Again for joining us at the Leerink Global Healthcare Conference. My name is Roanna Ruiz. I'm one of the Senior Biotech Analysts here at Leerink, and it is my pleasure to introduce United Therapeutics here. On the stage, I have with me Dr. Martine Rothblatt, who's really sort of led this company through a lot of different events and data and many, many milestones. Really glad to have you here.
Thank you, Roanna. I appreciate the opportunity to be here.
Yep, great. A lot of people know United Therapeutics, but just in case, in terms of if investors are wanting to refresh on the story a little bit, I'll ask you a big picture question before I dive into the details. Just how are you thinking about the main pillars of the United Therapeutics story, both commercially and in the pipeline, and your top goals for this year and beyond?
Sure. The main pillars of the United Therapeutics story are two progressive fatal illnesses, pulmonary hypertension and pulmonary fibrosis, of which we have been able to report this year the best clinical trial results that have ever been reported in each of these separate diseases ever since the creation of the FDA. Before I say more, let me just warn everybody that we are a publicly traded company, of course, and that I'm going to next say some things that are forecasts or projections into the future, and to please consider all of these quote-unquote, forward-looking statements as being conditioned by all of the information and risk factors described in our SEC 10-K and 10-Qs. With that, like, front note.
let me just mention that pulmonary hypertension, if it's untreated, the patients die within five years. Pulmonary fibrosis, similar situation. Pulmonary hypertension in the United States, around 50,000 patients. Pulmonary fibrosis in the United States, probably twice as many people. The results that we announced, just in the past three months, so this conference is so timely, were, first of all, the best ever clinical trial results for pulmonary fibrosis, which showed that we were able to improve patients' Forced Vital Capacity, which is the overwhelmingly used endpoint in pulmonary fibrosis, by a much greater amount than any other medicine ever approved by the FDA or the EMA.
Physicians are now forecasting that because of this, our medicine, called Tyvaso, will be used as the primary medicine for the field of these, you know, upwards of 100,000 patients, which is so extraordinary and such a great privilege to be able to slow the progression of their disease and give everybody more years of life. Very similarly, just last week, we announced the results of our ADVANCE OUTCOMES clinical trial of a medicine that we call ralinepag. This medicine is an amazing drug. We call it a super-prostacyclin because it lasts, one pill lasts all day long, and it has much greater potency for the pulmonary vasculature than any other medicine seen before in clinical trials.
At the end of our trial, which we announced just last week, we had shown that we had made a bigger improvement in slowing clinical worsening and a bigger improvement in clinical improvement than any other medicine taken orally in the whole time that the FDA has been approving medicines for pulmonary hypertension. The leading doctors are forecasting that every pulmonary hypertension patient will be put on ralinepag. As mentioned, that's upwards of 50,000 patients.
We expect as soon as two years after launch that at least 15,000 of those patients will already be on it.
Yep. You sort of It's a good segue to my next question. I was thinking ahead with ralinepag for a second and some of the potential peak sales that you could reach with ralinepag. Now that you have ADVANCE OUTCOMES data in hand, like what needs to happen, or what are some of the levers that could get you to a higher peak sales and your excitement behind that?
Great question, Roanna. There's a lot of factors at place, in play here. First of all is to have FDA approval, which we expect to have in the middle of next year, and we expect to file for approval in the middle of this year. It'll be launched very quickly. Next in place is to have a really great commercialization team that can go out to the pulmonary hypertension prescribers. Fortunately for United Therapeutics, we already have, like, one, two, three, four medicines approved in pulmonary hypertension, so we are very well acquainted with the field. The field has an enormous respect for United Therapeutics. There's a special recognition for our company as a public benefit company that has a mantra to leave no patient behind.
If patients are unable to pay for their medicines, we always have a patient assistance program to provide them the medicines for free. There's an enormous reservoir of great will for United Therapeutics. As a result, I think we'll very quickly reach our first target of 15,000 patients within 24 months of approval. That correlates to approximately $3 billion in revenue. Soon thereafter, we'll continue to march toward that peak revenue factor that you referred to, and that will involve going out to the large population of patients on dual oral background therapy, which is also known in the field as the AMBITION therapy. That's an ETRA, endothelin receptor antagonist, and a PDE5, such as Adcirca, or tadalafil is its proper name. There are about 30,000-40,000 patients on that dual background therapy.
We have the first time to be able to say to doctors, "If you just stay on background therapy, your patient's disease is gonna get worse faster. If you just add our super-prostacyclin to that background therapy, it will slow their rate of worsening, and many of them will actually get better." This is a very compelling proposition. I think very quickly you're gonna see us notching additional $billions in peak revenue during the 2030s. The ultimate story is that with something like 30,000 or 40,000 patients, we could literally have, you know, 20 times the initial peak revenue. The initial launch revenue could be our peak revenue in the 2030s.
Yeah. That's really interesting. Sort of thinking about the market and evolution here, I wanted to segue a little bit to PAH and PH-ILD with Tyvaso. Could you just level set a little bit about what you're seeing in terms of patient metrics for Tyvaso with the nebulizer and the DPI? You know, what's been exciting in terms of what you're hearing feedback from the field force and physician feedback as well?
Yes. First I want to correct one thing I just said. I said the peak revenues could be around 20 times the launch revenues. I think the peak revenues would more likely be around five times the launch revenues, because the launch revenues are associated with about 15,000 patients in the US.
Sure.
The peak revenues could reach $75,000 by considering both the U.S. patients and European and rest of world patients as well. With regard to Tyvaso for pulmonary fibrosis, I think the revenue potential is even greater. There we think that in terms of launch revenues, we could probably be helping something like maybe 30,000 patients very rapidly, those being the patients who are already taking some kind of medicine for pulmonary fibrosis or found themselves unable to tolerate medicine and went off it. With us, we can show the best clinical trial data ever shown that we can do better for those patients. I think getting to 30,000 patients is something that will happen within three years of product launch, so very, very quickly.
From there, the peak revenues are really, you know, just amazing because pulmonary fibrosis exists in two flavors. There's what's called idiopathic pulmonary fibrosis, which as many of the audience knows, it kind of means we're like idiots about what causes it. There's another version called proliferative pulmonary fibrosis, which is, frankly speaking, about 10 x more prevalent. There's many different types of it. The peak revenues could actually be 10 x our launch revenues in pulmonary fibrosis.
Yep. Got it. I'm glad you sort of segued to IPF, and there's a lot going on. In terms of thinking about the upcoming TETON-1 study readout, I mean, could you frame maybe for the audience what are your expectations from that data set in terms of reiterating what you saw potentially from TETON-2, and what would be a really exciting outcome?
Roanna, that's a great question, and in all of our one-on-ones that was the number one question that was always asked. We expect the TETON-1 results to lay very much right on top of the TETON-2 results. For the benefit of the audience, TETON-1 is the confirmatory registration pivotal trial for TETON-2, which was the first pivotal registration trial for the medicine Tyvaso in idiopathic pulmonary fibrosis. TETON-2 is just named TETON-2 because it started after TETON-1, but it enrolled all of its patients faster, so it got unblinded more quickly. The results as we talked were extraordinary, upwards of 100 mL of improvement in forced vital capacity, way above anything else.
We have looked very carefully to see is there some reason that the TETON-1 results would be different from the TETON-2 results, and we can't find any reason. The inclusion criteria for patients in both trials were the same. The endpoints we're measuring are the same. These kind of indicators that tell you if the patients had any confounding diseases or other diseases beyond pulmonary fibrosis, all of the metrics shows that there were not any of those confounding factors. From a standpoint of biostatistics, we expect the TETON-1 numbers to look just like the TETON-2 numbers.
Yep. In terms of thinking about the evolution of IPF and PPF and where you could layer into the treatment paradigm, how are you thinking about that?
I think that they would layer into the treatment paradigm in basically three different ways. First of all, there are a number of patients who unfortunately are at the end of the life expectancy phase of pulmonary fibrosis. They have found themselves unable to tolerate the two generally prescribed background therapies, nintedanib and pirfenidone, they went off of those, now they're getting even worse, we see rescuing those patients with Tyvaso. Excuse me. That's one group. The second group are on these prevalent background therapies. By the way, the reason I feel confident about that is in our clinical trial, a third of the patients were on no background therapy, or they had given up on the background therapy. We've already proven that we work on top of nothing.
The second group of patients are the roughly 30,000 patients in the U.S. who are on background, either pirfenidone and nintedanib. While these drugs have an FDA label that shows some modest improvement in Forced Vital Capacity, a much bigger portion of the label talks about the side effects, and they are very, very difficult to tolerate. We will be able to go to the physicians treating those patients and say, "You can go ahead and layer Tyvaso on top of these difficult to tolerate oral treatments, and if you see the patient is getting better, then you can wean them off of the oral treatments," and thereby kind of the patient gets two wins. They get win one of the power of Tyvaso, moving them up to a 100 mL of oxygen FVC improvement.
Win two is they get rid of a lot of the terrible side effects that they're suffering from pirfenidone and nintedanib. I think that's a very compelling proposition. What really seals the deal is 75% of the patients in our study were on those background therapies. We've already proved that our drug works better and synergistically with those background therapies. I think that'll be a pretty easy prescribe for the physicians.
Yeah.
The third group is very recently there have been a couple of new drugs approved in the IPF space. While we did not test our medicines on top of the new drugs, our clinical trial results showed a far greater improvement in Forced Vital Capacity. It may be that the physicians want to migrate their patients from the drugs that perform less well in the pivotal trial to Tyvaso, which performed much better.
Yep. I hear you. That's really interesting. Speaking of other new updates from the company, you also unveiled Tresmi or the new soft mist inhaler. Couldn't help but wanna ask, like, how are you positioning this product? You haven't released a lot of data, you did mention a 90% reduction in cough.
Yes.
How should the investors in the audience think about that commentary, the data you have so far, and what you're building towards with the soft mist inhaler?
Sure. We were very excited to announce Trezist because it's the first product that came out of United Therapeutics', what we call our skunkworks, where we develop, like, amazing new products that are much better than all of the products out there already. Trezist was the first one, and we are going to file for approval this year, 2026, and expect to launch it next year in 2027. We wanted to give the market some indication that there was a sea change coming in the field of inhalation therapy. Up until this date, first there was a generation of just big, bulky nebulizers being used for inhalation therapy, and then there was a next generation of dry powder inhalers.
The dry powder inhalers have turned out to be much more convenient for the patients, but much more difficult to tolerate, with a lot of patients suffering cough because it's so dry. It is just what the name says. When we were able to invent this soft mist inhaler and do our first study in humans, we saw that, whoa, it's 90% fewer of these people are coughing at all, like no cough, compared to the patients, the other kind of patients. This was, to us, a sea change in inhalation therapy. We wanted to get that out to everybody, even though we ourselves have, you know, a wonderful dry powder inhaler, and it's helping preserve the lives of over 6,000 patients. It's growing by double-digit amounts year-over-year.
I think it will continue to grow by double-digit amounts. Once the soft mist inhaler is approved by the FDA, hopefully next year, very quickly, within two years, the majority of people who do any kind of inhalation therapy will be breathing the soft mist inhaler.
That's great. Thinking ahead, you know, with TETON-1 data coming up and IPF potentially pursuing that indication and bringing it together with the soft mist inhaler, how are you thinking about the soft mist inhaler potentially moving into other pulmonary indications?
Excellent question, Roanna, once again. What we're trying to do is to segue things in the lowest risk way. Our first goal will be to file for Tyvaso to be approved in IPF without the soft mist inhaler. The next stage would be to file for Tyvaso soft mist inhaler or Trezist to also be approved in SMI in IPF. It's a kind of a very natural transition because nebulizers, despite their bulkiness and despite the need to have, like, a prolonged breathing period, they are easier to tolerate in terms of cough than dry powder. We think it will be a much easier regulatory ramp into IPF to make the next product that goes into their, the Trezist product.
Trezist is not the only new thing you started talking about. If you're able to share, was curious if you could talk about the once daily inhaler that you've mentioned. You also mentioned a PRN inhaler and also a possible.
Yes
Of Ralinepag?
I think maybe you've been snooping around our skunkworks. You know, all the products in the skunkworks. Yes, the next product cued up from the skunkworks in our stealth group is the once daily inhalation treatment for pulmonary hypertension. We intend to provide a full visibility into that product right after we file the ralinepag NDA in this summer, as I mentioned before, which would be the pill. Also at the same time, we'll file the Tyvaso product for IPF. Both of those filings will go in. The target date is June, July, something like that. We'll go into the FDA, and we hope to have both of those products approved in time for our 30th anniversary which is actually June of 2027.
That gives the FDA more than their usual period of time, and hopefully we'll get it approved a little bit earlier. That'll be a tremendous thing to celebrate along with the thirtieth anniversary. Of course, because 30 years is three decades, we want to have a third product to celebrate the launch of, which would be the Trezist product, soft mist inhaler. We also have these additional stealth projects coming out, like first of all, the once a day inhaler. Right after we do those filings in midsummer, we'll announce more details on the once daily inhaler. However, I can say that we have a very detailed and fine-tuned Gantt chart for its progress.
By everything that we see, we would expect to launch that product in 2028. It will be really just kind of right after the corner of these current products. Another really cool product coming out of that is a product that is for PRN use. Of course, as you know, my daughter has pulmonary hypertension, and I live in a community of pulmonary hypertension, and I see very, very frequently that people need something that I would just functionally describe as a rescue inhaler. They want to go to the store, they're running out of energy, or they're at the store and they're running out of energy, and this is the common problem with pulmonary hypertension. You just run out of energy.
The ability to have a PRN inhaler that you could use as needed that had a fast onset but maybe not a long duration, so as not to compound with your systemic once daily type of treatment, is another product we're really excited about in our stealth works group that you mentioned. A third product is a combo oral pill that would combine the kind of medicines that we proved that we were synergistic with in the ADVANCE OUTCOMES study because, as I may have mentioned, 80% of the patients in that study were on dual background therapy, both an ERA and a PDE5 inhibitor. We have actually recently figured out the unique way to combine all three medicines, ralinepag and those two, all in an easy-to-swallow pill.
It took some little smarts, but I think a core competency of UT is in drug formulation. That's another thing that is in our skunkworks that we'll be announcing the release of very soon.
Great. Looking forward to it.
Thank you, Roanna.
A lot of development going on.
Yes.
That's also a good pivot to another topic I wanted to hit, the organ manufacturing/xenotransplantation area of your work. I know you have about two active xenokidney INDs, and you're quickly moving into first in human. Could you talk about some of the early clinical signals that you're watching for from these studies and future studies?
Yes. The main point we look for is just normal kidney function and lack of signs of rejection. Fortunately, we already have two patients enrolled in the clinical trial that the FDA has approved. The second patient is nearing 12 weeks, and both of the patients walk around their neighborhoods. They're doing great. They're so grateful and thankful to be off of dialysis. There's every single indicator of, you know, all the lights are green on the dashboard to go forward into the second FDA-approved tranche, which is four more patients all at one time without waiting serially one after another. We'll now do the next four patients will be enrolled, and that will be all completed by the beginning of the summer. We'll have four, there would be six xenokidney patients walking around.
Again, what we're looking for is normal kidney function at the end of 12 weeks. That's what the FDA required. Once we get the 12 weeks from the 4th of those next four, we'll submit all the first six patient data to the FDA, which we plan to do in the third quarter of this year. They will then give us a answer in terms of they had told us initially when they cleared the IND that to gain approval, you'll have to do up to 50 patients, but they didn't give us, like, an exact number. Based on these six patients, we're gonna get, like, an exact number from them of how many patients. We have some reason to hope it could be as few as 30, but if it's 50, it's no problem.
We'll do that too. Whether it's 30 to 50, whatever it is, we'll then enroll those at centers coast to coast throughout the country. We already have such strong interest from, like, Washington University, the Mayo Clinic, other great hospitals, Northwestern is another one. There'll be all of these centers I've, like, name-dropped are already agreed to be in on that next cohort of patients. I think it will be no more than 2027 to enroll the rest of it, whether it's 30 or 50, it wouldn't matter. We have the production capability for those xenografts from our xenograft production facility, the honorable Tommy Thompson, Louis Sullivan Xenograft Production Facility in Christiansburg, Virginia.
The last patient from that study, let's say they are transplanted as late as December of 2027, the FDA said we have to watch for the last patient up to 24 weeks, so six months. That would be the middle of 2028.
Assuming that all goes well, we would file a BLA for the first ever, you know, xeno product, which is, like, super exciting. We would do that in the second half of 2028 and hope to have approval in 2029. I did say at the last earnings call that we would expect approval, a reasonable expectation is 2030 because after three decades, I've learned to always provide some wiggle room on biotechnology. It always takes its own little twists and turns.
Yep. Totally fair. I hear you. A little more detailed question I've gotten from some investors, how are you strategically differentiating, like, UThymoKidney versus UKidney, in terms of could they coexist or how these products will be used in different patients? What are you thinking about them?
It's an amazing question, and it's one of the things that I find so fascinating about United Therapeutics. It makes, like, such an amazing place to work. The UThymoKidney is just to bring everybody to the same, you know, platform, is when the genetically engineered pig is less than four weeks old, its thymus, which is the source of all of the T cells in all of our bodies, and it's the source of the cells that differentiate ourselves from anything else. The little tiny thymus of a four-week-old piglet is auto-transplanted by expert surgeon into a little niche in the kidney of the pig, which is called the kidney capsule. There it grows for the next couple months in the pig.
As the kidney is growing, as the pig is growing, the thymus is growing. Instead of, you know, where it usually is, it's growing inside the kidney. It's fortunate that in this kidney capsule, there is a very rich vascularization of that space. That's important for T cells because they have to get out to every part of your body. You've got T cells in every part of your body. When it's time to do the transplant into the patient, which is about 12 weeks, maybe 16 weeks, the patient is getting not just a kidney, but they're getting a thymus and a kidney. The purpose of the thymus is to teach the body's immune system, the recipient's body's immune system, that this kidney is part of you.
You should welcome this kidney as part of you because that's the job of the thymus, to define self versus not self. There is a little bit of question right now in terms of whether or not we should thymectomize the recipient, take out their thymus or not. I'm not a fan myself of thymectomizing the recipient for two reasons. First of all, believe it or not, after you're two years old, your thymus becomes involuted and it does almost nothing. It becomes like an appendix after you're two years old. By the way, more and more people, they don't want their appendix out because you could take antibiotics if you have appendicitis or something like that, or tonsils out.
That's one reason, you know, I wouldn't wanna take the thymus out. The other reason is the thymus is in a little bit of a difficult place to reach behind the heart. It's just I wouldn't wanna do a more complicated surgery that wasn't necessary. We did do in our brain-dead, heart-beating donor models, we did not thymectomize them, and we showed that the involuted natural thymus of the human and the genetically engineered ThymoKidney of the donor, that they can coexist and the immunology looked 100% coexistent. I'm kind of voting that we leave the thymus in.
The first of those patients, the first of those ThymoKidney patients will be transplanted within the next three months.
Yep.
In fact, those piglets have all been born inside the DPF, which are actually the first ever donor pigs 100% born within a pathogen-free facility. That's what I mean by a DPF, a place where it's protected against any pathogens.
Yep. That sounds great. That's super interesting. Last question. I know we've a minute left. I know you've alluded to discussions with large pharmas before in terms of largely driven by the interest in the AI-enabled digital lung model.
Yes.
Was curious, could you talk a bit more about, you know, what's so unique about this platform?
Great question, Roanna. We began working on the AI-enabled digital lung model actually, seven years ago as part of our program to 3D print a human lung and then cellularize it with autologous cells from the intended patient that would be reprogrammed into iPSCs and then further differentiated into airway and blood side cells. In doing that program, we needed to speed things up by having a digital lung that we could recellularize completely, you know, digitally in computer model in cyberspace. That was successful and has, we are now like on the verge of going into the brain-dead human, heart-beating, brain-dead models with our 3D printed autologously cellularized lungs.
In the process of doing that, we were able to then develop this model to test business development concepts that were brought to us in terms of you wanna in license this PH drug, you wanna in license this IPF drug. We began running those models, and the answers that we got from the AI-enabled digital lung model, every time it matched with what these third parties ended up resulting in their trials. Unfortunately, those trials weren't successful, but the digital lung model told us that, and we saved billions of dollars not buying those companies. We began running all of our own models to try to shadow match what we would find out in the in vivo unblinding, and it turned out to be highly successful.
In fact, like in the IPF model, I described how we got closer to the in vivo results than any of the other in vivo actual trials got to our results. It was really amazing. This is of great interest to some of the great pharmaceutical companies in the world that are developing new pulmonary hypertension treatments. I've mentioned that I see tremendous synergy with Winrevair and ralinepag, so that's something that can be completely vetted out and proven in our AI model. There are other companies working on other great drugs for pulmonary fibrosis that can also be vetted in our AI model. You know, it's one thing to save a lot of money on doing a trial that you don't wanna do or maybe doing it with a little bit different endpoints.
You don't have time to run all the phase II trials to show all those endpoints. What excites me most is the time saved, Roanna. I am literally blown away that we can run 100 trials with countless thousands of virtual patients that match all of the inclusion criteria factors of our trials in 48 hours, and it takes us years to run those trials in real life.
We're now in the process actually of briefing the FDA on our model, and I'm very hopeful that soon we'll be able to file our model results as collateral supportive evidence to try to pave the way for, I think, a brighter future when drugs can be developed much more quickly and even more safely because of our ability to replicate countless polygenic polymorphisms that people have than you would ever find in a clinical trial population.
Yeah. It's super exciting. I could keep going, but.
It's amazing.