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United Therapeutics Corp (NASDAQ:UTHR)
Q2 2020 Earnings Call
Jul 29, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the United Therapeutics Corporation's Second Quarter 2020 Earnings Call. My name is Marcella, and I will be your conference operator today. [Operator Instructions]

I would now like to turn the call over to Mr. Dewey Steadman, Head of Investor Relations at United Therapeutics.

Dewey Steadman -- Head of Investor Relations

Good morning. It's my pleasure to welcome you to the United Therapeutics Corporation Second Quarter 2020 Earnings Call. Accompanying me on today's call are Dr. Martine Rothblatt, our Chairman and Chief Executive Officer; Mr. Michael Benkowitz, our President and Chief Operating Officer; Mr. James Edgemond, our Chief Financial Officer and Treasurer; and Dr. Leigh Peterson, our 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. We assume no obligation to update our forward-looking statements. Today's remarks may also include financial measures that were not prepared in accordance with U.S. generally accepted accounting principles, or GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in our earnings release available on our website at ir.unither.com.

Today's remarks may discuss the progress and results of our 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 or ineffective for any unapproved or investigational uses. Full prescribing information for these products are available on our website.

Now I'd like to turn the call over to Dr. Rothblatt for an overview of our second quarter financial results and business activities of United Therapeutics. Dr. Rothblatt?

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thank you, Dewey, and welcome, everybody, to our second quarter earnings call. I'll be pleased to coordinate the call, starting with a brief overview. I'll then turn the call over to our President, Chief Operating Officer, Mike Benkowitz, who will provide a more in-depth overview and then he'll bounce the call back to me, and we'll open up the lines to questions and take the questions as they come. And I will forward them according to the topic, either if it's finance-related, to James, our CFO; if it's a science or clinical-related to, our Head of Product Development, Leigh Peterson; or if it's commercial-related or related to other areas of the company's operations to, Mike Benkowitz.

Well, I'm really pleased with the quarter because for the products that are material to us, that really matter, namely U.S. sales of Remodulin, Tyvaso, Orenitram and Unituxin, it's clear that we are poised to return to revenue growth as our patients are approaching now the levels that we had pre pandemic. We have previously guided that we believe these products will more than double current revenues for the following reasons. First, we expect net gains from Remodulin patients each year once we launch the highly differentiated products, Remodulin and the Implantable System for Remodulin.

These launches have been delayed for various supply chain reasons related to the pandemic for Remunity and for FDA, Re unity coordination reasons for the Implantable System for Remodulin. But we think these delays will not carry on very much longer. Also, we expect to contribute to net gains in Remodulin, the pending approval of Trevyent, which is in front of the FDA as a form of subcutaneous Remodulin and our R&D project of the with Smiths Medical of a very advanced smart parenteral pump device for Remodulin that really, I think, will provide a great amount of convenience and greater certainty to patients, families, physicians and payers.

So for all of these differentiated products, we expect Remodulin to continue to gain in patients year after year. We also expect net gains in Tyvaso patients from our new Dreamboat product, which is completing its final stage of clinical development. And a pending new market approval for Tyvaso in WHO Group three PAH patients. That one now pending in front of the FDA. We also have very exciting pipeline extensions for Tyvaso in the field of COPD with our PERFECT study and in a non-pulmonary hypertension field interstitial lung disease with our new Phase III TETON study.

Third, we expect net gains in Orenitram patients due to greater familiarity with its powerful new label and greater doctor confidence and appreciation of its unique titratability among oral treatments for pulmonary hypertension. Meanwhile, our pipeline is full of new opportunities. These include Phase III programs such as ralinepag for pulmonary hypertension, Tyvaso for interstitial lung disease, Tyvaso for COPD and endothelial nitric oxide synthase gene therapy, or eNOS gene therapy for pulmonary hypertension.

And finally, a Phase III trial relating to organ manufacturing processes. Beyond these Phase III programs, we have pipeline feeder projects such as a less painful or painless form of Remodulin. And we generated regenerative medicine sorry, we regenerative medicine, exosomes, which are a biological product that could be very helpful in the number of pulmonary and respiratory conditions. So when you take a look at the already-existing products, which are being rejuvenated and relaunched with differentiated drug delivery systems or being advance significantly due to label expansion such as in the case of Orenitram, showing the ability to significantly reduce morbidity and mortality.

Or in the case of something like Tyvaso, move into a virgin market area such as Group three pulmonary hypertension with some 30,000 patients that are yet been unable to benefit from prostacyclin therapy, I mean that's a whole new company right there, those three areas. It's like three new companies. So that's what you'd call super low-hanging fruit because it's products which have completed clinical development, are virtually done or pending before the FDA. And then you add on top of that, these opportunities that are currently in the midst of their Phase III strides, such as the ralinepag program for PAH, the Tyvaso program for COPD, the new TETON study in Phase III.

That, again, is like a whole new company worth of products, then you've got these very exciting transformative opportunities such as gene therapy to actually cure or significantly reduce the need of treatment for pulmonary hypertension and organ manufacturing with some 100,000 patients hanging out there on dialysis, waiting for a kidney transplant. This very month and next month, we move into the pivotal phase of our preclinical development of our Xeno-Kidneys with multiple transplants of our 10-gene Xeno-Kidney, which we hope will pave the way for the first clinical transplants sometime later in 2021. So it is the most exciting of times at United Therapeutics. This company is literally roaring on all thrusters and has the ability to do so for many years to come.

With that, 30,000-foot view of everything, I'd like to turn the line over to Mike Benkowitz, our President and Chief Operating Officer, to provide some additional color on where we're at. Mike?

Michael I. Benkowitz -- President and Chief Operating Officer

Thanks, Martine. Yes, I'd like to provide some color around physician and patient demand in the second quarter and our commercial plans for PH-ILD. As Martine said at the top, we're very pleased with our revenue performance in the second quarter offerings considered. Following the achievement of a record-high number of U.S. patients on our treprostinil therapies in each of the prior three quarters, we are happy that we're able to maintain relatively stable quarter-over-quarter active patient census in the midst of the COVID pandemic.

On our first quarter earnings call, we mentioned that we were seeing some impact to cross-sell prescriptions and starts for the month of April, attributable to the pandemic however, as the quarter progressed, we saw the number of new patient prescriptions grow and reach close to pre pandemic levels by the close of the quarter. We're especially pleased with the 40% year-over-year growth of Orenitram in the second quarter, which we believe is driven by increased acceptance of FREEDOM-EV label by physicians and patients.

We continue to see growth in Orenitram prescribers, including among KOLs at large PAH centers who have historically not written much Orenitram. We also observed a decline in discontinuations and an increase in average dose per patient during the second quarter. And we're excited that we've been able to improve formulary access to Orenitram since the start of the year, for plans that cover close to 11 million additional lives. According to our payer attracting data sources, Orenitram is now considered covered for around 76% of lives in the U.S. and a preferred or nonpreferred formulary positions. This compares to under 72% of U.S. lives for a. So all in all, we believe that physicians and payers and patients are understanding and appreciating the value proposition Orenitram provides.

We saw the biggest impact of COVID to our Remodulin business during the quarter. Progression from oral therapies such as PD5 and ERAs for Remodulin, which is typically an end-hospital procedure, had been delayed early on in the quarter, leading to an inadequate number of new patient prescriptions and starts to offset Remodulin patient discontinuations that occurred during the quarter. However, as we closed out the quarter and clinic started opening back up and physicians became more and physicians became more comfortable starting therapy at home, new prescriptions returned to almost near-normal levels.

In terms of generic competition in the U.S., the story remains the same as prior quarters. There's really been a little to no interest on the part of physicians to write generic Remodulin and very little payer pushback. In fact, we've seen 0 transitions from Remodulin to generic so far in the month of July. The Tyvaso story during the quarter is more similar to the Orenitram story and that we saw a decline in the prescriptions early in the quarter. But historically strong rebound in June and continuing into July. Like Orenitram, we observed fewer Tyvaso discontinuations during the quarter and an increase in new prescribers.

As we mentioned on our last call, PAH is unfortunately a progressive disease that doesn't shut down for COVID. There is a warehousing of patients that need or will need advanced PAH therapies such as a Orenitram, Tyvaso, Remodulin. So we fully expect that we'll make up any ground we lost during Q2 in terms of adding new patients, add more hospitals and clinics open up to seeing patients or physicians become more comfortable prescribing via telemedicine.

Finally, I want to spend a minute talking about our commercial launch plans for Tyvaso and PH-ILD. The increased data was presented recently at the American Thoracic Society virtual session, and we're looking forward to a potential publication in a major medical journal soon. We are very pleased with the positive reception of these important data by those physicians able to attend the ATS presentation, which is consistent with the feedback we've received from increased investigators, physicians attending our advisory board and our market research. The increased data is roundly considered overwhelmingly positive and the ILD treating community is very much looking forward to having Tyvaso and their treatment armamentarium for these very sick patients.

Following the supplemental NDA submission earlier this year, our launch preparations are well under way. As part of that effort, we're expanding our sales, marketing and medical affairs team by around 30 to 35 people by the end of the year. Many of these new hires will focus their efforts on building relationships in the pulmonology community and beginning to share the increased data more broadly, subject, of course, to pharma compliance restrictions.

So with that, I'll turn the call back over to Martine.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thank you so much, Mike. That was a great color and insight in all the different areas of our activities, and it's just it's so beautiful to see us helping now over 7,000 patients. So thank you, Mike, so much for your and the entire large team of medical and pharmaceutical professionals that you have working with you.

Operator, we now can accept questions that may like to be directed to either myself, James, Leigh or Michael.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Hartaj Singh from Oppenheimer. Your line is open.

Hartaj Singh -- Oppenheimer -- Analyst

Okay, thank you for the question. Really nice quarter. Martine, the main question I have is that most almost every other biopharma company reported decreases of 5% to 10% in revenues in the second quarter. You actually, I believe, had a slight increase over the first quarter. So can you just talk a little bit about the dynamics through the rest of the year, the third and the fourth quarter with the same seasonality hold for United Therapeutics has historically with COVID-19 and then and just talk a little bit about that in terms of also as you expect sort of near-term growth going forward?

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thanks so much, Hartaj. Great to hear your voice this morning and looking forward to the upcoming conference of your bank. Mike, I think you would be the best-place person on the call to respond to Hartaj's question.

Michael I. Benkowitz -- President and Chief Operating Officer

Sure. Thanks for the question, Hartaj. Yes. I mean we haven't seen anything to suggest the seasonality that we typically see in the second half of the year would change this year versus prior years. The big wildcard, obviously, is what happens with COVID and if things continue to increase if cases rise and centers are having to shut down, do we get a kind of a situation where new prescriptions and new starts kind of wax and a wane like we saw throughout the second quarter.

But I think we're all learning how to go up and had a deal in this new environment. And I think physicians are no exception to that. And so I think there as I said in my opening statement, I think they're becoming more comfortable prescribing via telemedicine, and a lot of these institutions owner are allowing their patients to come back in and get the treatment they need. So and plus we have this warehousing effect. So unless we have another complete shutdown, I think we would expect that we hopefully, it's not necessarily smooth sailing, but certainly continue kind of on an upward trajectory as we move into the second half of the year.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thanks, Mike. Thanks again, Hartaj, for the question. Operator, you can line up the next question.

Hartaj Singh -- Oppenheimer -- Analyst

Thanks, Mike.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thanks again Hartaj for the question.

Operator

Your next question comes from the line of Eun Yang from Jefferies. Your line is open.

Eun Yang -- Jefferies -- Analyst

Thanks very much. A question on Remodulin. So you mentioned that the reduction in the new patient start seem to have a more negative impact on Remodulin versus the Tyvaso and Orenitram. The question to you is that during the pandemic, you would think that Tyvaso may have more impact. So why do you think there is the greater impact on Remodulin versus the others? And then ex U.S.A sales decreased dramatically. So do you think that ex U.S.A. sales have been stabilized from here?

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thanks, Eun. I'm going to again ask Mike to respond to that question since he's responsible for all those areas.

Michael I. Benkowitz -- President and Chief Operating Officer

Sure. So I think in the case of Tyvaso versus Remodulin, any impact there. The main issue is with Remodulin when you're talking about perineal therapies, that in some cases most of the time is started in the hospital. And so with patients unable to come in during the first half of the second quarter, get into the doctor, get into hospitals because of the pandemic. That's where we saw the sharpest decline in new prescriptions and new starts. And then as we said, a rebound toward the end of the second quarter.

Within an here with Tyvaso while I think physicians would probably prefer to start that in their clinic, it is more easily started in a home setting. And so our specialty pharmacy nurses are very well trained on how to use a nebulizer and how to start patients on Tyvaso. And it's much more common that Tyvaso is starting to the home. So that's really, I think, the dynamic there. It's just really, I think, the familiarity and sort of historical precedents of starting Tyvaso in the home, much more regularly than what you would see with Remodulin.

But again, I think we're starting to see a little bit of that change as people start to adjust to the current situation. As it relates to ex U.S., yes, I think the situation there is I mean, we always see some lumpiness in the ordering so it's really hard to kind of look at one quarter and project that out over subsequent quarters because there's just not there's not a regular order in patterning ex U.S. as we see here in the U.S. But I think what we've seen there is certainly the impact of generic entrants. And a big reason for that is the payer landscape outside the U.S. as you know, is very, very hard than it is in the U.S., you have single-payer systems.

And so what happens in a lot of these countries where outside of the U.S., where Remodulin is used, is a generic entrant comes into the market, and they set their price and there's mandatory price reductions by the government to meet the generic price. And so what we've done with our partner, Ferrer, who's our distributor of a module outside the U.S. is, we've agreed to allow for adjustments in our transfer price of Remodulin to Ferrer in order to allow them to compete with generics and retain as much share as they can, albeit at lower price.

So that's sort of the first piece of it. The second piece of it is you have two competitors that have been, I would say, successful in making inroads in a couple of countries where we had a lot of Remodulin patients. And so that's part of the dynamic there. On the flip side, our partner, Ferrer, is looking to expand into other countries and do a lot of the same things that we're doing and doing a lot of the same things that we're doing here in the U.S. to promote the value of the brand over generic.

So my takeaway there is I wouldn't necessarily intuit that the revenues in the second quarter, you could project forward for every quarter going forward because it does vary a little bit based on the lumpiness of the ordering pattern. But I think it's true that for all the reasons that Martine said in her beginning around growth in Orenitram, growth in Tyvaso, both in PAH and the newer indications, all the things that we're bringing to the table for Remodulin and everything else in our development pipeline, that the rest-of-the-world Remodulin revenues are going to be increasingly an immaterial part of our overall revenue story.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Super. Mike, thank you so much. Operator, if you could please queue up the next question.

Operator

Your next question comes from the line of Marty Auster from Credit Suisse. Your line is open.

Marty Auster -- Credit Suisse -- Analyst

Thanks for taking the question. I'm going to do a no-no and try to sneak in two questions. But I'll let you do that, if you will.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

You know what they say for every 10 years somebody has in the field, they're entitled at least one question. So you're good for two and soon for three.

Marty Auster -- Credit Suisse -- Analyst

So the first part of me for Mike, just you'd mentioned 30 to 35 kind of new sales marketing liaison reps that support the PH-ILD opportunity. I was curious if you could kind of add a little more color to what sort of percent increases that is at about 20%, 30% in the guide increase to the effort? And can we read into that, that you expect to see kind of at least a commensurate type of revenue growth with that?

The second question, Martine, was for you. There's a competitor in transplantation that's out there, but I noticed has been kind of hiring up senior staff this year and had a successful financing last year. I was curious if you could comment on kind of competitive positioning for where UT is versus the competition.

And any kind of other competitive advantages you see you guys having? And then secondly, as that company progresses, has United given any thought to potentially seeking to kind of capture value for that program through a spin-out or some other kind of effort just because they think it's something that gets overlooked within the treprostinil and other franchises that are commercial?

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Great questions. A lot of good thought into each of those questions. Let me if it's OK, I'll talk about the second one because the first one involves more metrics, and give Mike a couple of minutes to line up those metrics. So there are more there are a few competitors in the xeno space, and there seem to be more creeping up all the time. It probably has been inspired by the successful financing of one of the companies, and I don't I'm going to I hope it doesn't break with anybody's protocol. I believe you're referring to eGenesis as has that company, but if not, feel free to tell me afterwards.

But eGenesis is the one that I'm aware of, that's completed the financing. And they're a great company. They're spun out by George Church, who's one of the geniuses, the certainly biological geniuses of our time, and it's based on great genetic engineering work by Luhan Yang, who's absolutely stellar molecular biologist. And now is, I believe, running an arm of that company in China. So that company has a lot of a lot going forward and very good investors.

We, at UT, are actually very happy to see the progress of eGenesis because for a while, it had been a little bit lonely for us in the xeno field, and we were wondering like why don't other people see this opportunity. There are 100,000 people, over 100,000 people on kidney dialysis machines, and very few of them can survive past 10 years. And yet, there are thousands and thousands, more than 10,000 that are out toward that number of years. So there's no other solution for these patients who are not going to get an allograft other than something like xeno transplantation. So we think it's an amazing market. It's a place where we can do a great deal of good.

And as mentioned in the introductory remarks, we are now in the pivotal phase of our preclinical development. In other words, conducting the last nonhuman studies that the FDA requires before going into the human studies. We've completed construction of our what's called a pathogen-free breeding facility for the Xeno-Kidneys. That's the GS' equivalent that one needs for something like a Xeno-Kidney. And again, that's pursuant to FDA guidance that we've received. We have a tremendous collaboration with University of Alabama, Birmingham, where a lot of this work is going on and Dr. Jamie Loch there, she's our principal investigator.

Dr. Loch, for those of you who may not know, is the principal person who is responsible for creating massive kidney chain transplants. You may have read how one person donate a kidney to another unknown person to another unknown person and ultimately, a friend or relative of theirs gets a kidney because of this huge chain of over 100 transplants. And that's all Dr. Jamie Loch. She's absolutely amazing, and we're so proud to have her as her PI. So we feel that we're in a really, really sweet spot, Marty.

And it's at one time, we did explore concepts such as spinning this out because it wasn't getting enough attention. But when we look more carefully at it, we realized that it wasn't getting more attention because it was just too premature. It was just too early. And I think once people see that we have filed for clinical xenograft, which again, is I'm hoping we'll be able to do in 2021. I think attention will spark up very, very rapidly. And this organ manufacturing activity will become one of the multiple pillars that help holds United Therapeutics.

So we're really not thinking about spinning it out at all right now. We're very proud and excited to have it intrinsic to our company. And we're really focused on accomplishing enough with our Xeno-Kidney with our 10-gene pig that will be able to go into the clinic and, therefore, become a major contributor to UT's valuation. Mike, can you provide some of the metrics that Dr. Auster was requesting?

Michael I. Benkowitz -- President and Chief Operating Officer

Sure. So Marty, I think you first part of your question was just around the kind of the 30 to 35 headcount adds to sales, marketing and medical. And what does that look like as a percentage of the current staffing there. So if I think about the current group and those three functions that are principally focused on PAH. The 30% to 35% is about a 25% to 30% increase, roughly in terms of headcount. I think it's hard to sort of draw sort of extend that out to an expectations around revenue.

We certainly think that the revenue opportunity with ILD is tremendous, certainly based on our citing with the data and what we're hearing from physicians that, that has seen the data. I think the challenge in trying to draw a correlation between the headcount increase size to the revenue is just there's a lot of variables in the air. So in PAH, it's the variables tend to be where are the patients. How concentrated are they at the physician at each physician or at each center? How many physicians and centers are there? And if I look at what PH looks like and what ILD looks like, those are different.

What's the other variables, what's the overlap between the docs that are treating ILD and those that are treating PAH, and there's not a lot of overlap there. So the expansion of the sales force, the in the field, sales force and medical teams will be really dedicated to ILD. So it will be, as I said, a dedicated team detailing these ILD docs. And you're also talking about as another variable the fact that there's really not a lot of competition in ILD. And these reps and these MSLs will only be detailing one indication whereas on the PAH side, they're carrying three products in the back. So there's a lot of variables that kind of go into sales force sizing.

That and again, it's just really hard to kind of draw that correlation to what we think the revenue opportunity is and say, OK, because we're increasing by 25% and that we only think that the ILD opportunity is 25% of our current revenues. I think we all believe that given the size of the patient population, the unmet need, the opportunity is significantly greater, just with the increased data and then certainly following all with perfect analyst with the TETON study, it's even greater than that.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thanks, Mike. Excellent. Operator, we have time for the next two questions in the queue.

Marty Auster -- Credit Suisse -- Analyst

Thanks, Mike. Excellent.

Operator

Your next question comes from the line of Liana Moussatos from Wedbush Securities. Your line is open.

Liana Moussatos -- Wedbush Securities -- Analyst

Thank you for taking my question and congratulations on the strong quarter.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Of course, Liana.

Liana Moussatos -- Wedbush Securities -- Analyst

Of these two programs, which one is going to provide a cure first, gene therapy or organ manufacturing?

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Wow, that is a very tough and challenging question. I'm not smart enough to know the answer to that question because both of them are very promising. And both of them has kind of come to their time. Gene therapy has been something people have talked about for 20 years; organ manufacturing, especially xeno transplantation, something people have talked about for 20 years. And it's just both of them are finally coming into their own.

In all likelihood, there will be different solutions for different patients. I find that the thing that most people gloss over with disease generally and certainly with pulmonary disease, is the tremendous heterogeneity of the patient population. And what works for some patients doesn't work for other patients. As you may know, Liana, we've been conducting pharmacogenomic screening of patients coming into our studies. And we've recently seen that there are significant pharmacogenomic differences among patients who respond to different types of medications for the pulmonary hypertension.

Those differences we've seen are now correlative, so there are hypotheses that will test in future studies, but it indicates the heterogeneity of the patient population. I think for a patient who is who pretty much looks like the still have time on their lungs if one could reverse the remodeling process, gene therapy would be a little bit more promising. Although I'd like to note that there is increasing data out there, Liana, showing that aggressive upfront treatment with Remodulin with the goal of reducing pulmonary artery pressure below 40 millimeters of mercury is also appears to be associated with a much better long-term horizon.

And more and more researchers are publishing articles where they dose to reducing pulmonary artery pressure rather than dosing to some symptomatic endpoints such as 6-minute block. Dr. Matsubara of Japan is one of the leaders of this area, but UT Southwestern, University of Texas, United therapeutics, and other researchers around the world are also beginning to see that you can affect remodeling. In other words, you can affect the disease modification applying hypertension by aggressive upfront treatment with Remodulin. Now that's very exciting because pressure is a kind of thing that you get into a well.

And if you get into a well of very high pressures, it's hard to get out of that well. But if you can get out of that high-pressure well and drop down to below 40 millimeters of mercury, you get back to a stabilized situation. And the patient can have a much better long-term outlook. Now there will be many patients who've been at super high pressures, north of 60, 70, 80 millimeters of mercury for a couple of years or more, and they've begun to experience serious fibrotic issues with their pulmonary vasculature. And unfortunately, for these patients, the lungs are kind of shot. And that's the reason why, unfortunately, mean survival is reported as anywhere from five to 10 years after diagnosis, depending whether the person's diagnosis is Functional Class III, IV and what their condition is.

So if a patient has already experienced essentially irreversible fibrotic processes in their pulmonary arteries and their pressures are super normal, I think for them, the cure is going to be a lung transplant. And I would like to conclude on this question, Leigh, by pointing out that one thing I always hated about lung transplants was that they were trading one disease for another. They were trading the disease, whether it's pulmonary fibrosis, cystic fibrosis, whatever, that gave rise to the need for a lung transplant for chronic rejection, ultimately resulting in something like bronchiolitis obliterans that destroyed their graft.

So whenever you get a transplant, you are kind of trading your previous condition for long-term rejection. But we, at United Therapeutics, are based on enormous strides in the field of autologous manufactured organs. In other words, we start with a fiber blast of the intended patient, turn it into an iPSC cell, then redifferentiat it down into endothelial, epithelial stromal basal cells and then expand those cells to the five billion to 10 billion that are needed to cellularize along.

So the patients that receive are autologous manufactured lungs will not have to take immunosuppressants and it truly will be a cure for those patients rather than just a bridge to another disease. Thank so much for those fascinating questions. Liana operator, last question.

Operator

Your last question comes from the line of Christopher Zopf from Cowen and Company. Your line is open.

CJ Muse -- Cowen and Company -- Analyst

This is CJ Muse on for Chris Shibutani. Given your interactions with the FDA on the Tyvaso sNDA, what sort of time line are you expecting for being able to add the PH-ILD indication of the label? And can you give us a sense of what fraction of Q2 and maybe current Tyvaso scripts might be seeing some off-label use there? Are we seeing some transition from the Remodulin setting? Or is this purely kind of new patient growth?

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Yes, I'm going to kind of chop on the second part of your question and ask Dr. Peterson, our Head of Product Development, and the one who she's really the one that made the discovery or led the team that made the discovery in terms of efficacy to confirm of Tyvaso in chronic fibrosis interstitial lung disease.

But Leigh, just before you get on, let me mention that I don't think that there is off-label use of Tyvaso in that condition, and it's certainly something that we would never suggest, promote, encourage or any of the above. So we are your on-label company. And with that introduction, Leigh, could you talk about the time frame that you see for the TETON study?

Leigh Peterson -- Vice President of Product Development

Yes. I believe it was for the increased FDA submission time line.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Oh, the time line for the FDA submission. Okay. Sure. No problem.

Leigh Peterson -- Vice President of Product Development

Yes, yes. So thank you. I'd love to talk about increase because, as you can imagine, it's a really, really exciting but.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Were you also in charge of that team?

Leigh Peterson -- Vice President of Product Development

And so we submitted that sNDAs in June. And we are any very, very soon, we will find out from FDA whether that receives priority review, which would be a six month turnaround. And if it doesn't, it would be 10 months. So that's the time line for finding out the approval of the increase in the ability to add it on to the label, assuming positive response.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

That's great. That's fantastic. And while we have you on the line, would you give a sketch of when you think that we would likely begin enrolling patients in the TETON study? And about how long do you think that study would take?

Leigh Peterson -- Vice President of Product Development

Yes. So again, the TETON study is our study of using Tyvaso in patients that have not been diagnosed with to also have pulmonary hypertension as was the case in increase. So we have actually submitted some questions and the protocol to FDA, and we're currently finalizing the study design with them as well as with our steering committee. And once that happens, we will begin steady start-up.

It's approximately 250 to 300 patients we're imagining that we would need to enroll. So that would probably take about two years to enroll, depending on the follow-up period. It's either six months or one year for that. And then we would finish things up, submit prepare that NDA and submit that for again, we would submit for priority review, six month time line. Or if we didn't get that, it would be 10 months.

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Thanks so much, Leigh. So much exciting group activity going on in our product development group and really glad to share that with all of the shareholders on the call. Well, operator, thank you so much for doing such a great job of coordinating all the questions today. And I will now turn the line back to you for your wrap-up statement.

Operator

Thank you for participating in today's United Therapeutics Corporation Conference Call. Every broadcast will be available for replay for one week by dialing one (800) 585-8367 with international. Thank you. This concludes today's conference call. You may now disconnect.

Duration: 42 minutes

Call participants:

Dewey Steadman -- Head of Investor Relations

Martine A. Rothblatt -- Chairman and Chief Executive Officer

Michael I. Benkowitz -- President and Chief Operating Officer

Leigh Peterson -- Vice President of Product Development

Hartaj Singh -- Oppenheimer -- Analyst

Eun Yang -- Jefferies -- Analyst

Marty Auster -- Credit Suisse -- Analyst

Liana Moussatos -- Wedbush Securities -- Analyst

CJ Muse -- Cowen and Company -- Analyst

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