Good morning and welcome to United Therapeutics Corporation Fourth Quarter and Full Year 2018 Earnings Call. My name is Nicole, and I'll be your conference operator today. [Operator Instructions] I will now to turn the conference over to James Edgemond, Chief Financial Officer of United Therapeutics.

Thank you. Good morning. It is my pleasure to welcome you to the United Therapeutics Corporation fourth quarter and full year 2018 earnings call. Accompanying me on today's call are Dr. Martine Rothblatt, our Chairman and Chief Executive Officer; Mr. Michael Benkowitz, our President and Chief Operating Officer. And in addition, we are pleased to welcome to this earnings call, Dr. Jim White, Professor of Medicine, Pharmacology and Physiology in the Division of Pulmonary and Critical Care Medicine at the University of Rochester Medical Center and a steering committee member for the FREEDOM-EV study of Orenitram. Dr. White will be available during the question-and-answer portion of the earnings call to answer questions regarding data from the FREEDOM-EV study. Remarks today will include forward-looking statements, representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings including Form 10-K and 10-Q will contain additional information on these risks and uncertainties. We assume no obligation to update forward-looking statements. Today's remarks may also include financial measures that were not prepared in accordance with US Generally Accepted Accounting Principles. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in our earnings release available on our website at www.unither.com. Today's remarks may discuss the progress and results of clinical trials and other developments with respect to our products. These remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision-making or to suggest that any products are safe and effective for any unapproved or investigational usage. Full prescribing information for the products is available on our website. Our earnings call this morning will be divided into two sections. During the first section of this earnings call, Dr. Rothblatt, will provide an overview of the fourth quarter and full year 2018 financial results and business activities of United Therapeutics and then we will transition to the question and answer portion of the teleconference for Dr. Rothblatt, Mr. Benkowitz and myself on our fourth quarter and full year 2018 financial results and business activity. We will then transition to the second section of this earnings call and I will introduce Dr. White to discuss the FREEDOM-EV clinical study and then transition to the question and answer portion of the teleconference for Dr. White, Mr. Benkowitz and myself. Now I will turn the call over to Dr. Rothblatt for an overview of the fourth quarter and full year 2018 financial results and business activities of United Therapeutics.

Thank you, James. And good morning everybody. Welcome to our 2018 fourth quarter and annual results conference call. As James indicated, the agenda for this call will be from 9.00 to 9:30, I'll review the financial results and our business activities and joining me for that review will be Mike Benkowitz, our President and James Edgemond, our Chief Financial Officer. During this first half hour after I complete few introductory remarks, we'll have questions and answers that can be directed to either myself, Michael or James. At 9:30, I'm going to turn the chairmanship of the call over to James Edgemond who will introduce Dr. Jim White and Jim White - led by Jim White and supported by Mike Benkowitz and James Edgemind who will review the FREEDOM-EV study and its implications for United Therapeutics. We are very honored to have Dr. White with us on this call. He is one of the top tier key opinion leaders in the field of pulmonary arterial hypertension and has been a member of the steering committee for the FREEDOM-EV study. 2018 was a truly transformative year for United Therapeutics. We signed four major agreements to acquire new product candidates, including an in-licensing agreement for Ralinepag, representing our largest deal to date. At the same time, we continue to execute against our existing commercial and clinical goals, including successful readout of our FREEDOM-EV clincial trial, significant progress toward near term Phase 3 readouts for our BEAT and DISTINCT studies and an increase to a record number of patients being treated with our treprostinil therapy. Let me now go to the numbers. Our revenues declined to $381 million in fourth quarter 2018 from $465 million in fourth quarter '17, reflecting a loss of Adcirca exclusivity, but our profits grew to $65 million in fourth…

[Operator Instructions] And our first question comes from Carter Gould from UBS. Your line is now open.

Hi, [inaudible] for Carter. Thanks for taking our questions. Could you talk about the evolving payer attitude in PAH and how that might impact how you're thinking about your pipeline assets. Maybe put another way, should we expect payer purchase in PAH evolve with new launches and what do you anticipate payer purchases space will look like in the next three to five years?

So really interesting question, thanks for asking it. I think the person probably most qualified to answer that question would be Mike Benkowitz, our President. He oversees all of the individuals, very talented individuals in our Company who interface on a regular basis with the payers called out our strategic operations group. And Mike, if you could perhaps provide your perspective the evolving payer landscape.

Thanks Martine. Yeah, I think it is an interesting question, a one that we are certainly keeping an eye on. There certainly seems to be a lot of energy and a lot of concern at the federal government level about reining in the cost of prescription drug prices and a lot of different proposals being, I guess bandied about and considered and so yeah, I think our approach right now is certainly to keep an eye on those things. See what eventually evolves. I think it's hard to predict at this point exactly what's going to happen because there are so many different proposals and approaches that are, as I said, being bandied about. I think as it relates to our medicines and to PAH, I think we have certainly expense of therapies, but I think we also have a responsibility to make sure that we're being mindful of the cost of those therapies and so historically, we've been really modest in our approach as and when price increases. Last year, we took a price increase for Remodulin. That was the first time we've done that in eight years. Our price increases with respect to other drugs are typically mid to low single digits and we think we just -- we have a responsibility to make sure that we keep our drug prices affordable. We also do a number of other things to assist patients that can't afford our drugs. We have I think a very competitive and generous patient assistance program. We offer co-pay cards for patients to help them with their financial obligation and so while the government is certainly paying a lot of attention to this and we'll keep an eye on that and respond to quarterly once there is a proposal or a bill to react to, we're continuing to do the things that we think are right -- appropriate for the PAH community.

Our next question comes from Hartaj Singh from Oppenheimer & Company. Your line is now open.

I just had a question on dinutuximab. I know that you're going to have the readout later this year, there is a study recruited close to 500 patients in the disease, you're looking at small cell lung cancer. I guess my question is, you know, it took about a year and half to recruit the patients, that's a pretty big study. Could you just give us some color around recruitment and it's a tough to treat disease and then what could the readouts have looked like just primary and the secondary endpoints. How would you -- how do we sort of expect to see a press release to look like? Thank you.

Thanks so much for the question. Absolutely, none of the three of us are really specifically a medical or scientific expert on small cell lung cancer. So it will be kind of, as a 30,000-foot level that I'll provide an answer to the question. The study was enrolled with our CRO partner called Precision Oncology and they have a tremendous worldwide network of oncology centers. So the study, although it was a large study for us, we felt it enrolled relatively quickly. And we've been very pleased with Precision Oncology work on that. Before we went into small cell, Precision Oncology did an exhaustive analysis based on the number of in-vitro and analytic markers that they have in terms of what would be the most promising next target for dinutuximab after its existing approval for neuroblastoma. And basically, the dashboard was very strongly green for go in terms of small-cell lung cancer. So we felt optimistic and strong about doing that. The heat map was in its favor. So we launched into the study. I think the fact that it enrolled relatively rapidly is a positive sign. I do believe we've passed all of the DMSP type of gateway. So the only thing that we're waiting for now is unblinding and I believe the current timing for that would be in the second half of this year, hopefully, the earlier part of that second half, and we still want this optimistic enough that as I mentioned in my introductory remarks we went ahead and in-licensed a humanized form of dinutuximab which the agents were testing as a kinetic mAb. So I'm really hopeful that this humanized form can reduce the side effect profile associated with the kinetic form and both expand the neuroblastoma market larger for us. Also of course, we'll have to do a comparability study from the humanized to the kinetic but also allow us to be including effective and even more attractive option in the small-cell lung cancer market. And we're also working with Precision now to line up a third target for this GD2 targeting antibody. And the third target, which is currently looking most attractive is glioblastoma multi-form. So we are investing a lot in this platform Hartaj. As I mentioned, we've built up a manufacturing facility it should -- for the humanized form. It should go into operation by the end of this year and hopefully, before the end of next year, we'll have drug product that we can move into at minimum, a new trial for neuroblastoma, hopefully, also an additional trial for Odessa comparability study for small cell and super exciting would be if we could go into TDM as well. Thanks so much for the focus on the dinutuximab and operator, you can queue up the next question.

Our next question comes from Terence Wang from Goldman Sachs. Your line is now open.

This is Jason on for Terence, had a quick Freedom-EV question but it's less from the clinical side, more from the Company side, have you seen any initial impact on prescribing trends or patient mix following the Freedom-EV readout?

Thanks Jason. I'm going to ask you to get back in the queue because that question, you will have a much more intelligent answer to that question after you hear Dr. White's expert review of Orenitram intersects with the disease and he was a presenter at the top tier Pulmonary Vascular Research Institute Conference just last month. So if you would just kindly get back in queue, I'm confident we'll be able to pick up your question in next half hour. Operator, next question.

Our next question comes from Liana Moussatos from Wedbush Securities. You're now. Your line is now open.

After BEAT readouts in assuming it's positive because Esuberaprost isn't approved and it's being tested in combination with Tyvaso, are there any extra regulatory or clinical steps you need before you would submit an NDA?

Yes, it's a great question Liana and the answer is no, because we have a really awesome clinical team that's been working on in terms of the CMC portion of the filing and the clinical portion, the [inaudible] like the medical portion. So everything possible has been done so that we could get that filing submitted in actually record time for our Company after a Phase 3 study. For example, like in the industry, six months is like kind of a typical time period to submit an NDA after the study is unblinded. We are aiming for three months on the B trial and there are no additional studies, no additional -- anything other than putting together the NDA during the three-month period and as mentioned just a moment ago, we're already beginning to put together a parts of that NDA. The exciting thing about Esuberaprost is that we are manufacturing it ourselves. And as you many know it is a very complex drug manufactured because it's just a single isomer, the single effective isomer of an otherwise ischemic molecule beraprost. And even our great partners in Japan employed, one the greatest chemical companies in the world was not able to manufacture the single isomer Esuberaprost form of the drug, which then had a very, but we were able to do that and that's the drug that we're using, that's a drug we'll hop on stability and that's a drug that we would get approved. So our hope is that we would unblind let's say in the second quarter of this year Liana, and then let's say that we could get this NDA filed before the fourth quarter of this year. And all of that crossing fingers and toes that there is no hold up at the FDA that would…

Our next question comes from Martin Ulster from Credit Suisse. Your line is now open.

Martine, prior to your licensing of Ralinepag, Arena Pharma had talked about including an addition to the three pivotal studies head to head study of Ralinepag versus selexipag to look at PVR hemodynamic changes. Just curious if that's a clinical trial path you're still thinking about evaluating and if so when those data might be available? Thanks.

Yes, that's a really insightful question. So the individual who's in charge of our clinical development on that, Dr. Lee Peterson, she will analyze all of those different possibilities of like the head-to-head trial and she together with her team and our Chief Medical Officer, Dr. Gil Golden, they'll all come to a consensus as to when or whether that would be a good study to do. In the meantime, what we found very attractive about Ralinepag is that the Arena team had successfully reached agreement with the FDA on seven different ways to get Ralinepag approved by the FDA out of just three clinical trials and three Phase 3 trials. And by the way, from the time we in-licensed to now we've began enrolling. So we - with actual patients involved and so on. So I think you know the path that's clear and that I can say our Company is definitely committed to is through executing on Arena's very good accomplishment with the FDA, based on their previous Phase 2 data of doing these three studies, an outcomes study, a morbidity-mortality, that's an outcome study and two, if you will, secondary factor studies and exercise study and the heat map study which are much smaller and out of these three different studies, depending on whether you get a highly statistically, highly statistically significant result or just a statistically significant results having all told seven different ways to get approval and we only need one of those seven ways to get approval, so being really focused on approval and getting the drug out to patients, that's our Number 1 priority. However, the ability to position Ralinepag compared to selexipag is also very important in the market dynamics. Right off the bat of course, Ralinepag, you take just once daily…

Thank you, Martine. Let's transition to the second section of this morning's earnings teleconference. And we are pleased to have Dr. White join our teleconference this morning to provide some initial thoughts and insights on the Freedom-EV clinical study and after Dr. White completes his opening remarks, we will take questions for Dr. White, Mr. Benkowitz and myself on Freedom-EV clinical setting. Dr. White?

Good morning, everybody. It's really my privilege to get to share what I think is an extremely exciting dataset that was a long time in the making and I trust that some people have already gotten to take a look at the presentation we made in Barcelona. As the Freedom-EV study demonstrated, Orenitram versus placebo decreased the overall risk of clinical worsening by 26% and this was driven by a 61% reduction in our disease progression. It also, and I think really importantly improved clinical status across key measures that physicians taking care of patients like to see, including WHO functional class, NT-proBNP boarding score after walk. And I think that the clinical improvement part of the data package is probably the most impressive. Our vital status assessment that the closure of the study indicated that those who were initially randomized to Orenitram are more likely to be alive than those assigned placebo with a 37% reduction in mortality at study close and I think this is also a very intriguing part of the data package. Orenitram safety and tolerability profile is very similar to Remodulin, the drug that clinicians and are very comfortable using side effects that they're very comfortable managing. I wanted to just address the disease progression end point for a second that -- of the Freedom-EV study design involved, not only in person visits at week 4, 8 and 12 so frequent and attentive in person visits with the investigator team. But they were mandatory weekly phone calls and because of the adverse effect profile with these mandatory weekly phone calls the contact on the phone was likely extensive. So the participants could be encouraged to do drug up titration and be helped to managing the adverse effect profile. I think this high degree of contact…

Great. Dr. White, thank you again for offering your insight on the freedom FREEDOM-EV clinical study. Nicole, can you please proceed to open up the teleconference for questions for Dr White regarding the FREEDOM-EV clinical study.

[Operator Instructions] And our first question comes from Jessica Fye from JPMorgan. Your line is now open.

This is Daniel for Jess. Thanks for taking our question, what were the open label medications that patients went on to in the follow-up period, and how do you think about that playing into the mortality finding? Thank you.

James. Can I answer that.

Dr. White. Yes, thank you very much for the question. Yes please Dr. White, if you can answer the question.

So this is going to be a really important next stage of the analysis. And honestly, we have just now started digging into the 311 data, which is the data that you're asking about. So 310 is the end of the randomized treatment assignment and when patient had a clinical worsening event, they moved over to - investigator described clinical worsening event, they moved over into the 311 the open label study. And patients who were initially signed Orenitram could continue taking Orenitram as long as they could take another parenteral prostacyclin. Patients who initially sign placebo could begin taking Orenitram during that. This is going to be a very rich dataset that talks - that shows us about what happens to the placebo patients when they get Orenitram something that we actually had not seen from some of the other event driven studies. So we're excited to dig into that data and we're just beginning that process. I really can't discuss it further. But we will very specifically look to see what other medications were added. I will tell you that we did not allow patients to be on Orenitram and another systemically delivered inhales - I'm sorry, either systemically delivered prostacyclin or inhaled prostacyclin. So they could be on one for up to 30 days but they could not be beyond that. So I think that we will have a very good sense. The main thing that we're going to learn from this is what happens to the placebo patients when their assigned to Orenitram. And we will look carefully to see if there are things other than their initial randomized treatment assignment that might explain this so that we can better understand the mortality. It is true that in the open label extension where we have the most information, there are already shift in the number of deaths again favoring oral treprostinil. So if you look at the deaths, the deaths are balanced in the 310 although the risk adjusted mortality begins to favor Orenitram. At the end of the open label study there are more deaths in placebo at a time - initially assigned placebo at a time that we know a lot about those patients and the risk adjusted again starts to shift even further towards Orenitram. And then finally it's at the end of study closure and by the way of course deaths are still continuing to accumulate, right. We're now not in October 2018 and still our most recent data favors the hypothesis that initially being assigned to Orenitram carries with a mortality benefit or survival benefit.

Our next question comes from Matt Catlin from Ladenburg Thalmann. Your line is now open.

Nicole can you proceed to the next question?

And we have another question from Liana Moussatos from Wedbush Securities. Your line is now open.

Dr. White given the freedom EV data that you've been describing and the mortality benefit of Orenitram, how does this change your decision on whether this prescribed Orenitram versus Uptravi and what kind of patients would you now treat with Orenitram, which you might have treated with Uptravi before?

Liana. thanks for the question. Yes. Dr. White can you please address Liana's question?

So, I think that the Orenitram data are going to shift people's perceptions. I think there's a couple of pieces of that. The first is that Remodulin is a drug that doctors and patients know and really like and have a lot of trust in. And this new data I think puts into perspective all of the previous development work, the blood levels, the pharmacokinetics, all of the work that we've done in the development of oral treprostinil now comes to light in the FREEDOM-EV data. And so now I think people are going to be much more likely to look at this as an oral form of Remodulin, a drug they know and love, a drug that they are confident about the benefits of. Whereas before they really just didn't understand why the drug did not perform in the initial combination therapies as people have expected, and of course we now understand that that's all about pharmacokinetics. It was all about three times daily dosing, it's all about avoiding very, very low trough levels, which are associated with a much worse adverse event profile. So to address the specific question about whether you're going to prescribe Orenitram versus Uptravi, I think that of course three times a day is more of a burden and it's not just three times a day, it's three times a day at carefully separate intervals. What do you get for that? You get meaningful improvements that Griffon study just does not show. I'll point out that the Griffon data for NT-proBNP is a tiny little line as the very last part of the supplement in the New England Journal of Medicine. And there is no color to the data. We don't have any information about whether the NT-proBNP data was mainly because of the…

Our next question comes from Hartaj Singh from Oppenheimer & Company. Your line is now open.

Thank you for the follow-up question on FREEDOM-EV. Just following Liana's question, as you said Dr. White Selexipag had an imbalance - slight imbalance in deaths. Also I think France actually a year or a year-and-half ago had stopped the dispensation of Selexipag. Probably there because there was a mortality imbalance post approval. And then you combine that with the ability of oral treprostinil to be titrated. It's a really nice increase in median dose by visit that you show. How does that impact you think the prescribing physicians thinking? They have the flexibility on the dose titration plus also in the long run you're getting a potential improvement on mortality and decrease in hospitalization.

Great, Hartaj. Thanks for the question. Yes, and Dr. White would be glad to answer.

So, this is again - off my earlier point about physician comfort and patients benefits associated for Remodulin. And I think that you just touched on dose titration, right. That's what physicians are very comfortable with, right. They're very comfortable on the dose titration aspect. And I'll tell you that we are, we had a pre-specified plan to analyze doses and dose improvements in terms of - I'm sorry, doses and clinical improvements in terms of dose response and we did actually hit that. That's data that's not been presented and I won't talk about it in more detail except to say that we do have a clear indication that 3 milligrams three times daily is a dose at which clinical benefits become quite apparent in terms of NT-proBNP and in terms of [inaudible] in terms of functional class. And so we think that the dose titration or the ability to move the dose up to continue to provide patients with further improvement and the ability to do that over time as without limitation, right we don’t have any indication that there is dose ceiling for Remodulin that there is dose ceiling for Orenitram. I have a patient who is a full time nurse working on 18 milligrams three times daily of Orenitram, 18 milligrams three times daily of Orenitram. So I think that your insight that Uptravi doesn’t have that support for infinitely large dose increases coupled with physicians comfort on Remodulin and dose type patient ability for Remodulin makes this drug very attractive. Now that the data package starts to look like something they know anything - dose type stable drug that produces meaningful clinical improvements and has an enduring benefit in terms of clinical worsening and maybe has an indication for survival improvement.

Great, thank you Dr. White. Nicole there's one more question it looks like in the queue. So can you proceed to the next question.

Our next question comes from [inaudible] from Cowen and Company. Your line is now open.

Wanted to see, what are your expectations about which components of the data would be added to the label, will this include the benefits observed in the open label portion as well. And what additional data should we expect to see in the upcoming two meetings that you described that may have been included in the filing that we haven’t seen yet? Thanks.

Great, Chris thanks for the question. Dr. White, can you address Chris' question.

I tell you what I am going - I heard in there a question about labeling that I'm definitely not qualified to answer so I am going to stay far away from that piece. I'm not going to speculate on that that's I don't like labels, but I will what I'll tell you is that we have. You asked about what we’re going to see the upcoming meetings. In the upcoming meetings what you're going to see is the ISHLT meeting in Florida, you're going to see the sort of bulk of the data the primary data being presented the disease progression difference. And then at the effects on board on functional class on NT-proBNP on walk and then at the ATS meeting is where we’re going to focus on this very exciting risk assessment and how risk impacted the results, how risk impacted the survival, how risk impacted and how risk scores shifted over time. And that's very exciting platform presentation we have at ATS. And then we have - I also heard a question in there about the open label data. And as I said earlier, I am not at liberty to talk about but have started to see the indications from the open label and we will be presenting that most likely at a meeting in the next year when that data is fully accumulated.

Great, thank you Dr. White. There's no more questions in the queue. So I do want to go back to what Dr. Rothblatt talked about in terms of what we are seeing in the market. I want to turn the call over now to Mr. Benkowitz just to follow-up on that earlier question.

Sure thanks, James. And then I guess Dr. White didn’t address the question of the regulatory component the last question, I just wanted to touch on that briefly to. So, we filed our application for label extension in December. We have to understand that the 10 month will be with the FDA we included most if not all of the data that Dr. White has reviewed this morning. And what makes it so label obviously time will tell as we engage in discussions with the FDA. So, as I think as Dr. White discussed we’re really excited about the data we think there is some really interesting and provocative things associated with this data so that we look forward to engaging in those discussions with the FDA around the label supplement. In terms of what we’re seeing in the market in terms of uptake as a result of this data, what I will say this level of data is only really been out in the market and even to a limited degree for about three weeks. So we announced the topline results in August from August until Dr. White gave his presentation at the PVRI conference at January there wasn't really additional data being presented either at medical conferences or through a medical affairs function because we wanted to preserve our ability to communicate this information at these conferences and publications. So now that this data has been presented at PVRI, I think physicians are able to look at the data in its totality. We're able through our medical affairs functions to appropriately discuss questions that physicians have around this data set. And so we do expect that there's going to be renewed interest in Orenitram even before we have the label updated, which will be latter part of this year. And then at the latter part of this year we can put our sales and marketing machine behind it, we expect to see even further uptick. So I just want to kind of come back and address that question around what we're seeing in the market and response to data. I think it's just still very, very early give the natural way presented this data about three weeks ago in Barcelona.

And Mike, if I could insert myself and just add to that, all of the excitement in this dataset is stuff that was not presented in August in the press release. Right, so everything that physicians are going to be excited about has to do with the clinical improvements, right. Hitting the endpoint of clinical worsening as the primary enables the unlocking and the analysis of the really exciting stuff which is how well patients did. And the community knew nothing about that, right. So there's no reason that anybody should have changed anything that they thought about Orenitram until three weeks ago. And I can say that I personally as a physician and as the lead investigator for the program am already getting feedback from very senior peers of mine congratulating me on the data, congratulating us on the analysis and this is a great opportunity for me to thank Martine for the incredible commitment to getting oral treprostinil across the finish line and physicians are excited about that aspect of this getting across the finish line and the data package really finally reflecting what they always had hoped to see with oral treprostinil that had never seen. So my team's commitment to making this happen really is worth emphasizing because I think it speaks to the value of the Company in the long term.

Great. Dr. White, Michael Benkowitz thank you both so much for joining this morning's teleconference. We really appreciate your perspective and insight on the FREEDOM-EV clinical study. Thank you all who join our teleconference this morning. And Nicole, can you please conclude the teleconference.

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 1-404-573-3406 and using access code 1595239.