Good morning. My name is James, and I will be your conference operator today. At this time, I would like to welcome everyone to the United Therapeutics Corporation 2017 Second Quarter Financial Results. 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 risks 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 U.S. generally accepted accounting principles. Reconciliation 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 solely 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 the company's website at www.unither.com. Thank you. Dr. Rothblatt, you may begin your conference.

Thank you, operator. Good morning, everyone. And welcome to our second quarter earnings call. My name is Martine Rothblatt; I am the Chairman and CEO. Joining me on the call is our Chief Financial Officer, James Edgemond and our Deputy General Counsel and Chief Strategy Officer, Andrew Fisher. I'll provide a couple of introductory remarks and then we'll open up the lines to questions. Our second quarter total revenues reached $445 million, our highest quarterly net revenue level ever. We continue to believe that Orenitram is well-positioned given the large and growing number of pulmonary arterial hypertension patients in need of a true prostacyclin analogue therapy and we believe we are beginning to see the early signs of this transition reflected in Orenitram's 21% growth in second quarter net revenues as compared to the second quarter of 2016. We are also advancing a growing number of pipeline priorities such as our new chemical entity esuberaprost, which has fully enrolled its phase III BEAT study, and our phase III studies of new indications related to pulmonary fibrosis and heart failure, and finally our new organ manufacturing technologies, since lung transplantation is currently the only curative treatment for pulmonary arterial hypertension. Also noteworthy are our new development in the cancer field with the inception of patients' enrollment in our small cell lung cancer study. With these introductory remarks behind us, I now like the ask operator to open the lines for any questions.

[Operator Instructions] Our first question comes from Liana Moussatos with Wedbush. Your line is open.

Congratulations on your quarter. My question has to do -- you mentioned the new cancer trial with small cell lung cancer with antibody Unituxin and are there other GD2 positive cancer that you are planning to study in the clinic or investigator initiated efforts?

Yes, Liana. Thank you for the question. There are additional cancers that we are planning to study that are GD2 positive and it's appearing to more and more experts that we have a broad GD2 platform with our dinutuximab or Unituxin antibody. Among some of the GD2 positive cancers that are of most interest, there are the soft tissue cancer such as sarcomas of various sorts which today are very poorly treated and highly expressed GD2 and in fact some investigator initiated activity are already underway with those cancers. Some patients have already been treated. So beyond that there is significant interest in the small cell lung cancer area, breast cancer and there are certain orphan cancers that have been largely neglected but are absolutely devastating to the patients who suffer from them albeit their rare cancers. Some of these are also highly GD2 responsive. There is for example -- this is an example of class of these sorts of cancers, there is a uveal cancer that affects the eye, a rare cancer, absolutely devastating but we are very hopeful that dinutuximab will prove to be effective against this. And we continue to devote substantial resources to our cancer platform. Just in round numbers we are committed to spending several tens of millions of dollars per year on developing dinutuximab in these different cancers. Next question please.

Thank you. Our next question comes from Alethia Young with Credit Suisse. Your line is open.

Hi, this [Eli] [ph] on for Alethia. Thanks for taking the question and congrats on the progress. So in the quarter we saw Tyvaso return to growth. Can you help us understand some of the dynamics here? Were the patients coming off of the AMBITION regimen back on to Tyvaso or were there any inventory factors at play? And then I have a follow up.

I won't be able to right now address your follow up because there are so many people up in the queue. But if I could maybe first ask our Chief Financial Officer, James Edgemond to comment on the inventory question. I think he could answer definitely for the sort of the patient related dynamic in the field. James?

Yes. Thank you, Martine. And thank you for the question. At the end of the second quarter, we review all inventory levels at specialty pharma and all inventory levels were in line with their contractual requirement. So we don't feel there is any unusual inventory level occurring at the end of the quarter. And just as a little background, we do require our specialty pharmaceutical distributors to maintain reasonable levels of inventory reserves. As the interruption of Remodulin, Tyvaso and Orenitram can be life threatening for these patients. And our specialty pharmaceutical distributors typical place monthly orders based upon their current utilization trend and also the contractual inventory requirement. So that patients have continued and interrupted access to all of our products. So Martine can I turn the question back over to you.

Yes. Thanks Jim for that clarification. With regard to the patient dynamics question. I think what you are seeing is a reflection of the fact that unfortunately pulmonary arterial hypertension is a progressive indication. And there is no therapy that has been shown to be curative for this condition. So as we saw what happen is that depending on the functional class of the patients when they first present to a pulmonary hypertension specialist for treatment, they maybe placed on more invasive therapy such as Remodulin or less invasive therapy such as AMBITION protocol. But over time there is an inexorable movement of patients on to the true prostacyclin analogue therapy such as Tyvaso and Remodulin. And I think it's just this progression of the bulk of the mass of patients that you are seeing reflected in the numbers. Next question please.

Thank you. Our next question comes from Hartaj Singh with Oppenheimer. Your line is open.

Yes, thank you for the question. Again really nice quarter. Just a quick question on just margin. You know you had a little bit increase in R&D; SG&A is keeping really moving along well. Just for the rest of the year as we go through Adcirca kind of loss of IP, just how you are thinking about margins and sort of for the rest of the year and then maybe even on a longer term trend as you are increasing your pipeline spend. Thank you.

Thanks Hartaj for the question. I'll talk a little bit about the second part of the question. And James after I do so if you don't mind to be able to speak little more specifically about the margin question that Hartaj asked in the first part of the question. So generally Hartaj what we found is that we have been able to execute a robust research and development program of aggressive pipeline development while overall spending about half of our net revenues each year. And this metric has been pretty predicable in the past and I believe it's pretty predictable going forward. Even with any fall of Adcirca branded revenues from its genrification. So for example there are in the lifecycle of a clinical trial there are times when very, very heavy spending if necessary and then times when the spending lets up a little a bit. So right now for example we have been in a peak spending mode because we are -- we have just completed enrollment which is the most aggressive spend period of the esuberaprost trial, the new chemical entity which is actually even more potent than treprostinil and it's binding efficacy. So that was a peak of spending. At the same time, we have completed our enrollment in FREEDOM which is the largest trial that we ever conducted with several hundred patients all over the world. So again that's a very peak spending type of activity. And now as we move forward over the next 12 months or so, while we do have new Phase III trial are ramping up, there are not really in their peak spending mode and the size of those trials are much easier for us to manage than say a very large FREEDOM-EV trial. And specifically I am talking about…

Sure. Thank you, Martine. Thanks for the question, Hartaj. And just for kind of following on to Martine, we do manage the annual operating expense budget. And they are developed not to exceed 50% of prior year net revenue. And that's something that we’ve managed and will continue to manage going forward. But to give specificity or clarity on an individual quarter, that’s something that we’ve stayed away from and probably will continue to do. And manage it more just at the annual level for many of the reasons that Martine talked about in terms of all the dynamics of the numerous new clinical trials and research and development activities.

Thank you. James. Next question please.

Thank you. Our next question comes from Jessica Fye with JPMorgan. Your line is open.

Hey, there. Thanks for taking my question. I was hoping you could refine the timing for when we might expect to here on the FREEDOM-EV interim and the final results for the study assuming it progresses. I think previously you had indicated sometime this quarter for the interim and early 2018 for the full study but I am not sure if you got any updated information there. Thank you.

Yes, thanks Jessica. So we did in fact this quarter cross the 154 event threshold necessary for doing the interim look. So that occurred right on schedule as predicted. The process of actually achieving the interim look is a little bit more complicated than one might think because on each event has to be-- the top of my head I can't remember the word but basically it has to be analyzed by an independent panel of doctors to assure that it is in fact by the true event within the meaning of the clinical trial protocol. And when they do this there is always some events which are determined that they weren't within the meaning of the trial or something like that. So we are actually over 154 events by now and we are at -- we are sufficiently over -- I don't remember the exact number but I think it's around 160, the word I am thinking about is adjudicated. So we are confident that we will have 154 adjudicated events at this point in time. But by the time that adjudication process actually occurs and we get the entire data monitoring the safety for together, who will be the individuals to look at the unbranded results and making exact call, it's going to be September. So we have in fact scheduled that meeting for September. And therefore I expect in September we are making announcement that we have crossed the statistical threshold specified in the interim look. Or that we will continue to study until its full completion in 2018. Next question please.

Our next question comes from Chris Shibutani with Cowen. Your line is open.

Yes, thank you. For the implantable Remodulin pump, can you provide us with any update relative to your prior announcement in terms of whether or not you have any information on timing or the factors that maybe able to influence that. And also for the Deka pump, so on both the pump products for Remodulin if we could get an update on where we are at. Thank you.

Sure. Thanks for the question. So first I'll talk about the implantable pump and then I move forward to the Deka pump. So the implantable pump, again for everybody who may not be that familiar is a joint venture of ourselves and Medtronic. And this is a pump which has been difficult product for us to finally launch into the market despite the fact that it had a superb clinical trial outcome, beating its endpoint by more than an order of magnitude. Despite this fact because it is kind of trailblazing technology when you are implanting a pump inside a person's abdomen and that pump has catheter that literally vines through many inches of their blood vessels and is automatically delivering a drug 24x7 by 365 which if the delivery of the drug is stopped the results can be immediately life threatening. And if the delivery of the drug is not precise, it's also very, very dangerous. So I don't fault the FDA at all for being very cautions in the process of approving the use of this pump called the SynchroMed pump for the delivery of treprostinil. Also complicate the factor is that there was a consent degree involving Medtronic and involving the same particular pump which is yet another complicating factor. So because of the kind of like the three way situation here between the FDA, Medtronic and United Therapeutics and the multiple issues that the FDA wanted to be satisfied on and then kind of the entire separate arena of issues to be resolved relating to the consent degree. I no longer felt comfortable at the last conference call to give a really precise month or even quarter in terms of when we can launch the product. Thankfully I was wrong like twice in and I was…