United Therapeutics Corporation (NASDAQ: UTHR) today announced its financial results for the second quarter ended June 30, 2016.
"We are pleased with our second quarter 2016 financial results as total revenues exceeded $400 million and earnings beat $200 million," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "These financial results strengthen our ability to advance our late-stage pipeline programs in cardiopulmonary disease and oncology, as well as early-stage programs in multiple indications."
Revenues for the three months ended June 30, 2016 increased by $65.4 million, compared to the same period in 2015. The growth in revenues primarily resulted from the following: (1) a $23.0 million increase in Remodulin net product sales; (2) a $22.7 million increase in Adcirca net product sales; (3) a $17.8 million increase in Unituxin net product sales; and (4) a $12.1 million increase in Orenitram net product sales. These increases were partially offset by an $8.8 million decrease in Tyvaso net product sales.
Expenses
Cost of product sales. The table below summarizes cost of product sales by major categories (dollars in millions):
Research and development expense. The table below summarizes research and development expense by major category (dollars in millions):
Selling, general and administrative expense. The table below summarizes selling, general and administrative expense by major categories (dollars in millions):
General and administrative. The decrease in general and administrative expense of $8.8 million for the three months ended June 30, 2016, as compared to the same period in 2015, was primarily attributable to the timing of charitable donations to a non-affiliated, non-profit organization that provides financial assistance to patients with PAH. Donations to the same organization in 2016 totaled $37.0 million, all of which were paid during the first quarter of this year. Donations to the same organization in 2015 were $17.0 million, all of which were paid in the second quarter of 2015. The donations made during the first quarter of 2016 and the second quarter of 2015 represent the full extent of our funding to this organization for these two years. We expense these types of grant payments in the period they are paid.
Share-based compensation. The decrease in share-based compensation of $29.3 million for the three months ended June 30, 2016, as compared to the same period in 2015, was primarily attributable to a 5 percent decrease in the price of our common stock during the three months ended June 30, 2016, compared to a 1 percent increase in the price of our common stock during the same period in 2015. The decrease was partially offset by approximately $9.8 million of costs related to the accelerated vesting of stock options associated with the departure of a company officer during the second quarter of 2016.
Income Tax Expense
Our 2016 effective income tax rate decreased as compared to 2015 primarily due to a decrease in non-deductible share-based compensation, which was driven largely by a decrease in our stock price during 2016.
Share Repurchases
In the second quarter of 2016, we repurchased approximately 1.2 million shares of our common stock at an aggregate cost of $136.5 million. These purchases were made pursuant to our $500 million stock repurchase program, which is effective during calendar year 2016, and $240.3 million of that amount remained available for additional share repurchases at June 30, 2016.
Non-GAAP Earnings
Non-GAAP earnings is defined as net income, adjusted for: (1) interest expense; (2) license fees; (3) depreciation and amortization; (4) impairment charges; (5) share-based compensation expense (benefit), net (including expenses relating to stock options, share tracking awards, restricted stock units and our employee stock purchase plan); and (6) tax impact on non-GAAP earnings adjustments.
About United Therapeutics
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 diseases.
