Increasing PAH Life Span Is A Growth Driver for United Therapeutics (UTHR) - Wedbush

Wedbush analyst, Liana Moussatos, cut her PT slightly after United Therapeutics Corp. (NASDAQ: UTHR) beat estimates but reduced projections for Tyvaso. PT goes to $238 from $244.

Reported Q4/2015 revenues of $405MM/$1466MM beat consensus of $388MM/$1448MM; Proforma EPS of $3.68/$12.33 beat consensus $3.43/$12.08. Remodulin, Tyvaso, and Orenitram missed consensus but Adcirca and Unituxin sales strongly beat consensus. Management commented that because PAH patients are living longer with all the new therapies, the prevalence is increasing (treatable patients estimated to be over 30,000 and growing). Since none of the new therapies are cures, the increased prevalence is a growth driver for all PAH drugs including Remodulin. The company ended 2015 with about $0.99BN in cash and cash equivalents.

Orenitram holds clear advantages over recently approved Uptravi (selexipag). Unlike Uptravi, Orenitram has no dose ceiling. In addition to preventing vasoconstriction, Orenitram also inhibits platelet aggregation and smooth muscle cell proliferation (all hallmarks of PAH) through its engagement of IP, DP1 and EP2 receptors.

There is room for multiple players in the PAH space, we believe Orenitram is likely to be the preferred oral prostacyclin and material switching from Orenitram to Uptravi is unlikely.

Potential PMA decision on Medtronic’s’ SynchroMed II Implantable pump is expected in March. If approved, we believe it could alleviate investors’ concerns surrounding the potential approvable of UTHR’s SynchroMed II based Remodulin implantable pump. UTHR filed its NDA for its implantable pump in late December and is expecting an action date by October.

No change to Outperform rating but reducing the PT to $238 for reduced Tyvaso projections.

For an analyst ratings summary and ratings history on United Therapeutics Corp. click here. For more ratings news on United Therapeutics Corp. click here.

Shares of United Therapeutics Corp. closed at $126.54 yesterday.

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