United Therapeutics
Shares of United have been on a tear, up 40% in the past six months as sales of its lead drug, pulmonary arterial hypertension (PAH) treatment Remodulin, have grown. In the second quarter, United's sales were up 29% year over year thanks to Remodulin, but net income was down primarily as a result of 42% higher R&D costs. Diluted earnings per share dropped 13%, coming in at $0.26 for the quarter.
The reason for the higher R&D costs this quarter is United's ongoing late-stage studies of oral and inhaled versions of Remodulin and its ovarian cancer drug, OvaRex. The next 12 months will be a busy time on the R&D front as data on all of these programs will become available, with results of the inhaled Remodulin phase 3 study coming first, in November.
The treatment landscape for the debilitating PAH is changing following Gilead's recent approval of its oral therapy, Letairis, and Actelion's attempts to expand Tracleer uses into new patient groups.
If United can show positive study results with its oral and inhaled forms of Remodulin (subcutaneous and intravenous versions are already on the market), then it will be able to compete more directly in the U.S. with the oral PAH compounds from Actelion and Gilead.
One thing is for sure: The upcoming year will be pivotal for United as all the major drug developers in the PAH treatment arena struggle to carve out market share and bring new drugs to the market.
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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.
