Good morning, ladies and gentlemen. My name is Tyrone, I'll be your conference operator today. At this time, I would like to welcome everyone to the United Therapeutics Corporation Third Quarter Earnings Conference Call. [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 could cause actual results to differ materially from those in the 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 could 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 update these forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting such forward-looking statements. Thank you. Dr. Martine Rothblatt, you may begin your conference.

Thank you very much, Tyrone. Good morning, everybody. I'm pleased to welcome everyone to our third quarter 2012 financial results conference call. Joining me with -- joining me on the call this morning is Dr. Roger Jeffs, our President and Chief Operating Officer; Mr. John Ferrari, our Chief Financial Officer; and Mr. Andrew Fisher, our Chief Strategy Officer. I'll provide a couple of introductory remarks, and then I'll ask Tyrone to please open up the phone to any questions. It's certainly gratifying to see us closely approach, for the first time, a revenue run rate of $1 billion per year. Our free cash flow enables us to continue investing in new therapies such as once-daily injectable treprostinil and once-monthly refillable implantable treprostinil that hold great promise for positively transforming the lives of patients with pulmonary arterial hypertension. I'm also very pleased to share that our earnings per share have risen to $1.52 per basic share. And perhaps, even more meaningfully, our earnings before noncash charges have risen to $2.93 per basic share. So I'd like to emphasize that the earnings before noncash charges' metric is, I think, the more useful and helpful metric because it excludes things such as our Share Tracking Award program expenses, which in fact, vary as a function of our stock price and have no bearing on the fundamentals of our core business. Speaking of the fundamentals of the core business, it's been a terrific quarter. Each of our 3 products have shown significant growth: Remodulin, Tyvaso and Adcirca. For those who may be new to the story, I'm happy to mention that Remodulin is the #1 market leader in the market segment of parenteral prostacyclin and prostacyclin analogues. There are about -- let's see, 1, 2, 3 -- about 4 different competing drugs in the…

[Operator Instructions] First question is from Liana Moussatos of Wedbush Securities.

Can you talk about growth drivers for Remodulin and specifically, what should we expect to hear about the injectable and implantable pump? I think in the past, you had mentioned you could potentially launch implantable pumps in 2014. Can you just give us like a timeline and some kind of data points that we could monitor?

Yes. Thank you, Liana. Thanks for the compliments and thanks for being steadfast with the story here. The Remodulin implantable pump reached a very important milestone since our last quarterly conference call. It is now a completely enrolled study. And terrific credit for that goes to the clinical investigators throughout the United States. But probably, the biggest shout out goes to Dr. Bourge who has, probably, the largest pulmonary hypertension practice at University of Alabama, Birmington -- Birmingham and has been a leader in the implantable pump effort. The -- so the study is fully enrolled. Now, what has to happen is that a specified number of hours, of cumulative clinical time with the implantable pump has to be aggregated. The clinical development team has forwarded to me that there are now -- that the study's fully enrolled, they can say that, that clinical number of hours is going to be reached in the third quarter of 2013. So in the third quarter of 2013, the study would be completed. And at that point in time, it's necessary to compile the information, which we would do together with our partner, Medtronic, and submit it to the FDA for a label expansion on the Synchromed II pump that it may also be used for pulmonary hypertension. Exactly how many months it will take working with Medtronic to do that, I'm not really sure. I would love for it to be done before Christmas of 2013, but I can only command United Therapeutics, so -- and it's ultimately, the submission will have to come from Medtronic. And let's say that it did happen by Christmas of 2013, then the FDA's decision could come during 2014 and it could be launched before Christmas of 2014. If there was a little bit of slip,…

That's great. What about in the injectable that you recently announced that you're starting to work on?

Yes. Let me ask -- the injectable is a project that Dr. Jeffs has initiated and will be managing. And Roger, can you sketch out for Lianna a schedule on the injectable pump? On the injectable Remodulin, I mean.

Sure. So maybe just a little bit of background for those who may not be aware of the program. So the TransCon approach, which is a deal we've recently announced with Ascendis, it converts Remodulin to a unique prodrug that's injected in an inert way through a carrier-bound compound. So the hope there is that it will be a pain-free injection, and then once released into the plasma, it will cleave and release treprostinil which will then have its known activity. We're in the initial stages; it's a preclinical development program. We're doing some formulation development, some synthesis, metabolize the identification, the whole host of things that one has to do. We think that will take us between 1 to 2 years to get into a pre-IND study. The good news is that the -- at least in animals, the bioavailability given through this prodrug approach, is very, very good and we think we can tackle the regulatory hurdle through a bioequivalence approach much as we did with intravenous Remodulin when we showed bioequivalence to subcu. So that will truncate the development timeline significantly. So if that's true, if we can show in humans that the PK has a similar profile through a prodrug approach as it would through a subcutaneous approach, we can then shorten that development timeline, and we think within a 3- to 4- year time frame, we could make this newly once-daily self injection of treprostinil available to patients. What's nice about that, it has its own IP and it would port a significant proprietary position for a once-daily injection well into the early 2030s.

Next question is from Michael Yee of RBC Capital Markets.

Two questions. One is on your cash balance. You have an impressive summary [ph] of just under $2 million in cash, $14 in share. And I guess the question is how are you thinking about using this? Is that increasing your share buybacks? Is that, heck, maybe even a dividend? How do you think about that? Maybe it's in-licensing things. How do you think about that?

Yes. Great question. So let me go through the checklist that you mentioned there. We're definitely a company that is committed to returning value to our shareholders through all reasonable means. And our favorite mean is growth in the company stock price. And we try to support that with growth in revenues, growth in profits and an exciting pipeline. We were, of course, disappointed with the FDA's complete response letter. But as mentioned in our conference call on that, we are doing our absolute best to turn that around since it seems that there were definitely some misunderstandings involved in the issuance of that letter. The second nice way to return value to shareholders is to also help the stock price. But this time, instead of dealing with the numerator, address the denominator by reducing the number of outstanding shares. And in that regard, we have been continually in the market repurchasing our shares. And just one statistic that shows the measure of our commitment to ongoing stock buybacks is we have repurchased just about 20% of all of our outstanding shares over the past few years of stock buybacks. So really, we're continually in there. And with the recent drop in our stock price, you can be sure that we're going to complete the current tranche of buyback that we initiated a few months ago. And then the next item is with regard to dividends. So there is all kinds of dividends. There's onetime, big cash dividends, there's reoccurring dividends. This is something that you can't really just decide on sort of like a more of a simplistic upsale, like a stock buyback, for example. It's something that has to be financially analyzed in a more complex way. And we have -- I enjoy hearing the viewpoints of our…

Okay. That was fantastic. One question for John. Any changes in inventory level on any of the products in the quarter?

Yes. For the quarter -- for the third quarter, there was a very slight increase in both dollar value and the inventory and inpatient count, days on hand. But that slight inventory is consistent -- that increase is consistent with the prior 3 -- Q3 quarter inventory changes. So nothing significant, nothing major, nothing noteworthy.

Next question is from Mark Schoenebaum of ISI Group.

So on the Medtronic device, just to be clear, is there any new IP that would surround that device or that delivery method? And then the second question I had, it was on -- it was commercial. And that is, I know sometimes historically you've had sequential revenue declines in 4Q due to, I think, seasonality. I know you're not -- I know your guidance is your guidance, but maybe you can just speak to that observation whether or not we should be thinking about that way this year? And then finally, can you just remind me the structure of your sales force, please? Do you have the same people detailing Tyvaso, as well as IV subcu Remodulin? Or are they somehow different?

Okay. Thanks. So there's 3 questions, I'm going to address questions 3 and 2, and Andy Fisher, our Chief Strategy Officer, will talk about the Medtronic IP situation. So first, we have 2 sales forces, one sales force focuses on treprostinil products and the other sales force does non treprostinil product. So the sales force selling Tyvaso also is responsible for Remodulin since both of those are treprostinil products. And then a separate sales force handles Adcirca, that being a PDE-5 inhibitor. The middle question -- what was the middle question again?

Seasonality.

The seasonality. Yes, where we can -- if you could see, we are doing pretty well in terms of being on track for hitting our forecast for 2013 -- or 2012 of $875 million plus-or-minus 5%. So yes, I do think that we are on track to hit that forecast. And as you can see in the press release, we were noting that we're on a revenue run rate that would certainly be very consistent with hitting our 2013 guidance of $1 billion, plus-or-minus 5%. Andy, can you address the IP thing?

Sure. Thanks for the question, Mark. The Medtronic relationship, as you know, is an exclusive one for us in terms of our right to use the Synchromed II to for the delivery of treprostinil intravenously. The delivery of treprostinil intravenously itself is already obviously covered and contemplated by existing IP. The use of this particular pump and our exclusive relationship with Medtronic is really part of the value of that relationship. So as far as additional new IP goes, I think we'll refrain from commenting on the existence of such IP. But for the time being, I think it -- we're most focused on our exclusive right to use that pump.

Next question is from Robyn Karnauskas of Deutsche Bank.

[indiscernible] Tyvaso, given the delay of the oral [indiscernible]...

Robyn, it's like almost impossible to hear you. It sounds like you're underwater.

Oh, sorry. Hopefully you can hear me. I'm just tuning in, in a hotel. So can you maybe comment on Tyvaso and any updated thoughts on doing another trial preapproval in Europe given the delay with the oral?

Yes, thanks, Robyn. Tyvaso is doing very, very well. And I don't know if you've ever seen this chart that we have, but it's one that kind of captures the situation in a snapshot. If you take a picture of what you need for one week worth of Tyvaso, it's 7 plastic ampules, that's it. One a day, you put it in the morning and that's it. And by the way, we formulate those ampules in our own facility, which just recently passed FDA inspection with no 483s. 483s is just the FDA logo -- I mean, verbiage and form for if they find any deficiencies that need to be rectified. So we're like right on track on Tyvaso. If you look on the right side of the page, and what would be needed for the competitive product is actually 63 glass vials. And that is our 7 days worth of 9 glass vials. And every inhalation session, the patient has to break open another glass vial, pour it in. And so, it's just such a night and day difference that, I think, Tyvaso will continue to soar in its market capture as it has been and as you see, it is doing right now. With regard to Europe, it is a very unfortunate situation that the EMEA did not agree to allow Tyvaso to move forward in Europe. And we had to carefully decide whether or not we would do another trial just for Europe or instead try to address that need for a non-parenteral form of treprostinil with another delivery modality. And there being so many moving pieces and pieces which are moving forward in our pipeline, it seemed to be best, in fact, to address the European patients' needs with some of our additional modality. So let…

The next question is from Geoff Meacham of JPMorgan. Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division: So pipeline-wise, just wanted to get your sense, Martine. Does the oral Remodulin outcome, does that move beraprost up in your mind as a priority? Or do you feel like what you have today for strategy for oral is going to be good enough for sort of longer-term life cycle management?

Yes. Interesting question, Geoff. We really move them both along as 2 forms of our strategic product development. And the way we look at it is that there's a tremendous diversity in the patient population here. Each of those molecules are 2 very different analogs of prostacyclin. They activate different sets of the prostacyclin receptors and they do so in -- with different strains. They also have different side effect profiles, and those side effect profiles are different for different patients. So our goal being to have everyone of the 30,000 U.S. and a comparable number of European PAH patients on one UT therapy or another, it seems wisest for us to bring both of those programs all the way through to approval. So if a particular patient either had a side effect profile or not as much desired improvement with one of the prostacyclin analogs, they could be segued over to the other prostacyclin analog. And you see a similar situation with many drugs. There's, in the PAH space, there's legions of stories of patients who have not improved on Tracleer, and then they're moved over to Letairis and they have a remarkable improvement. I know personally some of those stories. There's also -- I'll admit it, that I do kind of apply some pressure to my sales forces with regard to the PDE-5 because I find it hard to understand why would anybody take a pill 3 times a day in the case of sildenafil, where you could take a pill one time a day, tadalafil. And if you look at the 6-Minute Walk distance result and the side effect profiles, it's very much 6 of 1 and half dozen of the other. And while there is no doubt that the momentum is moving toward tadalafil, as I mentioned at the beginning of my call -- it's now the most prescribed one -- our physicians for whom I have the highest respect, tell me, "Martine, there are some patients who just do better on sildenafil than on tadalafil, even though I have other patients who do better on tadalafil than sildenafil." And this is just part of the pharmacogenomic reality that we all today, in 2013, we're in the dark ages of pharmacogenenomics. We're not yet at the level of the doctor being able to screen our personal genome, much less be able to compare it to the pharmacogenomic profile of different drugs and say, "Aha, this blood-pressure pill or this pulmonary hypertension pill is the best one for you." We're still in the trial and error phase, and some patients will do better on beraprost, some patients will be -- do better on oral treprostinil. We win exactly the same if, or whether they take either of them. So we're going to continue to move both forward and maintain our -- not only 2 shots on goal, but hopefully winning with both shots.

Next question is from Phil Nadeau of Cowen and Company.

Two questions. First, I was wondering if we could get an update on the intellectual property dispute with Sandoz? And in particular, get your thoughts on maybe an IP settlement. It does seem like with new formulations of Remodulin coming down the pike, if you could just push out the uncertainty on the IP beyond the availability of those, it would alleviate a lot of concerns of shareholders. And then second, Martine, at one point on the call, you mentioned misunderstandings in the complete response letter for oral Remodulin. I was wondering if you'd be willing to provide us more details on what those misunderstandings were.

Yes. So let me address the second question while Andy is gathering his thoughts with regard to the Sandoz question. So there are 3 points that were mentioned in the letter that we repeated in our press release and we talked about briefly. And those are the 3 things that, I think, we just have to work the system in the appropriate way to clear up the misunderstandings with regard. One of them was with regard to the clinical significance of the 6-Minute Walk distance on oral treprostinil's trial. So on that point, the 6-Minute Walk distance was, in fact, greater than the 6-Minute Walk distance on Tyvaso and on Remodulin. Both of those drugs were approved based on the clinical significance of that 6-Minute Walk distance. And the FDA was absolutely brilliant for having reached those conclusions. Since it's mentioned earlier on the call, those 2 drugs have become far and away the most preferred parenteral and inhaled treatments for pulmonary hypertension, and there are literally thousands of patients' positive clinical experience to testify to the clinical significance of treprostinil in Remodulin and Tyvaso, with even a lesser 6-Minute Walk distance than we demonstrated with our oral treprostinil. The second point that will be clearing up in the months ahead relates to the issue of imputation and data imputation. This is kind of getting into a statistical area that I'm not going to really bore people on the phone with. And anyway, I probably might mistake something. But the bottom line is that the imputation methodology was exactly what we had pre-discussed with the FDA, which was already approved in the physical analysis plans. It's the same imputation methodology that everybody else uses. It's totally clean and kosher as it gets. And our thinking is that maybe because if…

Sure. Thanks for the question. So to update everyone on the status of the case, pursuant to the scheduling order issued by the court back in, I think it was July, and that scheduling order is available for public download, I think, from the federal court docket. We are engaged in the procedural back and forth set forth in that scheduling order right now. So there's not anything really to update you on other than the fact that the parties are engaged in the activities outlined in that scheduling order. With respect to your question about settlement, given that we are currently engaged in that back and forth and given the early stage of the case and the lack of sort of substantive rulings by the court and substantive exchange of information between the parties, I think it's way too premature to get into any discussion about such things right now. And in any event, our policy is not to comment on active litigation in that way, so hopefully that helps answer your question.

Our next question is from Jim Birchenough of BMO Capital.

Just a question on the continuous delivery device, the implantable intravascular catheter is not yet approved by FDA, is that something that will get approval prior to filing for an expanded use of Medtronic pump? Or does that happen in concert with that filing? And then the broader question is just where do you see the implantable pump fitting in separate from the Remodulin switch business and from the Tyvaso switch business. I guess, the concern would be patients looking for better convenience might just use this as an alternative to Tyvaso. So I'm trying to get a sense of what the incremental market opportunity would be?

Sure. Let me answer your second question while I ask Roger to gather his thoughts with regard to the first question on the regulatory approval process for the indwelling catheter associated with the implantable pump. The research that we have, both statistical and anecdotal, all confirms the fact that only about half of all of the patients who a physician would say, "You need to have a continuous, measurable level of prostacyclin in your serum", actually avail themselves of that. And the patients who are on Tyvaso, I think it would be an odd and rare situation that those patients would feel that the brief 1 to 2 minutes, 4-times a day inhalation with Tyvaso was an inconvenience strong enough to accept having a pump implanted in them that had to be filled by a nurse specialist or a doctor once a month. And have -- and simply the fact that they've got this machine in them, whereas with the Tyvaso, they don't. Tyvaso is not appearing to be burdensome to those patients. Instead, the natural market is for the patients who are no longer able to have their disease managed on Tyvaso because their pulmonary hypertension is progressing. And the doctor is telling them Tyvaso has a local effect, it has a great local effect, but shortly after inhalation, we can't really detect very much treprostinil in your bloodstream. And what you need to do is you need to go on either the subcutaneous or the intravenous form of Remodulin so you can have a continuous high level of treprostinil circulating in your bloodstream. I believe half the patients just say, "No. I can't do that." And it might be -- you might think that, well, why would a patient risk their life to say no. But the fact…

Yes, certainly, Martine. So Jim, you're essentially correct. The pump, the Synchromed II pump is already approved for other uses. What's novel here and what's the basis for the IDE is the catheter. But when we file, we'll file the PNA based on the system which is the use of this catheter with this pump to infuse Remodulin and then the characteristic flow dynamics associated with that. So it's actually -- the filing of this would be more system-based than catheter-based. That's no issue at all, really, it's just -- that's the way our filings will port. Hopefully that's helpful.

All right. Our final question is from Terence Flynn of Goldman Sachs.

I was just wondering if you can comment on any trends you're seeing on the Tyvaso side with respect to treatment duration, types of patients there, and ultimately, where you do see this product -- where or when do you see this product peaking out?

Terence, the responsibility for the continued growth and strategic development of Tyvaso rests with Roger. So Roger, perhaps you could address that question.

Thanks for the question, Terrence. So when we look at the market dynamics for Tyvaso, obviously, we're seeing some strong and consistent growth as evidenced by the earnings. Some of that benefited from the price increase that we recently took in the previous months. What we're seeing from a market dynamic is really 3 drivers of the business, which is, we continue to gain new prescribers; we continue to gain depth of prescriptions within existing and these new prescribers; and then finally, we continue to focus on and maintain a duration of therapy which is approaching 18 months. It's certainly a goal for us that once we start a patient on therapy, to manage that patient to the best of everyone's ability so that the benefits of those therapies are durable. But those 3 are key drivers. And then in terms of strategic product development, we are also working on some modifications to the device so that it's a little bit more friendly to the patient in terms of ergonomics and other things. So there's some future, things we'll do to help patients with management of the device. But as Martine said, it's very well received by the market as evidenced by our patient share, 80%-plus of the inhaled market is ours. And I think Actelion recently reported a decline indicating a shift in market share. So everything, particularly with the growth of prescribers, the depth of prescriptions and then a focus by our sales and marketing team and our medical science liaison team and our distribution partners on improving the duration and management of Tyvaso continue to lead to the numbers that we're seeing today and look forward to seeing tomorrow.

Thanks, Roger. Thanks, Terrence. So I'd like to now wrap up by thanking everybody for participating in this call. Thanks for the wide range of your questions. In summary, the core business continues to be very strong. Growth, going forward, looks very positive. We have exciting new products in our pipeline, products that promise to make barbaric what might otherwise be generic forms of treatment entering into the marketplace. And finally, we have a important challenge in front of us that we're focused on, turning around the complete response letter on oral treprostinil so that we can all do the right thing and bring that very important medicine to the benefit of thousands of pulmonary hypertension patients. Thank you, everybody, for your participation this morning and we look forward to seeing you at upcoming health care conferences. Operator, you can now disconnect the call.

Ladies and gentlemen, thank you for participating in today's United Therapeutics Corporation Third Quarter Earnings Conference Call. This call will be available for replay beginning at 8:30 a.m. Eastern time today through 11:59 p.m. Eastern time on Friday, November 9, 2012. The conference ID number for the replay is 34857915. The number to dial for the replay is (855) 859-2056 or (404) 537-3406. Thank you for your participation in today's conference. You may now disconnect.