United Therapeutics Shares Fall On Delay To Hypertension Drug
17 March 2009 - 3:18AM
Dow Jones News
United Therapeutics Corp. (UTHR) shares fell as much as 10%
Monday as regulatory approval for an inhaled version of its
hypertension drug appears delayed to allow for more testing of the
product's instructions.
The Food and Drug Administration was expected to make an April
30 decision on Tyvaso, which is an inhaled version of Remodulin, a
$100,000-a-year drug that is administered either as a continuous
intravenous infusion or under-the-skin infusion using a delivery
pump and a catheter.
Regulators don't seem to be questioning the drug's effectiveness
or safety, and the effects of the setback may only be minimal. The
Silver Spring, Md., company hadn't expected a "material impact" in
2009 from the drug's approval and said Monday that it continues to
expect a revenue boost in 2010 from its launch.
United Therapeutics shares, which fell as low as $59.35,
recently dropped 7.8% to $61.14. Before Monday, the stock was up 6%
this year, as compared to the Amex Biotechnology Index's loss of
6.8% and the S&P 500 decline of 16%.
The regulatory delay stems from concerns about the instructions
that come with the drug. The agency wants testing to show that
"naive" users will be able to properly operate the delivery
device.
The company said it will conduct a study with 20 to 30
volunteers and provide that data to the agency within about a
month.
Wall Street analysts highlighted that the delay should be
resolved before the end of the year and allow for approval by that
time. Notably, regulators haven't asked for additional clinical
trials on safety or effectiveness that are both expensive and time
consuming.
In a conference call, Chief Executive Martine Rothblatt
expressed disappointment with the setback and downplayed its
impact, saying that such delays are "rather common" and "rather
brief."
Rothblatt put the revenue potential of the drug at "in excess of
$300 million a year" but refused to provide additional information
on the regulatory issues.
Remodulin, United Therapeutics' only product, has provided
steady topline growth of 35% to 40% a year since the 2002 launch,
with total revenue of $281 million in 2008. The company hopes to
build on that success by launching the inhaled formulation.
The drug treats pulmonary arterial hypertension, which is
continuous high blood pressure in the pulmonary arteries that makes
patients susceptible to heart failure.
Cowen & Co. has projected that the inhaled version will
drive sales of the franchise to more than $500 million by 2012.
An oral version failed a late-stage trial in November, but the
company continues to develop an oral version but in smaller dosages
than those used in the previous trial. Furthermore, United
Therapeutic has agreed to sell Eli Lilly & Co's (LLY)
erectile-dysfunction drug Cialis to treat pulmonary arterial
hypertension, which has an FDA decision date in late May.
Meanwhile, the competition in treating the relatively rare, and
often fatal, condition continues to be fierce.
Gilead Sciences Inc. (GILD) and Switzerland's Swiss drug maker
Actelion Ltd. (ATLN.VX) both sell pills to treat the condition and
Actelion also has an inhaled drug that is administered more
frequently than Tyvaso. Pfizer Inc. (PFE) sells its own
erectile-dysfunction drug, Viagra, under the brand Revatio to treat
the condition.
-Thomas Gryta; Dow Jones Newswires; 201-938-2053;
thomas.gryta@dowjones.com