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United Therapeutics Reports Third Quarter 2007 Financial Results
Date:11/1/2007

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Selling, general and administrative expenses consist primarily of salaries, travel, office expenses, insurance, professional fees, provision for doubtful accounts receivable, depreciation and amortization. The table below summarizes selling, general and administrative expenses by major categories (dollars in thousands):

Three Months

Ended

September 30,

Percentage

2007 2006 Change

Category:

General and administrative $8,380 $6,605 26.9%

Sales and marketing 5,923 3,619 63.7%

Stock option 4,860 2,667 82.7%

Total selling, general

and administrative expense $19,163 $12,891 48.7%

The increase in general and administrative expenses was due primarily to increased expenses of approximately $637,000 for salaries and related expenses from headcount growth to support our expanding operations, and approximately $1.5 million related to an impairment charge against the book value of our arginine patents. The impairment charge, using a discounted cashflow methodology, is the result of a recent court decision concerning the enforceability of patents and a publication discounting the benefits of arginine supplementation, which caused us to reevaluate our assumptions used in determining the recoverability of our arginine patents. The increase in sales and marketing related expenses is primarily due to an increase in headcount that led to a corresponding increase in salaries and related expenses of approximately $1.2 million.

Income Tax

An income tax expense of approximately $2.2 million was recognized for the three months e
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SOURCE United Therapeutics Corporation
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