael, go ahead. Can you take that?

Thank you. I'll address that. There are two parts to your question. Regarding the down titration from Remodulin to Orenitram, I wouldn’t categorize this as a trend or a common practice just yet. We've heard that some patients are managing this, but it's uncertain if it will become a widespread occurrence. Remodulin is still performing well, indicating that there is still a role for it and for parental prostacyclin therapy in pulmonary arterial hypertension. As for the transition from Remodulin to Orenitram, we do anticipate higher doses with Orenitram due to the expedite protocol. We're observing a higher average dose because the process involves starting patients on Remodulin, increasing their dose, and then transitioning them to Orenitram to quickly achieve a therapeutic dose. In some cases, this can happen within a month, whereas starting from scratch could take up to six months. As we see more patients moving from Remodulin to Orenitram, the average dose for Orenitram is likely to increase over time.

Thank you, Michael. Great answer. Next question please.

And the next question comes from Roanna Ruiz with Leerink Partners. Please go ahead.

So I noticed that the nebulized Tyvaso had pretty robust growth in the quarter along with DPI. I was just curious if you could elaborate on some of the drivers behind that? Did that include some new patient starts? And was there a piece of that where if you're observing, are there more patients transitioning from nebulizer to DPI eventually?

Thanks, Roanna. Michael, you definitely have the most knowledge of us on that. So if you could answer?

Sure. Some of the year-over-year growth in nebulized Tyvaso was influenced by destocking that occurred last year, which may account for some of the difference. Overall, we have reached a stable mix between DPI and nebulizer, which is roughly two-thirds to one-third in favor of DPI, and both segments are showing growth. The transitions between the two products are minimal at this point. We observed a significant number of nebulizer patients transition to DPI after our launch, but that trend has mostly played out. Now, it's more about individual patient responses to each delivery system. The advantage of our portfolio is that doctors can switch between the two as needed, based on how the patient is responding.

Perfect. Thank you so much, Michael. Operator, next question.

And the next question comes from Andreas Argyrides with Oppenheimer. Please go ahead.

Good morning and thanks for taking our questions and congrats on another solid quarter. We have some couple of capital allocation questions, just one or two parts here. But can you talk about Tyvaso and Tyvaso DPI manufacturing capacity needs to support IPF? Will additional investment need to take place? And then along the share repurchase program, how are you thinking about the potential to run another program, especially given the lead up into the IPF?

Okay. Thanks for those questions. And by the way, thanks to Oppenheimer as well for continuing a Rare Disease Day that we'll be very proud to present at. Our whole community appreciates that. Those two questions are best addressed by James. So James, can you take it from here?

Thank you, Martine. It's great to hear from you this morning, Andreas. Regarding your first question about capital allocation related to DPI production and IPF approval, we anticipate being able to support an IPF approval with DPI. Our production facility in North Carolina, which we previously mentioned, involves a $500 million investment to manufacture Tyvaso DPI. The plan to expand this manufacturing capacity is not only to serve the current patient population but also to be well-positioned for new indications using DPI in the future. We do not foresee any shortages going forward. As for the share repurchase, as I mentioned earlier, we completed a $1 billion accelerated share repurchase in 2024, finalized in September. Over the past year, we have shown our commitment to our capital allocation priorities through various initiatives. Moving forward, we will continue to carefully assess how we deploy capital across all our priorities, including investing in our facilities, corporate development, and potentially additional share repurchases. However, we are not specifically planning another share repurchase at this moment; it will depend on our future capital deployment strategy. Back to you, Martine.

Thank you, James. I appreciate how thoroughly you addressed that question. Operator, please proceed to the next question.

And the next question comes from Roger Song with Jefferies. Please go ahead.

Great. Congrats for the quarter. Thank you for taking my question. Maybe a question relates to the margin. And since your sales is reaching a pretty good kind of steady state with a slight growth just curious about the nuance between IV versus subcu against the generics? And then should we see some regrowth from here?

Okay, Roger. Thank you for your question and the compliment on the blowout order. Yes, and thank you also for recognizing the growth in the Remodulin patients. I think Mike would have all of the answers at his fingertips to the questions you asked. Mike?

Thank you, Martine, and thank you for the question, Roger. Regarding Remodulin, we have been confident in the brand's durability and resilience, especially with the potential for generic competition and the introduction of other treatments for pulmonary arterial hypertension (PAH). Doctors today still regard it as one of the preferred options for treating PAH patients. The main limitation to its wider use is that patients tend to hesitate to start on a pump unless absolutely necessary, considering other available options first. However, since PAH is a progressive disease without a cure, we believe that nearly all patients will eventually require parental prostacyclin. This belief reinforces our confidence in Remodulin's continued relevance over time. Looking ahead, we expect it to maintain its performance levels. As for patient treatment, there may be instances of switching between Remodulin and Orenitram, but eventually, some of those patients might need to return to Remodulin. This variability could manifest over the coming years as the expedite approach becomes more common. We also have an upcoming trial, the ARTISAN study, which is similar to expedite; however, it involves keeping patients on Remodulin longer to stabilize their hemodynamics before transitioning them to Orenitram as a maintenance therapy. We remain convinced that Remodulin will have a lasting place in the treatment options for PAH now and in the future.

Excellent, Mike. I appreciate your use of the word armamentarium. It accurately describes us. It's like hitting the target right in the center. Perfect. Operator, please go ahead with the next question.

And the next question comes from Jessica Fye with JPMorgan. Please go ahead.

Great. Good morning, guys. Thanks for taking my question and congrats on what sounds like some favorable pre-IND feedback for the 10-gene edit kidney. Can you elaborate on some of that pre-IND feedback you got from FDA? And maybe talk about how we should think about the design and goals for initial clinical trial?

Sure, Jessica, and it's so nice to hear your voice this morning as well. We have on our call, Dr. Leigh Peterson. She is in charge of all xenotransplantation. So Leigh, could you address Jessica's question.

Yes, we received some pre-IND feedback from the FDA regarding our UKidney, which is the 10-gene edited porcine xenokidney, and we are working diligently to submit the IND soon. We proposed a clinical study design with several options. However, we do not want to disclose specific details until we have obtained IND clearance from the FDA. We look forward to sharing the design with you once we have that clearance.

Thank you so much, Leigh. Great answer. Operator, next question please.

And the next question comes from Ash Verma with UBS. Please go ahead.

Great, thanks. Thanks for taking my question. Just good to see you get to the $3 billion annualized revenue run rate. I know you had previously outlined this goal of reaching a $4 billion run rate actually in 2025. Are you still on track to get there? And then secondly, in the last quarter, you made a mention of potential rebating contracting, I know the competitor launch has since then been pushed out to May next year, but have you already rebated some book of your business preemptively?

Okay. So maybe best would be to have Mike talk about the competitor environment. And with regard to the revenue run rate, it is actually quite amazing that we have doubled from $1.5 billion to $3 billion revenue run rate so rapidly. As we've mentioned throughout the call and in the earnings release, and actually, as we've been forecasting for the past several quarters, we feel very comfortable continuing our double-digit annual revenue growth based on all of the products that we have in our portfolio and already approved and then in the pipeline and then with the three waves that we talk about. So if you just do the math, you take $3 billion revenue run rate and you keep growing it at a double-digit rate, very quickly, you will be able to get to a $4 billion or $5 billion, $6 billion, and beyond revenue run rates, and that's what we're targeting. Mike, can you talk about the competitor environment? question.

Sure. And I think your question was specifically around some of the payer contracts we've entered into or in the process that we entered into. So we did have some that started. This is mainly on the Part D side where we haven't with the Part D payers where we historically have not contracted. So we had a couple that went effective July 1. We have a couple, I think, that kicked on October 1. And then I think one that kicks on January 1. So by January 1, they will all be in place. So we did see a little bit higher gross to net, particularly on DPI in Q3. But as you can see, we're clearly able to kind of grow through that. We think entering into these contracts now positions us very favorably for when a competitor comes to the market because we will, at that point, have rebate dollars already flowing through the payers, and we have parity and non-disadvantaged language. So I think they're going to be reluctant to just turn those off overnight. And so we thought it was important to kind of get those contracts in place, and I just have to give really a big shout out to our market access team. They did a phenomenal job in negotiating these contracts and really, I think, negotiating them on terms that are very favorable to United Therapeutics.

Perfect. Thanks, Michael. Operator, we have time for one last question.

We are not showing any further questions at this time.

Excellent. Thank you. We've blown them away. Fantastic. Well, just to wrap up here, as we mentioned at the beginning, United Therapeutics is a very strong momentum story. As a bit of a science nerd, I've got to point out that momentum is mass times velocity. And our mass is truly formidable. We have a huge fault of intellectual property. We've got over 1,000 top-of-their-game science, marketing, and allied health professionals among our employee base and others have pointed out that we have a fortress balance sheet. So all of that is really, as Michael would say, an armamentarium of math. And then in terms of velocity, UT really prides itself on moving at an entrepreneurial speed and the speed that we're moving in is in the direction of ever greater evasion and then, ultimately, a revolution in manufactured organ and organ alternative products. Thank you so much for participating in the call today, and I'll turn it back to the operator to wrap it up.

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 at ir.unither.com.