Hi, good afternoon, everyone. Welcome to day one of our Cantor Healthcare Conference. Hopefully, you guys can hear me okay. My name is Olivia Brayer. I am one of the senior biotech analysts here at Cantor, and really excited for this fireside chat. We have Martine Rothblatt, who is Founder and CEO of United Therapeutics, and of course, James Edgemond, who is CFO. Thank you both for joining us.
Thank you.
Thank you, Olivia, and also, I am happy to mention that Harry Silvers, our Head of Investor Relations, is right there in the front row and available to field questions afterwards.
Harry, we will make sure he keeps us all in check up here on stage. Well, it has been quite a year for United Therapeutics. A big year clinically. I think people are really excited about the momentum and what 2027 has to bring. So, maybe just set the stage for where the company is today and how you think about what could be a very big inflection and transformation for the company from here.
Olivia, you are so right that we are in the absolute best position we have ever been in the company. It's very rare in a company's life that you get to be present when it kind of inflects from say, like, a kid to an adult type of company, that sort of thing. That's where we are with United Therapeutics. We started off as a pulmonary hypertension company, and now because of the amazing results that we had from the TETON-1 and TETON-2 trials in pulmonary fibrosis, it's very, very clear that we have now inflected over to become a pulmonary fibrosis company. Those, not like within a half year after we fully enrolled those studies and reported the results, by far are the best results ever reported from any drug from any company in 30 years in pulmonary fibrosis. I mean, really making a difference.
Then we very rapidly, almost overnight, enroll in another study, TETON-PPF, in progressive pulmonary fibrosis, which is something like a three times larger indication. This amazing indication of pulmonary fibrosis, where we had the best results, now we rapidly enrolled this other one, and we're looking at now a capturable market that is in the neighborhood of north of a quarter of a million U.S. patients, compared to the maximum capturable market that we ever had in pulmonary hypertension of 25,000 patients. So a 10x jump based on solid data. NDA is now in the hopper, accepted by the FDA. PDUFA date issued, April 26th, so it's super awesome.
Okay. I'm going to come back to that in a minute.
Okay.
April 26th is the PDUFA date.
That's the PDUFA date, April 26th.
I know you just put some numbers around epidemiology, but would you ever put some numbers and characterize the opportunity set that you think that you have across the pipeline and some of the newer launches that you have coming up? Obviously, IPF, you eventually will hopefully have PPF when that data comes out next year. You have ralinepag in PAH. I think, a lot of investors are trying to put the pieces together. I do not know if there is anything that you can say to maybe help contextualize it for us.
Sure, Olivia. Fortunately, in these type of indications, it's possible to do that because the prices of the therapies for treating patients in these indications are well established and have been reimbursed by both public and private payers for many years. All of these therapies are, by their nature, chronic therapies that patients take to extend their lives. It makes sizing the opportunity a little bit easier because you don't have to make a lot of assumptions about how many new patients are going to be captured to replace patients that have already been successfully fully treated by your therapy. In our case, if you take a look at the combination of the pulmonary fibrosis and progressive pulmonary fibrosis markets, by most conservative estimates, you're looking at 400,000 patients.
Another indication, which we've announced that we will now be commencing enrollment in our clinical trials next year for, is the indication called COPD with pulmonary hypertension that is dominant in these COPD patients. That's an indication of 400,000 - 800,000 U.S. patients, so on average about 600,000 in the middle. Now having nothing to do with pulmonary hypertension at all, where we started as our youth growing up, now as adults, we find ourselves in a 1 million patient population, and that's the addressable market. Our drugs, fortunately, have shown that they are best in class for pulmonary fibrosis, best in class for pulmonary hypertension.
You're looking at, even if it is a 50% capture against these numbers, times something like $200,000 per patient per year for the normal reimbursed amount, you're looking at United Therapeutics now as a $100 billion pharma revenue company. Compared to just last year when we were only pulmonary hypertension, maybe the maximum potential would be around $10 billion. Again, a 10x transformation during the past year. Everybody in this company, we're just going full speed out for it.
Good for you guys. That first kind of proof point will be your IPF launch coming up next year. Like you said, you do have an official PDUFA date. Maybe just to start, what are you all doing as a company to get ready for that launch? From a sales force perspective, from an awareness perspective, I'm sure some of your team was just at ERS this past weekend. What has been the feedback from the community, and what are you all doing to make sure that you do end up having a successful launch come next year?
It's so great that you asked that question, Olivia, because speaking about the ERS, I kept getting text messages from my team of the slides that we showed, where you see the improvement in forced vital capacity on Tyvaso compared to the baseline background therapies like pirfenidone and nintedanib, and where you don't usually see curves separate and keep separating like this. But we saw them, they said, "Dr. So-and-so," everybody is just totally amazed that there is a drug which is now going to be hopefully shortly available for the patients with pulmonary fibrosis. We have rapidly doubled our sales force, including many people who are highly experienced in interacting with doctors for pulmonary fibrotic conditions. The doubled sales force are beginning to learn our medicines in the context of our approved indications of PH-ILD.
That's given them good practice, good understanding of treprostinil, how it's different from pirfenidone and nintedanib and other medicines in this area. We are preparing for the combination of our medicine also with Jascayd, which is a very nice new development from BI. We've opened up an open label extension arm of our TETON study, where we can now enroll patients who are going to be on nebulized Tyvaso as well as Jascayd. When we launch, we can present safety information to the prescriber, showing whether your patient is on no background therapy, any of the legacy background therapies for IPF, or even on the brand-new Jascayd. You can expect to have a safe and improved response as a result of adding on nebulized Tyvaso. We're also very hard at work at UT. We're just like relentlessly improvers.
In fact, our mantra for all 2,000 of us is approve and then improve. Approve and then improve. We never stop. Right away, on the heels of nebulized Tyvaso hopefully being launched in the middle of 2027, we're going to be rolling out the clinical program, which I think will be a very simple PK bioequivalent sort of thing for what we call Tyvaso DPI. Tyvaso DPI is already approved in PH and PH-ILD, so it's got a stellar safety record. We expect that that's going to be warmly receptive by the regulatory agencies, agents in IPF. Now you're going to go from having, okay, you've got a nebulizer, that's great. Now you also have a DPI that you just stick in your pocket. We're also going to be filing at the end of this year our next generation product, which is called a coughless TreSMI.
This is a product which, TreSMI is an acronym for treprostinil soft mist inhaler. The studies we've been doing in human volunteers already have shown no cough from these patients, so that's an amazing new thing in this indication. As well as then, yet another new study will start next year that I just mentioned before, the COPD study. We've gone from having, let's say, one or two pivotal registration studies a year back for the past few years. We now have 14 new product launches all going on simultaneously for 2027, 2028, and 2029. This is why, based upon 14 product launches, we can feel confident that UT will be a $50 billion-$100 billion pharma revenue company at the beginning of the 2030s.
Yeah. You brought up the DPI and the SMI formulations. I know maybe you guys aren't ready to share today exactly what the timelines are and next steps there. But is the hope that you could have DPI and SMI launch shortly after a nebulized product, or is that maybe a little bit more of a forward-thinking come 2028 or 2029? I'm not exactly sure what you guys have put in the public domain at this point.
Sure, Olivia. I think it is a shortly after. The reason for that is that our treprostinil product has such a good track record for safety and that we have such an amazing core competency in United Therapeutics at drug formulation and the drug device combination product. The one that might take a little bit longer is this yet another new product that's in that 14 product portfolio that we call once-daily Ralpi. This is an inhalation therapy where you just take one puff a day, and that will be your treatment for pulmonary hypertension and ILD.
We'll have to show, but I believe it'll be the treatment for pulmonary fibrosis as well as progressive pulmonary fibrosis. So this population of 100,000 IPF patients, 300,000 PPF patients, we plan to just introduce wave after wave of products, Nebulized Tyvaso , Tyvaso DPI, coughless SMI, and then once-daily Ralpi. Every patient will find the therapies that work both for them, best for them. Our goal is just to leave no patient behind.
Yeah. A lot going on and a lot of different lifecycle management strategies, so good for you all for staying in front of that. You brought up Jascayd obviously having an incredibly successful launch. I'm sure you all are tracking that very closely. Maybe to start, what have been some of the learnings from that launch? Have you been surprised by how quickly Jascayd, by just the commercial trajectory and the uptake of that product? Are there any commercial learnings from that launch that you can hopefully apply to your launch come next year?
That's an amazing question, Olivia. I second everything that you said, that it was an amazing launch for Jascayd, and BI deserves enormous credit for developing that drug and bringing it to the patient. When we saw the significant improvement that Jascayd offered over the legacy treatments, we were not surprised to see a rapid launch. This patient population, it's just horrible how they have suffered. Frankly, I know people even in our own company who have pulmonary fibrosis. It is a terrible indication. For literally decades, the patient population has suffered with a couple of drugs that have, for most people, intolerable GI side effects. Only a small fraction of the diagnosed patient population are actually treated with on-label approved products.
It wouldn't surprise me in the least for when patients come in for their doctor visits or even being called in by the physician saying, "We have something new for you that could make a difference." We were really heartened by that. I do think that our study in TETON-1 and TETON-2 showed that a polypharmacy approach is the way of the future in pulmonary fibrosis as well as pulmonary hypertension. I think that we're going to see many patients on both Jascayd as well as N ebulized Tyvaso and Tyvaso DPI.
I do think that our uptake will be, certainly, I can't say patient to patient, but will be as rapid, a rapid, explosive type of launch. We are planning for 10,000 patients in our first year on Nebulized Tyvaso. Given the difference between an inhaler and a pill, 10,000 for one year in inhaler is a much larger number for a pill.
Okay. You mentioned earlier that a very small proportion of patients with IPF are actually receiving medication. Why do you think that is?
I think it's because the only medication that's been available has been intolerable. The one thing that we've learned with a lot of orphan diseases is if you want the patient to stay compliant, to stay on the drug, you've got to make the patients feel better. Isn't that just common sense? If you're already sick, why do you want to just stay on a medicine that's only making you sicker?
You could deal with, "Okay, I got to wait a couple of weeks for it to get better." But the fact that two months, you're not any better and you're actually feeling a lot worse, you're going to drop the drug. I would, from the research I've done, Olivia, it seems to me that more than three times as many people have tried pirfenidone and nintedanib and dropped off it than have remained on it.
Yeah. You actually brought up a really interesting point, which I didn't realize until just now, is that you are enrolling patients on Jascayd in an open-label extension study. Can you talk about the decision to do that? From a data collection perspective, will you actually have some data to present or send to the FDA as part of your review application cycle?
First of all, there is no real intention on our part to modify the label for the open-label extension inclusion of the Jascayd patients. The reason for that is, crafting an NDA is like crafting a Mona Lisa painting. You want it to be picture perfect, and the last thing you want to be doing is, "Oh, I just want to change something at the last minute" that could introduce any basis for delay. If that was essential for a product launch, yeah, you'd have to do it, but it's the opposite of that for us. There's no possible way that Jascayd by its own can cover this whole pulmonary fibrosis market. It's not essential. There's plenty of time to amend the label in the future. We don't see a need to rush any of that data into the FDA.
The reason that we decided to do it is that we have become highly convinced through the TETON-1 and TETON-2 studies that polypharmacy is the way of the future in this indication. We did see synergistic benefits between the anti-fibrotic activity of treprostinil and that of differentially nintedanib and pirfenidone in the TETON-1 and TETON-2 studies. While it's a different indication, we've seen amazing synergy of the polypharmacy in pulmonary hypertension with, for example, sotatercept being an amazing drug introduced by Merck, and it turns out it works even better combined with treprostinil as well. That's the same thing for things like ERA receptor antagonists and PDE5 inhibitors. So, we are very comfortable with polypharmacies.
We're actively engaged in creating compounded new products that would in fact put the whole polypharmacy in one dosing, so you don't have to grab from here and grab from there. Jascayd lifted the bar from where it was with pirfenidone and nintedanib up to a higher level. That's awesome. However, the objective fact is that the improvement in the patient's forced vital capacity from Jascayd came nowhere near what was demonstrated independently twice to insane P-value levels in both TETON-1 and TETON-2. So, we'll wait till the FDA approves it, but based on the scientific data right now, Nebulized Tyvaso is a best-in-class drug for treating patients with pulmonary fibrosis.
Yeah, and to that point, what do you make of the agency's decision to give you all a standard review rather than a central priority review?
I think what's really just a consequence of the FDA managing their resources. We did a calculation, and we saw that if we did receive a priority review, it would've occurred about Christmas Eve. And I can imagine, with all of the drug applications pouring into the FDA, with the difficulty with headcount and everything these days, that they just felt the best way to manage their resources was to provide us a standard review. It really doesn't matter. It's four months later, and April 26th will be here before any of us know it. We have a ton of things to do to get ready for that launch, and we're doing them.
T hen you mentioned pricing earlier. How should we be thinking about pricing for Tyvaso? We obviously know the price in PAH and PH-ILD. Anything different as we think about IPF and the considerations there?
Olivia, I'm so glad you asked about pricing because we have our Chief Financial Officer right here on the podium with us.
Thank you, it's a great question. We've gotten it often. At this point, one, we don't talk a lot about pricing forward. Tyvaso is approved. It's reimbursed. We don't anticipate any change from what we currently are getting reimbursed for. We don't expect any change at this point. We'll talk about it more closer to around April 26th.
Okay, great. Last question on IPF before we move on is, something that comes up quite often with my investor conversations is the discontinuation rate that you all saw in the TETON studies. Obviously, it wasn't just the Tyvaso arm, right? We also saw it in the placebo arm. What do you make of that, and how do you reconcile that as you think about persistence numbers when you think about how big of a drug and how successful of a launch Tyvaso could have in IPF?
Yeah, I think discontinuation numbers, even in the 20% + discontinuation numbers, are not something which has blocked us from having other successful medicines in this space. When about, let's say, a fourth of the patients will go ahead and discontinue their therapy, as long as a larger number of patients are coming onto the therapy, you're going to have an increasing total number of patient count. For example, in a typical, let's talk about having nothing to do with pulmonary fibrosis, just in pulmonary hypertension.
You'll see whether you're talking about United Therapeutics therapies or a competitor's therapies. The average duration that the patients stay on these drugs is something on the order of between 12 and 24 months. Within that time period, there's patients dropping off at three months, six months, nine months, all along the way. Yet a larger number of patients are coming on the medicine. Oftentimes, the reason that they drop off are because of just progression of their disease. Unfortunately, these are not medicines that are an absolute cure for their disease.
Unfortunately, unlike with ralinepag, which we demonstrated in pulmonary hypertension and actually affects a clinical trial improvement, a clinical status improvement of the patients, here, we are able to reduce the rate of decline of the patients in pulmonary fibrosis, which is, of course, hugely important. So I think the dropouts at the rate that we saw in TETON-1 and TETON-2 are entirely consistent with us expecting a rapid net growth in the total number of patients on drug in IPF.
Okay, makes sense. Phase III PPF data coming next year, second half of next year. Maybe just as you think about the probability of success for that study, given the success you have had in IPF, what is the biological read-through to a PPF patient?
Yeah. So the differences between PPF and IPF are nuanced, I think would be the fairest way to say it. In fact, PPF is a relatively recent construction of the medical field as a standalone indication. We, in fact, originally intended to do a combined trial of all comers of IPF and PPF in the TETON study.
It was the FDA's pulmonary division, who I think very wisely pushed back, and they said, "PPF is a more diverse patient population with more diverse etiologies of the disease. Whereas in IPF, it is a little bit of a pure population without so many secondary causes of the pulmonary fibrosis. We really would prefer that you did a study just in IPF, and in fact, we'd prefer you do two studies in IPF to make sure that this drug is safe and effective in that patient population."
Well, I believe the FDA was very wise because we crushed it twice in terms of key value and efficacy and safety in IPF. When we came back to the FDA and said, "Okay, now we're ready to enroll TETON-3 in PPF," they said just one study will be adequate and sufficient. I think they too feel that there's going to be a super good biological read-through from the TETON-1 and 2 to the TETON-3.
What is your phase III PPF study powered for? Can you run us through some of those numbers if they're disclosed?
I can't. I can't because it's too many numbers for me to remember. But the study, probably Harry Silvers can remember better than me, but the study is around 350 patients. About double that. 700? 90% for 80 ml. There you go.
Okay. Just to repeat that, it's 90% powered for an 80 ml FVC improvement. Thank you very much.
It's better than AI. Just have Harry with you.
Funny. You mentioned obviously from a patient population number, PPF is a bigger market than IPF?
Yes.
Is that also how you feel about the commercial opportunity? Do you think of PPF as a bigger market for Tyvaso than IPF? Or do you think about it differently?
I do. I think it's very linear. I think it's very, very linear. Whether somebody ends up on one side or the other of the fence on just results is related to the etiologies of their fibrosis. I think the people suffer just as much, the mortality is just as bad, and it is roughly speaking a 3x opportunity compared to IPF. We actually looked very hard to see if we could fit PPF under 200,000 patients so that it would have Orphan Drug status, and the research was unanimous across every single source that there are more than 200,000 Americans suffering with PPF.
Yeah, I'm going to throw a little bit of a curveball your way. You brought up Orphan Drug status. I have heard rumors that IPF, you all obviously have Orphan Drug status. Do you think there's any chance in the future that IPF is no longer viewed as an orphan indication because of the growth? Have you heard that?
I've never heard that. I've never heard that. I hope not, because it's a terrible disease. I wouldn't want more people to suffer from it than otherwise. But what I have heard is that in a company that I think knows IPF better than any other company in the world, which is Boehringer, that in their own view, it's 125,000. Which is a long way from 200,000, and we try to be even more conservative than that, looking at 100,000.
Okay, very helpful. Then ralinepag, obviously another big priority for the company launching next year. Where does ralinepag fit in in all of this? Obviously, IPF and PPF is a big, exciting, large opportunity for you all, b ut ralinepag is something that you guys have been very excited about as well.
So it is exciting for everybody because IPF and PPF is like what the United Therapeutics company is now, pulmonary fibrosis rather than pulmonary hypertension. But it should be remembered that the ralinepag molecule is like the treprostinil molecule, but better. Because of that, it has produced the best data in pulmonary hypertension that anybody has ever produced. How is it going to be introduced into this market? It is going to be introduced as upfront frontline therapy. If a physician feels that they want to start their patient with a couple of cheap generics like a PDE5 inhibitor, an ERA, that is all good, but they are not going to be able to say to that patient that this therapy has been shown to provide clinical improvement to you. All they can say is that it has reduced the rate of decline.
But the United Therapeutics data shown in the outcome study, the more than 50% chance of clinical improvement. Our people are going to explain that to the doctors, and then to make it even easier that once-a-day ralinepag therapy, which we call Genraldi, is going to be followed right on its heels with another therapy called triple Genraldi, which is Genraldi, combined with a PDE5 and an ERA all in one single pill. This is going to become the dominant treatment for pulmonary hypertension.
I have no doubt about that at all. But there is more, because like I said, this is treprostinil but better. So we are already working on the development of bringing ralinepag into IPF, and we already have data in our AI digital lung model that shows that inhaled ralinepag works even better than treprostinil inhaled. As I mentioned at the beginning of our fireside chat, the once-daily Ralpi will provide a therapy for patients with pulmonary fibrosis and progressive pulmonary fibrosis with using our DPI device, just one inhalation, one times a day. I think it is going to end up showing even better results than treprostinil.
Okay, great.
And patent protected till 2040, so it is so cool.
Well, maybe just to end, because we are out of time. You have IPF, you have PPF, you have ralinepag. Hopefully xenotransplantation works out as well long term. That is going to be a lot of revenue, and a lot of cash. A s you think about positioning the company longer term, what do you plan to do with all of that?
I think one good answer is that the present is like a view of the future. So we have been really happy to be able to announce at this great conference an accelerated stock repurchase agreement, $500 million . We have received great feedback from everybody attending your conference about that. And I think, until the stock price reflects the fact that this is not like a few billion-dollar pulmonary hypertension company, but a tens of billions of dollars pulmonary fibrosis company, the stock will be too cheap, and the only logical thing to do, the economic thing to do, the economically rational thing to do is keep buying back the stock.
Okay, great. Well, Martine, James, thank you very much. Great discussion.
Thank you.