Good morning, and welcome to the United Therapeutics Corporation First Quarter 2022 Earnings Webcast. My name is Abby, and I will be your conference operator today. And I will now turn the webcast over to Dewey Steadman, Head of Investor Relations at United Therapeutics.

Thanks, Abby, and good morning. It’s my pleasure to welcome you to the United Therapeutics Corporation First Quarter 2022 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; and 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 Form 10-K and 10-Q, contain additional information on these risks and uncertainties, and we assume no obligation to update these forward-looking statements. Today’s remarks may discuss the progress and results of clinical trials or other developments with respect to our products. And 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 the products are available on our website. Now I’ll turn the webcast over to Dr. Rothblatt for an overview of the first quarter 2022 financial results and business activities of United Therapeutics. Dr. Rothblatt?

Thank you, Dewey, and good morning, everyone. Welcome to our first quarter 2022 financial results call. In my opinion, this is the best quarter we have ever reported, considering not only profits, patients and our contributions to our planetary community. At $462 million in revenues, we are now on the cusp of a $2 billion revenue run rate. This is a major milestone achievement for us. This $2 billion revenue run rate is what we expect based on the strong trends that are evidenced in this quarter as well as what we expect in coming quarters. Importantly, we see strength across our entire product portfolio. As a public benefit company, we focus on 3 Ps, profitable cash flow, patient care and planetary community. With respect to profits, that approximately $2 billion revenue run rate was accompanied by nearly $0.25 billion in quarterly profits. We are making more money than we spend, which is 1 of our key financial metrics. But with respect to patient care, we are spending a lot. Seven Phase III studies are underway. A new Phase I study in RemoPro is just starting and an exciting Phase IV study called ARTISAN designed to prove that strong dosing on Remodulin, followed by a rapid switch to Orenitram allows patients long-term good results for the treatment of pulmonary hypertension. They will be able to live with pulmonary hypertension more than die from pulmonary hypertension. Finally, with respect to our planetary community, we continue to lead by example with 0 carbon health care facilities that are amongst the best in our entire industry. For example, our clinical development operations work in the world’s largest site 0 carbon building in Silver Spring, Maryland. We are now building a first of its kind, 0 carbon footprint pharmaceutical inventory warehouse in North Carolina to store our ever-expanding production of pharmaceutical intermediates and pharmaceutical products. Speaking of products, I think that is a good opportunity for me to pass the baton to our President and Chief Operating Officer, Michael Benkowitz.

Thanks, Martine, and good morning, everyone. In the first quarter, we continued our trend of year-over-year revenue growth, and we saw the highest quarterly revenue for Tyvaso as well as our overall Treprostinil business. I’d like to dive into the underlying performance of our 3 treprostinil products, Tyvaso, Remodulin and Orenitram. As usual, I’m going to focus on – 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 specialty pharmacy ordering patterns. Starting with Tyvaso. We increased our active patients to about 4,400 as of the end of the first quarter, putting this approximately halfway toward the goal we set last year of doubling the number of Tyvaso patients from 3,000 to 6,000 by the end of this year. As I do in every setting like this, I want to remind everyone that achieving this goal assumes no COVID-related impact to health care practitioner access and patient initiation of therapy and the path to doubling will not be linear. Uptake in January and February was a little more gradual than in prior months, but this is not atypical for a serious chronic life-threatening condition where doctors want to be extra cautious about adding therapies. Having said that, in March, we saw a nice acceleration of patient additions with historically strong referrals and new starts along the lines of what we saw in Q2 and Q3 of last year, and this momentum has continued into April. Our continued path to 6,000 patients will be aided by 3 factors. First, assuming approval later this month, the launch of Tyvaso DPI, which we believe will expand Tyvaso’s use in both Group 1 and Group 3 pulmonary hypertension for the reasons I mentioned earlier. The recent CMS…

Thanks so much, Mike. That was perfect. Operator, you may open the lines.

And we will take our first question from Eun Yang with Jefferies.

Great quarter. Question on Tyvaso DPI side, we await FDA approval. Once approved on time, what do you think the conversion rate to DPI from Tyvaso would be? Whether you think that it will just help to expand into new patients?

Thanks so much, Eun. Nice to hear your voice after – it’s been a while since we’ve been able to see each other face-to-face. So thanks for dialing in. That question is something that I think on this call, Mike would be the – have the most detailed and ability to address. So Mike, can you give us a response on that one?

Sure, happy to. Yes, I think what you’ll see is you’ll see this play out over a little bit of time. As I said in my opening remarks, we’re dealing with chronic life-threatening diseases here. And I think patients – or I’m sorry, physicians and patients can be a little bit cautious in terms of switching therapy, switching delivery devices, what have you. We do see and we hear a lot of excitement among both physicians and patients for the Tyvaso DPI. So we do believe that there will be a lot of interest in switching over to Tyvaso DPI. I think as this plays out, as we expand the use of Tyvaso into Group 1 and Group 3, over time, my estimate is that we’ll probably see somewhere around 60% of the patients on Tyvaso DPI and about 40% on the nebulizer. I’d say that’s – I think that’s a pretty good estimate for Group 1. I think Group 3 may be a little bit more 50-50 just because of the disease we’re talking about and the severity and some patients for whatever reason, they decide that the nebulizer is a better option for them than the DPI.

Thanks, Mike. Eun, just to give you a little bit more color, as you know, my daughter has pulmonary hypertension. So I meet with a lot of parents and even their adult children with pulmonary hypertension. And I’m astonished that when I have a lunch or something with them, one of them will tell me that their daughter or their son is still taking Flolan from the old legacy pump, which weighs as much as maybe a small brick, not a brick, but small brick. And we’re just talking, and I’m obviously not selling. I’m just talking parent to parent, but I say like there are much smaller devices available and ones that can go subcutaneously. And I’m just – I know you’re aware of this, I’m just curious why your daughter or son has never transitioned. And they always give the same answer, which is very resonant with what Mike just said, they said, “this has kept our child alive.” This legacy Flolan brick, if you will, has kept our daughter alive or kept our son alive. And we just don’t – if it’s not broken, we don’t want to fix it. And so that just gives you a little bit more color on what Mike was saying that when patients have this type of condition, if the nebulizer is – I don’t want to say keeping them alive because I don’t think that’s in the label. But if the nebulizers, what they feel, has made their pulmonary hypertension livable, it’s just human nature to be very cautious about flipping that to a different therapeutic coral. Now for new patients, totally different story. If you tell somebody you want a big thing or a small thing, almost everybody will take a small thing.

Our next question comes from Joseph Thome with Cowen & Company.

Congratulations on the quarter. It was interesting that you mentioned there was an uptick in PH-ILD, either patients to referrals figure what you mentioned in March and continuing into April. Just a little bit of color in terms of why do you think maybe this was the case? And are you seeing an increased number of conventional ILD physicians using the therapy?

Thanks, Joseph. Mike, hand off to you.

Sure. Yes, great question. I think there's a number of factors at play, Joe. I mean 1 is, yes, we are continuing to, day by day, week by week, continuing to grow our Tyvaso prescriber base in the ILD community. And that will just continue to play out over really, I think, years -- this year into next year and beyond. And so we're really focused on the breadth of the prescribing community. And so that is certainly a contributing factor to that. I think the other things that have into that are I know Martine talked a little bit about the impact of COVID on clinical trial enrollment in the market generally. I think in hindsight, looking at Omicron and the impact, I think it had an impact more than maybe we realized at the time just in terms of us being able to get in and talk to physicians and physicians willing to really take the time to understand PH-ILD, think about Tyvaso, think about their patients and move them to Tyvaso. And I think what we've seen really in the last, I would say, 6 to 8 weeks is, as I said, with the cases coming down, hospitalization is coming down, there's just -- I think the physicians have a lot more time to really dig into this, and so we're starting -- I think that's contributing to the increase in the referral and the starts that we've seen in the last 2 months. I think the third factor too is, I mentioned this in my opening remarks about the conferences. And I think -- but again, none of these are just by themselves, I think, driving it. It's a combination of a number of things, but I was at the ISHLT conference last week, which was…

Our next question comes from Jessica Fye with JP Morgan.

And I have a backup if you can't answer this. But with the Tyvaso DPI PDUFA approaching, can you say if you've seen an updated draft label at this point?

And what's your backup so we have them all queued up.

What are your latest expectations for enrollment completion and data for the PERFECT AMT-TON trials?

Okay. So first, Jess, and nice to hear your voice again. And I'm excited speaking further about what Mike mentioned on the in-person presence. I'm excited to hear that JPMorgan will be fully in person this year. So congratulations on meeting our industry back to face-to-face health care conferences. So we really try to stay away from talking about decisions within the FDA and even decisions which are imminent. So we'll just leave it at that, and we'll issue the press release as soon as we get the good news. We are successfully enrolling all of our different clinical trials. It's really not possible to predict when any given trial will be completely enrolled. They are all enrolling, as we mentioned in the beginning of the remarks. And maybe just to provide a little bit of color around your question of what kind of factors are affecting enrollment in our clinical trials, I'd like to turn the microphone over to our Head of Product Development, Dr. Leigh Peterson. Leigh?

Thank you for the question. So we do have -- actually, we were able to progress. We do -- as Michael said, we were probably impacted by COVID for enrollment of the trials a little bit more than we had realized as we learn more and more about sites we're closing due to the pandemic. But they're opening now. We're getting more and more. We're getting boluses of patients coming in that we hadn't had before. And so we're really looking forward to completing the enrollment. Again, we can't really give you a specific time line. But we're really -- we haven't been inhibited to following our patients either. I mean there's a little bit of -- once we get the patients in the study, it's obviously critical that we continue to watch what happens follow and make sure that the sites are open, have access to the medicine and everything. And we've actually had no problems with that. And we even have a site in the Ukraine that has active patients that we're able to continue to follow and get medicine to in our study. So I hope that's the type of color you're looking for. Again, apologies, we can't really give you the specific enrollment dates as isn't possible for any clinical study.

Thanks so much, Dr. Peterson. And just to provide a little more color to your question, Jess, I think it has been proven over and over that clinical trial enrollment is a core competency at United Therapeutics. It's something that we do very, very well. Two examples that are out of many I could give, I myself am blown away at how our team successfully during COVID, early days, delivered our medicines to patients in Wuhan, China, the ground zero of COVID, yet we continue delivering medicines. We were able to have local clinical trial monitors, continue to take all the measurements like Dr. Peterson said. And then a more recent example, as Dr. Peterson just said, we have the center in the Ukraine, and it's part of our outcome study. And it's a -- fortunately, they are not in the part that's actively under bombardment from the Russians, but it's not far from there. And I just -- it's just amazing to me that our team is able to work to conduct these studies even in places of very, very difficult circumstances. Of course, here in the U.S., we're able to do much better. Things are peaceful, and we've even worked out -- backed up measures with the FDA, for example, in PERFECT, where we can take endpoint measurements using things like I can't remember the exact like altimetric. It's a kind of thing that measures how much you're walking, and it's an analogy. It's a 6-minute walk endpoint studies. So we have adapted to doing clinical trials during COVID. And I think we've adapted very, very well, as you can see from, for example, the outcomes of the INCREASE trial and the FDA approval of INCREASE and our ongoing -- all 7 of our trials are Phase III trials are enrolling. As I mentioned, we're now beginning to enroll a new Phase I trial for RemoPro. We're enrolling a Phase IV trial, Artisan. So it's a core competency of our company to carry these things out even during difficult times. Next question, please.

Our next question comes from Andreas Argyrides with Wedbush Securities.

Assuming approval, can you elaborate on the initial launch dynamics for DPI, given that it will be a first to market product? Also, what the time frame is to achieve the previously described breakdown between DPI and nebulizer? And then lastly, just an update on the xeno programs?

Thanks, Andreas. While Mike is queuing up some answers to the first 2 questions that you asked, I'd like to have the xeno question addressed by Dr. Peterson because she is now also in charge of our xeno heart and xeno kidney clinical development. So she can give you a general overview of the type of things that we're doing on xeno. And before I leave the introductory part of your answer, please give our best to Already, Leigh, would you -- while you're thinking about the xeno response, so Mike, do you want to start with the first 2 questions he asked?

Sure. So I think in terms of launch dynamics or launch timing, our expectation is that if we receive an approval this month, in accordance with our action date, we'll be able to commence promotional activities immediately. So we have all of our promotional materials queued up and ready to go and our sales reps trade. And so they'll be able to go out and start talking to physicians immediately. There'll be a little bit of a lag just in terms of getting product to specialty pharmacy and be able to start patients, but we would expect that patients will be able to start off therapy sometime in June. So you're just talking about a few weeks lag there, which is actually faster than normal between an approval and a lot. So -- and then for us, it's doing what we do from a sales and marketing standpoint and going out and communicating with physicians and communicating with patients and getting to understand the benefits of DPI and helping physicians with patients to identify the appropriate patient to either start to novo or transition over to the DPI. In terms of the timing for the breakdown that I mentioned earlier, sort of like the clinical trial question. I hesitate to put a time line on that because it always seems to move a little bit slower than what we think for the reasons that Martine -- the example that Martine gave because of the types of patients we're dealing with. I am optimistic that this will happen maybe quicker than what we typically see in this space just because of all of the prelaunch or preapproval buzz and excitement that is around this product.

Awesome, Mike. Totally, totally awesome. All right. Leigh, people are interested about what we can expect next on xeno.

Yes. So as everyone knows, the world has -- is very, very excited on what's going on here. And we have reports of institutions doing work in humans. One case that's coming out where the xeno heart was placed into a human patient, and that work -- the case study of that's coming out in a major medical journal. So please look for those details in that report. We're excited for that to come out soon. But what we do is we are really interested in doing the clinical studies that prove if a product is efficacious as we expect. And so in order to do the very -- the more formal Phase I sponsored clinical studies, we're required to continue to do some preclinical work and per FDA and we're working with FDA to understand specifically what we should do in order to prepare ourselves for the IND and prepare them. As everyone knows, this is an entirely new field and so we're working really closely together to make sure that we do this right. So we're spending time now working with our academic partners and doing the nonclinical work and making sure everything is in order for our Phase I and everything being the specific immunosuppression regimen that will be used, the specific product and all of the procedures that are associated with that. So once we have that completed, we will be submitting our IND to start the Phase I studies with the xeno organs.

Excellent. Thank you so much, Leigh. I'm going to call on 1 more person, Pat Poisson, who is our Executive Vice President for Technical Operations. Those of you who know me know that I kind of geek out on pharma biologic manufacturing things. I just really love it. And it's amazing to manufacture a xeno kidney and xeno heart. That is a -- it's a biologic, obviously. But it requires manufacturing facilities, really the likes of which have not existed before. And it is under Pat Poisson, who is our EVP, Technical Operations, that we are building the manufacturing facility for the clinical trials that Dr. Peterson just referred to because for a clinical trial whether it's a small molecule or a biologic or a whole organ, you have to have a higher level of attention and care to GMP type of processes. So Pat, would you just have like about a minute left in the call, but if you could kind of give us an overview of the kind of stuff that you're overseeing in terms of preparing a clinical trial, if I could say, material, or organ for Dr. Peterson's trial?

Yes. Thanks, Martine. So certainly, us and operations are very excited about the prospects of xeno. And we are undertaking building a clinical, call it, manufacturing facility that will produce organs for the trials that Dr. Peterson will run. And this is going to be a first-in-kind greenfield facility in Western Virginia, and it will be state-of-the-art as we do with all of our facilities working closely with FDA. So we are taking that program off. It's underway and design work is happening as we speak. So we will be prepared to supply organs when these trials start.

Thank you so much, Pat. Operator, it's been a wonderful call. Like I said at the beginning, in my opinion, the best quarter we've ever had the pleasure to share with everybody considering revenues, pipeline, even these amazing manufacturing activities. So operator, you may now wrap up the call.

Thank you. And thank you for participating in today's United Therapeutics Corporation Earnings Webcast. A rebroadcast of this webcast will be available for replay for 1 week by visiting the Events and Presentations section of the United Therapeutics' Investor Relations website at ir.unither.com.