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8-K - 8-K - UNITED THERAPEUTICS Corpa15-5078_18k.htm

Exhibit 99.1

 

For Immediate Release

Contact: James Edgemond

(301) 608-9292

Jedgemond@unither.com

 

UNITED THERAPEUTICS CORPORATION REPORTS

2014 FOURTH QUARTER AND ANNUAL FINANCIAL RESULTS

 

·                  Fourth Quarter Revenues of $346 million, Up 20% Year-over-year

·                  Total Annual Revenues of $1.3 billion, Up 15% Year-over-year

·                  Annual Net Income of $340 million or $6.28 per Diluted Share

·                  Annual Non-GAAP Earnings(1) of $591 million or $10.91 per Diluted Share

 

Silver Spring, MD and Research Triangle Park, NC, February 24, 2015: United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the fourth quarter and year ended December 31, 2014.

 

“Our overall revenues and profits grew significantly from 2013 to 2014, and we are pleased to see continued growth in the number of patients helped by each of our products,” said Martine Rothblatt, Ph.D., United Therapeutics’ Chairman and Co-Chief Executive Officer.  “The fourth quarter was especially distinguished by Orenitram® exceeding 25% of Adcirca® sales and 17% of Tyvaso® sales, despite the fact that December was only the seventh month after Orenitram’s launch, whereas the other products were launched in 2009.  This affirms our belief that Orenitram is on track to become our best-selling product.”

 

Key financial highlights include (in thousands, except per share data):

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

346,363

 

$

289,017

 

$

1,288,519

 

$

1,116,984

 

Net income (loss)

 

$

115,935

 

$

(30,314

)

$

340,074

 

$

174,560

 

Non-GAAP earnings(1)

 

$

171,709

 

$

160,203

 

$

590,956

 

$

544,663

 

Net income (loss), per diluted share

 

$

2.17

 

$

(0.60

)

$

6.28

 

$

3.28

 

Non-GAAP earnings, per diluted share(1)

 

$

3.21

 

$

2.88

 

$

10.91

 

$

10.23

 

 


(1)         See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.

 



 

Operating Results

 

Revenues

 

The table below summarizes the components of net revenues (in thousands):

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Cardiopulmonary products:

 

 

 

 

 

 

 

 

 

Remodulin®

 

$

136,591

 

$

119,865

 

$

553,728

 

$

491,179

 

Tyvaso

 

115,070

 

114,385

 

463,067

 

438,793

 

Adcirca

 

73,546

 

52,047

 

221,471

 

176,972

 

Orenitram

 

20,174

 

 

41,267

 

 

Other

 

982

 

2,720

 

8,986

 

10,040

 

Total net revenues

 

$

346,363

 

$

289,017

 

$

1,288,519

 

$

1,116,984

 

 

Revenues for the quarter ended December 31, 2014 increased by $57.3 million, compared to the quarter ended December 31, 2013. The growth in revenues corresponded to the continued increase in the number of patients being treated with our cardiopulmonary products and the commencement of Orenitram sales in 2014.

 

Expenses

 

The table below summarizes research and development expense by major project and non-project components (in thousands):

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

Project and non-project component:

 

 

 

 

 

 

 

 

 

Cardiopulmonary

 

$

46,858

 

$

32,242

 

$

131,843

 

$

116,137

 

Share-based compensation expense

 

15,729

 

76,422

 

72,714

 

134,706

 

Other

 

8,895

 

12,888

 

37,992

 

48,505

 

Total research and development expense

 

$

71,482

 

$

121,552

 

$

242,549

 

$

299,348

 

 

Cardiopulmonary. The increase in cardiopulmonary project expenses of $14.6 million for the quarter ended December 31, 2014, compared to the quarter ended December 31, 2013, resulted from an increase of $15.7 million in expenses related to our esuberaprost program, offset by a decrease of $2.8 million in expenses relating to our sustained-release, self-injectable product development program, which was terminated in 2014.

 

Share-based compensation. The $60.7 million decrease in share-based compensation expense for the quarter ended December 31, 2014 over the same quarter in 2013 reflects the one percent appreciation in the price of our common stock during the quarter ended December 31, 2014, compared to the 43 percent increase in the price of our common stock during the same quarter in 2013.

 



 

The table below summarizes selling, general and administrative expense by major categories (in thousands):

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Category:

 

 

 

 

 

 

 

 

 

General and administrative

 

$

41,493

 

$

38,112

 

$

186,312

 

$

140,235

 

Sales and marketing

 

21,313

 

21,038

 

82,000

 

73,871

 

Share-based compensation expense

 

17,728

 

98,028

 

112,975

 

179,904

 

Total selling, general and administrative expense

 

$

80,534

 

$

157,178

 

$

381,287

 

$

394,010

 

 

Share-based compensation. The $80.3 million decrease in share-based compensation expense for the quarter ended December 31, 2014 compared to the same quarter in 2013 reflects the one percent appreciation in the price of our common stock during the quarter ended December 31, 2014, compared to a 43 percent increase in the price of our common stock for the same period in 2013.

 

Cost of Product Sales

 

Cost of product sales for the quarter ended December 31, 2014 were $15.8 million, compared to $38.8 million for the quarter ended December 31, 2013.  The decrease of $23.0 million corresponded primarily to the expiration of our royalty obligation to GlaxoSmithKline PLC on sales of our treprostinil-based products.

 

Income Taxes

 

We recognized income tax expense of $58.8 million for the quarter ended December 31, 2014, compared to a $1.3 million tax benefit for the quarter ended December 31, 2013 that primarily resulted from our net loss for the quarter ended December 31, 2013.

 

Non-GAAP Earnings

 

Non-GAAP earnings is defined as net income (loss), adjusted for the following charges, as applicable: (1) interest; (2) license fees; (3) depreciation and amortization; (4) impairment charges; and (5) share-based compensation expense (stock option, share tracking award and employee stock purchase plan).

 



 

A reconciliation of net income to non-GAAP earnings is presented below (in thousands, except per share data):

 

 

 

Year Ended December 31,

 

Three Months Ended
December 31,

 

 

 

2014

 

2013

 

2012

 

2014

 

2013

 

Net income (loss), as reported

 

$

340,074

 

$

174,560

 

$

304,442

 

$

115,935

 

$

(30,314

)

Adjust for the following charges:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

17,592

 

18,058

 

16,639

 

3,527

 

4,562

 

License fees

 

10,991

 

 

 

10,991

 

 

Depreciation and amortization

 

32,245

 

31,259

 

27,145

 

8,932

 

7,753

 

Impairment charges

 

 

 

4,839

 

 

 

Share-based compensation expense

 

190,054

 

320,786

 

30,115

 

32,324

 

178,202

 

Non-GAAP earnings

 

$

590,956

 

$

544,663

 

$

383,180

 

$

171,709

 

$

160,203

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP earnings per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

12.27

 

$

10.88

 

$

7.36

 

$

3.62

 

$

3.19

 

Diluted

 

$

10.91

 

$

10.23

 

$

7.19

 

$

3.21

 

$

2.88

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

48,176

 

50,076

 

52,093

 

47,431

 

50,281

 

Diluted

 

54,155

 

53,231

 

53,280

 

53,548

 

55,648

 

 

Conference Call

 

We will host a half-hour teleconference on Tuesday, February 24, 2015, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533.  A rebroadcast of the teleconference will be available for one week by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406 and using access code 73843546.

 

This teleconference is also being webcast and can be accessed via our website at http://ir.unither.com/events.cfm.

 

About United Therapeutics

 

United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions.

 

Non-GAAP Financial Information

 

This press release contains a financial measure, non-GAAP earnings, that does not comply with United States generally accepted accounting principles (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.

 

We use non-GAAP earnings to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources in an effort to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) assessing our capacity to fund capital expenditures and expand our business.  We believe this non-GAAP financial measure improves investors’ understanding of our financial results by excluding certain expenses that we

 



 

do not consider when evaluating and comparing the performance of our core operations and making operating decisions.  However, there are limitations in the use of this non-GAAP financial measure in that it excludes certain operating expenses that are recurring in nature.  In addition, our calculation of this non-GAAP financial measure may differ from the methodology used by other companies.  The presentation of this non-GAAP financial measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.  A reconciliation of net income, the most directly comparable GAAP financial measure, to non-GAAP earnings can be found in the table above under the heading, Non-GAAP Earnings.

 

Forward-looking Statements

 

Statements included in this press release that are not historical in nature are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, among others, our expectation regarding Orenitram’s potential to become our best-selling product.  These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from anticipated results.  Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in our periodic reports and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements.  We are providing this information as of February 24, 2015, and assume no obligation to update or revise the information contained in this press release whether as a result of new information, future events or any other reason.  [uthr-g]

 

Orenitram, Remodulin and Tyvaso are registered trademarks of United Therapeutics Corporation.

 

Adcirca is a registered trademark of Eli Lilly and Company.

 



 

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

Revenues:

 

 

 

 

 

 

 

 

 

Net product sales

 

$

345,381

 

$

286,297

 

$

1,279,533

 

$

1,106,944

 

Other

 

982

 

2,720

 

8,986

 

10,040

 

Total revenues

 

346,363

 

289,017

 

1,288,519

 

1,116,984

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

71,482

 

121,552

 

242,549

 

299,348

 

Selling, general and administrative

 

80,534

 

157,178

 

381,287

 

394,010

 

Cost of product sales

 

15,771

 

38,778

 

125,883

 

131,127

 

Total operating expenses

 

167,787

 

317,508

 

749,719

 

824,485

 

Operating income (loss)

 

178,576

 

(28,491

)

538,800

 

292,499

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

Interest expense

 

(3,527

)

(4,562

)

(17,592

)

(18,058

)

Other, net

 

(285

)

1,423

 

3,972

 

4,462

 

Total other (expense) income, net

 

(3,812

)

(3,139

)

(13,620

)

(13,596

)

Income (loss) before income taxes

 

174,764

 

(31,630

)

525,180

 

278,903

 

Income tax (expense) benefit

 

(58,829

)

1,316

 

(185,106

)

(104,343

)

Net income (loss)

 

$

115,935

 

$

(30,314

)

$

340,074

 

$

174,560

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

2.44

 

$

(0.60

)

$

7.06

 

$

3.49

 

Diluted

 

$

2.17

 

$

(0.60

)

$

6.28

 

$

3.28

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

47,431

 

50,281

 

48,176

 

50,076

 

Diluted

 

53,548

 

50,281

 

54,155

 

53,231

 

 

SELECTED CONSOLIDATED BALANCE SHEET DATA

(In billions)

 

 

 

December 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Cash, cash equivalents and marketable securities (excluding restricted amounts)

 

$

0.8

 

$

1.1

 

Total assets

 

1.9

 

2.1

 

Total liabilities and temporary equity

 

0.6

 

0.8

 

Total stockholders’ equity

 

1.2

 

1.3