United Therapeutics (UTHR) Q1 Earnings Beat, Sales Miss

United Therapeutics Corporation (NASDAQ:UTHR) reported adjusted earnings of $3.89 per share (including stock-based compensation benefit) for the first quarter of 2017, which beat the Zacks Consensus Estimate of $3.54 by 9.89%.

However, quarterly revenues of $370.5 million missed the Zacks Consensus Estimate of $402 million. It grew a mere 0.4% year over year.

Shares declined almost 1.5% on Wednesday in response to the soft earnings result. A look at United Therapeutics’ share price movement shows that the stock has underperformed the Zacks classified Medical - Drugs industry this year so far. United Therapeutics declined 16.3% during this period, while the industry rose 3.4%.

The Quarter in Detail

United Therapeutics markets four products for the treatment of pulmonary arterial hypertension (PAH) – Remodulin, Tyvaso, Adcirca and Orenitram.

A slight increase in sales of Remodulin and Adcirca was offset by declines in sales of Orenitram and Tyvaso.

Orenitram reported sales of $39.3 million in the quarter, down 2.2% year over year. Adcirca reported sales of $80.0 million, up 10.2% year over year. Tyvaso sales totaled $87.4 million, down 14.5% year over year. Remodulin sales were $145.8 million, up 4.3% year over year. Unituxin (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $18.0 million were up 26.8% year over year.

At the call, the company said that growth of its PAH drugs was slower than expected because patients were staying longer on oral PAH therapies like Adcirca and Gilead Sciences Inc.’s (NASDAQ:GILD) Letairis (ambrisentan), and Actelion Ltd.’s (OTC:ALIOF) latest PAH drug, Uptravi (selexipag). The number of patients increased this quarter.

Research and development (R&D) expenses (including stock-based compensation benefit) increased 9,150% to $36.2 million due to a decline in stock-based compensation benefit.

Selling, general and administrative (SG&A) expenses (including stock-based compensation benefit) increased 1,028% to $56.4 million due to lower stock-based compensation benefit.

We remind investors that earlier this month, United Therapeutics announced that regulatory issues will delay the planned U.S. launch of RemoSynch - an implantable pump for delivering Remodulin. The company now expects to launch RemoSynch sometime in 2018 against the first half of this year, as expected previously. United Therapeuticsis working withmedical device makerMedtronic, Inc. (NYSE:MDT) to get RemoSynch approved by the FDA.

United Therapeutics carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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