United Therapeutics Corp (UTHR) 2007 Q3 法說會逐字稿

Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the United Therapeutics Corporation third-quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (OPERATOR INSTRUCTIONS).

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 such 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 obligation to take these forward-looking statements to reflect actual results, changes in assumptions or changes in factors as some affecting such forward-looking statements.

Thank you. The Rothblatt, you may begin your conference.

Good morning, everybody, and thank you for joining the United Therapeutics third-quarter 2007 financial results conference call. And for this conference call, we will be addressing some fantastic news which we released just a few hours ago -- the results of our TRIUMPH-1 trial of Viveta in pulmonary arterial hypertension. Because we have two important matters to discuss, the financial results and the TRIUMPH results, our conference call will extend for double the normal time, so it will extend for one hour.

I have joining me on the conference call this morning Roger Jeffs, our President and Chief Operating Officer; John Ferrari, our Chief Financial Officer; and Dr. Lewis Rubin, who is the co-chair of the steering committee for the TRIUMPH study. And he is joining us very early this morning from his office at the University of California-San Diego.

Let's begin with the third quarter 2007 financial results. The total revenues for the third quarter of 2007 were $59 million, up 46% from $40 million for the third quarter of 2006. Pro forma earnings were $27 million for the third quarter of 2007, up 35% from the $20 million for the third quarter of 2006. Net income for 2007 was $15 million, or about $0.70 per basic share, up 74% from the earnings which we achieved in -- from the net income we achieved in the third quarter of 2006. These are really some fantastic financial results, and it's really a thrill to report them. It's especially gratifying for us to be on the line of approximately 40% annual growth in revenues for almost five straight years now. Our trailing 12-month revenues of almost $200 million are 37% above that of the preceding period.

In addition, this is our 13th profitable quarter overall, and would be our 14th consecutive profitable quarter, disregarding a onetime expense for new intellectual property taken in the first quarter of this year. A special thanks I would like to make in acknowledgment to Roger, who manages our sales and marketing effort, and to his head of sales and marketing, [Alex St. Pierre], for the fantastic job that they and their team have done of really expanding the awareness of the benefits of (inaudible) Remodulin. And these revenue figures show that doctors and their patients are appreciating those benefits very much.

I would like to now turn to a brief introduction to the second topic of the conference call, which is the TRIUMPH-1 trial of Viveta in pulmonary arterial hypertension. It was just over four years ago today that Dr. Rubin and I had what was for both of us one of our most satisfying lunches ever. We closed down a restaurant in La Jolla, California as Dr. Rubin patiently explained to me that the best and most logical way to deliver treprostinil, our active ingredient, was through inhalation. And Dr. Rubin had the vision to see that this was the best way to deliver the product. And by the way, that was at a time when there were no other approved inhalation products for pulmonary hypertension. He had the vision to see -- together with Dr. Werner Seeger at the University of Giessen the pulmonary selectivity of treprostinil. And finally, he had the insight to conceptualize how to do the clinical study in a way that would be accomplished as rapidly as possible and as successfully as possible. And Dr. Rubin and Dr. Seeger's insight have really been borne out by the news that we relayed today.

I personally am truly elated by the success of our TRIUMPH-1 study. The p value of 0.0006 is more than an order of magnitude better than what the FDA had indicated to us had to be achieved for the drug to be approved. So this is a complete, knock the cover off the ball success in TRIUMPH-1 trial, and comprehensively demonstrates the efficacy of the drug.

I would again like to pay special recognition to Dr. Werner Seeger, who did the first experiments proving the pulmonary selectivity of treprostinil and -- when delivered via inhalation, and Dr. Rubin, who really encouraged us and led us to complete this development, and has been invaluable as the co-chair of the steering committee for the development.

I would like to also acknowledge that it takes people on the ground to actually do the hard work, and we have been blessed to have two fantastic clinical drug developers, [Dave Saccardelli] and [Ted Staub], leading the efforts to work with doctors one-on-one and clinical trial monitors to make sure that the trial is executed appropriately, and the results today really speak to the success of their fantastic efforts.

Well, with that introduction, I would like to now ask Dr. Jeffs to please take a few moments to walk us through some of the more particularized details of the successful TRIUMPH-1 trial. And after Roger walks us through some of the additional statistics and provides a little bit more background and color, I will then ask the operator to return to me as the moderator, and we can take all of your questions. The questions can be directed to either Dr. Rubin, Dr. Jeffs, John Ferrari, our CFO; or myself. And if you are not exactly sure, you could just say, like, I have a clinical question or a financial question, and I will sort them out.

So, Roger, could you please give us some additional color and background on the TRIUMPH study? And congratulations.

Yes, certainly, Martine, and like you, I share your elation. And I would be very happy to share some further details about the TRIUMPH-1 study.

Like you, I would like to say that I am delighted that Dr. Rubin is joining us on the call today. Dr. Rubin has provided invaluable leadership of the TRIUMPH-1 study, and I think his intimate clinical and regulatory knowledge, which is unparalleled, given his universal involvement in the trials of all currently approved therapies for this disease, will be a valuable resource as we advance regulatory filings for Viveta.

I will take the next few minutes to provide a general overview of the key study data. This data -- this overview is not meant to be a complete and exhaustive review, as data analysis is still at an early stage, relatively speaking. But I hope I will be able to provide you with some additional and useful insights.

I want to stress that the numbers I will provide are based on our initial analyses. While we expect these numbers to be generally representative of what we anticipate the final numbers to be, there undoubtedly will be some modifications as we continue to analyze this data set.

So with that as a backdrop, let me begin with a review of the summary baseline information. As mentioned in the press release, 235 patients were randomized, 115 to active therapy and 120 to placebo. The treatment groups were well-balanced at baseline. Approximately 80% of patients in both groups were female; 98% were NYHA Class III, and the mean baseline walk distance was approximately 350 meters -- 346 meters in the active group and 350 meters in the placebo group.

Disease etiology was similar between groups, with approximately 55% of patients in each group with idiopathic or familiar PAH; 35% of patients with PAH associated with collagen vascular disease; and 10% with PAH associated with other conditions, mostly HIV and anorexigen-induced PAH.

70% of the patients received bosentan as background therapy, and 30% received sildenafil.

Of the 235 patients who were randomized, 101, or 88% of the active group patients, and 111, or 93% of placebo patients, completed the 12-week study. While few patients discontinued, the most common reasons for discontinuation included adverse event, withdrawal of consent, and addition of new therapy. The majority of patients in both treatment groups achieved the target dose of 45 micrograms inhaled four times a day. There was only one death in the study, and this occurred in the placebo group.

Now to the very exciting primary efficacy results. As has been stated, the Hodges-Lehmann estimate of the median change in six-minute walk distance measured at peak plasma level post-inhalation was 20 meters. This result was highly statistically significant, with a p value of 0.0006, as Martine stated.

One way to test the strength of this finding is to analyze the data in a number of ways. In particular, analyses that employed differing imputation strategies for missing data is an important way to assess robustness.

For the 23 patients who did not complete the study and for whom the 12-week walk data was missing, the primary imputation methodology was applied as prespecified in the statistical analysis plan. This imputation employed worse rank for patients who died or who met the definition of clinically worsening. Patients who dropped out for other reasons -- for example, patients who withdrew consent or for whom peak walk distance was not performed, had their last observation carried forward.

For preliminary robustness testing using other imputation strategies, for example, the worst-ranking of all imputed values or last observation carried forward for all imputed values, confirms that the primary analysis of walk change is very robust. This is not surprising, as the primary analysis is relatively insensitive to the imputation methodology that is used, given, one, the overall statistical strength of the data; two, the fact that only about 10% of patients required imputation; and three, that the degree of imputation was relatively balanced between the groups.

We are extremely pleased with the underlying statistical strength of the primary endpoint data as we feel this will be an important factor in the successful navigation of the regulatory process.

Now, let's explore the 20-meter effect size in a little more depth. Both baseline walk and disease etiology were prespecified as covariants, and the primary nonparametric analysis of covariants adjusted for these variables. Baseline walk was found to significantly impact the magnitude of the treatment effect, with a p value of less than 0.05, indicating that patients with the lowest baseline walks experienced the greatest treatment effect.

To put this in perspective, we conducted an exploratory analysis that divided all patients into quartiles based on their baseline walk value. The lowest quartile included patients whose baseline walk was between 204 and 300 meters. In this quartile, the median change in six-minute walk distance was approximately 49 meters, indicating that patients with more severe disease benefited the most from Viveta in this trial.

This implies that the relative health of the patient population, and likely, the fact that patients were stable on oral PAH therapy, contributed to the magnitude of the primary endpoint finding that was observed. Dr. Rubin will no doubt have valuable comments on this during the Q&A.

I should point out that similar effects of baseline disease severity on treatment outcome has been observed in other PAH trials of prostacyclin and prostacyclin analogues, including the subcutaneous treprostinil pivotal trials.

No significant treatment interaction was observed based on disease etiology, suggesting that the treatment effect on six-minute walk distance was present irrespective of etiology. Thus, the findings are broadly applicable to the randomized population.

That summarizes my comments on the primary endpoint. Another important and closely associated endpoint was the change in six-minute walk distance measured at trough plasma levels. This endpoint was employed to assess the durability of the four times a day dosing regimen. The median trough change in six-minute walk distance was approximately 14 meters, and was also highly statistically significant, with a p value of less than 0.01. This significant affected trough exposure is the first such demonstration of a durable treatment benefit at trough for an inhaled prostacyclin analogue, and one we think provides meaningful differentiation to currently available inhalation therapy.

The change in six-minute walk distance was also measured at two other time points -- treatment day one, and at week six. There was no observed change at day one. However, the median change in six-minute walk distance at week six was significantly improved, with results closely mirroring, and thus supporting, the week 12 findings.

As you are aware, this trial investigated the impact of Viveta as adjunctive combination therapy to approved oral medications. Preliminary exploratory analysis of the data within the bosentan and sildenafil groups suggested that the effect in the bosentan subset was somewhat greater than the effect in the sildenafil patients, and we are investigating this finding further.

Preliminary analysis of other secondary endpoints, including change in Borg Dyspnea Scale rating, a shortness of breath scale; NYHA functional class, and time to clinical worsening were not significantly different between the groups.

In summary, then, we are pleased to have achieved such a robust outcome in this trial. It obviously takes a special commitment on behalf of patients and their treating physicians to participate in placebo-controlled studies, given the availability of a wide choice of treatment options. For their courage, we are thankful.

With that, I would like to turned back to you, Martine, as I'm sure callers are anxious to hear Dr. Rubin's perspectives on this data.

Thanks so much, Roger. That was a real tour de force of covering all the different aspects of the study, and it's one of the real thrills of being a biotechnology, that we're able to accomplish true scientific research and learn new things in this way, and things that have such an immediate benefit to patients. So thank you, and your entire clinical, regulatory team once again -- just thank you so much.

Operator, it would be great if you could now open up the lines and just take the callers on a first-come, first-served basis. up until 10:00.

(OPERATOR INSTRUCTIONS). Jim Birchenough.

Congratulations on the quarter and the TRIUMPH data. So I have a few questions -- one related to (multiple speakers).

Because there's over 450 people on the call, we are going to have to limit you to just one question. I'm sorry, but this is the hugest number of people we have ever had the call.

Okay, so I will just ask of Dr. Rubin, and if he could perhaps comment on I guess the lack of significance on the secondary endpoints. What might have accounted for that, and what impact that would have on how the Viveta be positioned in the market?

Okay, so that is a very good question. You know, I think that the -- we are exploring new territory here with combination therapy. So we have to recognize that as we do that, we are looking at a little bit of a different patient population than we are with most of the prior studies that have been de novo therapy. This is an impaired population, but it's also a relatively stable population. And the range of disease severity, at least by functional class, is fairly, homogeneous. But in terms of degree of impairment, say, by walk test, there is a fairly large range here.

So the clinical worsening events are largely driven by hospitalizations. That's a relatively soft endpoint. And I think, ultimately, we are going to need to do, particularly in the future in combination trials, longer studies, longer-duration studies, to really eke out meaningful data, interpretable data regarding clinical worsening.

I'm a little surprised the dyspnea score didn't improve, but again, the magnitude of improvement that one sees in that, and most of the other trials, is relatively small -- 0.5.points in Borg score or less. So I am not too troubled by the absence of change in secondary endpoint in light of the patient population and what is still I think a relatively short duration of study -- [three months]

Thanks so much, Lou, and thank you for the question. Next question, please?

Bret Holley.

I would add my congratulations to everyone on the team there. Another question for Dr. Rubin. How do you view that 20-meter benefit from a clinical perspective? Is this something that is meaningful, you think in your practice, and applicable to a broad range of patients?

Well, it's a very good question. And I think the way to look at it again is this combination therapy. So it's in patients who are already on a background therapy, who are still impaired. So any degree of improvement in those patients is probably clinically meaningful. And I think I mean change of 20 meters in patients whose (technical difficulty) walk at baseline is considerably impaired -- 350 is clinically meaningful.

And the two ways I would look at it is if you sort of look at the combination of effects -- let's say, a mean effect of Tracleer and a mean effect of inhaled treprostinil -- we are now talking about mean effect of around 60, 65, 70 meters. That's very meaningful.

The other way to look at it is, you know that there is a separation point in outcome in patients who achieve a walk test with therapy of about 370, 380 meters. There is a big difference in long-term outcome in those patients who can achieve that threshold, and those who cannot.

So now, we are talking about this impaired population -- again, with a background, a baseline mean of about 350 -- achieving a mean of about 370. They are reaching that threshold. And equally important is, as Dr. Jeffs said, it seems that the patients who are most impaired had the greatest response. And that's the population that we really need to target with combination therapies. Now, the patients who are getting an insufficient response to a single therapy need to get them to that threshold level.

Great. Thank you very much, Dr., Rubin. Operator, the next question, please?

Jennifer Chao.

Thank you for taking the question, and my heartfelt congratulations, Martine, to your entire team.

I would like to just dig a little bit deeper on the 20 meter walk, if we could, Lew. How do you think Remodulin will be viewed now with these results vis-a-vis Ventavis by the clinicians, given that there is going to be a tendency to look at the comparator of Ventavis plus Tracleer? Why would this data be challenging? And then is there going to be any question in the mind of these clinicians that Remodulin is the prostacyclin of choice?

Another great question. You guys are hitting the early in the morning here with (multiple speakers) really good questions.

You know, to me, the great news is that we are moving forward with this disease, and we are coming up with treatment options. And there are going to be options for patients. Some patients may tolerate one treatment, but not another. The more options we have, the better. I think that -- and I was involved in the [STEP] study as well, as you know. And I think when you look at the results, we now have two studies with inhaled therapy, combination therapy, that show that there is added benefit to background therapy and -- in impaired patients. And the overall trend, I think, is that there are fairly comparable effects. But there is a trough effect that we see with inhaled treprostinil, and that is consistent with what we have felt is a longer duration of action. I think that is important and relevant to the efficacy and long-term potential benefits of inhaled treprostinil. And again, going to the longer duration of action, the fact that you can get away with four times a day dosing of inhaled treprostinil, whereas with inhaled iloprosts, a minimum of six, and often more than that, times a day -- six to nine times a day, because of its shorter duration of action.

So a therapy that can improve patients, that is easy to administer and relatively convenient, particularly with the opportunity to make it even more simple to administer with developments, with delivery systems, I think will be a tremendous advantage for patients.

Thanks so much, Lew. And I would like to add if I could, Jennifer, that the new delivery systems that Lew refers to includes the MDI agreement that we announced just a couple of months ago with Aradigm where we will be continuing our inhaled treprostinil development, going beyond the nebulizer to an MDI. Aradigm has a fantastic palm-sized MDI device, and we are moving very quickly now to even begin laying out the manufacturing process and what not for the MDI form of inhaled treprostinil.

And the other thing I would like to add also is that the beauty of our inhalation time is that even it's -- with the nebulizer, it's a very, very brief -- one to two minute at most period of inhalation, which is certainly a further huge development. And the easier we make it for patients, the better that they can comply, and the better they can comply, the better they can reach that sweet spot that Dr. Rubin referred to of getting over that 370, 380 meter hurdle point.

Next question, operator?

Congratulations on an excellent result. I just wanted to ask Dr. Rubin, maybe also Dr. Jeffs, just the perspectives on their regulatory path -- what hurdles, if any, do you see with inhaled Remodulin? And do you think this data will be taken in the context of more add-on therapy, rather than comparing this to, say, earlier PAH trials that are truly placebo-controlled?

Maybe, Dr. Rubin, if you could answer first? And then Dr. Jeffs, if you could add additional comments after Lew.

Well, it is placebo-controlled. I think that this study has addressed, to my understanding, the major issues that the FDA wanted addressed. They wanted a well-designed, well performed, placebo-controlled trial, which I believe we have achieved. They wanted to statistically significant change in primary endpoint, an endpoint that they are particularly fond of in this disease -- six-minute walk. And with a robust p value, less than 0.01, they were certainly willing to consider approval based on a single trial. There are no major safety issues, at least at this point, in analysis of the data that I think will raise major concerns. And they were also particularly interested in seeing a trough effect to provide some additional ideas regarding frequency of dosing, and that has been provided. So with regards to efficacy, safety, dosing -- all of those issues have been addressed with this trial. So I am very optimistic.

Great, great. I think we all definitely share your optimism, Lew. And Roger, can you give us a little more color on the regulatory process going forward?

Yes, I would be happy to. And I think that Dr. Rubin summarized it perfectly. I think the only thing I might add is the other secondary endpoint that subserves the primary most closely is the six-week walk. And that also was highly statistically significant, and in fact, nearly mirrored the primary endpoint results. So I think it just as for the strength to the finding on the primary endpoint, and with the statistic, I think that finding is indisputable.

In terms of the filing strategy, we're going to work with all our energy to advance a filing in the first half of '08 in the U.S., and then in the latter half of '08, we will file in Europe. So I see no barriers to filing. The thing to remember is this is a change of a route for a drug that is already commercially available, at least the active species is commercially available. So there is an abundance of safety information. The FDA is comfortable with this therapy. I think this data set, as Dr. Rubin has so nicely stated, will make them even more comfortable with the data, and proves that at least the drug is both safe and effective, as is the requirement for filing and for approval. So I think we have met every standard that one would hope to meet, and that is why we are so excited about the result.

Absolutely, Roger. One way that I could visualize this for everybody on the phone is we were extremely grateful some 10 years ago when we licensed treprostinil from Glaxo. And the only way that it could be delivered was through continuous infusion. And that obviously is a challenging route to delivery. What we have really accomplished with this trial today and in order to realize it, we have to complete the regulatory road ahead that Lew and Roger have laid out, is for the first time ever, we have uncovered treprostinil from an intravenous or subcutaneous form of delivery. And that is a huge step forward in terms of market potential. It's a huge step forward in terms of patient convenience. And I think as Dr. Rubin and Dr. Seeger had the brilliance to see initially, it is also a huge step forward in terms of therapeutic effect, because we are now being able to deliver treprostinil directly to where it's needed.

All right, operator, next call? And let me -- I know there is -- we are all extremely excited and blinded by the beauty of the TRIUMPH result. But I just want to remind everybody that there is also some fantastic, best-ever in our 10-year history finance results that we would be happy to talk about, as well. Next color, please?

Navdeep Jaikaria.

Congratulations, Martine. Most of my questions have been answered, so I am going to let somebody else with a burning question on.

We appreciate that politeness very much. Thank you. Next caller, please?

Matt Kaplan.

Congratulations. It looks great in the quarter, and the results. A question for Dr. Rubin and also Roger. Talk about the side effects that you saw in this study and how these compare with the side effects that you see patients using Ventavis. And does durability also impact the side effects as well -- the frequency of the dosing?

Roger, maybe you want to (multiple speakers) the side effect data, because you have looked at that in more detail than I have?

Yes. So I think I would from a general sense categorize the side effect profile as benign. There were very few side effects of any concern. So the most common were transient cough, headache, nausea, flushing and dizziness. Some most of those are typical prostacyclin-like side effects.

The other thing of interest, at least at early looks at the data set, is these were also common in the placebo group. So we haven't really actually sorted out statistics around what is meaningfully different between the two groups. But I think one should expect, there should be more prostacyclin-like side effects in the active group. The most common effect was transient cough. But that one was actually more equal between the two groups than the others. So it could be that nebulization of a liquid into the airways is disturbing in some respects, no matter what is there. But certainly, the presence of treprostinil does not make that any worse. So I'm going to assume that most of these coughs are mild in nature, and not dose-limiting.

It's interesting that there is published data that shows that patients with pulmonary hypertension tend to have a component of reactive airways disease frequently. And so I think that anything that you put into the airways in these patients may induce some mild irritant response. And if that holds up the data, it shows that the placebo group also has frequency of cough comparable would support that.

My own clinical experience with both iloprost and inhaled treprostinil is that a cough is not uncommon. It's usually not severe and [relimiting]. And oftentimes, it subsides over time. So patients are -- much like the headache with nitroglycerin, that patients first starting on it develop a severe headache. But that usually subsides over time, an analogous sort of thing. Sometimes for patients, if they just slow the degree of administration of the drug a little less rapid inhalation, the cough is even more mild in nature.

Thanks, Lew. Thanks, Roger. Operator, we can take the next call, please?

Lucy Lu.

The six-minute walk distance results -- many prior PAH studies are driven by placebo deterioration. I guess I am just a little curious -- how did the placebo do in this trial? Was there any deterioration? Thank you.

Thanks. Roger, would you like to address that question?

Yes, certainly. Good question, Lucy, thanks for it. In this trial, consistent with Dr. Rubin's statement that these patients were stable on background oral therapy, there was essentially no detriment in the placebo group. So they were stable for all intents and purposes across the 12-week period as it relates to walk.

And that is really what is so remarkable that we have been able to demonstrate so statistically significant an improvement in patients that are really quite well optimized on their oral therapy. So to -- it has really moved to the accomplishment bar for pulmonary hypertension therapy higher. And that's the great promise of being in the area of combination therapy now.

If I could just add that, I think that's also a testimony to the quality of the investigators who participate in this study. These were I believe patients who were entered in the study that were able patients, optimized, and therefore, we didn't see much change with the placebo group as you [would] hope to see in such a trial.

Lew, that's such a great point, because it echoes from what I know has been said at previous FDA approval meetings for pulmonary hypertension drugs, which is that the best course of action is to refer the pulmonary hypertension patient to a center of excellence. Just because there's oral drugs doesn't mean it's easy to treat the patient or even easy to diagnose the condition. It remains as difficult to diagnose and as complicated to treat a condition as it ever was.

Yes, and it also speaks to the fact that this is a true treatment effect, the placebo-corrected treatment effect. If the placebo group deteriorates, it magnifies the number in terms of the improvement in walk test. But this -- this placebo group stayed absolutely stable. This is a true treatment.

Thank you so much, Lucy, and thank you for Lew and Roger pointing out that very important statistic. Great. Next caller, please?

Joseph Schwartz.

Good morning and Congratulations.

Thanks so much, Joseph. Glad you were able to get in the queue here.

I was wondering if -- that 20-meter, six-minute walk increase looks like it's in the range of other PAH drugs, especially prostacyclins, which seem to be particularly dose dependent. So I was wondering -- since the drug is so well tolerated, do you anticipate testing higher doses?

It's a good question. Maybe first, if Lew could opine on that, and then Roger?

Yes, it's a really good question and it's one that I have given some thought to, as well. And I think that there is room for exploration here. I am comfortable based on these data, based on our pilot data, which -- the basis for choosing this is the target dose that -- we are in the therapeutic range, whether we are at the peak of the therapeutic efficacy -- I think we don't know. Because tolerability was good, I think there is opportunity to explore higher doses. I agree.

And I think I would add that's already in our Phase IV planning horizon. Certainly, we need to work with Dr. Rubin and Dr. Seeger on the design of that trial. But I think the beauty of the inhalation delivery is it's very simple to dose escalate. It's just a few more breaths during each inhalation period. So the conduct of the trial itself would be quite simple, easily managed by patients, and one I think that we could provide, as Dr. Rubin said, hopefully perhaps a greater benefit. But certainly, it would be worth studying.

(multiple speakers) that's great, so more exciting news flow to come on in the future on improving treprostinil.

Add-on that note, I would like to mention that, actually, we had a number of very exciting presentations at the recent [CHESS] conference that was just completed. And we have more submissions that -- to the major medical conferences for 2008. So there will be quite a lot of exciting clinical data coming out about treprostinil in general and inhaled treprostinil in particular during the next 12 months.

Next question, please?

Matt Duffy.

Hi, it's Matt Duffy from BDR. Just wanted to follow on on some of the other trend of questions. Could you comment on the possibility of -- given the robust trough effect of using this maybe even three times a day?

That's an interesting question. First Lew, and then Roger?

It's possible. My own sense from the pharmacokinetic we have is that three times a day -- and perhaps even some extended clinical experience -- three times a day might be (technical difficulty) brief in the current formulation. But it might be worth exploring. My sense is that the current formulation is probably four times a day. (multiple speakers) Roger?

Yes, I think one thing I would add -- that might be more worthwhile if there had been compliance issues with the regimen. And to our knowledge, there are not. So it's an easily-complied-with regimen. So I'm not sure that it's necessary, or that there will be a demand to explore a less-frequent dosing paradigm for this therapy.

Yes. And also something, Matt, that I would mention is if we were talking about a population of millions of patients that you need to really drive things down to the absolute minimum simplicity, that's one thing. But we are still dealing with very much of an orphan patient population here. And less than 20,000 patients, probably being actively treated -- class 3 patients, fewer than those. So with this small number of patients, and especially the condition being as life-threatening as it is, it's really better to probably be on the safe side and count our blessings already that we have a trough effect with four times a day. That's a really great blessing right there, and probably continue to build on that.

Yes, I would agree with that. This is a very compliant population in general, because they know what the alternative is. And I would rather have a sustained effect supported by the trough effect than an intermittent effect with less frequent dosing.

Exactly. (multiple speakers). Thanks for the question, Matt. Next question?

Biren Amin.

Thanks for taking my questions. Congratulations on the data. I was wondering if you could comment possibly on the improvements on the hemodynamic parameters in the trial with inhaled Remodulin?

Maybe once again, first, Lew, and then Roger?

Well, hemodynamics were not measured in this trial. It's not one of the endpoints. We do have hemodynamics from the two pilot trial that have been published, one from UC-San Diego and the one from Giessen that were three-month trials with hemodynamics. So similar to other developments, for example, with both bosentan and [bursantan] where hemodynamics were done in early trials but not in the pivotal trial, we also hope to have data on the -- some of the long-term hemodynamics from our Phase II trials that we are going to put together from UC-San Diego and Giessen on the patients who have now been on therapy for four-plus years that we are in the process of putting together.

Doctors, would you like to add anything in terms of pharmacokinetics, I mean, of basically the hemodynamics?

Yes, I would just like to add to what Lew said. In addition to the open-label patients, which have now been on more than four years, as we mentioned, there is 150 patients in the long-term open-label extension of this trial. Each of these patients will come in at least annually for a hemodynamic assessment. I'm sure that that's data that we could collect and summarize. So it will be available in time, it just won't be available now. I don't think it's an important limiter for any regulatory process that we will have. As Dr. Rubin mentioned, other drugs have been approved with limited hemodynamic profiling.

The agency isn't really -- doesn't see hemodynamic measurements as meaningful endpoints for their regulatory pulmonary (technical difficulty).

Thank you. Operator, if we could have the next question, please?

Kevin Tang.

Congratulations, everyone. Great results. I wanted to probe into a little bit more of the eventual further competitive differentiation of the product. You mentioned this Aradigm device? What is the regulatory pathway to get that integrated into Viveta's commercialization, and what is the timeframe in which you think that would happen?

Well, we are still sort of sorting that out, so I can't give a definitive answer right now. And the -- what we know is normally the situation for an inhaled treprostinil type of drug is that one needs to have an approval that marries the device with the drug. And that's certainly a very reasonable approach, because both the extent to which the device will be able to achieve deep penetration with the drug and the inherent efficacy and safety of the drug itself are two sides of a coin. So you definitely need to obtain an integrated approval there.

In terms of the Aradigm device, we first want to demonstrate comparability with the Aradigm device to the results that we have shared with everybody today, the type of results we have shared with everybody today, for the nebulizer. And it's not necessary to do a complete study. What we're really trying to do is just to make sure that the degree of penetration of the drug into the deep lung is comparable with the nebulizer and with the Aradigm MDI.

Once we demonstrate that, then it will be important to talk with the regulatory agencies in Europe and the U.S., understand exactly what type of study would be advisable with the MDI device. Dr. Rubin and we have already commenced these discussions internally, and the development is being guided by [Gene] Sullivan, our Chief Medical Officer, who has a long and rich experience with pulmonary delivery. So we have a fantastic team of people beginning to work on this. Even though it has been four years since Dr. Rubin and Dr. Seeger's conceptualization to these results for the nebulizer, you should not imply that it's going to take another four years for the MDI. I think that the MDI will be accomplished much more rapidly than the nebulizer. But in terms of exactly when, it's a little bit premature for us to share that right now. Maybe -- keep that question on tap and ask it again each quarter, and we will be able to come closer and closer to giving you a good target for that.

Okay. And just quickly, Dr. Rubin's clinical view of the MDI inhaler?

I think -- assuming that the challenges of formulating are not a major hurdle, the ability to deliver medication in a very simple, convenient, hand-held, highly portable device is phenomenal. My career has been -- has given me the perspective of new therapy for this disease to acquiring a continuous intravenous delivery of a prostanoid as the first therapy (technical difficulty) now having (technical difficulty) equivalent of a metered dose inhaler like we treat asthma. Not for everyone, but nevertheless, the progression, the development has been very gratifying. Certainly, a portable, convenient device will be great for patients.

Next question, please?

[John Ajay].

Congratulations, everyone. I wanted to check -- what are the plans for filing and Europe? And can you also comment on the impact that inventory might have had on your terrific Remodulin revenue number?

Okay. Why don't we have Roger first address question about Europe? He mentioned earlier that we're looking at a second half '08, but maybe Roger, if you want to provide a little more color on that, and then pass the call to John Ferrari, our Chief Financial Officer, to talk about whether inventory in any way impacted the record financial results?

So I would remain consistent with our earlier comments, it will be second half of '08 for a European filing, and the latter half of the second half of '08. We're going to prioritize the U.S. regulatory filing first.

Okay, and John, could you talk about inventory for the past quarter?

Yes, I would be happy to. Inventory increased just slightly during the quarter, which we expected based on the new patients being added. And what's up with the distributors, we just saw their inventory levels hovering around their contractual levels, and getting those up based on -- also on anticipated new starts.

So you see most of the strength as reflecting a big uptick in buying demand?

Definitely, yes. Inventory had really very low impact on the quarter.

Yes, we were very excited to see that, because we track market share sort of statistics as well fairly close and it's hard to always know exactly what the situation is. But we feel pretty clearly that we have moved in terms of our -- the true definition of our market, which is the prostacyclin market -- we feel that with these results, we have moved into an undisputed position of number one leadership. And in terms of the broader market, which is not really the market that we compete with because it includes complementary and adjunctive therapies, but the broader PAH market, we have pretty clearly now moved into a number two position. And again, it's just fantastic, having achieved that in just such a short span of years.

And one quick question, on European filing, do you have to do any other studies, or anything like that?

Roger?

We don't believe so. We've had the same similar discussions with the agencies there. I should point out, this is a central filing -- very different than the subcutaneous, where we use France as the reference member state. So as a centralized filing, I think that speaks well for the timing of the approval post-submission. We should get that in a much quicker time frame than we did for subcu. And as everybody knows, we are still awaiting I.V. approval in Europe, though we filed that nearly two years ago.

So I think we are set with the data that we have -- the data set that will be enough for the FDA, should be enough for the EMEA as well.

We continue to have a strong European contribution to our overall revenues, continued to track north of 10% in terms of its contribution total to our overall revenues. In Europe, which is quite different than in some regards in the pattern of pulmonary hypertension treatment, Germany is really the most important market, and in Germany, the prostacyclin market is overwhelmingly an iloprost inhalation-based market. So we feel we really have something really valuable to contribute to the German market with Viveta. And it's in Germany that we're already building up our sales and marketing infrastructure for the Viveta launch. Next question please?

Jim Birchenough

Yes, hi, just a quick follow-up. There was mention in the prepared comments that there was a differential effect in patients on Tracleer versus Revatio. Could you maybe break out the differential effect there in six-minute walk?

Roger?

Yes, and this is preliminary and certainly needs further exploration with Dr. Rubin and Dr. Seeger as we go through the data set. And I would remind people that what we're doing now is starting to look at subsets. So you have to remember that the study was not randomized around these subsets, nor was it powered to show a statistical affect within subsets. Set let's not make too much work or too little of the things that we can describe.

In the bosentan subset, which was the larger, it was 70% of the patients that were randomized, there was about 25-meter week 12 improvement. And that p value was also less than 0.0006. So I think that subset, because it's the majority with the overall patient sample, it's not that surprising that that also mimics closely the primary endpoint result. Interestingly, it also is close to what was reported for Ventavis in their add-on therapy trial, which I believe was 26 meters. So in combination, as Dr. Rubin says, this seems to be approximating the effect size that one may anticipate in a well-managed, optimized background therapy population.

So if the bosentan population was 25 meters, obviously, the sildenafil population being smaller had a lower than effect size, and that was closer to 10 meters. But we are trying to understand that. But there is data obviously to suggest that these drugs may be -- that PD-5 inhibitors and prostacyclins may act synergistically. We have produced some recent data from our [REVIVE] study showing that with Remodulin, at least, added as combination therapy to sildenafil, the effect size in that sample was more robust than in a Tracleer sample of patients, albeit these were small cohorts of patients.

So I think it needs more exploration. I would caution all of us not make too much about subset analyses of patient populations. But they are of interest and certainly something that physicians like Dr. Rubin and others will be interested in either exploring more or disseminating more information about this. Maybe, Dr. Rubin, you can comment?

Yes, I agree. It's at a [post-hoc] subgroup analysis, so I wouldn't make too much out of it. It wasn't a prespecified analysis. It is interesting, and perhaps a little surprising, because all the evidence, including the [PACES] trial, which was add-on sildenafil to background Flolan, suggests synergy. So we need to look at it a little bit more. It could be dosing was different in that population, maybe side effects limited the ability to achieve the therapeutic dose, in which case we need to think about maybe going a little more slowly in those patients. There are a variety of potential explanations. But the data needs to be looked at a little bit more. And it's still a small population, looked at retrospectively.

Thanks so much, Lew. I would like to think everybody for participating in our conference call this morning. We really are grateful for all of the congratulations that have been shared with us during the call, and through the e-mails and what not. It's really a fantastic statement that we could say about the entire way medicines can be developed in this country, that key leading physician investigators such as Dr. Rubin and Dr. Seeger can come up with a great idea, share it with a biotechnology company, and within a period of four years, we can prove to scientific certainty that the idea is safe and effective, and be on a short lap to bringing it to the benefit of patients. I mean, I think that whatever, there really can be only I think applause for the biotechnology physician investigator system that we have developed in the United States, because it would be hard to imagine a more beautiful way to bring medical discoveries to the benefit of patients throughout the country. And all of us at United and [LungRX] are absolutely elated to be part of this process, and we realize that the investment community plays an absolutely essential role in providing capital for the ideas to be turned in the medicine.

So in addition to thanking and congratulating us, all of you deserve to be thanked and congratulated as well. It has been a tremendous win-win-win for all constituencies involved in pulmonary hypertension. And we look forward to working even harder to achieving more and more and more.

Thanks so much, and have a great balance of the week and look forward to seeing many of you at the health care and medical conferences coming up during November. Thank you, operator.

Thank you for participating in today's United Therapeutics Corporation third-quarter earnings conference call. This call will be available for replay beginning at 11: 30 AM Eastern standard time today through 11:59 PM Eastern standard time on Friday, November 9, 2007. The conference ID number for the replay is 20811764. (OPERATOR INSTRUCTIONS). The number to dial for the replay is 1-800-642-1687, or 706-645-9291.

Thank you. You may now disconnect.