Good morning, and welcome to the United Therapeutics Corporation Fourth Quarter and Full Year 2021 Earnings Webcast. My name is Emma, and I will be your conference operator today. All participants on the call portion of this webcast will be in listen-only mode until the question-and-answer portion of this earnings call. I will now turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics.

Good morning, and thank you, Emma. It's my pleasure to welcome you to the United Therapeutics Corporation Fourth Quarter and Full Year 2021 Earnings Webcast. Accompanying me on today's call are Dr. Martine Rothblatt, our Chairperson and Chief Executive Officer; Michael Benkowitz, our President and Chief Operating Officer; James Edgemond, our Chief Financial Officer and Treasurer; Pat Poisson, our Executive Vice President of Technical Operations; and Dr. Leigh Peterson, Senior Vice President of Product Development. 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 forms 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update these forward-looking statements. Today's remarks may also include financial measures that were not prepared in accordance with U.S. generally accounted -- generally accepted accounting principles. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in our earnings release available on our website at ir.unither.com. Today's remarks may discuss the progress and results of clinical trials or 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 uses. Full prescribing information for these products are available on our website. Now I'll turn the call over to Dr. Rothblatt for an overview of the fourth quarter and full year 2021 financial results and business activities of United Therapeutics. Dr. Rothblatt?

Good morning, and thank you, Dewey, for that great introduction. We are very excited about this 2021 annual results call. It's -- 2021, I think, beyond the doubt, has been the most exciting year in our company's history. There are a couple of big picture observations here that I'd like to start with, and then I'll go into some more details. From the big picture standpoint, first of all, we grew both patient count and revenues by double-digit percentages in 2021, as we had forecast we would do at the start of the year. Generics have not impacted our treprostinil growth trajectory because patients, physicians, payers, they all recognize our outstanding commitment and track record for customer service and supply chain reliability. Our continued double-digit percentage patient growth is how we get to our announced goal of 25,000 patients by 2025, and we remain right on target to make that goal. In fact, we expect double-digit patient growth again this year in 2022. The second grow big picture item is that our organ manufacturing products made a dramatic and highly successful debut with one 10 gene UHeart, two, 10 gene UKidneys and 2 UThymoKidneys transplanted. Of course, the focus of everybody is on our living UHeart recipient, Mr. David Bennett Sr. So I'm very pleased to report that he is doing well at almost two-months post-transplant. Specifically, his cardiovascular function at 7 weeks is excellent, and there's no sign of rejection even after a 30-day postoperative biopsy. Although he has a lot of non-heart serious health challenges, he said last night, "Thank you for this chance to live. And my response to Mr. Bennett was, thank you, Mr. Bennett for giving us this chance to let countless thousands of others also live. I believe our clear cut successes in 2021…

Sure. Thanks, Martine, and good morning, everybody. As Martine said, we're very pleased to have posted double-digit revenue and patient growth for the full year of 2021, ending the year with more than 10,000 patients on one of our treprostinil therapies. This quarter, I'd like to dive into the underlying performance of our three treprostinil products, Tyvaso, Remodulin and Orenitram. As usual, I'm going to focus more on our patient metrics, and I'll remind everyone that our quarterly treprostinil revenue does not always track exactly with quarterly underlying patient demand due to our specialty pharmacy partner ordering patterns. So I'll begin with Tyvaso. As you may recall, in early 2021, we established a goal to double the number of patients on Tyvaso from approximately 3,000 when the PH-ILD indication was added to the label to 6,000 by the end of 2022. This assumes no COVID-related impacts to physician access and patient initiation of therapy and importantly recognizes that our path to doubling may not be linear. The fourth quarter was our third quarter of the PH-ILD launch. And in this quarter, we had the highest number of Tyvaso referrals, which is what we call prescriptions since launch, and we added close to 300 patients to our Tyvaso active patient census. Our new patient starts were less than Q3, which is common in the fourth quarter as many patients opt to wait until after the holidays to begin advanced therapies. Our specialty pharmacy partners are working to clear this backlog and get these patients started on therapy during the current quarter. We continue to anticipate a CMS coverage decision regarding Medicare reimbursement for Tyvaso and PH-ILD any time between now and May of this year. All the necessary steps have been completed, including the close of a public comment period last…

Thanks so much, Mike. Super exciting about the Remunity breakout next week. Awesome. So operator, I understand that you probably have some people in queue and feel free to bring them on.

Your first question today comes from the line of Joseph Thome with Cowen and Co. Your line is now open.

Good morning and thank you for taking my question and congrats on the progress. Maybe just on the Tyvaso DPI request by the FDA. Are you able to provide a little bit more information as to the type of information that you submitted? And then in terms of the safety profile you've seen with Tyvaso DPI to date, some high-level thoughts there, especially as it relates to potential for bronchospasm? Thank you.

Yes. Thanks Joe. We've really had some absolutely great experience with the Tyvaso DPI to date, and we have not experienced those bronchospasm side effects that you referred to. So we really don't believe that that's going to be an issue at all. The -- there is some more information in the press release if you look down towards the second-or-so page of the press release. Be a little bit more information there about the submission and what was admitted and not submitted. So I think it's all really quite routine and the FDA doing their job as best that they can. As I mentioned in my introductory remarks and as Mike emphasized in his remarks, three-months is really meaningless in the context of this product's life. This product has a very long patent life. It is an amazing product. I mean it's so convenient and easy for the patients to use. We have the great results of the BREEZE trial. It's going to end up being used, I'm confident, by thousands and thousands. And over the course of its life, like, 10,000 more or more patients. It's just an amazing product. So it will get out there. Everybody just has to make sure that, like all the boxes are checked and the Is are dotted and the Ts are crossed. And as Mike said, we feel confident with the launch by the time frames that we've previously guided everyone to.

Thanks for the question and operator you can bring up the next one.

Your next question today comes from the line of Eun Yang with Jefferies. Your line is now open.

Thank you. Another question on DPI. Once it's approved, does it need to go through a CMS approval process similar to the PH-ILD indication for Medicare coverage?

Thank you, Eun. So nice to hear your voice this morning. I think we have a lot of experts on our call, but I think Mike Benkowitz would be the best person to respond to your question. Mike, if that's okay?

Sure. Happy to take that question. So there is a seamless approval process that will need to happen or review process that will need to happen with Tyvaso DPI, but it's different than what we're experiencing with PH-ILD. So for PHI -- sorry, for PH-ILD. So right now, PH-ILD is approved for use with our TD-300 nebulizer, and it's covered in the medical benefit or Part B side -- B as a boy side of Medicare. The DPI will be a pharmacy benefit product, so covered in Part D. So the process is a little different. So while Medicare is reviewing the data, reviewing the product for coverage, patients can still access -- federal health care patients can still access DPI. The physician simply has to go through an appeal process, and they're accustomed to doing this. They have to do this often with products that aren't on Medicare formulary, and it's just an extra step they have to go through it and then it gets approved. So we won't see this -- we won't see the same issue we're seeing with PH-ILD where we have this hold up with the DPI. Those will continue to go through with doctors, like I said, doing this additional step of a dealing.

Perfect, thank you so much Mike.

Your next question today comes from the line of Jessica Fye with JPMorgan. Your line is now open.

Good morning and thanks for taking my question. Curious what proportion of Tyvaso patients are currently on free drug and what are the next clinical or manufacturing milestones we should look out for in the organ transplant business? And what results in your mind would justify ungating the potential investment in the first GMP or GMP-like manufacturing facilities for those products?

Great, Jess. So happy to hear you on the call. We think of you as one of the KOLs of pharmaceutical analyst. So it's always exciting to hear your voice here. I think the first part of your question is probably best answered by Mike. And then, Mike, if you bounce it back over to me, I'll then talk about the xeno aspects of Jess question.

Sure. This question has come up, I think, a couple of times over the last year. So as a baseline, -- there's always a small percentage, I would say, kind of low to mid-single-digit percentage of patients that are in our patient assistance program at any point in time. What's the -- we need to wait for the CMS coverage decision on PH-ILD, that has continued to increase. And so I think on the last call, I had reported that it was getting up into kind of the higher single digits about to cross over into double digits. We've now crossed over into double digits. So it's in -- it's double-digit percentage of patients, but it's on the low end of double-digit percentage.

Perfect.

That's great, Mike. Jess, it's really interesting, the launch of these new xeno products. And we have in our call, in fact, Dr. Peterson. She is our Senior Vice President for Product Development, and she will be leading the effort now to take those products through their clinical development process. We also have on the call, Pat Poisson, who is our Executive VP for Technical Operations; and then people underneath him, who right now are responsible for our manufacturing on biologic called -- our biologic products such as Unituxin. They will be responsible for manufacturing this new type of biologic, the xenografts, be they the UHearts, the UKidneys or the UThymoKidneys. So all of that is very much moving into the clinical development phase. And it's super exciting doing the things like identifying the clinical trial centers, identifying the clinical investigators, putting together the necessary protocol having the meetings with the FDA to get buy into the protocol, the clinical development, our biostatisticians are already computing the necessary clinical trial parameters. So everybody is kind of rolling their oars in the same direction toward those clinical development and gating milestones for those products. So I think you're going to see all of that in the near term. And in between, you may hear of certain kind of expanded access opportunities that arise, such as with the case of Mr. Bennett where there's a possibility for a leading surgeon at a leading hospital to uniquely save somebody's life through the unique advantages of these Xenografts. So I think you'll see some of that as well. In the case of Mr. Bennett, there were no other alternatives, and here he is almost two months out, no sign of rejection. I just could not be more proud of all of the efforts of our group at Revivicor how they were able to carefully splice in all of these different 10 genes to make that heart -- in the words of Dr. Griffith, the transplant surgeon, he keeps telling me, Martine, this heart is a rock star. And this is the guy who's like did the second Jarvik heart. I mean, he really knows his stuff. And in the words of, for example, Dr. Montgomery at NYU. He is just so impressed with the -- it's hard to get a little bit graphic here, but like the urine produced by the xeno kidney, super, super impressed with it. Dr. Locke, the Head of transplant down at UAB, she's placed her xeno kidneys into Mr. Parson was one of the seeking donors, orthotopic positions for the kidneys. She's done another similar type of xeno kidney transplant, and in both cases, is just super, super pleased with the outcome. So this xenotransplantation train has definitely, definitely, definitely just left the station. And I think you're going to see some really exciting ungating of the clinical development and production spending, capital expansion opportunities right up ahead. Operator it looks like we have one more question in line.

Your next question comes from the line of Andreas Argyrides with Wedbush Securities. Your line is open.

Hi, good morning and thanks for taking my question. Before I get into questions, just congrats on the quarter and all the life-saving progress that you've made. It's a true testament to your dedication to it. So we appreciate that, too. So just continuing on the xenotransplantation, could you maybe give us a little bit more color around how you think? Or what the next kind of major milestone would be in these programs? Is it 6 months out? And then looking at DPI approval, how are you looking at that launch contributing to -- or the potential launch contributing to growth of patients on Tyvaso this year and next year as well. Thank you.

Thank you so much, Andreas, for the questions. And thank you for the recognition of us doing our best with our public benefit purpose. Mike, if I could call on you again to answer first the DPI-related question, and then I'll follow up with the xeno-related question?

Sure. On the DPI launch, as I said in my opening remarks, we'll hear back from the FDA in May, assuming that's an approval and we're ready to go, ready to launch. We have everything in place and ready to go. We'll have inventory, plenty of inventory. We actually had our launch meeting with our sales team this week. So they're prepped and ready to go, and so we'll be able to really press play on our launch once we hear back from the FDA. And we do think that there's opportunities in both PH-ILD, as I mentioned, to accelerate growth there as well as PAH. So there's really, I think, a lot of excitement and enthusiasm around the Tyvaso DPI. And I think it really is going to create an opportunity for us to expand the number of patients that we're able to help with prostacyclin therapy and PAH as well as PH-ILD, as I said. So we look at that as being a significant contributor to our March to 25,000 patients by the end of 2025. As Martine said, it should be a blockbuster drug, that's certainly how we view it, and how we're planning to approach it from a launch perspective.

Thanks so much, Mike. Andreas, with regard to the next thing that you might hear about, it's I think that there is a pretty good likelihood that there will be some sort of an announcement, and again, knock on wood and cross my fingers, Mr. David Bennett Sr. continues to do well at the 90-day and the 6-months mark. And the reason I call those out is when the FDA looks at clinical transplantation milestones, they put a lot of emphasis on sort of like two weeks, 30 days, 60 days, 90 days and maybe one year. And we know this because one of our Phase III trials, for example, which relates to the over 200 lives we've saved with our Lung Bioengineering technology relates to getting clinical FDA approval for our second Lung Bioengineering technology, which is in its wrapping up its last couple of patients of its Phase III trial. And with this type of technology, which is kind of techno speak, it's called ex-vivo lung perfusion technology. The FDA wants to see that the patients who are on our Lung Bioengineering technology do as well at two weeks, four weeks, three months, six months, et cetera, as the patients who don't have the advantage of a Lung Bioengineering technology. So that same kind of milestone metrics, I think, are going to apply in the xeno context. And our goal would be to show that our xenograft patients, of course, separately for kidneys and hearts, do as well at two weeks, four weeks, three months, six months and the year as would patients who are otherwise similarly matched but have allografts. Now depending on the organ, the slope is pretty severe, even with something that has been done for decades, like allo heart transplants, you're looking at 80%…

Turn it to the operator.

Okay. Operator, it's all yours.

Thank you for participating in today's United Therapeutics Corporation Earnings Webcast. A rebroadcast of this webcast will be available for replay for one week by visiting the Events and Presentations section of the United Therapeutics Investor Relations website at ir.unither.com. Thank you. You may now disconnect.