SILVER SPRING, Md. and RESEARCH
TRIANGLE PARK, N.C., July 28, 2016 /PRNewswire/
-- United Therapeutics Corporation (NASDAQ: UTHR) today
announced its financial results for the second quarter ended
June 30, 2016.
"We are pleased with our second quarter 2016 financial results
as total revenues exceeded $400
million and earnings beat $200
million," said Martine
Rothblatt, Ph.D., United Therapeutics' Chairman and Chief
Executive Officer. "These financial results strengthen our ability
to advance our late-stage pipeline programs in cardiopulmonary
disease and oncology, as well as early-stage programs in multiple
indications."
Key financial highlights include (dollars in millions, except
per share data):
|
|
Three Months Ended
June 30,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
412.6
|
|
$
|
347.2
|
|
18.8
|
%
|
Net income
|
|
$
|
206.1
|
|
$
|
99.2
|
|
107.8
|
%
|
Non-GAAP
earnings(1)
|
|
$
|
213.3
|
|
$
|
132.8
|
|
60.6
|
%
|
Net income, per
diluted share
|
|
$
|
4.39
|
|
$
|
1.91
|
|
129.8
|
%
|
Non-GAAP earnings,
per diluted share(1)
|
|
$
|
4.55
|
|
$
|
2.56
|
|
77.7
|
%
|
______________________________
|
(1)
|
See definition of
non-GAAP earnings, a non-GAAP financial measure, and a
reconciliation of net income to non-GAAP earnings below.
|
|
|
Financial Results for the Three Months Ended June 30,
2016
Revenues
The table below summarizes the components of total revenues
(dollars in millions):
|
|
Three Months Ended
June 30,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Net product
sales:
|
|
|
|
|
|
|
|
Remodulin®
|
|
$
|
158.9
|
|
$
|
135.9
|
|
16.9
|
%
|
Tyvaso®
|
|
107.0
|
|
115.8
|
|
(7.6)
|
%
|
Adcirca®
|
|
90.9
|
|
68.2
|
|
33.3
|
%
|
Orenitram®
|
|
38.0
|
|
25.9
|
|
46.7
|
%
|
Unituxin®
|
|
17.8
|
|
—
|
|
NM
|
(1)
|
Other
|
|
—
|
|
1.4
|
|
(100.0)
|
%
|
Total
revenues
|
|
$
|
412.6
|
|
$
|
347.2
|
|
18.8
|
%
|
______________________________
|
(1)
|
Calculation is not
meaningful.
|
|
|
Revenues for the three months ended June 30, 2016 increased
by $65.4 million, compared to the
same period in 2015. The growth in revenues primarily resulted from
the following: (1) a $23.0
million increase in Remodulin net product sales; (2) a
$22.7 million increase in Adcirca net
product sales; (3) a $17.8
million increase in Unituxin net product sales; and
(4) a $12.1 million increase in
Orenitram net product sales. These increases were partially offset
by an $8.8 million decrease in Tyvaso
net product sales.
Expenses
Cost of product sales. The table below summarizes cost of
product sales by major categories (dollars in millions):
|
|
Three Months Ended
June 30,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
Cost of product
sales
|
|
$
|
20.0
|
|
$
|
14.7
|
|
36.1
|
%
|
Share-based
compensation expense
|
|
—
|
|
1.3
|
|
(100.0)
|
%
|
Total cost of product
sales
|
|
$
|
20.0
|
|
$
|
16.0
|
|
25.0
|
%
|
Cost of product sales. The increase in cost of product
sales of $5.3 million for the three
months ended June 30, 2016, as compared to the same period in
2015, was attributable to increased sales volume.
Research and development expense. The table below
summarizes research and development expense by major category
(dollars in millions):
|
|
Three Months Ended
June 30,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
Research and
development expense
|
|
$
|
37.0
|
|
$
|
36.0
|
|
2.8
|
%
|
Share-based
compensation (benefit) expense
|
|
(1.8)
|
|
13.4
|
|
(113.4)
|
%
|
Total research and
development expense
|
|
$
|
35.2
|
|
$
|
49.4
|
|
(28.7)
|
%
|
Share-based compensation. The decrease in share-based
compensation of $15.2 million for the
three months ended June 30, 2016, as compared to the same
period in 2015, corresponded to a 5 percent decrease in the price
of our common stock during the three months ended June 30,
2016, compared to a 1 percent increase in the price of our common
stock during the same period in 2015.
Selling, general and administrative expense. The table
below summarizes selling, general and administrative expense by
major categories (dollars in millions):
|
|
Three Months Ended
June 30,
|
|
Percentage
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
Category:
|
|
|
|
|
|
|
|
General and
administrative
|
|
$
|
44.2
|
|
$
|
53.0
|
|
(16.6)
|
%
|
Sales and
marketing
|
|
24.7
|
|
24.4
|
|
1.2
|
%
|
Share-based
compensation expense
|
|
3.3
|
|
32.6
|
|
(89.9)
|
%
|
Total selling, general
and administrative expense
|
|
$
|
72.2
|
|
$
|
110.0
|
|
(34.4)
|
%
|
General and administrative. The decrease in general and
administrative expense of $8.8
million for the three months ended June 30, 2016, as
compared to the same period in 2015, was primarily attributable to
the timing of charitable donations to a non-affiliated, non-profit
organization that provides financial assistance to patients with
PAH. Donations to the same organization in 2016 totaled
$37.0 million, all of which were paid
during the first quarter of this year. Donations to the same
organization in 2015 were $17.0
million, all of which were paid in the second quarter of
2015. The donations made during the first quarter of 2016 and the
second quarter of 2015 represent the full extent of our funding to
this organization for these two years. We expense these types of
grant payments in the period they are paid.
Share-based compensation. The decrease in share-based
compensation of $29.3 million for the
three months ended June 30, 2016, as compared to the same
period in 2015, was primarily attributable to a 5 percent decrease
in the price of our common stock during the three months ended
June 30, 2016, compared to a 1 percent increase in the price
of our common stock during the same period in 2015. The decrease
was partially offset by approximately $9.8
million of costs related to the accelerated vesting of stock
options associated with the departure of a company officer during
the second quarter of 2016.
Income Tax Expense
Our 2016 effective income tax rate decreased as compared to 2015
primarily due to a decrease in non-deductible share-based
compensation, which was driven largely by a decrease in our stock
price during 2016.
Share Repurchases
In the second quarter of 2016, we repurchased approximately 1.2
million shares of our common stock at an aggregate cost
of $136.5 million. These purchases were made pursuant to our
$500 million stock repurchase
program, which is effective during calendar year 2016, and
$240.3 million of that amount
remained available for additional share repurchases at
June 30, 2016.
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for:
(1) interest expense; (2) license fees;
(3) depreciation and amortization; (4) impairment
charges; (5) share-based compensation expense (benefit), net
(including expenses relating to stock options, share tracking
awards, restricted stock units and our employee stock purchase
plan); and (6) tax impact on non-GAAP earnings
adjustments.
A reconciliation of net income to non-GAAP earnings is presented
below (in millions, except per share data):
|
|
Three Months Ended
June 30,
|
|
|
|
2016
|
|
2015
|
|
Net income, as
reported
|
|
$
|
206.1
|
|
$
|
99.2
|
|
Adjusted
for:
|
|
|
|
|
|
Interest
expense
|
|
0.6
|
|
1.3
|
|
Depreciation and
amortization
|
|
7.9
|
|
8.4
|
|
Share-based
compensation expense, net
|
|
1.5
|
|
47.3
|
|
Tax
benefit(1)
|
|
(2.8)
|
|
(23.4)
|
|
Non-GAAP
earnings
|
|
$
|
213.3
|
|
$
|
132.8
|
|
Non-GAAP earnings per
share:
|
|
|
|
|
|
Basic
|
|
$
|
4.82
|
|
$
|
2.88
|
|
Diluted
|
|
$
|
4.55
|
|
$
|
2.56
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
|
44.3
|
|
46.1
|
|
Diluted
|
|
46.9
|
|
51.9
|
|
______________________________
|
(1)
|
Represents the total
tax impact of the quarterly Non-GAAP earnings adjustments based on
our actual quarterly effective income tax rates of approximately 28
percent and approximately 41 percent as of June 30, 2016 and
2015, respectively.
|
|
|
Conference Call
We will host a half-hour teleconference on Thursday,
July 28, 2016, 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: 40900672.
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 diseases.
Non-GAAP Financial Information
This press release contains a financial measure, non-GAAP
earnings, which 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, the calculation of our non-GAAP financial
measure may differ from the methodology used by other companies.
The presentation of our 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, statements
relating to the development of our pipeline programs. 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 July 28, 2016, 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, Tyvaso and Unituxin 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 millions,
except per share data)
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
2016
|
|
2015
|
|
|
|
(Unaudited)
|
|
Revenues:
|
|
|
|
|
|
Net product
sales
|
|
$
|
412.6
|
|
$
|
345.8
|
|
Other
|
|
—
|
|
1.4
|
|
Total
revenues
|
|
412.6
|
|
347.2
|
|
Operating
expenses:
|
|
|
|
|
|
Cost of product
sales
|
|
20.0
|
|
16.0
|
|
Research and
development
|
|
35.2
|
|
49.4
|
|
Selling, general and
administrative
|
|
72.2
|
|
110.0
|
|
Total operating
expenses
|
|
127.4
|
|
175.4
|
|
Operating
income
|
|
285.2
|
|
171.8
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
|
(0.6)
|
|
(1.3)
|
|
Other, net
|
|
1.1
|
|
(2.1)
|
|
Total other income
(expense), net
|
|
0.5
|
|
(3.4)
|
|
Income before income
taxes
|
|
285.7
|
|
168.4
|
|
Income tax
expense
|
|
(79.6)
|
|
(69.2)
|
|
Net income
|
|
$
|
206.1
|
|
$
|
99.2
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
|
$
|
4.65
|
|
$
|
2.15
|
|
Diluted
|
|
$
|
4.39
|
|
$
|
1.91
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
|
44.3
|
|
46.1
|
|
Diluted
|
|
46.9
|
|
51.9
|
|
SELECTED
CONSOLIDATED BALANCE SHEET DATA
|
(Unaudited, in
millions)
|
|
|
|
June 30,
2016
|
|
Cash, cash
equivalents and marketable securities
|
|
$
|
948.6
|
|
Total
assets
|
|
2,201.5
|
|
Total liabilities and
temporary equity
|
|
395.3
|
|
Total stockholders'
equity
|
|
1,806.2
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/united-therapeutics-corporation-reports-second-quarter-2016-financial-results-300305252.html
SOURCE United Therapeutics Corporation