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United Therapeutics Reports Third Quarter 2008 Financial Results

- Revenues of $75.0 Million, Increase of 27% over Third Quarter 2007 - EPS of $0.55 per Basic Share, or $0.50 per Diluted Share, Decreases of

21% and 24% over Third Quarter 2007, respectively - Earnings Before Non-Cash Charges of $37.8 million, Increase of 39% over

Third Quarter 2007

SILVER SPRING, Md., Oct. 30 /PRNewswire-FirstCall/ -- United Therapeutics Corporation (Nasdaq: UTHR) today announced its results of operations for the quarter ended September 30, 2008. Total revenues for the third quarter of 2008 were $75.0 million, up from $59.0 million for the third quarter of 2007. Net income for the third quarter of 2008 was $12.6 million, or $0.55 per basic share, compared to $14.8 million, or $0.70 per basic share, for the third quarter of 2007. Gross margins from sales were $66.7 million for the third quarter of 2008, compared to $52.2 million for the third quarter of 2007. The increases in revenues and gross margins corresponded to the continued growth in sales of our lead product, Remodulin. Earnings before non-cash charges, defined as net income before non-cash income taxes, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), were $37.8 million for the third quarter of 2008, up 39% from $27.3 million for the third quarter of 2007.

"I am enthused about being on track for a $300 million per year revenue run rate based on this quarter's results," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "We are also energized by the great opportunity of bringing prostacyclin therapy to the thousands of additional patients who need it."

Research and Development Expenses

The table below summarizes research and development expenses by major project and non-project components (dollars in thousands):

Three Months Ended

September 30,

2008 2007 Percentage


Project and non-project:

Cardiovascular $11,678 $11,761 (0.7)%

Cancer 984 3,408 (71.1)%

Infectious disease 347 202 71.8%

Share-based compensation 4,701 3,148 49.3%

Other 1,503 1,040 44.5%

Total research and

development expenses $19,213 $19,559 (1.8)%

Selling, General and Administrative Expenses

The table below summarizes selling, general and administrative expenses by major category (dollars in thousands):

Three Months Ended

September 30,


2008 2007 Change


General and administrative $9,832 $8,380 17.3%

Sales and marketing 7,920 5,923 33.7%

Share-based compensation 12,266 4,860 152.4%

Total selling, general and

administrative expenses $30,018 $19,163 56.6%

The increase in sales and marketing expenses primarily reflects increases in salaries and related expenses as a result of headcount growth.

Share-based compensation was higher for the quarter ended September 30, 2008, compared to the same quarter in 2007, as a result of an approximate $5.2 million increase relating to the fair value of a potential year-end stock option grant to our Chief Executive Officer, which is governed by her employment agreement.

Earnings Before Non-Cash Charges

The following table provides a reconciliation of net income to earnings before non-cash charges for the three-month periods ending September 30, 2008 and 2007 (in thousands, except per share data):

Three Months Ended

September 30,

2008 2007

Net income, as reported $12,623 $14,848

Add back:

Income tax expense 6,712 2,010

Depreciation and amortization 1,143 865

Impairment charges 353 1,515

Share-based compensation 16,989 8,040

Earnings before non-cash charges $37,820 $27,278

Earnings before non-cash charges per share (1):

Basic $1.65 $1.29

Diluted $1.48 $1.22

(1) Calculated by dividing earnings before non-cash charges by the

weighted average shares outstanding, as reported below.

Conference Call

United Therapeutics will host a half-hour teleconference on Thursday, October 30, 2008, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-800-603-1777, with international callers dialing 1-706-679-8129. A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 1-800-642-1687, with international callers dialing 1-706-645-9291, and using conference code: 67213939.

This teleconference is also being webcast and can be accessed via United Therapeutics' website at

About United Therapeutics

United Therapeutics is a biotechnology company focused on the development and commercialization of unique products to address the unmet medical needs of patients with chronic and life-threatening cardiovascular and infectious diseases and cancer.

Non-GAAP Financial Information

This press release contains a financial measure that does not comply with U.S. generally accepted accounting principals (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.

We use earnings before non-cash charges, a financial non-GAAP measure, internally for operating, budgeting and financial planning purposes and as a metric to determine the efficiency of our operations. We believe our investors' understanding of our performance is enhanced by disclosing this measure. The presentation of this non-GAAP financial measure is not to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

Forward-looking Statements

Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, our expectations and intentions related to financial performance and results, including our annual revenue run rate and our belief about the future prospects of Remodulin. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from anticipated results. Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in our periodic reports and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8-K. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We are providing this information as of October 30, 2008, and assume no obligation to update or revise the information contained in this press release whether as a result of new information, future events or any other reason.

Remodulin is a registered trademark of United Therapeutics Corporation. [uthr-g]



(In thousands, except per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2008 2007 2008 2007

(Unaudited) (Unaudited)


Net product sales $72,149 $56,661 $196,799 $144,449

Service sales 2,324 1,718 6,944 5,263

Distributor fees 559 666 1,892 1,333

Total revenues 75,032 59,045 205,635 151,045

Operating expenses:

Research and


19,213 19,559 59,430 65,642

Selling, general and

administrative 30,018 19,163 72,442 54,801

Cost of product sales 6,950 5,568 19,689 14,174

Cost of service sales 791 598 2,270 1,730

Total operating


56,972 44,888 153,831 136,347

Income from

operations 18,060 14,157 51,804 14,698

Other income (expense):

Interest income 2,311 3,681 8,723 9,663

Interest expense - (717) - (2,141)

Equity loss in affiliate 1 (72) (155) (265)

Other, net (493) (34) 32 (254)

Total other income,

net 1,819 2,858 8,600 7,003

Income before income tax 19,879 17,015 60,404 21,701

Income tax expense (7,256) (2,167) (22,048) (3,828)

Net income $12,623 $14,848 $38,356 $17,873

Net income per common


Basic $0.55 $0.70 $1.70 $0.85

Diluted $0.50 $0.66 $1.55 $0.80

Weighted average number

of common shares


Basic 22,934 21,087 22,624 21,075

Diluted 25,482 22,443 24,707 22,380


As of September 30, 2008

(Unaudited, in thousands)

Cash, cash equivalents and marketable investments

(excluding restricted amounts of $45,353) $341,861

Total assets $766,680

Total liabilities & common stock subject to repurchase $348,094

Total stockholders' equity $418,586

SOURCE United Therapeutics Corporation
Copyright©2008 PR Newswire.
All rights reserved

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