United Therapeutics Corp Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>United Therapeutics Corp filed its Q1 2024 10-Q report on May 1, 2024.</b>

AI Summary

UNITED THERAPEUTICS Corp (UTHR) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. United Therapeutics Corp filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's fiscal year ends on December 31st. The filing was made on May 1, 2024. The company's principal business is in Pharmaceutical Preparations (SIC 2834).

Why It Matters

For investors and stakeholders tracking UNITED THERAPEUTICS Corp, this filing contains several important signals. This 10-Q filing provides an update on the company's financial performance and position for the first quarter of 2024, which is crucial for investors to assess recent operational results and trends. Understanding the details within this report allows stakeholders to evaluate the company's financial health, including its assets, liabilities, and equity, as of March 31, 2024.

Risk Assessment

Risk Level: low — UNITED THERAPEUTICS Corp shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain any immediately apparent unusual or high-risk disclosures.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand the company's performance drivers and outlook for the remainder of 2024.

Key Numbers

• 2024-03-31 — Report Date (CONFORMED PERIOD OF REPORT)
• 2024-05-01 — Filing Date (FILED AS OF DATE)
• 2024-01-01 — Quarter Start Date (Period of Report)
• 2023-12-31 — Prior Year End Date (Fiscal Year End)

Key Players & Entities

• UNITED THERAPEUTICS Corp (company) — FILER
• 1000 SPRING ST (address) — BUSINESS ADDRESS
• SILVER SPRING (location) — BUSINESS ADDRESS
• MD (location) — BUSINESS ADDRESS
• 20910 (postal_code) — BUSINESS ADDRESS
• 3016089292 (phone_number) — BUSINESS PHONE

FAQ

Industry Context

United Therapeutics Corp operates in the Pharmaceutical Preparations industry, focusing on developing and commercializing treatments for life-threatening conditions.

Regulatory Implications

The company is subject to standard SEC regulations for public companies, including the requirement to file quarterly reports (10-Q) detailing financial performance and business operations.

What Investors Should Do

1. Analyze the balance sheet as of March 31, 2024, for changes in assets, liabilities, and equity compared to the previous fiscal year-end.
2. Review any disclosures related to cash, cash equivalents, and marketable securities to understand liquidity and investment strategies.
3. Examine the filing for any updates on ongoing clinical trials, regulatory approvals, or new product developments.

Key Dates

• 2024-03-31: Quarter End Date — End of the reporting period for the 10-Q.
• 2024-05-01: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This is the first 10-Q filing for the fiscal year 2024, providing the initial quarterly financial update after the full-year 2023 report.

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share UTHR Nasdaq Global Select Mar

Filing Documents

• uthr-20240331.htm (10-Q) — 1618KB
• uthrex31103312024.htm (EX-31.1) — 12KB
• uthrex31203312024.htm (EX-31.2) — 12KB
• uthrex32103312024.htm (EX-32.1) — 6KB
• uthrex32203312024.htm (EX-32.2) — 7KB
• 0001082554-24-000025.txt (&nbsp;) — 8256KB
• uthr-20240331.xsd (EX-101.SCH) — 52KB
• uthr-20240331_cal.xml (EX-101.CAL) — 81KB
• uthr-20240331_def.xml (EX-101.DEF) — 289KB
• uthr-20240331_lab.xml (EX-101.LAB) — 719KB
• uthr-20240331_pre.xml (EX-101.PRE) — 499KB
• uthr-20240331_htm.xml (XML) — 1243KB

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 39 Item 4.

Controls and Procedures

Controls and Procedures 39 Part II OTHER INFORMATION 40 Item 1.

Legal Proceedings

Legal Proceedings 40 Item 1A.

Risk Factors

Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 53 Item 5. Other Information 53 Item 6. Exhibits 54

SIGNATURES

SIGNATURES 55 2 United Therapeutics, a public benefit corporation Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements Consolidated Balance Sheets (In millions, except share data) March 31, 2024 December 31, 2023 (Unaudited) Assets Current assets: Cash and cash equivalents $ 1,251.5 $ 1,207.7 Marketable investments 1,456.3 1,786.4 Accounts receivable, no allowance for 2024 and 2023 307.3 278.9 Inventories, net 120.2 111.8 Other current assets 113.4 166.2 Total current assets 3,248.7 3,551.0 Marketable investments 1,491.9 1,909.8 Goodwill and other intangible assets, net 115.4 114.2 Property, plant, and equipment, net 1,074.0 1,045.4 Deferred tax assets, net 396.1 394.8 Other non-current assets 169.1 151.8 Total assets $ 6,495.2 $ 7,167.0 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 305.1 $ 298.0 Line of credit (current) 400.0 400.0 Share tracking awards plan 29.2 35.4 Other current liabilities 126.3 71.0 Total current liabilities 860.6 804.4 Line of credit (non-current) 200.0 300.0 Other non-current liabilities 96.5 77.8 Total liabilities 1,157.1 1,182.2 Commitments and contingencies Stockholders' equity: Preferred stock, par value $ .01 , 10,000,000 shares authorized, no shares issued — — Common stock, par value $ .01 , 245,000,000 shares authorized, 74,098,932 and 73,659,761 shares issued, and 44,204,517 and 47,040,545 shares outstanding as of March 31, 2024 and December 31, 2023, respectively 0.7 0.7 Additional paid-in capital 2,405.4 2,549.0 Accumulated other comprehensive loss ( 15.6 ) ( 12.8 ) Treasury stock, 29,894,415 and 26,619,216 shares as of March 31, 2024 and December 31, 2023, respectively ( 3,386.1 ) ( 2,579.2 ) Retained earnings 6,333.7 6,027.1 Total stockholders' equity 5,338.1 5,984.8 Total liabilities and stockholders' equity $ 6,495.2 $ 7,167.0 See accompanying notes to consolidated financial statements. Quarterly Report 3 Table of Contents

Financial Information

Part I. Financial Information Consolidated Statements of Operations (In millions, except per share data) Three Months Ended March 31, 2024 2023 (Unaudited) Total revenues $ 677.7 $ 506.9 Operating expenses: Cost of sales 72.9 52.3 Research and development 104.1 82.9 Selling, general, and administrative 144.4 87.3 Total operating expenses 321.4 222.5 Operating income 356.3 284.4 Interest income 53.8 29.2 Interest expense ( 13.3 ) ( 13.8 ) Other income (expense), net 1.8 ( 7.9 ) Total other income, net 42.3 7.5 Income before income taxes 398.6 291.9 Income tax expense ( 92.0 ) ( 51.0 ) Net income $ 306.6 $ 240.9 Net income per common share: Basic $ 6.52 $ 5.20 Diluted $ 6.17 $ 4.86 Weighted average number of common shares outstanding: Basic 47.0 46.3 Diluted 49.7 49.6 See accompanying notes to consolidated financial statements. 4 United Therapeutics, a public benefit corporation Table of Contents

Financial Information

Part I. Financial Information Consolidated Statements of Comprehensive Income (In millions) Three Months Ended March 31, 2024 2023 (Unaudited) Net income $ 306.6 $ 240.9 Other comprehensive (loss) income: Foreign currency translation loss included in net income 2.4 — Defined benefit pension plan: Actuarial loss arising during period, net of tax ( 0.5 ) ( 0.9 ) Actuarial gain and prior service cost included in net periodic pension cost, net of tax ( 1.2 ) ( 2.3 ) Total defined benefit pension plan, net of tax ( 1.7 ) ( 3.2 ) Available-for-sale debt securities: Unrealized (loss) gain arising during period, net of tax ( 4.6 ) 19.9 Realized loss included in net income, net of tax 1.1 — Total (loss) gain on available-for-sale debt securities, net of tax ( 3.5 ) 19.9 Other comprehensive (loss) income, net of tax ( 2.8 ) 16.7 Comprehensive income $ 303.8 $ 257.6 During the three months ended March 31, 2024 and 2023, the tax (benefit) expense in other comprehensive income was $( 0.1 ) million and $( 0.5 ) million, respectively, for the defined benefit pension plan and $( 1.2 ) million and $ 6.3 million, respectively, for the available-for-sale debt securities. See accompanying notes to consolidated financial statements. Quarterly Report 5 Table of Contents

Financial Information

Part I. Financial Information Consolidated Statements of Stockholders' Equity (In millions) Three Months Ended March 31, 2024 (Unaudited) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Treasury Stock Retained Earnings Stockholders' Equity Shares Amount Balance, January 1, 2024 73.7 $ 0.7 $ 2,549.0 $ ( 12.8 ) $ ( 2,579.2 ) $ 6,027.1 $ 5,984.8 Net income — — — — — 306.6 306.6 Foreign currency translation loss — — — 2.4 — — 2.4 Unrealized loss on available-for-sale debt securities — — — ( 3.5 ) — — ( 3.5 ) Defined benefit pension plan — — — ( 1.7 ) — — ( 1.7 ) Shares issued under employee stock purchase plan ( ESPP ) — — 3.9 — — — 3.9 Restricted stock units ( RSUs ) withheld for taxes — — ( 11.4 ) — — — ( 11.4 ) Share repurchase — — ( 200.0 ) — ( 800.0 ) — ( 1,000.0 ) Excise tax on net share repurchase — — — — ( 6.9 ) — ( 6.9 ) Common stock issued for RSUs vested 0.1 — — — — — — Exercise of stock options 0.3 — 42.2 — — — 42.2 Share-based compensation — — 21.7 — — — 21.7 Balance, March 31, 2024 74.1 $ 0.7 $ 2,405.4 $ ( 15.6 ) $ ( 3,386.1 ) $ 6,333.7 $ 5,338.1 Three Months Ended March 31, 2023 (Unaudited) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Treasury Stock Retained Earnings Stockholders' Equity Shares Amount Balance, January 1, 2023 72.7 $ 0.7 $ 2,388.4 $ ( 55.5 ) $ ( 2,579.2 ) $ 5,042.3 $ 4,796.7 Net income — — — — — 240.9 240.9 Unrealized gain on available-for-sale debt securities — — — 19.9 — — 19.9 Defined benefit pension plan — — — ( 3.2 ) — — ( 3.2 ) Shares issued under ESPP — — 3.4 — — — 3.4 RSUs withheld for taxes — — ( 13.5 ) — — — ( 13.5 ) Common stock issued for RSUs vested 0.1 — — — — — — Exercise of stock options 0.5 — 61.4 — — — 61.4 Share-based compensation — — 17.6 — — — 17.6 Balance, March 31, 2023 73.3 $ 0.7 $ 2,457.3 $ ( 38.8 ) $ ( 2,579.2 ) $ 5,283.2 $ 5,123.2 See accompanying notes to consolidated financial statements. 6 United Th

Financial Information

Part I. Financial Information Consolidated Statements of Cash Flows (In millions) Three Months Ended March 31, 2024 2023 (Unaudited) Cash flows from operating activities: Net income $ 306.6 $ 240.9 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15.0 13.3 Share-based compensation expense (benefit) 25.6 ( 12.4 ) Other ( 10.5 ) 5.8 Changes in operating assets and liabilities: Accounts receivable ( 28.3 ) 85.9 Inventories ( 9.3 ) ( 2.5 ) Accounts payable and accrued expenses 1.9 2.8 Other assets and liabilities 75.5 41.0 Net cash provided by operating activities 376.5 374.8 Cash flows from investing activities: Purchases of property, plant, and equipment ( 38.2 ) ( 41.3 ) Deposits ( 4.3 ) — Purchases of available-for-sale debt securities ( 529.3 ) ( 889.5 ) Maturities of available-for-sale debt securities 475.3 709.7 Sales of available-for-sale debt securities 831.8 — Net cash provided by (used in) investing activities 735.3 ( 221.1 ) Cash flows from financing activities: Payments to repurchase common stock ( 1,000.0 ) — Repayment of line of credit ( 100.0 ) — Payments of debt issuance costs ( 2.7 ) ( 2.7 ) Proceeds from the exercise of stock options 42.2 61.4 Proceeds from the issuance of stock under ESPP 3.9 3.4 RSUs withheld for taxes ( 11.4 ) ( 13.5 ) Net cash (used in) provided by financing activities ( 1,068.0 ) 48.6 Net increase in cash and cash equivalents $ 43.8 $ 202.3 Cash and cash equivalents, beginning of period 1,207.7 961.2 Cash and cash equivalents, end of period $ 1,251.5 $ 1,163.5 Supplemental cash flow information: Cash paid for interest $ 12.6 $ 13.1 Cash paid for income taxes $ 4.7 $ — Non-cash investing and financing activities: Non-cash additions to property, plant, and equipment $ 23.6 $ 18.4 Measurement period adjustment to purchase price $ 1.4 $ — Excise tax on net share repurchase $ 6.9 $ — See accompanying notes to con

Financial Information

Part I. Financial Information

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements March 31, 2024 (Unaudited) 1. Organization and Business Description United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions. In 2021, we converted to a Delaware public benefit corporation ( PBC ), with the express public benefit purpose to provide a brighter future for patients through (a) the development of novel pharmaceutical therapies; and (b) technologies that expand the availability of transplantable organs . We have approval from the U.S. Food and Drug Administration ( FDA ) to market the following therapies: Tyvaso DPI (treprostinil) Inhalation Powder ( Tyvaso DPI ), Tyvaso (treprostinil) Inhalation Solution ( nebulized Tyvaso ), Remodulin (treprostinil) Injection ( Remodulin ), Orenitram (treprostinil) Extended-Release Tablets ( Orenitram ), Unituxin (dinutuximab) Injection ( Unituxin ), and Adcirca (tadalafil) Tablets ( Adcirca ). We also derive revenues outside the United States from sales of nebulized Tyvaso, Remodulin, and Unituxin. As used in these notes to our consolidated financial statements, unless the context otherwise requires, the terms " we ", " us ", " our ", and similar terms refer to United Therapeutics Corporation and its consolidated subsidiaries. 2. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ( SEC ) for interim financial information. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the accompanying notes to our consolidated financial statements contained i

Financial Information

Part I. Financial Information In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which enhances the required disclosures primarily related to the income tax rate reconciliation and income taxes paid. This ASU requires an entity's income tax rate reconciliation to provide additional information for reconciling items meeting a quantitative threshold, and to disclose certain selected categories within the income tax rate reconciliation. This ASU also requires entities to disclose the amount of income taxes paid, disaggregated by federal, state, and foreign taxes. This ASU is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. 3. Investments Marketable Investments Available-for-Sale Debt Securities Available-for-sale debt securities are recorded at fair value, with the portion of the unrealized gains and losses that are not credit-related included as a component of accumulated other comprehensive loss in stockholders' equity, until realized. Available-for-sale debt securities consisted of the following (in millions): As of March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government and agency securities $ 2,415.1 $ 0.6 $ ( 17.1 ) $ 2,398.6 Corporate debt securities 573.5 0.8 ( 3.6 ) 570.7 Total $ 2,988.6 $ 1.4 $ ( 20.7 ) $ 2,969.3 Reported under the following captions in our consolidated balance sheets: Cash and cash equivalents $ 41.6 Current marketable investments 1,435.8 Non-current marketable investments 1,491.9 Total $ 2,969.3 As of December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government and agency securities $ 3,044.5 $ 5.3 $ ( 17.2 ) $ 3,032.6 Corporate debt securities 727.2 2.1 ( 4.7 ) 724.6 Total (1) $ 3,771.7 $ 7.4 $ ( 21.9

Financial Information

Part I. Financial Information Less than 12 months 12 months or longer Total As of December 31, 2023 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. government and agency securities $ 1,101.8 $ ( 4.4 ) $ 838.1 $ ( 12.8 ) $ 1,939.9 $ ( 17.2 ) Corporate debt securities 209.4 ( 0.5 ) 284.1 ( 4.2 ) 493.5 ( 4.7 ) Total $ 1,311.2 $ ( 4.9 ) $ 1,122.2 $ ( 17.0 ) $ 2,433.4 $ ( 21.9 ) As of March 31, 2024 and December 31, 2023, we held 474 and 385 available-for-sale debt securities, respectively, that were in an unrealized loss position. In assessing whether the decline in fair value as of March 31, 2024 of any of these securities resulted from a credit loss, we consulted with our investment managers and reviewed the credit ratings for each security. We believe that these unrealized losses are a direct result of the current interest rate environment and do not represent an indication of credit loss. We do not intend to sell the investments in unrealized loss positions prior to their maturity and it is not more likely than not that we will be required to sell these investments before recovery of their amortized cost basis. There were no impairments due to credit loss on our available-for-sale debt securities during the three months ended March 31, 2024 and 2023. During the three months ended March 31, 2024, we sold certain available-for-sale debt securities prior to maturity to fund the repurchase of our common stock. See Note 9— Stockholders' Equity — Share Repurchase for further information. As a result of the sale, we received $ 831.8 million in proceeds and recognized gross realized gains of $ 0.4 million and gross realized losses of $ 1.8 million. The net realized loss of $ 1.4 million is included in other income (expense), net in our consolidated statements of operations. No available-for-sale debt securities were sold prior to maturity during the three months ended March 31, 2023. The following table

Financial Information

Part I. Financial Information Assets and liabilities subject to fair value measurements are as follows (in millions): As of March 31, 2024 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 99.7 $ — $ — $ 99.7 Time deposits (1) 336.8 — — 336.8 U.S. government and agency securities (2) — 2,398.6 — 2,398.6 Corporate debt securities (2) — 570.7 — 570.7 Equity securities (3) 20.5 — — 20.5 Total assets $ 457.0 $ 2,969.3 $ — $ 3,426.3 Liabilities Contingent consideration (4) — — 22.6 22.6 Total liabilities $ — $ — $ 22.6 $ 22.6 As of December 31, 2023 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 408.5 $ — $ — $ 408.5 Time deposits (1) 126.4 — — 126.4 U.S. government and agency securities (2) — 3,032.6 — 3,032.6 Corporate debt securities (2) — 724.6 — 724.6 Equity securities (3) 14.9 — — 14.9 Total assets $ 549.8 $ 3,757.2 $ — $ 4,307.0 Liabilities Contingent consideration (4) — — 21.1 21.1 Total liabilities $ — $ — $ 21.1 $ 21.1 (1) Included in cash and cash equivalents in our consolidated balance sheets. (2) Included in cash and cash equivalents and current and non-current marketable investments in our consolidated balance sheets. See Note 3— Investments — Marketable Investments — Available-for-Sale Debt Securities for further information. The fair value of these securities is principally measured or corroborated by trade data for identical securities for which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded. (3) Included in current marketable investments in our consolidated balance sheets. The fair value of these securities is based on quoted market prices for identical instruments in active markets. During the three months ended March 31, 2024, and March 31, 2023 we recognized $ 5.6 million of net unrealized gains and $ 8.8 million of net unrealized losses, respectively, on these securities. We rec

Financial Information

Part I. Financial Information 5. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following, net of reserves (in millions): March 31, 2024 December 31, 2023 Raw materials $ 21.6 $ 21.7 Work-in-progress 34.8 34.4 Finished goods 63.8 55.7 Total inventories $ 120.2 $ 111.8 6. Property, Plant, and Equipment Property, plant, and equipment consists of the following (in millions): March 31, 2024 December 31, 2023 Land and land improvements $ 152.3 $ 148.0 Buildings, building improvements, and leasehold improvements 837.1 685.3 Buildings under construction 96.8 259.1 Furniture, equipment, and vehicles 430.7 381.2 Subtotal 1,516.9 1,473.6 Less—accumulated depreciation ( 442.9 ) ( 428.2 ) Property, plant, and equipment, net $ 1,074.0 $ 1,045.4 7. Debt Credit Agreement In March 2022, we entered into a credit agreement (the Credit Agreement ) with Wells Fargo Bank, National Association ( Wells Fargo ), as administrative agent and a swingline lender, and various other lender parties, which provides for: (1) an unsecured revolving credit facility of up to $ 1.2 billion; and (2) a second unsecured revolving credit facility of up to $ 800.0 million (which facilities may, at our request, be increased by up to $ 500.0 million in the aggregate subject to obtaining commitments from existing or new lenders for such increase and other conditions). In accordance with the terms of the Credit Agreement, in March 2024, we extended the maturity date of the Credit Agreement by one year , to March 2029. At our option, amounts borrowed under the Credit Agreement bear interest at either an adjusted Term Secured Overnight Finance Rate ( Term SOFR ) or