Get started. Thank you everyone for joining us in the room and online at TD Cowen's 46th Annual Healthcare Conference. I'm Joe Thome, one of the senior biotech analysts here on the team at TD Cowen, and it is my pleasure to have with me today a couple members of the United Therapeutics team. We have President and COO, Mike Bankowitz, and CFO, James Edgemond. Thank you very much for being here today. We usually kick these off with just sort of a overall state of the business, what's been sort of the highlights of recent progress, and what should investors be looking for for the rest of 2026. Obviously, we'll dive into the specific programs and your exciting new data.
Thanks, Joe. Thanks for inviting us to attend the conference this year. Yeah, I think as we look at really over the next 18- months, I think the key takeaways are, we have a growing, existing commercial business, reported double-digit annual growth last year. Expect that to continue as we move into moving forward. If you think about where we are or will be over the next 18 months, you know, we released our Ralinepag data today, which I know we're gonna talk about, but we're poised to launch the best drug in PAH. We're poised to launch the best drug, which is Tyvaso, in IPF. As we announced on our earnings call last week, we think we'll have the best and most well-tolerated drug delivery device for inhaled therapies across multiple indications.
That just really, I think, positions us really nice for significant growth as we move out to the rest of the decade.
Great. Maybe we'll start with the Ralinepag data that you announced this morning. Obviously, we saw the 55% reduction headline. Maybe if you could just kind of recap the data. What are the highlights of the release this morning? Obviously, Uptravi was always used as sort of a comparison, but how should we think about these two trials?
Yeah. We were frankly pleasantly surprised with how robust the data was. I think one of the things that came through, if you happened to listen on our call this morning, came through multiple times was the idea of how contemporary this patient population was. You know, we had over 80% or around 80% of the patients on dual background therapy, which was what we see in clinical practice. You mentioned the 55% reduction in risk of clinical worsening, which we think is very significant. You had patients that were on Ralinepag had a delay in disease progression three times better than what you saw on placebo with the dual therapy.
You had about a half, about a 50% chance of actually seeing clinical improvement, which is something we haven't really seen in pulmonary hypertension. The other thing that I thought was really important was the durability, the benefit we saw going out to at least four years, which is something that's, I think, pretty impressive and great for patients. You know, lastly, seems to be well-tolerated. Just, you know, from our standpoint, you know, we think it's a home run, we're looking forward to working with the FDA to get it approved out into the market to help patients.
Maybe how do you expect this to be incorporated into the treatment paradigm? Obviously, it does have the more convenient dosing than both, you know, Uptravi and Orenitram with the differences in the activity that we just saw. I guess, is this gonna be sort of the first prostacyclin oral, the first, you know, branded oral? How do we think about how this is gonna fold in?
Yeah. Yep. You know, we had Dr. Lachat, who was our top enroller in the U.S., on our call this morning, and I think he summarized it really well, which is it's gonna be his first-line prostacyclin after AMBITION, and very soon after AMBITION. You know, he talked about the idea that he would start patients on AMBITION, or if he had patients on AMBITION, really as quickly as within a month, add Ralinepag. We think this has the potential and will be the new standard of care for pulmonary arterial hypertension.
When you think about what that value is.
Mm-hmm.
A nd, we'll see if you answer. I guess how big of a drug do you think this could be? Obviously, Uptravi's done very well. Orenitram's done very well. It's around $500 million-ish, I guess, a year, expected. Kinda where do you think this will fall?
We think this has an opportunity to be a blockbuster and our biggest product in pulmonary hypertension. If you think about the landscape right now, you've got about 30,000 patients not currently on a prostacyclin therapy, right? Just right there, and again, as Dr. Lachot said, you know, those patients should all really all be on Ralinepag. You know, you've got a, you know, pretty big addressable, catchable, capturable market. As we kind of look at what the opportunities are, launching hopefully middle of next year, we think by, you know, by 2030, we could be upwards of around $2 billion with just Ralinepag.
Wow. Great. Maybe to talk a little bit about the PAH market in general and how that's been changing over the past couple of years. I guess we'll first have anything else that we left off on Ralinepag that you wanted to emphasize given the newness of the data?
just the, I think the last point, I guess I should have meant. When we think about pricing, 'cause that question's.
Yeah.
Come up a lot.
Yeah.
I think we think about pricing to be pretty comparable to existing prostacyclin therapies.
Great. Maybe on the PAH business, how have you seen this change? We've obviously had the introduction of Sotatercept, we've had the introduction of Liquidia's, Yutrepia. I guess how has the Tyvaso and the prostacyclin market for ether-branded drugs changed, since the launch of either of these? Then maybe we'll get into your unveiling, from last week as well.
Sure. you know, I think if you kinda go back over the last couple years, I think we've had nice double-digit growth. That's continued. As we said on the call last week, we expect that to continue going forward. Haven't really seen much of an impact, I think, from Sotatercept in terms of utilization of our therapies. In fact, when you know, you dig into their trial data, you actually see, there appears to be some sort of synergistic effect between prostacyclin and Sotatercept. The patients that were on both of those drugs, had really favorable results in their trial data. you know, largely, we're seeing Sotatercept used, as it was in the, in the trial and no real impact to any of our prostacyclin products.
You know, Liquidia launched their product last year. You know, we talked at the time and have over the last couple quarters. I think given some of the, you know, the statements and claims they were making, it's not surprising that the physicians wanted to try a new agent or try a new product. We did go through this trialing period. I think over, you know, really over the last couple months, I think what we've seen is that, you know, the physicians are starting to figure out, you know, what's real and what's not with respect to their product.
I would say we, while we saw an initial dip in referrals after their launch, really by the end of the summer, that started to trend back up. As we reported on the call last week, our referrals or our prescriptions for the last three of the last four months for DPI, are at pre-launch, pre-Liquidia launch levels. Nebulizer referrals for the last month are now back up at pre-Liquidia launch levels. Really in the last four to five weeks, we've seen the starts pull through. Like, you know, I described last week that we do typically see some seasonality in the fourth quarter with respect to starts, and we saw that. While the referrals were coming in at a healthy clip, the starts were a little bit slow to follow.
In the last 3 to 4 weeks, we've seen that logjam break, and the starts are now really over the last few weeks back where we were last spring.
Great. Obviously on the call last week unveiled the soft mist inhaler. Maybe, before we get into how that's gonna fold into the treatment paradigm, what sort of data do you have in-house to support, you know, the competitive profile or differentiation versus maybe your dry powder inhalers, and when will we see some of that data?
Sure. We started working on this about two years ago. We conducted our first healthy volunteer study cohort second half of last year. That data looked really good, and I think Martine reported last week that we saw up to a 90% reduction in cough, which is the number one side effect with dry powder inhalers. Very encouraged by that data. We still have to do some more studies in healthy volunteers to prove out PK bioequivalence. That work is ongoing right now, and we expect to file for FDA, or for approval by the end of the year.
Great. Those bioequivalence and stability studies that you need for approval, I guess, does anything need to be done in PAH patients, or can you get that done with healthy volunteers?
The FDA has told us thus far that all we need is healthy volunteers.
Great. If this is approved, how do you expect the Tyvaso-based business to be impacted? Would everyone kind of flip to the soft mist inhaler? I guess same for Liquidia, when you think about just the overall impact to DPIs, what proportion do you think is gonna be on nebulized Tyvaso DPI, and the Trezmie?
Yeah. What I would expect is that nebulized Tyvaso probably goes somewhere close to 0. Nothing ever really goes to zero. I think the difference, the soft mist inhaler and the nebulizer are very close in terms of drug delivery. I think that, you know, patients and doctors are certainly gonna prefer one breath four times a day than doing anywhere from nine to15 breaths four times a day, not to mention the fact that the SMI is a much smaller device. Not quite as small as the DPI, but certainly smaller than the nebulizer. I think, you know, SMI trumps the nebulizer. I do think it's probably gonna be preferred over the DPI as well.
I think there will still be a market for DPI, but I think it is gonna be the preferred option for inhaled delivery.
Maybe... Yeah.
Just MannKind put up the chart in their presentation about, I guess the only approved soft mist-type inhaler was, it was Spiriva. I guess that was at basically 50% penetration over its time. What's different, the same? How, you know, as you think about that as an analogy, both the technology and/or the market, you know, as an analogy to what you see here?
Yeah. I think it's, you know, we'll prove this out when we do the healthy volunteer study, is gonna be, I think it's gonna be the side effect profile, right? I think if we, when we do this next trial, we look at the data and we do see a striking difference in cough, I think that's really gonna be, what turns things.
The next thing to fold in is, obviously with Insmed, the potential once-daily administration therapies. Martine has indicated that UT, you know, themselves are also advancing a once-daily inhaled therapy. How do you think that will compare to the Trezmie, and kinda when can we expect an update from your once-daily drug?
Yeah. we'll have more to say on the once daily drug later this year. I think what we've said pretty consistently is we wanna get through these filings for IPF and for Ralinepag, and then, we'll start to talk about the once daily inhaled therapy. assuming that works, and we're very confident that it will work, I think that once daily will trump four times a day.
Mm-hmm.
I mean, just pretty simple.
Mm-hmm. Maybe if we go to IPF now, 'cause that's the next data set to read out.
Mm-hmm.
Obviously, you saw really strong data from TETON-2. TETON 1's coming out now. I guess when we look at the background and baseline characteristics between TETON-2 and TETON 1, outside of the geographical differences, I guess any reason why this study wouldn't replicate, and kinda what are your expectations for the top line release?
We don't think so. I mean, as you mentioned, the baseline characteristics between the two studies are very similar. The trial design is the same. We, you know, I guess there's always a wild card in there, but we remain, I think very confident that we will have a positive readout along the lines of what we saw for TETON-2 .
What do you anticipate sharing in the top line release? Because obviously with the two studies, there's also the opportunity to maybe show some additional data on, you know, subsets or mortality or things like that. What would make sense for the top line, and maybe what would be you save for, you know, ATS or something else like that?
Yeah. I think the baseline assumption is what we did for TETON-2, right? You'll probably see that level of data in the top line, and then we'll follow on later at a medical conference with additional data.
How long after the data could you file the sNDA? I know the company was anticipating meeting with the FDA for potential accelerated filing paths or review paths.
Mm-hmm.
I guess when could we hear the outcomes of those discussions, and how fast do you think this could get on the market?
Our internal plan is to file by the middle of the summer with the FDA. We continue to have discussions and explore options for an accelerated approval, but I don't have any updates for you at this point.
I guess how large of an opportunity do you think IPF is for Tyvaso, and where do you see it fitting in? Obviously, it showed that 50 milliliter decline, no matter if you were on no background, Ofev, Esbriet. I guess where do you think physicians are going to use it based on your discussions, and how big of a growth opportunity is this?
Sure. I think if you look at the IPF market in the U.S., it's roughly 100,000 patients, maybe a little bit more than that, actually. You're talking about a patient population that's twice the size of PAH. Really, I think it and still an area of unmet need, despite the fact that there's I guess three drugs on the market. I think in terms of utilization, we just hosted an advisory board with 15 of the top KOLs in the country a few weeks ago, and I think their general sense of things is that one, this becomes a polypharmacy market, and they think that the dominant drugs will be Nurent, Omalast, and Tyvaso.
You'll see patients on a combination therapy of those two drugs. Sequencing of that I think is gonna be a little bit patient-dependent, I think the other point they made is it probably doesn't matter because if I start on one, I'm gonna add the second pretty quickly thereafter.
Would the soft mist inhaler also benefit from an approval in IPF, or how would you potentially incorporate that to this labeling?
We've not had discussions with the FDA yet on SMI and IPF. We'll start those conversations again after we get the filings in in the summertime.
Are you seeing any off-label benefit from the data you presented so far, either in patients with, you know, PH-IPF, or do you think this is something once we have the U.S. data in hand could happen, or do we really kinda need a label for IPF to see?
Yeah, just to be clear, PH-IPF really is PH-ILD, so that's on label. I would say, you know, I think the academicians are familiar with the data. Those out in the community are not yet because we've been, you know, pretty much embargoed until we issue, get a publication out, which is, you know, hopefully coming here before not too long, and then we'll at least our medical affairs teams will be able to go out and start talking about the data in greater detail. What I think we could see in the U.S. is more aggressive screening of patients with PH-ILD because in, you know, some ways, you're gonna treat the PH-ILD, you're also gonna get a benefit from the IPF by doing that.
I do think that we could start to see some more aggressive screening for PH-ILD between now and approval. I think getting off-label, seeing material off-label use in IPF is gonna be really difficult because right now in order for the payers to approve the drug, you have to have a right heart cath to confirm pulmonary hypertension.
If you do get an eventual label, hopefully in IPF, would that also be a tailwind to PH-ILD because maybe you wouldn't need a right heart cath to confirm disease, maybe you could do an echo? Do you think that's gonna be a tailwind of the PH-ILD opportunity for that reason?
I think it'll be, I think we'll see a tailwind for PH-ILD. It's gonna depend on the subset 'cause, you know, ILD is a really broad patient population. Our initial indication in IPF is going to be a subset of that. I think clearly if the patients have IPF, you'll be able to start them on Tyvaso without a right heart cath. If they don't, they aren't diagnosed with IPF as a subset, you probably will still need to do a right heart cath in order to get it approved.
Okay, great. Obviously, since the TETON-2 study was run in Europe. I guess, what are your discussions and plans kind of ex-U.S. for Tyvaso? I know Martine has kind of alluded to potential global partnerships on the last two calls. How do we think about that?
We designed the trials to support approval in Europe. That's part of one of the reasons we ran two trials. Right now, we're focused on the U.S. approval, getting that filing in, and getting it approved. I think after that, we'll start to take a look at opportunities in Europe. I think one of the things that, you know, we're obviously mindful of is some of the Most-Favored-Nation policies that are coming out of the Trump administration and how that could potentially impact pricing in the U.S., Very interested in exploring approval outside the U.S., but still some work to be done there.
maybe can you give us an update on the progress of the PPF study? I think the company's indicated this could be an additional 60,000 patient opportunity in the U.S. Is that still the case, and when can we see data from that trial?
Sure. We started that trial, I think it was last year. We're about 50% enrolled.
Mm-hmm.
That's been enrolling at, that trial's been enrolling at a really nice clip. We're really, you know, enthusiastic and optimistic about the success of that trial. The patient population, I think 60,000's conservative, to be honest. I think, you know, depending on who you talk to, they'll say it could be as much as 200,000, but somewhere in that range. Again, just another really kind of virgin market for us with no great therapies. I mean, I think it's one or two that are out there, but I think it's still an area of unmet need. We're excited about the potential that Tyvaso can bring to those patients.
Maybe rounding out the Tyvaso conversation, maybe how penetrated are you right now, you think, into the PH-ILD market? Obviously, we indicated some of the issues with the right heart catheterization. I guess, how much of that can be the team just really educating and pushing sites to do more right heart caths? What sort of peak penetration do you think you can get to?
Yeah. I think we're probably at around 15%-20% right now. I think, you know, coming back to your question about the tailwind potentially from IPF, That's where I think this can really help us out in PH-ILD, 'cause I still think, the majority of patients are being referred to PH clinics.
Mm-hmm.
The PH-ILD patients are being referred to PH clinics, and we are increasing the number of treaters in ILD. I think as those physicians start to get more experience using Tyvaso with their IPF patients, they're gonna be more inclined to start again, aggressively screening and treating the PH-ILD patients that aren't a subset in the IPF subset.
Okay. Great. Maybe before we get to xenotransplantation, we'll circle back maybe on some... Obviously, with Ralinepag, you brought that into through business development. A lot of the opportunities we're touching on for the first, you know, 20-plus minutes here, you're gonna have some pretty good cash flows generated, over the coming years. I guess, are you interested in BD? Kinda how are you thinking about how to use maybe some of these funds?
Sure. I'm gonna let my colleague here, James, handle that.
Thank you.
Yeah.
BD is something that is always on our radar screen. We, as we've talked about, well, we try and be as good financial stewards of investors' money. The areas where we tend to focus on are pulmonary, cardiopulmonary, even oncology, we've talked about. As part of, Joe, our capital allocation priorities that I know we talked about, just as a quick review, for those listening, we first focus on internal research and development and also our facilities. It's kind of our first priority. We always wanna make sure we have enough capital to make sure we can execute against the programs and R&D programs we've talked about, including things like Ralinepag today. The second thing is corporate development. As I talked about, we do look at opportunities often.
We also don't feel we have the need to rush out to bring in an asset. We've talked about advanced outcomes in Ralinepag today, the TETON trials in IPF. We have a lot of conviction in our internal programs. To bring something in and displace what's on our plate is something that we evaluate very carefully. We do evaluate opportunities often. We don't feel the need to rush out. The third item is return of capital to investors. As we put in our 10-K that we just filed last week, we did wrap up the most recent $1 billion share repurchase that we felt went very well.
I think going forward, what, people can expect is us to continue to evaluate this waterfall of capital allocation priorities, including, I think, where you started with corporate development.
Mm-hmm.
The last thing I would say on corporate development is, we have a tremendous amount of resources internally, from Michael's commercial teams to clinical development teams to manufacturing, and regulatory. When we look at opportunities, we wanna make sure first there's scientific validity to an opportunity, and then we kinda match it up against our internal resources that, we do have a lot of confidence in. Again, you're seeing some of that play out in the recent clinical trial on blindings. Overall, we just wanna be good stewards of capital, and I think people can expect going forward the same capital allocation priorities.
Great. Maybe we'll move over to xenotransplantation. If you could just kind of hit on the first study that's entering the clinic now in the kidneys.
Sure.
What's the current status of the program? How many, you know, transplanted patients would you like to have data on before maybe releasing that to publicly?
Sure. We started our 10-gene xenokidney trial in the fall of last year. We've now enrolled two patients. The way the FDA's asked us to do the trial is transplant the first patient, wait 12- weeks, do the second patient. Wait 12- weeks. Then we can do patients three through six.
Mm-hmm.
After we have data on six patients, we'll go back to the FDA, share that information with them. Then, per the trial, they said that the full trial is up to 50 patients, but I think after looking at the data for the first six, they'll tell us what that number is. It could be something less than 50. You know, because it's a clinical trial and you have privacy concerns with the patients, we're not gonna provide regular updates on the patients and how they're doing. I think the next update you can expect from us is after we get those six patients enrolled and have that discussion with the FDA.
Great. What is de-risking for these patients? Obviously, you can get immediate rejection, which obviously you've shown these patients can be followed for quite some time, and then maybe there's this sort of next acute stage, and then there's kind of chronic acceptance of the tissue. I guess, how long is long enough to know that this, you know, organ is making a difference for these patients?
Yeah, I think.
Six months, 12- months?
Six months. Six months per the trial.
Per the trial.
Yep.
Okay. Great. How large of an opportunity do you think this could be when you look at the number of patients this could address? Maybe what's your current footprint on the xeno side of things?
Sure. I mean, the opportunity is massive. You have about 500,000 patients with end-stage renal disease that aren't even eligible for to be on the transplant list. Massive opportunity. Just as a reminder, the eligibility criteria for our trial are patients that aren't eligible to be on the transplant list or are on the list, aren't expected to get a transplant within or have been on for five years, right?
Mm-hmm.
They've been on for five years, or not on the transplant list. I think the opportunity is there. In terms of our footprint, we have one what we call a designated pathogen-free facility that we opened last year in Virginia, and that's what we're using to source the organs for our clinical trial. Once we're commercial, we'll also be able to source organs for commercialization. We will open two more designated pathogen-free facilities this year. As we see how the trial goes, our strategy is continue to open up more facilities strategically across the country to get the facilities nearer the transplant centers that we think are gonna be performing these surgeries.
Maybe on that last point, can you talk a little bit about the reception that you've seen so far to sites wanting to participate in a study and are they seeing this as sort of a bridge to allotransplant or more of a hopefully permanent cure for some patients?
Yeah. I think the receptivity has been really good. Now, so far we're just doing transplants out of one site, but we will open. You know, I think once we get past the first six, we'll open it up. I think there's certainly a lot of interest in participating in the trial, so that's not an issue. I think based on our early conversations, and ongoing conversations with the transplant surgeons, I think they see it as a potential cure. Not just a bridge, but a potential cure.
Great. maybe we'll circle back to some announcements that you made last week as well. You indicated that you're gonna take Tyvaso into PHCOPD again. I guess, can you just remind us what happened the first time with PHCOPD? It was kind of during COVID. I feel like there were some issues. I guess, what got you re-interested in pursuing PHCOPD?
The issue. This was called the PERFECT trial that we ran. As you said, a lot of the trial occurred during COVID. I think there were a number of issues with the trial in terms of patient selection, endpoints, dealing with COVID 'cause a lot of the measurements were being of benefit were being done at home. It was just... It was a really challenging trial for us, and I think we learned a lot from that trial. I think we also believe that the drug works in the right subset of PHCOPD patients.
You know, just by virtue of getting smarter about, from what we learned from the prior trial, we think we've got, we've got a path to get to have a positive study and get an approval.
Great. maybe in the last minute here, we'll talk about Remodulin. It's held in really well kind of over the years, and the company has done well at kind of innovating new devices to kind of stay competitive there. I guess, how should we think about Remodulin moving forward? Is this a stable kind of part of a PH regimen, or are some of these newer agents gonna disrupt that? How do we watch that?
I think there's always gonna be a role for parenteral, right? I think particularly as you start to look at the functional Class IV patients, the really late-stage severe patients, I think that Remodulin's gonna continue to be the go-to drug for doctors and that group of patients. Now, I think what you may see is there's opportunities to, if you can stabilize patients on Remodulin, transition them over to, say, an Orenitram. We've got a couple studies that have shown that you're able to do that. I imagine what we do in a Remodulin to Ralinepag study now to show that you can take a stable patient on Remodulin or a severe patient on Remodulin and then transition them over to Ralinepag. But I think there's always gonna be some role for Remodulin in PAH.
Awesome. With that, I think we're just about out of time. Thank you very much for the time.