Shares of rare-disease specialist United Therapeutics (NASDAQ:UTHR) dropped nearly 11% today after the company announced that a phase 3 trial evaluating Orenitram in patients with pulmonary arterial hypertension, or PAH, will continue through completion after an independent interim analysis was conducted. That may sound like an odd reason to send shares lower, but investors were hoping that the trial would be stopped early had the drug shown overwhelming efficacy.
The company apparently understood that expectation. In the press release, it was noted that the threshold for stopping the trial early was set incredibly high, which would allow it to run to completion and hand the company more robust results from observations made over a longer time period. The explanation notwithstanding, investors couldn't shake their disappointment.
As of 12:29 p.m. EDT, the stock had settled to a 10.1% loss.
Investors and United Therapeutics alike have pretty high hopes for Orenitram. Currently the company's fourth best-selling drug representing 10% of total sales through the first half of 2017, it's the fastest-growing product in the portfolio. Expectations for expanded use after the successful conclusion of ongoing trials remain high -- perhaps a little bit too high.
The trial in question, the phase 3 Freedom-EV study, is being run to determine the worsening of PAH symptoms for patients taking Orenitram and a background oral monotherapy (the condition worsens over time). Therefore, investors were hoping that the interim results -- which the company and the Food and Drug Administration did not see -- would show good-enough improvements to stop the trial early, give all participating patients the drug, and breeze through another FDA approval. That didn't happen.
Continuing the trial to completion means data won't be available until the second half of 2018.
Despite the disappointment among investors hoping for an expedited expansion of Orenitram's approved uses, the Freedom-EV trial is well designed. Furthermore, the tremendous track record of United Therapeutics demonstrates that the company knows what it's doing. Then again, with generic competition continuing to turn up the pressure on its portfolio, it's easy to see why investors didn't want to wait another year for final results.