It is hard to see an end to the gloom experienced by United Therapeutics. Yesterday the group saw its shares fall 9% after it revealed that the launch of Remosynch, an implantable delivery system for the pulmonary arterial hypertension drug Remodulin, had been pushed back to the end of 2018, instead of a hoped for April or June entry.
This is yet another setback for the company, which is mired in intellectual property disputes and has had made heavy work of R&D progress. And, with analysts now expecting a low probability of success for extending oral Remodulin’s reach, it is hard to see how United can turn its fortunes around without a radical plan of action.
On top of the bad product news was a steep earnings decline thanks to skyrocketing R&D costs and a rise in the royalty rate paid to Lilly for Adcirca from 5% to 42.5% beginning December 1, 2017. As a result, profit in 2017 fell from $714m to $418m. A $250m share buyback programme announced last year could help to prop up earnings per share, but investors will want to see more signs of organic growth.
With the intellectual property estate cracking for treprostinil, the active ingredient in its top three sellers Remodulin, Tyvaso and Orenitram, United has been turning to new products to reverse the forecast slide in sales (Patent rulings knock Acorda and Forward, April 3, 2017).
The bad news is that much of this has involved building a new moat around treprostinil through the use of delivery devices. The implantable Remosynch, which delivers Remodulin through patients’ veins, is the lead project, but United is also developing the Remunity subcutaneous pump and a Remodulin prodrug called Remopro that can be injected subcutaneously.
A more audacious launch is Orenitram as Oreniplus, should the Freedom-EV pulmonary arterial hypertension outcomes study return positive results; the “plus” is a higher dose and background oral therapy.
Thus a setback to the first project, Remosynch, was not taken well when announced last April, and chief executive Martine Rothblatt’s statement this week during a year-end earnings call that it should be launched “in the next calendar year” can hardly build confidence.
Moreover, if United intends to back up a Remosynch launch with Remunity it needs to hurry. The Israeli company Steadymed, which successfully challenged the treprostinil manufacturing patents, has its own patch-based pump called Trevyent with orphan designation, and this could block United from launching Remunity.
Ms Rothblatt spoke at length with analysts about eventually turning to gene therapy to cure PAH, but the company acknowledges that the soonest such a product could be launched is in 2022-25. More near-term, the one company project that does not lean on treprostinil is Unituxin, a monoclonal antibody now used in neuroblastoma that United hopes soon will return positive phase II/III data in small cell lung cancer.
Repurposing treprostinil has served United well, but it has reached a point of diminishing returns. Investors will be anxious for United to beef up its pipeline – with a cash pile of $1.4bn, it has room to try new things.