Good morning and welcome to the United Therapeutics Corporation First Quarter 2025 Corporate Update. My name is Dorwin 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. 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. Please go ahead.

Thank you Dorwin and good morning. It is my pleasure to welcome you to the United Therapeutics Corporation first quarter 2025 corporate update webcast. 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 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. 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 those products are 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 and Xenotransplantation; and Pat Poisson, our Executive Vice President of Technical Operations. Our scientific, commercial and medical affairs team will present at the American Thoracic Society International Conference in San Francisco from May 16 to the 21st. And now I will turn the webcast over to Martine for an overview of our development pipeline and business activities.

Thank you Dewey and good morning everyone. We have slides available for reference and I encourage you to review those at your leisure. However, Mike and I will not speak directly to the slides. How often can a CEO report to their investors and stakeholders that we've had a record revenue quarter? For United Therapeutics, it has been 9 quarters out of the past 12. That reflects on the strong execution of our long-term vision to be a biotech leader with a relentless drive to deliver to patients with rare and underserved diseases, a broad array of solutions to help improve their lives. Our solid foundation built by Tyvaso, Orenitram, Remodulin and Unituxin continues to grow revenue by double digits now for 11 quarters in a row. We expect this momentum to continue, led by Tyvaso and Tyvaso DPI with continued solid performance by our other commercial products. Moving to our innovation and revolution waves. We believe our record revenue performance can continue for the foreseeable future as we have entered a sustained period of clinical and regulatory events poised to propel our business forward. We continue to grow our pipeline with 5 registration phase studies underway, a pending marketing application at the FDA and several new preclinical candidates, including 3 xeno organs that should be ready for clinical trials within a year. We also have other exciting innovations we will share later that we expect will keep our product portfolio innovating for years to come. We're planning for the first transplant in our UKidney clinical study which we're calling the EXPAND study in the middle of this year. This will be followed by investigational new drug applications for the EXTEND study evaluating the UTHYMOKIDNEY and the EXPRESS study evaluating the UHeart. Both of those INDs are expected to be submitted within the next year. We recently received positive feedback from the FDA on our UTHYMOKIDNEY program that gives us confidence to file INDs for both the UTHYMOKIDNEY and UHeart without conducting additional Baboon clinical studies. What makes United Therapeutics unlike any other biotech is that we've been able to accomplish this massive business growth and unparalleled pipeline productivity while maintaining strict financial discipline. We never spent more than 50% of prior year revenue on cash operating expenses. And as a result, we have an industry-leading productivity per employee and more than $1 billion in annual operating cash flow. And we're deploying our capital thoughtfully and strategically to provide for a sustainable business in the years to come. In the past 6 quarters, we have touched on all 3 areas of our capital allocation philosophy across both our commercial and development portfolios. We've invested in CapEx to support our new Tyvaso DPI manufacturing facility and acquired additional real estate to support future commercial manufacturing needs. We also commissioned the world's first clinical scale designated pathogen-free facility in Virginia and plan to complete 2 others in short order. On corporate development, we acquired IVIVA and Miromatrix to enhance our organ alternative development expertise and we've licensed in new technologies to support our small molecule business. And with all this, we still returned $1 billion to you, our shareholders, through an accelerated share repurchase program last year that was universally well received. We will continue to evaluate all 3 core areas of our capital allocation philosophy on an ongoing basis and we plan to pursue multiple avenues of capital allocation in the future. Our commercial business is extremely strong and growing. That, along with 5 registration studies underway, several important data reads in the next 18 months and revolutionary progress on revolutionary organ programs makes United Therapeutics a truly unique and compelling story. And I thank you, our stakeholders and shareholders for joining us on this journey. We're only just beginning. And with that, I'll now turn the call over to our President, Mike Benkowitz, who will give an overview of our spectacular commercial performance for the quarter.

Thank you Martine and good morning everyone. Today we are pleased to report a strong start to the year with another quarter of record revenue at $794 million, representing 17% growth from the first quarter of 2024, driven by robust results for each of our treprostinil products. This quarter's performance is reflective of consistent patient demand where we continue to see very strong referrals, starts and patient shipments for all of our treprostinil products, Tyvaso, both DPI and nebulizer, Orenitram and Remodulin as well as Unituxin. We continue to see growth in the number of treprostinil prescribers and increases in the depth of prescribing within practices as measured by writers with 3 or more patients. Overall, we believe these results demonstrate that treprostinil continues to be an important part of the treatment armamentarium for pulmonary hypertension even with new therapies reaching the market. Building on Martine's comments, we remain confident that Tyvaso DPI is positioned for sustained growth over the long term due to the convenience of the device, its unlimited dosing potential, the thousands of prescribers and many thousands of patients experienced with the product since launch, as well as the fact that there are no payer incentives to prefer an alternative product. Moreover, if positive, the TETON data in idiopathic pulmonary fibrosis which is expected soon, could shift Tyvaso use into a much larger market where we will have orphan drug exclusivity and rapidly position Tyvaso for continued long-term growth. To wrap up, we couldn't be prouder of the unwavering effort of our dedicated team to deliver this outstanding performance and to provide therapies to our patients in need. And we believe that we are set up well to continue to execute throughout the remainder of the year and beyond. With that, I'll turn things back to Martine to run the Q&A session.

Thank you so much, Mike. That's an amazing report. Operator, can we have the first caller, please?

The first question comes from Joseph Thome with TD Cowen.

On the quarter. Maybe will the UTHYMOKIDNEY program enroll the same target population as the 10-gene kidney program? And we saw the great progress, obviously, with Ms. Looney but then I did see that she did have to be explanted. So maybe if you could talk a little bit about what you learned from that experience and how you might apply that to the upcoming trial, that would be great.

Sure. Thank you for your question, Joe and thank you for the congrats. I'm going to assign that question to Dr. Leigh Peterson. She's in charge of all of our xenotransplantation activities. Dr. Peterson?

Yes. Thanks for the call. And yes, we haven't completed our clinical protocol for our UTHYMOKIDNEY study yet. But yes, we do plan on enrolling a very similar, if not identical patient population into that study as what we're enrolling into the 10-gene xenokidney study. And yes, we learned an incredible amount. We're very, very grateful for Ms. Looney's participation through the EIND conducted by NYU. And we learned a lot. We learned a little bit more about tweaking the immunosuppression which is a little bit different than what's commonly done in allo transplantation. And we're looking forward to applying all of the learnings with regard to the immunosuppression and follow-up that we learned with her. So again, we're really, really grateful. We consider it definitely a positive experience and it's unfortunate that she did have the unrelated infection that required us to have to reduce the amount of immunosuppression that she was on which ultimately resulted in rejection. But again, it was an unrelated infection. And so learning how to manage that without having to reduce the immunosuppression quite as much is going to be key in the study.

Thank you so much, Dr. Peterson, for all of that great color on the progress that we're making both with the 10-gene kidney and with the UTHYMOKIDNEY and as we are now referring to the trials as the EXPAND trial for the 10-gene kidney which is now enrolling.

Our next question is from Jessica Fye with JPMorgan.

Congrats on the strong quarter. I was wondering if you could elaborate for Tyvaso on kind of the magnitude of year-over-year contribution to sales from the continued implementation of the Part D redesign. I think you guys had previously said that was kind of mostly realized in '24. So I'm just curious the extent to which you're seeing that benefit again this year as the out-of-pocket cap is further reduced.

Yes. Thank you so much for that question and so nice to hear your voice this morning. If it's okay with you, I think the best person to address that question would be Michael Benkowitz. Mike?

Yes, thanks for the question. Looking at Q1 of this year compared to Q1 last year, there's obviously a benefit. We discussed this in the last quarter; we saw a decline in Q1 last year that continued into Q2 and Q3 before flattening out for the remainder of the year. When comparing Q1 to Q4, there is a modest benefit, but we also need to consider that manufacturers had to start shouldering part of the costs related to the changes in the Part D redesign. This created some obligations for us, but it was less significant due to the phase-in. I haven't calculated whether these factors completely offset each other, but overall, they likely do, so any benefit appears to be very modest when reviewing this quarter's results.

Great answer, Mike. fully nailed it and that queues us up for our next questioner. Operator, you can open up the line.

Yes. We have Roanna Ruiz with Leerink Partners with the next question.

So I was going to ask about Tyvaso DPI revenue growth specifically in 1Q. Could you help us understand just the general split of prescriber and patient demand driving growth versus a little bit of price increase? And are there any gross to net impacts that we should think about for the product in 1Q or going forward?

Yes. Thanks, Roanna. Michael, again, would be totally on top of all of those numbers. So Mike, can you take that call?

Sure. Yes. So I think in terms of split between DPI and nebulizer, I think it's settled in at about 2/3, 1/3 in terms of new patient starts. We haven't really seen much variability from that really for several quarters now. So I think that mix persists. And it's great that we have both options, right? Because there just happen to be patients that tolerate a nebulizer better than they do a powder. And so we have an option for both patients. So that's, I think, really great that we're able to provide those options to the patients. We did do a price increase at the beginning of the year on both products. I think it was the same amount for both in line with what we typically have done in the past. And then on the gross to net question, as we said on the call a couple of months ago, that largely played out in the fourth quarter. But for the additional, I think it's 1% obligation we have under the Part D redesign of the IRA that I mentioned in the answer to Jess's question, really no additional impact there that we observed in Q1.

We have Andreas Argyrides with Oppenheimer with the next question.

Let me also extend my congratulations on a fantastic quarter. Martine, you mentioned capital allocation considerations in your opening remarks, and I think we left James out of the earnings call last time. I wanted to make sure he gets to address this question. There was a successful share repurchase last year, and now you have $5 billion in cash. With many developments happening in the PAH space from a competitive standpoint, how are you considering deploying capital? James, could you elaborate on deploying capital either in terms of acquisitions to grow the business or share repurchases, especially with significant catalysts coming from IPF and TETON?

Thanks for your questions, Andreas. I will direct the capital allocation part to James shortly, but first, I'll address your inquiry regarding internal R&D and our competitiveness in the pulmonary arterial hypertension (PAH) sector. As noted earlier, we allocate about 50% of our cash towards various forms of internal R&D and SG&A. A significant portion of that spending focuses on our core strengths in pulmonary hypertension and interstitial lung disease. Currently, we are engaged in registration efforts with ralinepag and conducting outcome studies, alongside our initiatives for pulmonary fibrosis with TETON 1, TETON 2, and PPF. There are also several initiatives in the pipeline that are still in preclinical stages and not yet visible. We're exploring alternative dosing methods, including a once-daily Tyvaso regimen that is currently under preclinical development. Despite the competitive pressures since we encountered our first competitor, such as the Liquidia generic parenteral product about seven years ago, there has been no significant impact on our performance. Concerns arose regarding sotatercept, but we clarified that it would likely be complementary to our offerings, and that has proven true following its rollout. At UT, we consistently strive to enhance our drugs and delivery devices. For example, our Remunity device has now been adopted by nearly all patients, which is remarkable given the transition from an older parenteral delivery system to near-total adoption within approximately 24 months. We're also preparing to upgrade to what we refer to as Remunity D9, similar innovations will occur with our inhalation devices. While our current four-times-a-day dosing is simple and effective, we're working towards new products that would allow for once-a-day dosing. This continuous improvement mindset is ingrained in our culture at UT, where our philosophy is to approve a product and then enhance it. This approach applies to Tyvaso as well. With that background, James, can you share your insights regarding the capital allocation question, particularly concerning economic and financial aspects?

Thank you, Martine. I appreciate your question and your recall of our last call. We are dedicated to using our capital wisely and spend considerable time discussing it internally. Our goal is to act in our shareholders' best interests. Our top priority is to invest our capital in internal research and development and commercial initiatives. As Martine mentioned, there is significant focus on R&D spending. If you examine this quarter’s P&L, you’ll notice a milestone payment made in R&D, which reflects increased spending compared to previous quarters as we advance the initiatives mentioned by Martine. We also invest substantial capital in our manufacturing facilities, including the new DPI manufacturing facility in Research Triangle Park, North Carolina, which is progressing well. Our second consistent priority for capital investment involves external corporate development, where we seek new opportunities for potential acquisitions and in-licensing. As Martine highlighted in her opening remarks, we have actively pursued these priorities in business and corporate development over the last year and a half. We’re looking for products that complement our existing offerings, focusing particularly on rare diseases and areas with limited competition. Lastly, as outlined by Martine, we aim to return cash to shareholders, and for 2024, we have initiated a $1 billion share repurchase that was well received. Our capital allocation priorities remain unchanged, and as you can see, we have been actively investing across all three areas in recent months and years. Thank you once again for your question, and Martine, I’ll hand it back to you.

Thank you, James. Thanks for such a great 360-degree coverage of that topic.

Roger Song with Jefferies has the next question for us.

Congrats for the strong quarter. I think, Martine, you mentioned a couple of things related to the competitive landscape for PAH. Maybe just can you just qualitatively comment on the potential growth trajectory this year and next, given we have a couple of emerging competitor dynamics. If you can kind of understand you don't provide the revenue guidance but just qualitatively, the revenue growth trajectory for the rest of the year and the next will be helpful.

Of course, Roger, thank you for the question. But I right with you. I'm going to assign that question to Michael because he oversees so many of the core competencies that we have within UT relevant to the growth trajectory question. For a complex disease, like PAH and like ILD. Of course, it's very, very important to have a strong commercialization team, sales and marketing personnel, so-called specialized sales reps throughout the country. But actually, it's just the foundation. And on top of that, there's like a superstructure that extends into global medical affairs and many other core competencies. And all of these, we have regional nurse specialists. Our drugs are complex and require almost always a drug-device combination and there has to be training and how to use these things, working with the nurses, not to mention the entire payer universe. So all of these things are relevant, Roger. And Mike is like a virtuoso conductor who's got all these different sections of the orchestra, all with the goal of providing a growth trajectory for our products that is second to none. And with that lead-in, Mike, can you provide some kind of deeper color on all of that?

Thank you, Martine, for the introduction. I feel like I've just received an award. As we've mentioned over the last couple of years and most recently in our last call, we anticipate continuing to grow revenues at a double-digit rate with our current portfolio this year and next year. If TETON is positive, it will allow us to enter a completely new market where we will have orphan exclusivity. I didn't mention ralinepag, which we hope to commercialize around the same time frame and expect it to be a best-in-class product for pulmonary arterial hypertension (PAH). Despite the increasing competition in the PAH market, we believe we are well positioned for growth. Currently, only about 40% of PAH patients are on any form of prostacyclin, indicating significant growth potential. Even among competitive products in this category, there is still a considerable opportunity since prostacyclins remain underprescribed in PAH. We are continuing to make progress through our efforts and the dedication of the teams Martine mentioned. Not long ago, we stated that only about 20% of PAH patients were on prostacyclin. However, with our initiatives and the introduction of new, user-friendly products like Tyvaso DPI, we have significantly increased the utilization of prostacyclins in PAH. In the case of pulmonary hypertension associated with interstitial lung disease (PH-ILD), I believe we are just beginning to tap into its potential. Our team has done an excellent job expanding our prescriber base and increasing the number of ILD physicians prescribing Tyvaso. I expect this to continue as we progress through the rest of this year and into the next. We still see many opportunities ahead and are confident in our ability to continue achieving double-digit revenue growth with our existing portfolio.

Thank you so much, Mike. Operator, we're actually at the bottom of the hour but we'll take one last question.

We have our next question from Ash Verma with UBS.

Congrats on the quarter. I have 2 questions. Just can you give us a sense of how much patient adds there have been in the last few quarters for Tyvaso? Is it more in line with the roughly 500-ish that you have had historically or more or less? Just wanted to understand like the volume growth dynamic for PAH and PH-ILD. And then secondly, for Insmed's upcoming data on TPIP, just what are you expecting this trial can show? And how do you think Tyvaso is competitive position against TPIP?

Okay. Mike, do you want to continue your role on that same topic?

Sure. Yes. I think your first question was around patient adds for Tyvaso. Is that right? So yes, so going back about a year, 1.5 years, we really kind of moved away from the patient add metric due to, I think, just competitive confidentiality reasons. I think what we said about 1.5 years ago is if you look at the revenue, we've gotten to a point where I think the revenues are tracking pretty well with underlying demand. And so I think you can kind of look at how the revenues are trending and really get a good sense of what's happening at the underlying demand level. In terms of the Insmed product, we'll see here in a few weeks when they unwind. And so it's hard for me to sort of speculate on what the impact is going to be relative to Tyvaso without actually seeing any data but I think we're all going to find out here pretty quick. And then as Martine said in her answer to a prior question, we have some things that we're looking at in the preclinical setting and in our pipeline to potentially bring a once-daily inhaled product to market.

Thank you, Mike, and thank you, Ash. I have doubts that simply copying treprostinil into a once-daily formulation will deliver equally effective control of pulmonary hypertension. Nevertheless, as Mike and I mentioned earlier, we are developing a once-daily new chemical entity in the early stages, and our clinical development team is structured to move quickly from preclinical to registration phase. While I don't believe it's necessary, many know that at United Therapeutics, we embrace the philosophy of multiple shots on goal, which is why we have numerous products for pulmonary hypertension. As you saw from today's data, all of them are experiencing growth. It's quite impressive, with options available in oral, parenteral, inhaled, and nebulized DPI forms. We are consistently working on new product developments. Moreover, in my experience since the company's inception, no new product has ever come in and taken over the market. This is primarily because patients with life-threatening illnesses who are well managed on our medications are very hesitant to switch to a new, unproven option. This cautious approach is why Mike and I, along with our team, are confident that United Therapeutics will continue to achieve double-digit revenue growth year after year, maintaining the record growth I've mentioned in my opening remarks for many years to come.

Operator: Thank you. Thank you for participating in today's United Therapeutics Corporation earnings webcast. A rebroadcast of this webcast will be available for replay for 1 week by visiting the Events and Presentations section of the United Therapeutics Investor Relations website at ir.unither.com. That is ir.unither.com.