Good morning. My name is Tamara, and I will be your conference operator today. At this time, I would like to welcome everyone to the United Therapeutics Corporation Second Quarter 2015 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Remarks today concerning United Therapeutics will include forward-looking statements, representing the company's expectations or beliefs regarding future events. The company cautions that these statements involve risk and uncertainties that may cause actual results to differ materially. Please see the company’s latest SEC filings including Form 10-K and 10-Q for additional information on these risks and uncertainties. The company assumes no obligation to update forward-looking statements. Today’s remarks may also include financial measures that were not prepared in accordance with the U.S. Generally Accepted Accounting Principles. Reconciliations of non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures can be found in our earnings release available on our website at www.unither.com. Finally, please note that today’s remarks may include reporting on the progress and results of clinical trials or other developments with respect to the company’s products. These remarks are intended fully to educate investors about the company, and are not intended to promote the company’s products to suggest that they are safe and effective for any use other than what is consistent with their FDA-approved labeling or to provide all available information regarding the products, their risks or related clinical trial results. Anyone seeking information regarding the use of one of the company’s products should consult the full prescribing information for the product available on company’s website at www.unither.com. Thank you. Dr. Jeffs, you may begin.

Thank you, operator. Good morning, everyone, and welcome to United Therapeutics second quarter earnings call. I am Roger Jeffs, President and Co-CEO. I am pleased to be joined on the call today by James Edgemond, our Chief Financial Officer; Dr. David Zaccardelli, our Chief Operating Officer and EVP, Product Development; and Andy Fisher, Deputy General Counsel and Chief Strategy Officer. James, David and Andy will assist me with answering questions related to their respective area of expertise in finance, development and legal, respectively. No doubt, many of you are now wondering, where is Martine? Well, Martine sends along her regrets for not being able to participate today, but she is away on an international business trip and not able to join today’s call. So I’d like to take the opening time period to provide a summary across three main areas. Firstly, I’ll review our quarterly financial results; secondly, I’ll provide specific detail with regard to Orenitram performance; and thirdly, I’ll highlight other material achievements during the quarter. Starting with the financials, we continued to see year-over-year, as well as quarter-over-quarter total revenue growth with the increase driven primarily by Orenitram sales growing nearly 300% as compared to the second quarter of 2014, when the product was first launched, and Orenitram growth of 24% when compared to Q1 of this year. This growth in Orenitram is principally result of increased patient demand, and I’d like to specifically unpack the Orenitram number in more detail in a minute given the keen interest in the performance of this brand. In addition, second quarter revenues also benefited from the growth of Adcirca sales, which grew 23% as compared to the second quarter of 2014. Much of this growth is related to price increases. Remodulin and Tyvaso revenue were sustained year-over-year. As we have previously…

Great. Thanks for taking the question, and thanks a lot, Roger, for such a great detail on Orenitram. I wanted to go a little bit more on that vein. Could you give us a perspective on duration of therapy, how do you see persistent rates playing out over the next, say what’s happened historically and over the next say six to 12 months, and then what does your market research tell you about the meds that patients have had before on Orenitram just to get a sense for where we are in the sequencing of therapy? Thanks a lot.

Yes, good morning, Geoff. Thanks for the question. So in terms of more detail, it's a very hard to give a duration in persistence because obviously we've only launched last June, so the persistence at best would be 12 months for the first patient in, commercially. So we do have a little inside however from our open-label controlled clinical study where patients exited the control portion and went into the open-label portion. And there we saw that the patients had a persistence well over two years. Early suggestions are is that this is tracking very similarly to Tyvaso in terms of tolerability and persistence. So we do lose some of the starts, some of the patients die unfortunately. There is some intolerance mostly due to headache, nausea and GI distress, which is typical of prostacyclins but the large majority of patients stay on therapy and continue. The advantage of that, as you’ve heard in the opening comments, is that as they stay on therapy, the dose escalates with time, as they continue to titrate the drug to maximal benefit and tolerability. One of the questions we have for ourself is sort of where is dose heading? So if it's 12 milligrams as a total daily dose at 10 months, where will it end up? And one potential window into that aspect is, if you look at those patients that were in the open-label clinical trial, who have now transferred to commercial products. So there is a subset of our commercial patients, but they are the patients that have been on the therapy longest. Their average dose is about 20 milligrams. It's a total daily dose. So it's our expectation that, of all the patients that we had, if they stay on therapy for a longer period of time, they will also begin to approximate that level of dosing which will then obviously port a higher level of revenues per patient. So that's the leverage aspect that I mentioned in the opening, that it’s not just the numbers of patients but it's the dose that will drive the upside. So hopefully that answers your question about duration and persistence. In terms of market research or market feedback, we do find a couple of things. We find that about 70% of the patients are on three times a day dosing versus twice a day. That seems to be the preferred route. In terms of use on top of background therapies, we don't promote it that way, which is promoted as a frontline use, the prostacyclin are first choice so to speak, but lot of patients are on background therapy and that doesn't seem to be a hindrance at all in terms of this prescription behavior or payor behavior. So I think a lot of uses is follow-on therapy to other oral therapies. So does that…

Great, thanks.

Thank you, Geoff. Next caller, please.

Thank you. Our next question comes from the line of Mark Schoenebaum with Evercore ISI. Your line is now open.

Hi, Roger, and hi guys, this is Salim in Mark. Thanks so much again for the color. Roger, it was super helpful. Just one critical question and then two quick ones, if I may. On the patient numbers, I know last quarter you mentioned there were 800 patients. This quarter you mentioned there is a 1,000, and last quarter you said there was 100 net new adds. So is that slowing down? And then the high-dose patients, you mentioned last quarter I believe that 20 per month were rolling off. So can you just give us more clarity if that’s still occurring and how many high-dose patients remain and where are they going? And then the two quick ones. On the share repo, would you guys be willing to consider a Dutch tender and be more aggressive in the share buyback? And then on Unituxin, do you expect any competition there from products and development? Thank you.

Okay. All right, so we’ll ask for just one question per caller after this. So in terms of the patient on therapy. So the starts since launch have been well over 1,000. If you looked at the number of patients on and pending, then we have about 1,000 patients in our census. So that's the answer to that. In terms of dropout, patients dropout across all spectrums of dozing and all spectrums of time and there can be - death can occur. That's one of the largest reasons for discontinuation of any treprostinil therapy or they dropout due to intolerance. Now intolerance would typically happen early, so that gets filtered out very quickly and has less impact obviously then on revenues going forward because they are not on therapy and on higher doses. But the patients that discontinue, who have been on at a higher dose have a greater impact on the revenue number. I'll touch on Unituxin, and then I’ll prompt to James on the share repurchase question. So on Unituxin, there is a company in Europe that is developing basically 14.18 like very similar product. It’s manufactured differently. It’s a CHO cell-based manufacturing production. It has different glycosylation features. They are developing it with a different cytokine adjunctive therapy regimen. We think that the regimen that was developed by MCI and COG [ph] was the right regimen and certainly that was born out in the clinical trials, where you saw both, event-free survival significantly improved as well as overall survival. We don’t view the other product as competitive, because they have an unblinded their study, so we don’t know if their regimen will work. It’s a similar product, but we do have orphan designation. So in Europe, I think that has potential to negate their ability to commercialize, although it's - again it's not something I don't think will defend aggressively in Europe. The only issue we’ll have in Europe as we begin to commercialize ourselves is that that therapy has been tested in a lot of the main centers and it may infringe on some of our commercial uptake because they are going to be using new clinical trial material from that trial. But other than that, I think our stated expectation that the global revenue expectation for Unituxin is between $75 million and $100 million remains true and hope the same. So, James, if you could answer the question on share repurchase?

Yes. Thanks Roger. Good morning, Salim. As you know, Salim, historically we’ve repurchased shares and we've done the accelerated share repurchase, and we've also done it through open market. So we have been committed to share repurchase. I don't want to say whether we would or wouldn't consider going forward other mediums or other vehicles. I think the thing to keep in mind for us is we have the open share repurchase program right now, and we’re committed to completing that by the end of the month. So thank you very much.

Thanks so much.

Thank you. Our next question comes from the line of Liana Moussatos with Wedbush Securities. Your line is now open.

Thank you for taking my question. Can you talk about the earlier stage pipeline implantable pump and behind that and what kind of catalysts we can expect between now and year-end and 2016? Thank you.

Yes. Thanks for the question, Liana. And I'm very pleased to introduce Dr. David Zaccardelli to this earnings call. Dave was promoted to Chief Operating Officer in January. Dave has been with United Therapeutics almost 10 years and has been pivotal to our success. And so Dave, if you would answer that pipeline question, I’d appreciate it.

Thank you, Roger, and thanks very much for the question. I'm happy to comment on the implantable pump program and also our other pump program with DEKA. As you may know, we have a collaboration that's been in place with Medtronic to progress their SynchroMed II pump into the marketplace for use with treprostinil pulmonary hypertension. That has progressed substantially to the point where a PMA was submitted by Medtronic. An NDA also was submitted by UT in order to support that. We have subsequently received refusal of file on the NDA and have been in communication with the Agency, as well as Medtronic has received some comments on their PMA. Both of those have to progress at the same time in order to complete that, and we’re working with the Agency and Medtronic to sort that out. And hopefully in 2015, we’ll be able to provide the Agency the information they request and then look forward to hopefully progressing that to an approval sometime in 2016, is our current plan. But as you know, that program is substantially been with Medtronic and so we rely on them for the responses and for their collaboration. But we’re working very closely with them and very closely with the Agency to get that done. I'm also pleased to say that we have a collaboration with DEKA Research in order to progress a proprietary based small pump platform for subcutaneous administration, and the teams are working very closely together now to work with putting treprostinil in that pump platform and we're working at making the submission which would be a combination drug device submission to the Agency sometime in early 2017 and look for an approval of that later 2017 or early 2018. And so both of those, our pump platform play for progressing treprostinil with a easier to use pump platform.

Great. Thank you for the very good answer, Dave. Operator, we’ll take another caller, please.

Thank you. Our next question comes from the line of Phil Nadeau with Cowen and Company. Your line is now open.

Good morning. Thanks for taking my question. Roger, a follow-up on your Orenitram comments. Just doing the math here. If we assume 900 patients on therapy on average for the quarter times 90 days in the quarter at 10.2 milligrams and $39 per milligram, we get to $32 million of revenue. Obviously you reported $25 million. So that implies maybe 22% gross to net adjustment. Is my closed-in [ph] assumption accurate, or is my math in some other way flaw that it’s meant again to account some other element that we should be considering? Thanks.

Yes, so it’s not as simple as doing the math the way you’re doing it. So the purchases by the specialty pharmacies are based on a past months census and a knowledge of what the referral rate is. So they order towards a future inventory level to meet a minimum requirement. It doesn’t - so the math doesn’t always work out as nicely and cleanly as you articulated. I think your math does accurately predict where we’re headed, but it doesn’t say why we have - the revenue isn't what you just described it to be within the current quarter, and obviously we also start patients within the quarter. So if we don’t - there is different levels of inventory required for those patients as well. So it’s really a flux based on past active census and referrals and an expectation also with discontinuation. So they do that calculus. They have a formula and then we ought that they maintain minimum inventory levels. So it’s more done that way.

So when we try to predict revenue, what is the true patient number that the specialty pharmacies will be looking at? Is it like a couple month lag or…

Yes. So it’s - in general, I think it’s a 30 to 60 day lag is what happens, which as I noted in the opening with referrals being robust in Q2, that bodes very well for Q3, which is why we’re confident in predicting where revenues will head in the next quarter if things hold true, which we expect they will, in fact we should add - continue to add patients and we could improve upon that. So you’re right, the lag is 30 to 60 days in general. And that’s why there is lumpiness in the numbers. That’s why it’s better to look - when you look at a quarter-to-quarter, it’s always better to look at our businesses year-over-year is a more predictable way to look at treprostinil revenues than quarter-over-quarter, particularly in such an early phase of launch which Orenitram is still in. Thank you. So operator we’ll take another caller, please.

Thank you. Our next question comes from the line of Michael Yee with RBC Capital Markets. Your line is now open.

Hi, it’s Mike Yee from RBC. I wanted to ask a bigger picture question for you. Obviously you’ve done a ton of great things with treprostinil. Just want to understand given your balance sheet, your flush with cash for profitable, how you’re looking at thinking about bringing in maybe new things, in-licensing things, commercial, things that could leverage your commercial infrastructure and all the things you’ve done already in the past. So we haven't really heard of that with you and maybe thinking about the opportunities for you to bring stuff in. Are you thinking about that, or you’re not thinking about that, or you’re in early stage pipeline stuff. How should we think about building out beyond treprostinil? Thanks.

Yes. Thank you for the question, Michael. So it’s one that’s at the forefront of our mind. We’ve recently hired Director of Business Development because we’re trying to be much more active in our strategic acquisition investigation. So our development efforts are really focused on areas where we can leverage our infrastructure and expertise and rapidly develop and commercialize high impact medications. Our emphasis in terms of where we’re looking to answer your question is on orphan indications that are poorly addressed by current therapies, particularly in the pulmonary and oncology therapeutic areas where you have strong platforms in place. We’ve been engaged in active discussions with companies ranging from start-ups to top 10 drug companies looking to either acquire or in-license assets. It’s a pretty robust time in oncology, but we think particularly in pediatric oncology we can be a major player and there is ways to leverage not only Unituxin but our presence in that space and our ability to serve that community to help out some of the other successful compounds that are being developed for adults and partner with companies to do that as a specific priority objective. It reminds me sort of the blank white space that pulmonary hypertension was when we first started United Therapeutics. There was very little interest in pulmonary hypertension and since that time obviously this indication has exploded. We think pediatric oncology has potential to be a similar growth opportunity. In pulmonary conditions, particularly pulmonary hypertension, I think we’re the go-to company. If somebody has something for pulmonary hypertension, they usually call us. So there is a lot of inbound activity to us for new targets for pulmonary hypertension. Our emphasis there though is we want something that’s interesting in the sense that it should be disease modifying. We don’t…

So operator, I think that’s it for calls. And we appreciate everybody calling in today and joining us for the second quarter earnings call, and we look forward to speaking to you at the next earnings call. Thank you very much.

Thank you for participating in today’s United Therapeutics Corporation conference call. A rebroadcast will be available for replay for one week by dialing 1 (855) 859-2056 with international callers dialing 1 (404) 527-3406 and using access code 72033077.