10-Q 1 uthr-20240331.htm 10-Q uthr-20240331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2024
OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from                to                 
Commission file number 0-26301
United Therapeutics Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware52-1984749
(State or Other Jurisdiction of(I.R.S. Employer
Incorporation or Organization)Identification No.)
1000 Spring Street, Silver Spring, MD
20910
(Address of Principal Executive Offices)(Zip Code)
(301) 608-9292
(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of exchange on which registered
Common Stock, par value $0.01 per shareUTHRNasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒   No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐    No 
The number of shares outstanding of the issuer’s common stock, par value $.01 per share, as of April 24, 2024 was 44,355,694.


TABLE OF CONTENTS
INDEX
2
United Therapeutics, a public benefit corporation

PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets
(In millions, except share data)
 March 31, 2024December 31, 2023
 (Unaudited) 
Assets  
Current assets:  
Cash and cash equivalents$1,251.5 $1,207.7 
Marketable investments1,456.3 1,786.4 
Accounts receivable, no allowance for 2024 and 2023
307.3 278.9 
Inventories, net120.2 111.8 
Other current assets113.4 166.2 
Total current assets3,248.7 3,551.0 
Marketable investments1,491.9 1,909.8 
Goodwill and other intangible assets, net115.4 114.2 
Property, plant, and equipment, net1,074.0 1,045.4 
Deferred tax assets, net396.1 394.8 
Other non-current assets169.1 151.8 
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 plan29.2 35.4 
Other current liabilities126.3 71.0 
Total current liabilities860.6 804.4 
Line of credit (non-current)200.0 300.0 
Other non-current liabilities96.5 77.8 
Total liabilities1,157.1 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 capital2,405.4 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 earnings6,333.7 6,027.1 
Total stockholders’ equity5,338.1 5,984.8 
Total liabilities and stockholders’ equity$6,495.2 $7,167.0 

See accompanying notes to consolidated financial statements.
Quarterly Report
3

Part I. Financial Information
Consolidated Statements of Operations
(In millions, except per share data)
 Three Months Ended
March 31,
 20242023
 (Unaudited)
Total revenues$677.7 $506.9 
Operating expenses: 
Cost of sales72.9 52.3 
Research and development104.1 82.9 
Selling, general, and administrative144.4 87.3 
Total operating expenses321.4 222.5 
Operating income356.3 284.4 
Interest income53.8 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 taxes398.6 291.9 
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:  
Basic47.0 46.3 
Diluted49.7 49.6 

See accompanying notes to consolidated financial statements.
4
United Therapeutics, a public benefit corporation

Part I. Financial Information
Consolidated Statements of Comprehensive Income
(In millions)
                       Three Months Ended
March 31,
 20242023
(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

Part I. Financial Information
Consolidated Statements of Stockholders’ Equity
(In millions)
Three Months Ended March 31, 2024
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Retained EarningsStockholders’ Equity
 SharesAmount
Balance, January 1, 202473.7 $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 vested0.1 — — — — — — 
Exercise of stock options0.3 — 42.2 — — — 42.2 
Share-based compensation— — 21.7 — — — 21.7 
Balance, March 31, 202474.1 $0.7 $2,405.4 $(15.6)$(3,386.1)$6,333.7 $5,338.1 
Three Months Ended March 31, 2023
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Retained EarningsStockholders’ Equity
 SharesAmount
Balance, January 1, 202372.7 $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 vested0.1 — — — — — — 
Exercise of stock options0.5 — 61.4 — — — 61.4 
Share-based compensation— — 17.6 — — — 17.6 
Balance, March 31, 202373.3 $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 Therapeutics, a public benefit corporation

Part I. Financial Information
Consolidated Statements of Cash Flows
(In millions)
 Three Months Ended March 31,
 20242023
 (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 amortization15.0 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 expenses1.9 2.8 
Other assets and liabilities75.5 41.0 
Net cash provided by operating activities376.5 374.8 
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 securities475.3 709.7 
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 options42.2 61.4 
Proceeds from the issuance of stock under ESPP3.9 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 period1,207.7 961.2 
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 consolidated financial statements.
Quarterly Report
7

Part I. Financial Information
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 in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 21, 2024.
In our management’s opinion, the accompanying consolidated financial statements contain all adjustments, including normal, recurring adjustments, necessary to fairly present our financial position as of March 31, 2024 and December 31, 2023, and our statements of operations, comprehensive income, stockholders’ equity, and cash flows for the three-month periods ended March 31, 2024 and 2023. Interim results are not necessarily indicative of results for an entire year.
Recently Issued Accounting Standards
Accounting Standards Adopted During the Period
None.
Accounting Standards Not Yet Adopted
In October 2023, the FASB issued Accounting Standards Update (ASU) 2023-06, Disclosure Improvements, which incorporates certain existing or incremental disclosure and presentation requirements of SEC Regulation S-X and Regulation S-K into the FASB Accounting Standards Codification (Codification). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification topics and to align the requirements in the Codification with the SEC’s regulations. The effective date for each amendment in the ASU will be the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the related requirement by June 30, 2027, the applicable amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. This ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment profit or loss used by the CODM when deciding how to allocate resources. This ASU also requires all annual disclosures currently required by Topic 280 to be included in interim period disclosures. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance requires retrospective application to all prior periods presented in the financial statements. We are currently assessing the timing and impact of adopting the updated provisions on our consolidated financial statements.
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United Therapeutics, a public benefit corporation

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, 2024Amortized
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 securities573.5 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, 2023Amortized
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 securities727.2 2.1 (4.7)724.6 
Total(1)
$3,771.7 $7.4 $(21.9)$3,757.2 
Reported under the following captions in our consolidated balance sheets:
Cash and cash equivalents$75.9 
Current marketable investments  1,771.5 
Non-current marketable investments  1,909.8 
Total(1)
  $3,757.2 

(1)Total excludes $21.0 million related to available-for-sale debt securities that matured on December 31, 2023, although cash proceeds were not received until January 2, 2024. We recorded the $21.0 million receivable within other current assets in our consolidated balance sheets as of December 31, 2023.

The following tables present gross unrealized losses and fair value for those available-for-sale debt securities that were in an unrealized loss position as of March 31, 2024 and December 31, 2023, aggregated by investment category and length of time that the individual securities have been in a continuous loss position (in millions):

Less than 12 months12 months or longerTotal
As of March 31, 2024Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
U.S. government and agency securities$1,704.5 $(9.7)$492.9 $(7.4)$2,197.4 $(17.1)
Corporate debt securities292.4 (1.2)121.4 (2.4)413.8 (3.6)
Total$1,996.9 $(10.9)$614.3 $(9.8)$2,611.2 $(20.7)
Quarterly Report
9

Part I. Financial Information

Less than 12 months12 months or longerTotal
As of December 31, 2023Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
U.S. government and agency securities$1,101.8 $(4.4)$838.1 $(12.8)$1,939.9 $(17.2)
Corporate debt securities209.4 (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’ EquityShare 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 summarizes the contractual maturities of available-for-sale debt securities (in millions). Actual maturities may differ from contractual maturities because the issuers of certain of these debt securities have the right to call the securities or prepay their obligations under the securities with or without penalties.
 As of March 31, 2024
 Amortized CostFair Value
Due within one year$1,489.8 $1,477.4 
Due in one to three years1,498.8 1,491.9 
Total$2,988.6 $2,969.3 
Investments in Equity Securities with Readily Determinable Fair Values
We held investments in equity securities with readily determinable fair values, in the aggregate, of $20.5 million and $14.9 million as of March 31, 2024 and December 31, 2023, respectively, which are included in current marketable investments in our consolidated balance sheets. Changes in the fair value of publicly-traded equity securities are recorded in our consolidated statements of operations within other income (expense), net. See Note 4—Fair Value Measurements.
Investments in Privately-Held Companies
As of March 31, 2024 and December 31, 2023, we maintained non-controlling equity investments in privately-held companies of $28.5 million in the aggregate. We measure these investments using the measurement alternative because the fair values of these investments are not readily determinable. Under this alternative, the investments are measured at cost, less any impairment, and adjusted for any observable price changes. We include our investments in privately-held companies within other non-current assets in our consolidated balance sheets. These investments are subject to a periodic impairment review and, if impaired, the investment is measured and recorded at fair value in accordance with ASC 820, Fair Value Measurements.
4. Fair Value Measurements
We account for certain assets and liabilities at fair value and classify these assets and liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3). Our other current assets and other current liabilities have fair values that approximate their carrying values.
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United Therapeutics, a public benefit corporation

Part I. Financial Information
Assets and liabilities subject to fair value measurements are as follows (in millions):
 As of March 31, 2024
 Level 1Level 2Level 3Balance
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 1Level 2Level 3Balance
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—InvestmentsMarketable InvestmentsAvailable-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 recorded these gains and losses in our consolidated statements of operations within other income (expense), net. See Note 3—Investments—Marketable Investments—Investments in Equity Securities with Readily Determinable Fair Values.
(4)Included in other current liabilities and other non-current liabilities in our consolidated balance sheets. The fair value of our contingent consideration obligations has been estimated using probability-weighted discounted cash flow models (DCFs). The DCFs incorporate Level 3 inputs, including estimated discount rates, that we believe market participants would consider relevant in pricing, and the projected timing and amount of cash flows, which are estimated and developed, in part, based on the requirements specific to each acquisition agreement. The fair value of our contingent consideration liabilities increased by $1.5 million during the three months ended March 31, 2024, of which $1.4 million was a measurement period adjustment related to the Miromatrix acquisition with the remaining change recorded within research and development in our consolidated statements of operations.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate fair value because of their short maturities. The fair values of our marketable investments and contingent consideration are reported above within the fair value hierarchy. See Note 3—Investments. The carrying value of our debt is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt.
Quarterly Report
11

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, 2024December 31, 2023
Raw materials$21.6 $21.7 
Work-in-progress34.8 34.4 
Finished goods63.8 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, 2024December 31, 2023
Land and land improvements$152.3 $148.0 
Buildings, building improvements, and leasehold improvements837.1 685.3 
Buildings under construction96.8 259.1 
Furniture, equipment, and vehicles430.7 381.2 
Subtotal1,516.9 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 a fluctuating base rate, in each case, plus an applicable margin determined on a quarterly basis based on our consolidated ratio of total indebtedness to EBITDA (as calculated in accordance with the Credit Agreement). To date, we have elected to calculate interest on the outstanding balance at an adjusted Term SOFR plus an applicable margin.
On March 31, 2022, we borrowed $800.0 million under the Credit Agreement, and used the funds to repay outstanding indebtedness under a prior credit agreement.
As of December 31, 2023, our outstanding aggregate principal balance under the Credit Agreement was $700.0 million. During the three months ended March 31, 2024, we paid down $100.0 million of our balance under the Credit Agreement, which brought our aggregate outstanding balance down to $600.0 million as of March 31, 2024. Although our credit facility matures in 2029, we classified $400.0 million of the outstanding balance as a current liability on our consolidated balance sheet as of March 31, 2024, as we intend to repay this amount within one year.
The Credit Agreement contains customary events of default and customary affirmative and negative covenants. As of March 31, 2024, we were in compliance with these covenants.
The interest expense reported in our consolidated statements of operations for the three months ended March 31, 2024 and 2023 is related to our borrowings under the Credit Agreement.
8. Share-Based Compensation
As of March 31, 2024, we have two shareholder-approved equity incentive plans: the United Therapeutics Corporation Amended and Restated Equity Incentive Plan (the 1999 Plan) and the United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan (the 2015 Plan). The 2015 Plan provides for the issuance of up to 12,500,000 shares of our
12
United Therapeutics, a public benefit corporation

Part I. Financial Information
common stock pursuant to awards granted under the 2015 Plan. No further awards will be granted under the 1999 Plan. We also have one equity incentive plan, the United Therapeutics Corporation 2019 Inducement Stock Incentive Plan (the 2019 Inducement Plan), that has not been approved by our shareholders, as permitted by the Nasdaq Stock Market rules. The 2019 Inducement Plan was approved by our Board of Directors in February 2019 and provides for the issuance of up to 99,000 shares of our common stock under awards granted to newly-hired employees. Currently, we grant equity-based awards to employees and members of our Board of Directors in the form of stock options and restricted stock units (RSUs) under the 2015 Plan, and we may grant RSUs to newly-hired employees under the 2019 Inducement Plan. See the sections entitled Stock Options and RSUs below for additional information regarding these equity-based awards.
During the three months ended March 31, 2024 and 2023, we issued stock options and RSUs to certain executives with vesting conditions tied to the achievement of specified performance criteria through the end of 2026 and 2025, respectively. Throughout the performance period, we reassess the estimated performance and update the number of performance-based awards that we believe will ultimately vest. Estimating future performance requires the use of judgment. Upon the conclusion of the performance period, the performance level achieved and the ultimate number of stock options and RSUs that may vest are determined. Share-based compensation expense for these awards is recorded ratably over their vesting period, depending on the specific terms of the award and anticipated achievement of the specified performance criteria.
We previously issued awards under the United Therapeutics Corporation 2011 Share Tracking Awards Plan (the STAP). We refer to awards outstanding under the STAP as STAP awards. See the section entitled STAP Awards below for additional information regarding STAP awards. We discontinued the issuance of STAP awards in June 2015.
In 2012, our shareholders approved the United Therapeutics Corporation Employee Stock Purchase Plan (ESPP), which is structured to comply with Section 423 of the Internal Revenue Code. See the section entitled ESPP below for additional information regarding the ESPP.
The following table reflects the components of share-based compensation expense (benefit) recognized in our consolidated statements of operations (in millions):
 Three Months Ended
March 31,
 20242023
Stock options$5.7 $4.9 
RSUs15.5 12.2 
STAP awards3.9 (30.0)
ESPP0.5 0.5 
Total share-based compensation expense (benefit) before tax$25.6 $(12.4)
Stock Options
We estimate the fair value of stock options using the Black-Scholes-Merton valuation model, which requires us to make certain assumptions that can materially impact the estimation of fair value and related compensation expense. The assumptions used to estimate fair value include the price of our common stock, the expected volatility of our common stock, the risk-free interest rate, the expected term of stock option awards, and the expected dividend yield.
During the three months ended March 31, 2024 and 2023, in addition to time-based stock options, we granted 0.5 million and 0.4 million performance-based stock options with a total grant date fair value of $50.2 million and $35.6 million, respectively, in each case calculated based on the assumed achievement of maximum performance of the relevant financial performance condition. During the three months ended March 31, 2024 and 2023, we recorded $4.8 million and $0.2 million, respectively, of share-based compensation expense related to performance-based stock options, calculated based on the assumed levels of performance achievement.
The following weighted average assumptions were used in estimating the fair value of stock options granted to employees during the three months ended March 31, 2024 and 2023:
March 31, 2024March 31, 2023
Expected term of awards (in years)6.56.5
Expected volatility31.6 %31.4 %
Risk-free interest rate4.3 %3.6 %
Expected dividend yield % %
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Part I. Financial Information
A summary of the activity and status of stock options under our equity incentive plans during the three-month period ended March 31, 2024 is presented below:
 Number of
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term (in Years)
Aggregate
Intrinsic
Value (in millions)
Outstanding as of January 1, 20246,213,853 $136.60   
Granted534,277 235.78   
Exercised(327,267)128.92   
Forfeited    
Outstanding as of March 31, 20246,420,863 $145.24 4.0$545.9 
Exercisable as of March 31, 20245,427,581 $130.19 2.9$540.5 
Unvested as of March 31, 2024993,282 $227.50 9.5$5.4 
The weighted average fair value of a stock option granted during each of the three-month periods ended March 31, 2024 and March 31, 2023 was $97.18 and $85.52, respectively. These stock options have an aggregate grant date fair value of $51.9 million and $36.3 million, respectively. The total grant date fair value of stock options that vested during the three-month periods ended March 31, 2024 and March 31, 2023 was $0.9 million and $52.9 million, respectively.
Total share-based compensation expense related to stock options is recorded as follows (in millions):
 Three Months Ended
March 31,
 20242023
Cost of sales$ $ 
Research and development0.1 0.1 
Selling, general, and administrative5.6 4.8 
Share-based compensation expense before taxes5.7 4.9 
Related income tax benefit(0.2)(0.2)
Share-based compensation expense, net of taxes$5.5 $4.7 
As of March 31, 2024, unrecognized compensation cost related to stock options was $75.9 million. Unvested outstanding stock options as of March 31, 2024 had a weighted average remaining vesting period of 2.6 years.
Stock option exercise data is summarized below (dollars in millions):
 Three Months Ended
March 31,
 20242023
Number of options exercised327,267 539,100 
Cash received$42.2 $61.4 
Total intrinsic value of options exercised$35.7 $71.6 
RSUs
Each RSU entitles the recipient to one share of our common stock upon vesting. We measure the fair value of RSUs using the stock price on the date of grant. Share-based compensation expense for RSUs is recorded ratably over their vesting period.
During the three months ended March 31, 2024 and 2023, in addition to time-based RSUs, we granted 0.2 million and 0.2 million performance-based RSUs with a total grant date fair value of $47.5 million and $32.2 million, respectively, calculated based on the assumed achievement of maximum performance of the relevant financial and non-financial performance conditions. During the three months ended March 31, 2024 and 2023, we recorded $2.1 million and $0.2 million, respectively, of share-based compensation expense related to performance-based RSUs, calculated based on the assumed levels of performance achievement.
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United Therapeutics, a public benefit corporation

Part I. Financial Information
A summary of the activity with respect to, and status of, RSUs during the three-month period ended March 31, 2024 is presented below:
 Number of
RSUs
Weighted
Average
Grant Date
Fair Value
Unvested as of January 1, 2024964,759 $210.35 
Granted391,725 235.18 
Vested(139,219)186.49 
Forfeited(4,882)208.45 
Unvested as of March 31, 20241,212,383 $221.12 
Total share-based compensation expense related to RSUs is recorded as follows (in millions):
 Three Months Ended
March 31,
 20242023
Cost of sales$0.9 $1.0 
Research and development5.6 4.7 
Selling, general, and administrative9.0 6.5 
Share-based compensation expense before taxes15.5 12.2 
Related income tax benefit(3.3)(2.9)
Share-based compensation expense, net of taxes$12.2 $9.3 
As of March 31, 2024, unrecognized compensation cost related to the grant of RSUs was $204.7 million. Unvested outstanding RSUs as of March 31, 2024 had a weighted average remaining vesting period of 2.9 years.
STAP Awards
STAP awards convey the right to receive in cash an amount equal to the appreciation of our common stock, which is measured as the increase in the closing price of our common stock between the dates of grant and exercise. STAP awards expire on the tenth anniversary of the grant date, and in most cases, they vest in equal increments on each anniversary of the grant date over a four-year period. We discontinued the issuance of STAP awards in June 2015.
The aggregate liability balance associated with outstanding STAP awards was $29.2 million and $35.4 million as of March 31, 2024 and December 31, 2023, respectively, all of which was classified as a current liability in our consolidated balance sheets.
Estimating the fair value of STAP awards requires the use of certain inputs that can materially impact the determination of fair value and the amount of compensation expense we recognize. Inputs used in estimating fair value include the price of our common stock, the expected volatility of the price of our common stock, the risk-free interest rate, the expected term of STAP awards, and the expected dividend yield. The fair value of the STAP awards is measured at the end of each financial reporting period because the awards are settled in cash.
The table below includes the weighted average assumptions used to measure the fair value of the outstanding STAP awards:
 March 31, 2024March 31, 2023
Expected term of awards (in years)0.90.9
Expected volatility26.8 %28.6 %
Risk-free interest rate5.1 %4.6 %
Expected dividend yield
 % %
The closing price of our common stock was $229.72 and $223.96 on March 31, 2024 and March 31, 2023, respectively. The closing price of our common stock was $219.89 on December 31, 2023.
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Part I. Financial Information
A summary of the activity and status of STAP awards during the three-month period ended March 31, 2024 is presented below:
 Number of
Awards
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
(in Years)
Aggregate
Intrinsic
Value
(in millions)
Outstanding as of January 1, 2024443,058 $149.21   
Granted    
Exercised(75,764)103.15   
Forfeited    
Outstanding as of March 31, 2024367,294 $158.71 0.9$26.1 
Exercisable as of March 31, 2024367,294 $158.71 0.9$26.1 
Unvested as of March 31, 2024— $— — $— 
Share-based compensation expense (benefit) recognized in connection with STAP awards is as follows (in millions):
 Three Months Ended
March 31,
 20242023
Cost of sales$0.2 $(1.4)
Research and development0.5 (3.7)
Selling, general, and administrative3.2 (24.9)
Share-based compensation expense (benefit) before taxes3.9 (30.0)
Related income tax (benefit) expense(0.8)5.2 
Share-based compensation expense (benefit), net of taxes$3.1 $(24.8)
Cash paid to settle STAP awards exercised during the three-month periods ended March 31, 2024 and March 31, 2023 was $10.1 million and $4.6 million, respectively. 
ESPP
The ESPP provides eligible employees with the right to purchase shares of our common stock at a discount through elective accumulated payroll deductions at the end of each offering period. Eligible employees may contribute up to 15 percent of their base salary, subject to certain annual limitations as defined in the ESPP. The purchase price of the shares is equal to the lower of 85 percent of the closing price of our common stock on either the first or last trading day of a given offering period. In addition, the ESPP provides that no eligible employee may purchase more than 4,000 shares during any offering period. The ESPP expires in June 2032 and limits the aggregate number of shares that can be issued under the ESPP to 3.0 million.
9. Stockholders’ Equity
Earnings Per Common Share
Basic earnings per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period, adjusted for the potential dilutive effect of our outstanding stock options, outstanding RSUs, and shares issuable under the ESPP, as if the RSUs were vested, the stock options were exercised, and the shares expected to be issued under the ESPP at the end of the current offering period were issued.
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Part I. Financial Information
The components of basic and diluted earnings per common share comprised the following (in millions, except per share amounts):
 Three Months Ended
March 31,
 20242023
Numerator:
Net income$306.6 $240.9 
Denominator:
Weighted average outstanding shares — basic47.0 46.3 
Effect of dilutive securities(1):
Stock options, RSUs, and ESPP(2)
2.7 3.3 
Weighted average shares — diluted(2)
49.7 49.6 
Net income per common share:
Basic$6.52 $5.20 
Diluted$6.17 $4.86 
 
Stock options and RSUs excluded from calculation(2)
0.7 0.1 
(1)Calculated using the treasury stock method.
(2)The common shares underlying certain stock options and RSUs have been excluded from the computation of diluted earnings per share because their impact would be anti-dilutive.
Share Repurchase
In March 2024, our Board of Directors approved a share repurchase program authorizing up to $1.0 billion in aggregate repurchases of our common stock. Pursuant to this authorization, we entered into an accelerated share repurchase agreement (the ASR agreement) with Citibank, N.A. (Citi) on March 25, 2024, to repurchase approximately $1.0 billion of our common stock. Under the ASR agreement, we made an aggregate upfront payment of $1.0 billion to Citi and received an aggregate initial delivery of 3,275,199 shares of our common stock on March 27, 2024, representing approximately 80 percent of the total shares that would be repurchased under the ASR agreement measured based on the closing price of our common stock on March 25, 2024. The final number of shares that we will ultimately repurchase pursuant to the ASR agreement will be based on the average of the daily volume-weighted average price per share of our common stock during the repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreement. At the final settlement of the ASR agreement, we may be entitled to receive additional shares of common stock, or, under certain limited circumstances, be required to make a cash payment to Citi or, if we so elect, deliver shares of common stock to Citi. The final settlement of the transactions under the ASR agreement is expected to occur in the second quarter of 2024 with respect to $300 million of the transactions and in the third quarter of 2024 with respect to $700 million of the transactions.
The ASR agreement will be accounted for in two separate transactions. The initial repurchase of our common stock was accounted for as a reduction to stockholders’ equity in the consolidated balance sheets and treated as a reduction of the outstanding shares used to calculate the weighted average common stock outstanding for basic and diluted earnings per common share. The final settlement of the transactions under the ASR agreement will be accounted for as an unsettled forward contract indexed to our common stock and we expect to conclude that equity classification, in accordance with ASC 815, Derivatives and Hedging, will be appropriate. During the first quarter of 2024, we recorded $6.9 million for an excise tax imposed under the Inflation Reduction Act as a result of our repurchase of shares under the ASR agreement.
10. Income Taxes
Our effective income tax rate (ETR) for the three months ended March 31, 2024 and 2023 was 23 percent and 17 percent, respectively. Our ETR for the three months ended March 31, 2024 increased compared to our ETR for the three months ended March 31, 2023 primarily due to decreased excess tax benefits from share-based compensation.
We record interest and penalties related to uncertain tax positions as a component of income tax expense. As of March 31, 2024 and December 31, 2023, our unrecognized tax benefits, including related interest, were approximately $28.9 million and $25.7 million, respectively. The total amount of unrecognized tax benefits relating to our tax positions is subject to change based on future events and it is reasonably possible that the balance could change significantly over the next 12 months. Given the uncertainty of future events, we are unable to reasonably estimate the range of possible adjustments to our unrecognized tax benefits.
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Part I. Financial Information
11. Segment Information
We operate as one operating segment with a focus on the development and commercialization of products to address the unmet needs of patients with chronic and life-threatening conditions. Our Chief Executive Officer, as our chief operating decision maker, manages and allocates resources to the operations of our company on a consolidated basis. This enables our Chief Executive Officer to assess our overall level of available resources and determine how best to deploy these resources across functions, therapeutic areas, and research and development projects in line with our long-term company-wide strategic goals.
Total revenues, cost of sales, and gross profit (loss) for each of our commercial products and other were as follows (in millions):
Three Months Ended March 31,
2024
Tyvaso DPI(1)
Nebulized Tyvaso(1)
Remodulin(2)
OrenitramUnituxinAdcircaOtherTotal
Total revenues$227.5 $145.0 $128.0 $106.2 $58.4 $6.4 $6.2 $677.7 
Cost of sales33.3 8.9 7.9 9.2 3.6 2.6 7.4 72.9 
Gross profit (loss)$194.2 $136.1 $120.1 $97.0 $54.8 $3.8 $(1.2)$604.8 
2023
Total revenues$118.7 $119.7 $121.4 $88.2 $49.1 $7.3 $2.5 $506.9 
Cost of sales20.7 6.2 6.9 7.6 4.7 3.1 3.1 52.3 
Gross profit (loss)
$98.0 $113.5 $114.5 $80.6 $44.4 $4.2 $(0.6)$454.6 
(1) Total revenues and cost of sales include both the drug product and the respective inhalation device.
(2) Total revenues and cost of sales include sales of infusion devices, including the Remunity Pump.
Geographic revenues are determined based on the country in which our customers (distributors) are located. Total revenues from external customers in the United States and rest-of-world (ROW) for each of our commercial products were as follows (in millions):
Three Months Ended March 31,
20242023
U.S.ROWTotalU.S.ROWTotal
Net product sales:
Tyvaso DPI(1)
$227.5 $ $227.5 $118.7 $ $118.7 
Nebulized Tyvaso(1)
133.7 11.3 145.0 115.7 4.0 119.7 
Total Tyvaso
361.2 11.3 372.5 234.4 4.0 238.4 
Remodulin(2)
108.3 19.7 128.0 93.2 28.2 121.4 
Orenitram
106.2  106.2 88.2  88.2 
Unituxin
53.4 5.0 58.4 44.3 4.8 49.1 
Adcirca
6.4  6.4 7.3  7.3 
Other6.0 0.2 6.2 2.3 0.2 2.5 
Total revenues
$641.5 $36.2 $677.7 $469.7 $37.2 $506.9 
(1) Net product sales include both the drug product and the respective inhalation device.
(2) Net product sales include sales of infusion devices, including the Remunity Pump.
We recorded revenue from two distributors in the United States that exceeded ten percent of total revenues. Revenue from these two distributors as a percentage of total revenues is as follows:
Three Months Ended March 31, 20242023
Distributor 151 %50 %
Distributor 234 %33 %

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Part I. Financial Information
12. Litigation
Sandoz Litigation
In April 2019, Sandoz Inc. (Sandoz) and its marketing partner RareGen, LLC (now known as Liquidia PAH, LLC, a subsidiary of Liquidia Corporation) (RareGen), filed a complaint in the U.S. District Court for the District of New Jersey against us and Smiths Medical ASD, Inc. (Smiths Medical), alleging that we and Smiths Medical engaged in anticompetitive conduct in connection with the plaintiffs’ efforts to launch their generic version of Remodulin. In particular, the complaint alleged that we and Smiths Medical unlawfully impeded competition by entering into an agreement to produce CADD-MS®3 (MS-3) cartridges specifically for the administration of subcutaneous Remodulin for our patients, without making these cartridges available for the administration of Sandoz’s generic treprostinil injection. In March 2020, the plaintiffs filed an amended complaint to add a count alleging that we breached our earlier patent settlement agreement with Sandoz by refusing to grant Sandoz access to cartridges purchased for our patients.
Smiths Medical was dismissed from the case in November 2020, based on a settlement resolving the disputes between the plaintiffs and Smiths Medical. As part of this settlement, Smiths Medical paid the plaintiffs $4.25 million, disclosed and made available to the plaintiffs certain specifications and other information related to the MS-3 cartridges, and granted to the plaintiffs a non-exclusive, royalty-free license in the United States to Smiths Medical’s patents and copyrights associated with the MS-3 cartridges and certain other information related to the MS-3 pumps and cartridges.
In March 2022, the court granted our motion for summary judgment with respect to all claims brought by the plaintiffs except the breach of contract claim. As a result, all antitrust claims, all claims under state competition laws, and the common law tortious interference claim were resolved in our favor. These were the only claims in the case that gave rise to any potential for trebling of damages, punitive damages, and/or the award of attorneys’ fees. The court also denied the plaintiffs’ request for injunctive relief.
The court granted Sandoz’s motion for summary judgment with respect to Sandoz’s breach of contract claim. The issue of what, if any, damages Sandoz is entitled to based on the contract claim will proceed to trial. Trial commenced on April 29, 2024, and is limited to determining the amount of damages under the breach of contract claim. RareGen has no claim for breach of contract and, as a result, has no remaining claims in the litigation. The parties will have the right to appeal the summary judgment decisions and the result of the trial, upon entry of final judgment following the trial.
We intend to continue to vigorously defend ourselves against the claims made in this litigation. Among other things, we believe that the plaintiffs, who were on notice that Smiths Medical would discontinue the MS-3 system, failed to fulfill their duty to properly mitigate their exposure as a result of such discontinuation, and any damages they incurred are the result of their own failure to properly plan their own product launch. However, due to the uncertainty inherent in any litigation, we cannot guarantee that an outcome adverse to us will not result. Any litigation of this nature could involve substantial cost, and an adverse outcome could result in substantial monetary damages. We currently are not able to reasonably estimate a range of potential losses due to the number of variables that may affect the outcome of the damages trial and any potential appeals, including potential damages amounts sought, the strength of our defenses, the variety of potential legal and factual determinations yet to be made by the court, the rulings that may be subject to appeal, and the inherent unpredictability of any outcome associated with these issues.
Litigation with Liquidia Technologies, Inc.
In March 2020, Liquidia Technologies, Inc. (Liquidia) filed two petitions for inter partes review (IPR) with the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO). In its petitions, Liquidia sought to invalidate U.S. Patent Nos. 9,604,901 (the ’901 patent) and 9,593,066 (the ’066 patent), both of which relate to a method of making treprostinil, the active pharmaceutical ingredient in Tyvaso DPI, nebulized Tyvaso, Remodulin, and Orenitram. These patents were issued in March 2017 and are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations publication, also known as the Orange Book, for Tyvaso DPI, nebulized Tyvaso, Remodulin, and Orenitram. In October 2020, the PTAB declined to institute IPR proceedings on the ’066 patent because Liquidia failed to establish a reasonable likelihood of prevailing on any claim relating to the ’066 patent. The PTAB instituted IPR proceedings on the ’901 patent in October 2020 and issued a final written decision in October 2021. The final written decision found that Liquidia had proven the invalidity of seven of the claims of the ‘901 patent but failed to prove the invalidity of two other claims. The parties have each appealed portions of the final written decision adverse to them, and those appeals are pending. No cancellation of claims takes effect until resolution of any appeals.
In January 2020, Liquidia submitted an NDA to the FDA for approval of Yutrepia™, a dry powder inhalation formulation of treprostinil, to treat pulmonary arterial hypertension (PAH). This NDA was submitted under the 505(b)(2) regulatory pathway with nebulized Tyvaso as the reference listed drug. In November 2021, the FDA granted tentative approval of Liquidia’s NDA.
In April 2020, we received a Paragraph IV Certification Notice Letter (Notice Letter) from Liquidia, stating that it intends to market Yutrepia before the expiration of all patents listed in the Orange Book for nebulized Tyvaso. The Notice Letter stated
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Part I. Financial Information
that Liquidia’s NDA for Yutrepia contains a Paragraph IV certification alleging that these patents are not valid, not enforceable, and/or will not be infringed by the commercial manufacture, use, or sale of Yutrepia.
In June 2020, we filed a lawsuit in the U.S. District Court for the District of Delaware against Liquidia for infringement of the ’901 patent and the ’066 patent, both of which expire in December 2028. We filed our lawsuit within 45 days of receipt of notice from Liquidia of its NDA filing. As a result, under the Hatch-Waxman Act, the FDA was precluded by regulation from approving Liquidia’s NDA for up to 30 months or until the resolution of the litigation, whichever occurs first. In July 2020, Liquidia filed an answer to our complaint that included counterclaims alleging, among other things, that the patents at issue in the litigation are not valid and will not be infringed by the commercial manufacture, use, or sale of Yutrepia. 
In July 2020, the USPTO issued a new patent to us related to Tyvaso. The new patent, U.S. Patent No. 10,716,793 (the ’793 patent), expires in May 2027, and is listed in the Orange Book for Tyvaso DPI and nebulized Tyvaso. In July 2020, we filed an amended complaint against Liquidia to include a claim for infringement of the ’793 patent. The ’793 patent relates to a method of administering treprostinil via inhalation and includes claims covering the dosing regimen used to administer Tyvaso DPI and nebulized Tyvaso. In December 2021, we filed a stipulation that the ’901 patent would not be infringed by Liquidia based on the court’s claim construction ruling.
Trial took place during March 2022, and the court issued its decision in August 2022. The court found that Liquidia’s product would infringe the ’793 patent and that Liquidia had not proved that any claim of that patent is invalid. The court also determined that Liquidia had proved certain claims of the ’066 patent were invalid and that we had not proved Liquidia’s infringement of another ’066 patent claim. Accordingly, the court issued a final judgment that bars the FDA from approving Yutrepia until expiration of the ’793 patent in May 2027. The parties appealed portions of the decision adverse to each of them, and on July 24, 2023, the appellate court issued its decision affirming the district court decision in its entirety. The court subsequently denied the parties’ requests for rehearing, so the appellate court decision is now final. On January 23, 2024, Liquidia filed a petition for writ of certiorari seeking review by the U.S. Supreme Court, and that petition was denied on February 20, 2024. Liquidia also filed a motion with the district court seeking to modify the portion of the judgment that bars the FDA from finally approving Yutrepia until the ’793 patent expires. On March 28, 2024, the court granted the motion to permit the FDA to grant final approval for Yutrepia. We filed a motion in the district court for a stay of that decision pending appeal, and the court denied that motion. On April 18, 2024, we filed a motion in the appellate court for a stay of that decision, and the appellate court has not yet ruled on that motion.
In January 2021, Liquidia filed another petition for IPR with the PTAB. In its petition, Liquidia sought to invalidate the ’793 patent. In July 2022, the PTAB issued a final written decision finding all claims of the ’793 patent to be unpatentable. We filed a request for rehearing and for precedential opinion panel review. On October 26, 2022, the PTAB denied our request for precedential opinion panel review, but “determine[d] that the Board’s Final Written Decision did not address adequately whether the [references relied upon as the basis for canceling claims] qualify as prior art.” Thus, the PTAB directed the original panel “in its consideration on rehearing, to clearly identify whether the … references qualify as prior art.” The original panel issued its decision on our request for rehearing in February 2023. The original panel agreed that it had overlooked our arguments and that its rationale for determining that certain references are prior art was erroneous. Nonetheless, the original panel determined the references qualify as prior art under a new rationale. Thus, the original panel maintained that the claims of this patent are not valid. We appealed this decision, and the appellate court affirmed the PTAB decision. On January 19, 2024, we filed a petition for rehearing, and the court denied that motion on March 15, 2024. We now have the opportunity to seek review by the U.S. Supreme Court. All claims of this patent remain valid until any IPR appeals are exhausted.
On September 5, 2023, we filed a lawsuit in the U.S. District Court for the District of Delaware against Liquidia for infringement of the ’793 patent based on Liquidia’s efforts to obtain FDA approval for a PH-ILD indication for Yutrepia. On November 30, 2023, we filed an amended complaint to assert a new patent: U.S. Patent No. 11,826,327 (the ’327 patent). The claims of the ’327 patent generally cover improving exercise capacity in patients suffering from PH-ILD by inhaling treprostinil at specific dosages. On January 22, 2024, we filed a stipulation withdrawing the ’793 patent from the case. As a result, the only patent at issue in the case is the ’327 patent. Liquidia answered the complaint asserting a variety of defenses. The case is pending, and the court has not yet set a schedule for the case. As noted below under FDA Litigation Regarding Yutrepia, we believe this lawsuit could entitle us to a 30-month stay, preventing the FDA from approving Yutrepia for the treatment of PH-ILD until the resolution of this lawsuit, or the expiration of the 30-month period following receipt of a Paragraph IV notice, whichever occurs first. Because the issue of whether a 30-month stay is appropriate remains unresolved, we filed a motion for preliminary injunction in the patent case on February 26, 2024. Briefing is complete, and the court held a hearing on April 23, 2024.
In June 2021, we filed a motion in the patent case in the U.S. District Court for the District of Delaware to file an amended complaint adding trade secret misappropriation claims against Liquidia and a former Liquidia employee, Dr. Robert Roscigno. The court denied the motion based on a finding that adding the additional claims would impact the case schedule. Thus, we filed those claims as a separate case against Liquidia and Robert Roscigno in North Carolina state court. Fact discovery is complete, and expert discovery is underway.
We plan to continue to vigorously enforce our intellectual property rights related to Tyvaso DPI and nebulized Tyvaso.
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Part I. Financial Information
FDA Litigation Regarding Yutrepia
On February 20, 2024, we filed an action against the FDA in the U.S. District Court for the District of Columbia regarding the FDA’s review of Liquidia’s efforts to obtain a PH-ILD indication for its Yutrepia product. Liquidia submitted an amendment to its pending Yutrepia NDA to pursue approval for a PH-ILD indication. The suit alleges that FDA rules, precedents, and procedures require that such a new indication be pursued in a new NDA rather than as an amendment to a pending NDA. Thus, we asked the FDA to require Liquidia to submit a new NDA if it wishes to further pursue approval for a PH-ILD indication.
On March 4, 2024, we filed a motion for preliminary injunction and temporary restraining order seeking to prevent the FDA from approving the PH-ILD indication for Yutrepia by amendment. The court denied that motion on March 29, 2024, following a hearing on the motion. The FDA represented at the hearing that it continues to assess the situation, so in the court’s view, there is no final agency action to review. The court requires the FDA to provide notice 72 hours before it acts on Liquidia’s amendment, so the parties can seek meaningful review when a decision is imminent.
If Liquidia is required to submit a new NDA, we believe that we would be entitled to a 30-month stay of any PH-ILD approval based on our assertion of the ’327 patent against Liquidia as discussed under Litigation with Liquidia Technologies, Inc. That is, Liquidia could not obtain final approval for a PH-ILD indication until the earlier of the expiration of the 30-month stay or a district court decision in Liquidia’s favor.
MSP Recovery Litigation
In July 2020, MSP Recovery Claims, Series LLC; MSPA Claims 1, LLC; and Series PMPI, a designated series of MAO-MSO Recovery II, LLC, filed a “Class Action Complaint” against Caring Voices Coalition, Inc. (CVC) and us in the U.S. District Court for the District of Massachusetts. The complaint alleged that we violated the federal Racketeer Influenced and Corrupt Organizations (RICO) Act and various state laws by coordinating with CVC when making donations to a PAH fund so that those donations would go towards copayment obligations for Medicare patients taking drugs manufactured and marketed by us. The plaintiffs claim to have received assignments from various Medicare Advantage health plans and other insurance entities that allow them to bring this lawsuit on behalf of those entities to recover allegedly inflated amounts they paid for our drugs. In April 2021, the court granted our motion to transfer the case to the U.S. District Court for the Southern District of Florida.
In October 2021, we filed a motion for judgment on the pleadings, seeking to dismiss the plaintiffs’ claims in this litigation. On that same day, the plaintiffs filed an amended complaint that includes state antitrust claims based on alleged facts similar to those raised by Sandoz and RareGen in the matter described above. The amended complaint added MSP Recovery Claims Series 44, LLC as a plaintiff and Smiths Medical and CVC as defendants. As a result of the amended complaint, the court ruled that our motion for judgment on the pleadings was moot. In December 2021, we filed a motion to dismiss all of the plaintiffs’ claims in the amended complaint, including the new antitrust claims. Smiths Medical also filed a motion to dismiss the plaintiffs’ claims against Smiths Medical. In September 2022, the court dismissed all of the plaintiffs’ claims against us and Smiths Medical without prejudice.
In October 2022, the plaintiffs filed a motion for leave to amend the complaint and attached a proposed second amended complaint. In addition to the claims previously asserted, the proposed second amended complaint added federal antitrust claims and consumer protection claims under other states’ laws. The second amended complaint also named Accredo Health Group, CVS Health Corporation, Express Scripts, Inc., and Express Scripts Holding Company (collectively, the Specialty Pharmacies), and the Adira Foundation as additional defendants. In October 2022, the court granted the plaintiffs’ motion for leave to amend, and the plaintiffs filed the second amended complaint. In March 2023, we filed our motion to dismiss the second amended complaint. The Specialty Pharmacies filed their own motion to dismiss, as did Smiths Medical. On March 22, 2024, the magistrate judge recommended dismissal of the plaintiffs’ complaint against all defendants in its entirety with prejudice, and for administrative purposes, issued an order dismissing the complaint. On April 12, 2024, the plaintiffs filed an objection to the magistrate judge’s recommendation. If the district court judge adopts the magistrate judge’s recommendation and dismisses the case, the plaintiffs will have the right to appeal.
We intend to continue to vigorously defend ourselves against the claims made in this lawsuit.
Litigation with Humana and United Healthcare
Humana Inc. (Humana) and United Healthcare Services, Inc. (United) filed separate lawsuits against us in the U.S. District Court for the District of Maryland in December 2022 and November 2022, respectively. Each of these lawsuits includes allegations similar to those in the MSP Recovery matter discussed above concerning our charitable contributions to CVC. In particular, these lawsuits allege that our donations to CVC violated RICO and various state laws. We filed motions to dismiss both of these lawsuits in March 2023. On March 25, 2024, the court dismissed both the Humana and United complaints in their entirety. In both cases, the RICO claims were dismissed with prejudice. In the Humana case, the state law claims were
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Part I. Financial Information
dismissed without prejudice, and in the United case, some of the state law claims were dismissed with prejudice, while others were dismissed without prejudice. To date, neither Humana nor United has appealed these decisions.
On April 24, 2024, Humana and United each filed lawsuits against us in the Circuit Court for Montgomery County, Maryland. These lawsuits include allegations similar to those in Humana and United’s lawsuits discussed above concerning charitable contributions. Humana and United allege that our donations to CVC give rise to claims that include common law causes of action, violations of state consumer protection statutes, and vio