United Therapeutics Corp (UTHR) 2005 Q4 法說會逐字稿

Good morning and welcome ladies and gentlemen to United Therapeutics’ Teleconference regarding its announced fourth quarter financial results. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the Company, we will open the conference up for question-and-answers after the presentation.

Remarks today concerning United Therapeutics will include forward-looking statements, which represent United Therapeutics’ expectations or beliefs regarding future events based on current assumptions. United Therapeutics cautions that such statements involve risks and uncertainties that may cause actual results to differ materially from those in the forward-looking statements. Consequently, all such forward-looking statements are qualified by the cautionary language and risk factors set forth in United Therapeutics’ periodic and other reports filed with the SEC. There can be no assurance that the actual results, events, or developments referenced in such forward-looking statements will occur or be realized.

United Therapeutics assumes no obligations to update these forward-looking statements to reflect actual results, changes in assumptions, or changes in factors affecting such forward-looking statements.

I will now turn the conference over to Dr. Rothblatt. Please go ahead Dr. Rothblatt.

Good morning everyone and I’m sure you’ll all be glad to come back from what was hopefully a very enjoyable President’s Day weekend. I’m pleased to share with everybody that we’ve got over 150 callers on this conference call, so it’s exciting for us to see that there is such a high level of interest in United Therapeutics from callers throughout the United States and overseas.

Turning to our annual financial results, we’re pleased to report that United Therapeutics’ revenues for the year-ended 2005, December 31, 2005, totaled almost $116 million, representing a 58% increase over 2004. This is also the first year in which our revenues hit the triple-digit million, so it certainly has been a big cause for celebration at United Therapeutics.

Additionally, our annual net income was $65 million for 2005, $17.5 million of which was due to a tax benefit. This represents a 321% increase over 2004’s net income with the tax benefit, and even without the benefit our net earnings increased 208% compared to the previous year.

In addition to these operating results, our financial position strengthened such that we ended the year with nearly $200 million of cash and investments and no debt. And let me also add though that while not part of the SEC required reporting, let me mention that our revenues from the fourth quarter compared to the third quarter of 2005-- so sequential quarter revenues during 2004 did not increase, but that was very much in line with our expectations as the fourth quarter in this industry has traditionally been quite choppy as patients generally tend to-- often tend to defer going onto a continuous parenteral therapy until they get past the Thanksgiving and the Christmas holiday season. This is something that both doctors and patients find difficult to often schedule in the fourth quarter. So our fourth quarter revenues did not grow from the third quarter, but we see that as a typical seasonal choppiness that we’ve experienced before and, indeed, the trends going into 2006 look extremely strong and we feel quite confident that 2006 will indeed be our best year ever.

So with those introductory remarks behind me, I’d like to mention to everyone that I have our President and Chief Operating Officer Dr. Roger Jeffs on the phone with me as well as our Executive Vice President and Chief Financial Officer Fred Hadeed, and between the three of us we’d be pleased to field your questions relating to clinical, marketing, business, or financial matters.

So, Operator, if you could please take the calls in the order received and we’re happy to receive the first call.

Thank you Dr. Rothblatt. [OPERATOR INSTRUCTIONS]. Our first question will come from Jennifer Chao.

Thanks for taking the question. Good morning Martine and team. The first question goes with respect to Remodulin sales on the quarter. You did comment here in your formal comments that the trends look strong and I wanted to understand exactly what metrics you may be referring to.

And then, specifically, Martine, if you could give us some appreciation for the degree of conversion from Flolan. Are we seeing more Flolan patients being converted in the fourth quarter?

And also, on the inventory at the bottom of the fourth quarter, to what extent does inventory in your view represent a proxy for demand going forward?

Great. Okay. Now that’s what I call a concatenated question. So let me try to address all of the different aspects of it and call upon help if necessary.

The metrics that we look at for into 2006 are, of course, product sales, and the reason that we feel very optimistic that things are going in the right direction is because sales are starting off quite strong right from the beginning of the year as, in fact, is often the case after the fourth quarter.

In particular, we think that the lion’s share of the sales are going to come-- the new sales are going to come from Flolan transitions because of two complementary factors. The first is that we are making very good progress and we believe we are coming around the final lap in terms of agreements with the FDA on a revision to our label, which, as you know, our label up to now, which highly constrains our sales and marketing efforts, has been the label that we received when the drug was first approved as a subcutaneous therapy and the Company was under Subpart H and had to do a Phase IV study to reconfirm the efficacy of Remodulin.

Thanks to the efforts of Dr. Jeffs and his team, we believe we’ve satisfied the Phase IV requirement and we’re in discussion with the agency right now on the changes that would be made to the label to reflect the completion of the Phase IV process. We are quite hopeful that the revised language of the label will be affirmative with regard to transitions of patients from Flolan, and that will be an enormous opening up for us in terms of sales and marketing in transitioning patients from Flolan.

Up until now, I’d say that we’ve been-- we’ve had to approach that issue with sort of like an arm and a leg tied behind our back, because we’re always very careful to comply with the label and regulatory requirements. We’re quite hopeful that we will be able to be much more sharing with doctors in terms of the results, the clinical trial results that have come out showing that transition from Flolan to Remodulin works very, very well indeed.

Now, the other part, I mentioned that there are two complementary aspects. The other complementary aspect and, of course, the metric to take a look at is the size of the Company’s sales and marketing force and sales and marketing endeavor. And here, in anticipation of us being liberated from Subpart H and completion of our Phase IV study, during the second half of the year we beefed up significantly our sales and marketing force and, in fact, we did a pivot. We pivoted from relying principally on our distributors to handle detailing to as of January 1st we pivoted to relying principally on our own specialized sales force to do the sales and marketing.

I would mention that the sales force is now comprised of seasoned professionals from most of the top companies in our field, whereas, previously it was comprised of nurse specialists in pulmonary hypertension that really worked and assisted the distributor’s detailing forces in accomplishing what needed to be done. So now we’ve really taken the bull by the horns, if you will, in terms of sales and marketing and Flolan transitions in anticipation of a favorable label coming from the FDA in the next few months.

So those are the metrics and the reasons behind our confidence that 2006 is looking better than ever. In terms of your last question on the inventory, I don’t really think inventory is a very good proxy at all. First of all, the inventory depends completely on the policies of our distributors, because by contract they’re only obligated to keep a very small inventory and in return we always have to make sure that we have plenty of drug available. So depending on the policies of the distributors, the inventory levels can fluctuate quite significantly. That factor is underlined by the fact that the distributors themselves have changed ownership and policies multiple times. Our largest customer has actually gone through three separate permutations, if you will, three separate ownerships and corporations since we’ve been working with them. They’re a terrific company, but that’s just an indication of why inventories are not a very reliable indicator.

Very helpful color. If I could, just one brief follow-up-- on TRIUMPH can you give us a patient count, Martine, for either end of the year or where you are currently and maybe also help us appreciate any confounding factors with regard to patient enrollment, competition from other trials, give us a sense of what we’re seeing there.

Sure, Jennifer, and thank you for the follow-up. And, again, it’s nice to have the call start with you, nice to talk with you again at the beginning of the year.

With regard to TRIUMPH, TRIUMPH for those who may be new on the call is our treprostinil Inhalation Used in the Management of Pulmonary Hypertension study. That’s the acronym for it and it’s inhaled treprostinil. This is one of the most exciting studies going on in the pulmonary hypertension field. It’s led by two of the most respected and most accomplished key opinion leaders in the field, [Dr. Lewis Rubin] in the United States and [Dr. Werner Seeger] the developer and creator of inhaled iloprost in Germany. So we couldn’t have two more accomplished individuals on steering the effort from a medical and scientific standpoint.

As of now, the trial is about half enrolled, which is very good, and as is common with drug trials, they usually start off slowly and then rapidly pick up steam as more and more centers get on board. So we are now approximately halfway enrolled. What we’ve actually done is we are now in the process, in fact, of even doubling the number of clinical trial centers from 14 to 28, and the reason for that is that there is a-- to be frank, there’s a pounding on the door of clinical trial centers that want to be enrolled in this inhaled treprostinil study. They see it as very significant. I think they’re also anxious to be involved in the post-trial open enrollment, open-label kind of portion that occurs after the trial, and we want to get-- We feel so positive about the therapeutic benefits of inhaled treprostinil we too feel kind of an ethical obligation to allow as many people to participate as possible.

So even though the enrollment is now moving ahead briskly past the halfway mark, we’re still going ahead and doubling the number of clinical trial centers enrolled. That will basically speak to an even faster completion of enrollment and maybe more interestingly it will speak to a much larger post-enrollment, open-label, safety sort of phase that we can experience here with inhaled treprostinil.

Great. Thanks a lot.

Thank you. We’ll take our next question from [Jeff Meacham].

A question for you I guess more on the demand in the quarter again. Can you help us characterize the new patient starts just from the impact that you’re seeing from Ventavis? And then the second part of that is kind of the mix shift there between subcu. and I.V. in the quarter.

Sure. That’s a great question because it really is something that it is possible to give quite a bit of color on based on what’s going on in the marketplace here. There are-- there are really sort of like three distinct markets that are emerging in the pulmonary hypertension space.

There is the people who are newly diagnosed and those numbers I would say both fortunately and unfortunately are skyrocketing. And it’s fortunate because it’s much better to be diagnosed than to end up dying suddenly of right heart failure due to undiagnosed pulmonary hypertension, which unfortunately is still by all accounts and all statistics the fate of most of the people with pulmonary hypertension even in the United States. So it’s much better to be diagnosed but, of course, it’s also not a pleasant diagnosis to receive from one’s doctor.

So due to the tremendous path clearing and pioneering efforts of first and foremost Actelion and more recently Pfizer there are ever-larger numbers of being diagnosed-- of people being diagnosed with pulmonary hypertension, and that’s really the market for people to go on oral therapy, because certainly that’s the most logical place to start with therapy unless one presents an extreme [inflective class] for patient.

So I think most people’s estimates are that the numbers of new patients being diagnosed with pulmonary hypertension of being put on oral therapy are increasing something like 30% a year are the kind of statistics that I’m seeing, so it’s quite robust.

Now, secondly, there is a market for people who are failing oral therapy, and that means not failing just one but maybe failing both, that they’ve tried to take Sildenafil in combination with Bosentan, and even the combination is not able to arrest the progression of the disease. And it’s to those patients who are failing oral therapy is the logical market for the inhaled therapy, and that’s the reason why in our TRIUMPH study we have designed the study for people who are not optimally managed on Bosentan, the only approved endothelin receptor antagonist. So people who are not optimally managed on it, meaning that their 6-minute walk distance is falling beneath where it really should be and they’re presenting with clinical problems, those are the people that we are targeting with our treprostinil inhalation study.

Of course, for us it’s only a clinical trial, whereas for Ventavis that’s actually their key market-- that’s their core market. And I’m sure that once we get inhaled treprostinil approved, it will be a very healthy and vigorous what I call “co-opetition,” meaning that we both-- we cooperate in the sense that we’re growing the market, but we’re both alternative choices of Ventavis versus inhaled treprostinil for those patients who are failing oral therapy.

And then, finally, there is the third market for the patients who are on already parenteral therapy, meaning continuous infusion type of therapy. These therapies are reserved for patients who unfortunately are not responding to either oral or inhalation therapy and there is just a level of efficacy that can be achieved with a parenteral therapy that is sort of unmatched with any other therapy, but due to its invasiveness it’s also reserved for patients who are out of all other options. As just common sense would tell you, you wouldn’t go there unless you were out of all other options.

Now it’s in the parenteral therapy area that’s the target of subcutaneous and intravenous Remodulin. That is the only alternative to intravenous epoprostenol or Flolan, and we certainly believe that subcutaneous and intravenous Remodulin have unique and special advantages compared to intravenous epoprostenol or Flolan. And hence the overwhelming thrust of our marketing efforts for subcu. and I.V. Remodulin and hence for United Therapeutics’ revenues in the near-term is based on switching people from Flolan to subcutaneous or intravenous Remodulin once our label is modified to permit intravenous Remodulin to be a direct alternative because of the advantages that the drug seems to provide to patients and to physicians as well.

Thanks, and just a real quick follow-up for Fred. The tax benefits recognized in the quarter, should we expect then going forward a fully-loaded tax rate in ’06 and beyond?

Fred, did you hear that question about the tax rate? Fred? Jeff? Hello?

I’ll just touch base with him off line.

Let me answer the question for Fred. As you probably know UT by now, we’re not big on giving forward-looking guidance, so he’s not going to be able to give you any forward-looking guidance on that question from what the tax rates will be going forward.

But it is-- I will say it is a fairly complicated calculation. I’ll share with you that I’ve asked like two separate big audit firms, like the top audit firms, to both agree on exactly what our number is and what it should be because it’s definitely beyond what I learned in business school, and Fred understands it very well as does the rest of our finance staff. But it’s a number that ultimately really has to be [blessed] by a big audit firm, and in our case we required two big audit firms to [bless] that number to be absolutely sure it’s correct.

Okay. Thanks.

You will now hear from Lucy Lu.

Hi. Thanks for taking my call. Actually, I just have a quick question regarding the Phase IV label revision. Can you please tell us what is the nature of the filing, you did the sNDA, and also what is the timing? In addition, is there any way the TRUST data can be incorporated into the label? Thank you.

Great. Lucy, I’m going to ask Dr. Jeffs, who really is in charge of that whole label effort, to answer your question. Roger?

Sure, Martine. Good morning Lucy. In essence, it’s just a supplement to the NDA. Obviously, based on the study result, we’re quite confident that we’ll get out of the Subpart H study. I think that the key thing for us now is to work and coordinate with the agency language that is appropriate for the study that was conducted, specifically the transition of patients from Flolan to subcu. Remodulin and the success that was seen there.

The action date is April 13th, and certainly we’ll have an answer by that. We’re in ongoing discussions at this point with the agency about the language that we’ve incorporated as well as sort of graphic displays that we want to include in the label. And all of that becomes important, as Martine has alluded to earlier, that it gives us an [un-tethered] ability for our sales and marketing team to sort of promote to Flolan transitions, which is a key market for us.

So I think post April 13th we will be free to do that. I think we’ll have language that will be very encouraging for all of us.

So you’ll have some kind of definitive response from the FDA regarding the labeling language on April 13th either way?

Yes, exactly. Yes. Exactly.

Okay. That’s very helpful. Thank you.

Thanks Lucy. Next question please.

Our next question will come from [Matt Dunn].

Good morning. Thanks for taking my call. I just wondered if you might be able to give me a little extra color on your sales force efforts. How many representatives do you have?

And then also on top of that, if you could, we’ve been looking at the third and fourth quarter and the progression of sales. It seems like we’ve been assuming and estimating that we’re having increased revenues per patient, but it looks like when you take into consideration all of the changes in wholesaler inventory levels, you’re probably pretty much flat sales quarter-over-quarter. I wonder if that might indicate because that’s-- is that a [simpler] number of patients or how is that?

Okay, well, let’s see. It looks like there are some other questions being asked in the background there.

They always do.

Right. With regard to sales and marketing head count, we’re at about 20 people now and the complexion of the force has changed substantially in that we are really honored to have among our numbers some of the top sales performers from both the pulmonary hypertension field as well as big pharma. So the complexion has changed quite a bit and we’re actually on a continuous recruitment and enrollment-- recruitment rate here with regard to sales and personnel head count.

We’ve got a-- we’ve divided the country up into regions and over in Europe up into regions. Speaking of Europe, let me just drop a footnote there to say that we are beginning to get our reimbursement approvals in different countries pursuant to the mutual recognition process that Roger had reported favorably upon at the previous conference call. And I’m happy to say again, as far as this footnote, that we just recently received reimbursement approval in Spain and Portugal, Spain being one of our larger markets in Europe actually, that allows us to maintain the same pricing that we’ve had there during the compassionate use period. In other words, that we will be-- we will be able to sell our drug in that market at the same price that we sell it here in the United States. So that’s quite a positive development I think for the European pricing area.

So we’re continuing to build up our sales force. We’re at 20 now and I’m sure that as the year goes on we’ll continue to grow United Therapeutics’ overall number of people involved in sales and marketing.

With regard to the inventory type of questions and let’s see--

I guess my question was as we’ve seen over the last few-- I think it was actually in ‘03 also-- sort of a relatively flat number of patients third quarter to fourth quarter just because I think because of the natural rate of people not starting new therapies such as injectable prostacyclin.

Right.

In the fourth quarter and then saving perhaps for the first quarter, but also obviously the natural attrition of the disease that’s sort of inexorable in a lot of cases. But in this year, just sort of our research has indicated probably the rise in average revenue per patient, and looking at relatively flat end user sales by all [apparent] considering the inventory levels, I wonder if that might mean that there has been a little bit more attrition than addition in the fourth quarter.

Yeah, no. We haven’t really seen that, and nor have we really seen alterations in the revenue per patient. As people have expected, there is a tendency to dose intravenous Remodulin higher than subcutaneous Remodulin, and the implications of that are a little bit higher priced. On the other hand, there are more and more patients who are on combination therapies, because oftentimes when Remodulin is added to patients who are not doing that well on oral drugs, it’s oftentimes the case if not usually the case that the oral drugs are not removed. And so, there is a certain synergistic benefit that is beginning to become apparent between especially the phosphodiesterase 5 inhibitors such as Sildenafil and prostacyclin analogs like Remodulin, and then also there is synergy with the endothelin receptor antagonists, because all three of these agents work on complementary mechanisms affecting the progression of the disease in the lungs.

So I think it is more because of a moderation of dosing due to combination drug trials, drug use, basically is outweighing the tendency toward higher dosing of people on intravenous Remodulin monotherapy that you’re seeing those results.

Okay. Thanks very much.

We’ll take our next question from [Andrew Fein].

Hi. Good morning everybody. I just wanted to touch base quickly and see if you could talk a little bit about any preclinical tox data you might have for inhaled Remodulin. I know the FDA sometimes likes to see the 6-month and 2-year chronic tox and carcinogenicity data. I was just wondering and wanted to know what you have generated-- what you’re in the process of generating.

The FDA definitely does like to see that kind of data and, to tell you the truth, I just-- I just don’t know. But there definitely are people in our Lung Rx division who do know the answer to that question, so if you wouldn’t mind calling Andy Fisher, our VP of Investor Relations, back, he would be very happy to share with you what has been asked in terms of preclinical tox data for the inhaled drug, but I actually just don’t know.

Okay, that’s fine. And then also wondering if you could just touch base on the [Corono 5] pump and the extent to which traction has been gained? So what--? To what extent is the [CADD-5]--? Is the CADD still being used and to what extent are more patients using the [Corono 5]?

Great. Well, that innovation of the [Corono 5] was really due, again, to efforts on Dr. Jeffs’ team, a tremendous initiative there, and, Roger, a chance for you guys to strut your stuff on that.

Sure, Martine, and good morning Andrew. I think let me just start off by being a little bit more comprehensive in my answers. I think 2005 was an absolute banner year for the clinical group at United Therapeutics. We had a number of initiatives, which included the miniaturization effort, but also we had long-term data on the intravenous Remodulin, it was presented at CHEST, showed triple-digit improvement.

We’ve successfully resolved and showed that we can transition patients from I.V. to subcu. We did the miniaturization studies. We did the TRUST study in India showing that de novo starts of I.V. Remodulin resulted in a very robust response. And then coincident with that, we did a rapid switch study. So not only could you switch patients as shown in the Phase IV study, but you could do that rapidly and conveniently. And then now we’re also working and working to publish data and present data at the Cardiology Congress in Europe about the 4-year survival that we observed with Remodulin from a massive sample of patients, about 860 patients followed long-term.

So for the part of the miniaturization effort and specific to your question was looking at different platforms, because what we really want to present to patients is choices. So we provide you a choice of route, either I.V. or subcu. and then if you choose I.V., we want to give you a choice of pump platforms. So you can either use the CADD-Legacy pump, which is still the predominant pump used, but you don’t have to use it with ice packs and you can infuse for 48 hours and the mixing requirements are much less compared to epoprostenol. So those are advantages of using that pump.

If you want to take it one step further, you can then use a smaller pump, which is the patient’s desire. So they said, “Now that I don’t have the ice packs, what can I do about this pump?” And we showed that the [407C] was a useful platform for some patients, particularly pediatric patients who choose to use a smaller pump.

In addition, the [CONAID] pump, the [Chronimed 5], is now approved for I.V. use in the U.S. and Europe, and we have now recently begun patients on that pump platform. I think it’s important to say we really don’t promote one pump over the other. It’s really, again, up to the physician and the patient to choose what’s right for them. The important thing for us is that we provided that choice and the option, so that’s sort of where that whole data is at this point.

Roger, that’s a great answer, and, Operator, we have time for one more question.

Our last question will come from [Matt Kaplan].

Oh wow. That’s a great way to top it off.

Hi. Thanks for taking my question. Kind of to elaborate on some of the detail that Roger just gave with respect to the plans for publishing some of this data. Obviously, it’s going to be very important to help to get some of the patients to transition from I.V. Flolan to I.V. Remodulin to have these data published. When do you think you’ll get the data published from the various studies, including the rapid switch, the TRUST study, the study in terms of the long-term data, the 4-year survival data on Remodulin? All these things seem to be fairly important from the point of view of marketing now that you have a 20-person marketing force.

Thank you, Matt. I think what we’re seeing, as Martine talked to, is a nice conversion of several good things. One is the label change and the other is going to be not only the publication but the presentation of the data that I alluded to earlier. So the key-- I think the key things to look forward to is the [USIV] Investigator study. That data has been presented, both the short- and long-term, 12-week, both transitions in de novo and one-year follow-up with CHEST, and then the publication for the de novo was in CHEST-- was in the American Journal of Respiratory and Critical Care Medicine in December. In March, the de novo component of that will be published. The Phase IV data is going to be-- has been submitted to the European Cardiology Congress.

Now, again, Matt, I must caution you that we submit things and they don’t always get accepted, but we’re hopeful that they will be, so just keep that in mind. And then certainly there is an intent to publish that data also in American Journal of Respiratory and Critical Care Medicine, so that’s going to be submitted shortly.

The rapid switch data from [Olivia Pittbaum] and colleagues at [deClaire] as well as [Nazarino Gyai] in Italy is going to be presented at ATS. The miniaturization data is in process in terms of writing the manuscripts and submitting those. The TRUST data we’re still doing analysis and ongoing data clean-up, but that certainly will be submitted and, hopefully, also submitted to the FDA for label revision to show that the de novo use is quite effective and robust. And the long-term survival we’ve submitted an abstract to the European-- the World Congress of Cardiology.

I think the other key opportunity for us-- So looking ahead, I’d say ATS-- ATS is important for us, and then in June is the PHA, the association meeting that happens once every two years. Many of these abstracts that I’ve talked about, both old and new, have been resubmitted there because it doesn’t require sort of a novel abstract. So we’re hoping for the PHA to be a nice session not only for physicians but for patients to look at the various aspects that have been developed by the clinical group here in 2005.

And I think ATS-- So April’s big because it’s the label change, May is ATS, and June is PHA. I think those are some key levers in terms of launching I.V. Remodulin and solidifying subcu. Remodulin. I don’t-- I think we should remember that that’s an important and useful therapy to many, many, many patients and certainly one that we support wholly.

And one quick question, additional question, with respect to giving us an update on the oral Remodulin program.

Sure, Matt. I think that’s our next big-- behind TRIUMPH the big buzz in PH therapy is going to be oral Remodulin. We have a solid dosage form, an osmotic relief tablet that looks to be viable for twice-a-day delivery of Remodulin. I think the advantage is-- and we’re going to call these trials the Freedom trial and there will be a trial in-- as monotherapy as well as a trial in combination to Tracleer and Sildenafil and/or Tracleer and Sildenafil, since, as Martine said, that’s sort of the emerging combination.

We call it Freedom for a very simple reason, because it’s going to free patients from pumps and nebulizers, and that’s our goal is to provide a pump-like plasma exposure in an oral dosage form. And we think we can show zero-order release over a significant period of time that would be sufficient for twice-a-day dosing. The trials would head FDA and EMEA meetings, and we seem to have concurrence that we’re in a position to go forward.

At this point, we have IRB submissions as a protocol in both the U.S. and Europe and we’ll have a major investigator meeting in the U.S. in April and a like meeting in May in Europe planned to start off sort of a collective initiation of the study, and then we’ll begin enrollment in these Phase II/III trials. And while we’re hopeful, I would caution people that we’ve never dosed patients with this drug. We don’t know about the tolerability and the profile of the drug and the acceptance of dose ramp, but we think at least from a kinetic standard that we can match what we’ve seen with infusion therapy, and obviously that’s a successful way to dose this drug, so we’re going to try to piggyback on that.

Fantastic. Thanks, Roger.

Martine, I was just freed by the Operator. Unfortunately, my phone was muted previously. So I would like to just jump in and answer the call Jeff had with respect to taxes.

Sure.

So that it’s clear for everyone since this was the first time that we recorded a tax benefit. Clearly, now that we’ve recognized an asset of around $17 or $18 million, the Company will begin to report tax expenses in future periods so long as it generates taxable income, but there could also be additional recognitions of benefits in the future as well. Based on the Company’s analysis as of future reporting dates, it could determine that it could take down its valuation allowances further and, therefore, report additional benefits. So those two kinds of expense and benefits agitate against each other, and for that reason it’s really not possible for us to predict what our effective tax rate will be for 2006. And I also concur with all the other comments as well, Martine, that you added.

Okay, thanks Fred, and I’m glad you were able to share that additional color on that question.

In conclusion, I’d like to simply remind everybody on the call about the five strategic objectives that guide us here at United Therapeutics and maybe use this opportunity to touch briefly on a couple of points that were not able to get made during the call.

Our first priority at United Therapeutics is to develop the best possible medicines that our intellectual property platform supports, and I think we saw a great indication of that with Roger’s description of his progress on oral prostacyclin, oral Remodulin, which would really be kind of like the Holy Grail of the entire pulmonary hypertension field.

Our second key strategic objective is to conduct the most insightful possible clinical trials, and we did not have a chance in this call to talk about our ovarian cancer trial, but that is widely viewed as a very innovative and insightful clinical trial. It’s two parallel trials actually, one of which is 100% enrolled and the other of which is almost fully enrolled, such that the two trials combined have now enrolled 330 out of 354 patients, so we’re getting very close to completion. And just as a reminder, the FDA was adequately satisfied with that trial design that we have just a 6-month fast-track review on the results when they are obtained.

The third strategic objective of the Company is to communicate as transparently and effectively as possible the clinical trial results, and we’ve spoke quite a bit during this call about our newly expanded professionalized and much more in control sales and marketing force in charge of subcutaneous and intravenous Remodulin.

Our fourth strategic objective is to conduct all of the above activities with the highest possible level of ethics and compliance with all regulations and to hear everybody’s [view T], always emphasizing the importance of staying consistent with the label.

And our fifth and final objective is to conduct all of the above goals in such a way that allows the Company to remain in the top quintile of its peer group in terms of year-to-year earnings and revenue growth. And that takes us back to really the headlines of the press release today that with a revenue increase from ’04 to ’05 of 58% and an earnings increase from ’04 to ’05 of 200 or 300%, depending on whether or not one includes the tax benefit, we’re clearly in the top quintile of our peer group, one of the few companies in our group to even have an issue of dealing with taxes because of our profitability.

And I would just like to us the occasion of the call to thank all of those 150 of you on the line for your support and interest in United Therapeutics, your questions always help keep us on our toes and help insure that we’ll do our best to keep true to our goal of remaining a top quintile performer in the biotech sector.

Thank you very much and I hope everybody has a great week back from the three-day weekend.

Thank you Dr. Rothblatt. Ladies and gentlemen, if you wish to access the replay for this call, you may do so by dialing 1-888-203-1112 or 1-719-457-0820 with the ID Number of 2147202.

This concludes our conference for today. Thank you for participating and have a nice day. All parties may now disconnect.