- Total Annual Revenues of $281.5 Million
- Annual Basic and Diluted Net Loss per Share of $1.87
- Annual Earnings Before Non-Cash Charges of $5.20 per Basic Share, or $4.77 per Diluted Share
SILVER SPRING, Md., Feb. 17 /PRNewswire-FirstCall/ -- United Therapeutics Corporation (Nasdaq: UTHR) today announced its financial results for the fourth quarter and year ended December 31, 2008.
"We are pleased that our revenues for 2008 grew in excess of 30% for the seventh consecutive year to $281.5 million," remarked Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "Along with the continued positive trend relative to existing revenues, we are also excited about the potential to reach even more pulmonary hypertension patients in 2009 with inhaled treprostinil and oral tadalafil."
Total revenues for the three months ended December 31, 2008, were $75.9 million, up from $59.9 million for the three months ended December 31, 2007. Net loss for the three months ended December 31, 2008, was $81.1 million or $3.42 per basic share, compared to net income of $2.0 million or $0.09 per basic share for the three months ended December 31, 2007. Research and development expense for the three months ended December 31, 2008, included a $150.0 million charge related to a one-time, upfront payment to Eli Lilly & Company (Lilly) pursuant to agreements for the license, manufacture and supply of tadalafil for pulmonary hypertension. Earnings before non-cash charges, a non-GAAP financial measure, defined as net (loss) income before non-cash income taxes, non-cash license fee expenses, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), for the three months ended December 31, 2008, was $25.1 million or $1.06 per basic share, compared to $24.1 million or $1.11 per basic share for the three months ended December 31, 2007.
Revenues. Revenues for the year ended December 31, 2008, increased by 33% over the year ended December 31, 2007, from $210.9 million to $281.5 million. The increase in revenues in 2008 was primarily due to an increase in the number of patients prescribed Remodulin. Gross margins from sales were $249.2 million and $186.5 million, or 89%, for the years ended December 31, 2008 and 2007, respectively.
The table below summarizes the components of revenues (in thousands):
Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 Revenues: Remodulin $73,137 $56,824 $269,718 $200,879 Telemedicine products and services 2,370 2,205 9,485 7,725 Distributor fees 342 827 2,234 2,160 Other products 13 42 60 179 Total revenues $75,862 $59,898 $281,497 $210,943
Operating Expenses. Our operating expenses principally consist of research and development, selling, general and administrative and costs of service and product sales.
The table below summarizes research and development expense by major project and non-project components (in thousands):
Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 Project and non-project: Cardiovascular $20,890 $8,570 $60,549 $38,459 License fees 150,000 - 150,000 11,013 Cancer 687 3,189 2,771 13,874 Infectious disease 725 278 1,556 824 Share-based compensation 4,918 3,671 16,200 12,373 Other 2,531 2,002 8,105 6,809 Total research and development expense $179,751 $17,710 $239,181 $83,352
Cardiovascular programs. During the three months ended December 31, 2008, expenses related to our cardiovascular programs increased over those for the three months ended December 31, 2007, as a result of the following:
The table below summarizes selling, general and administrative expense by major categories (in thousands):
Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 Category General and administrative $13,171 $13,429 $41,284 $38,515 Sales and marketing 8,778 7,826 32,899 24,159 Share-based compensation (84) 22,971 20,123 36,353 Total selling, general and administrative expense $21,865 $44,226 $94,306 $99,027
During the three months and year ended December 31, 2008, selling, general and administrative expense decreased as compared to the three months and year ended December 31, 2007, primarily as the result of a reduction in share-based compensation expense. For the three months and year ended December 31, 2007, we recognized share-based compensation expense of approximately $20.3 million and $23.7 million, respectively, representing the fair value of the year-end stock option grant to our Chief Executive Officer, which is determined by a formula set forth in her employment agreement. Based on this formula, our Chief Executive Officer did not receive a stock option grant for the year ended December 31, 2008. Accordingly, during the three months ended December 31, 2008, we reversed approximately $6.4 million in estimated compensation expense that had been accrued through September 30, 2008.
Income Tax Benefit. As a result of net losses incurred before income taxes, we recognized income tax benefits of $51.6 million and $29.5 million, respectively, for the three months and year ended December 31, 2008. For the three months and year ended December 31, 2007, we recognized income tax benefits of approximately $7.1 million and $3.3 million, respectively. Related tax benefits recognized in 2007 resulted principally from the generation of business tax credits during the year for our orphan drug related research and development activities.
Earnings Before Non-Cash Charges
A reconciliation of net (loss) income to earnings before non-cash charges is presented below (in thousands, except per share data):
Three Months Ended Year Ended December 31, December 31, 2008 2007 2006 2005 2008 2007 Net (loss) income, as reported $(42,789) $19,859 $73,965 $65,016 $(81,145) $1,986 Add (subtract) non-cash charges: Income tax benefit, net of taxes paid (31,137) (4,831) (34,361) (17,679) (51,557) (7,466) License fee 150,000(1) 11,013(2) - - 150,000(1) - Depreciation and amortization 4,955 3,427 2,713 2,534 1,810 941 Impairments 1,605 3,582 2,024 - 1,100 2,067 Share-based compensation 36,393 48,766 23,513 983 4,852 26,585 Earnings before non-cash charges $119,027 $81,816 $67,854 $50,854 $25,060 $24,113 Earnings before non-cash charges per share: Basic(3) $5.20 $3.85 $2.95 $2.23 $1.06 $1.11 Diluted(4) $4.77 $3.64 $2.81 $2.02 $1.02 $1.02 (1) During the three months ended December 31, 2008, we made a one-time payment of $150.0 million to Lilly related to our license and manufacturing and supply agreements. We also issued approximately 3.2 million shares of our common stock to Lilly for $150.0 million under a related stock purchase agreement. Since there was no net impact on our cash flows associated with these transactions, we have presented related up-front fees as an adjustment to net loss. (2) During the year ended December 31, 2007, we issued 200,000 shares of our common stock to Toray. Based on the closing price of our common stock, the fair value of the shares issued was expensed as research and development. (3) Calculated by dividing earnings before non-cash charges presented above by the weighted average shares outstanding for the period. (4) Calculated by dividing earnings before non-cash charges presented above by the weighted average shares outstanding for the period adjusted for potentially dilutive securities. For the three months and year ended December 31, 2008, approximately 24.6 million shares and 25.0 million shares, respectively, were used in calculating diluted earnings before non-cash charges.
United Therapeutics will host a half-hour teleconference on Tuesday, February 17, 2009, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 877-879-6209, with international callers dialing 719-325-4753. A rebroadcast of the teleconference will be available for one week by dialing 888-203-1112, with international callers dialing 719-457-0820 and using access code 6654716.
This teleconference is also being webcast and can be accessed via United Therapeutics' website at http://ir.unither.com/events.cfm.
About United Therapeutics
United Therapeutics Corporation 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 certain financial measures that do not comply with U.S. generally accepted accounting principals (GAAP). This measure supplements our financial results prepared in accordance with GAAP.
We use earnings before non-cash charges, a non-GAAP financial 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.
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 annual revenue growth and our expectations about inhaled treprostinil and tadalafil reaching more patients. 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 February 17, 2009, 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.
AERx Essence is a registered trademark of Aradigm Corporation.[uthr-g]
UNITED THERAPEUTICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended For the Years Ended December 31, December 31, 2008 2007 2008 2007 Revenues: Net product sales $73,206 $56,899 $270,005 $201,348 Service sales 2,314 2,172 9,258 7,435 Distributor fees 342 827 2,234 2,160 Total revenues 75,862 59,898 281,497 210,943 Operating expenses: Research and development 179,751 17,710 239,181 83,352 Selling, general and administrative 21,865 44,226 94,306 99,027 Cost of product sales 7,267 5,745 26,957 19,919 Cost of service sales 839 612 3,109 2,342 Total operating expenses 209,722 68,293 363,553 204,640 (Loss) income from operations (133,860) (8,395) (82,056) 6,303 Other income (expense): Interest income 2,302 3,939 11,025 13,602 Interest expense (16) (34) (16) (2,175) Equity loss in affiliate (71) (56) (226) (321) Other, net (1,057) (572) (1,025) (826) Total other income, net 1,158 3,277 9,758 10,280 (Loss) income before income tax benefit (132,702) (5,118) (72,298) 16,583 Income tax benefit 51,557 7,104 29,509 3,276 Net (loss) income $(81,145) $1,986 $(42,789) $19,859 Net (loss) income per common share: Basic $(3.42) $0.09 $(1.87) $0.94 Diluted $(3.42) $0.08 $(1.87) $0.88 Weighted average number of common shares outstanding: Basic 23,727 21,666 22,901 21,224 Diluted 23,727 23,746 22,901 22,451
SELECTED CONSOLIDATED BALANCE SHEET DATA (In dollars and thousands) December 31, 2008 2007 Cash, cash equivalents and marketable investments (excluding restricted amounts of $45,755 and $44,195, respectively) $336,318 $299,792 Total assets 871,319 587, 018 Total liabilities 352,738 280,346 Total stockholders' equity 507,699 295,790
|SOURCE United Therapeutics Corporation|
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