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United Therapeutics Corp. (UTHR) shares fell as much as 10% Monday as regulatory approval for an inhaled version of its hypertension drug appears delayed to allow for more testing of the product's instructions.

The Food and Drug Administration was expected to make an April 30 decision on Tyvaso, which is an inhaled version of Remodulin, a $100,000-a-year drug that is administered either as a continuous intravenous infusion or under-the-skin infusion using a delivery pump and a catheter.

Regulators don't seem to be questioning the drug's effectiveness or safety, and the effects of the setback may only be minimal. The Silver Spring, Md., company hadn't expected a "material impact" in 2009 from the drug's approval and said Monday that it continues to expect a revenue boost in 2010 from its launch.

United Therapeutics shares, which fell as low as $59.35, recently dropped 7.8% to $61.14. Before Monday, the stock was up 6% this year, as compared to the Amex Biotechnology Index's loss of 6.8% and the S&P 500 decline of 16%.

The regulatory delay stems from concerns about the instructions that come with the drug. The agency wants testing to show that "naive" users will be able to properly operate the delivery device.

The company said it will conduct a study with 20 to 30 volunteers and provide that data to the agency within about a month.

Wall Street analysts highlighted that the delay should be resolved before the end of the year and allow for approval by that time. Notably, regulators haven't asked for additional clinical trials on safety or effectiveness that are both expensive and time consuming.

In a conference call, Chief Executive Martine Rothblatt expressed disappointment with the setback and downplayed its impact, saying that such delays are "rather common" and "rather brief."

Rothblatt put the revenue potential of the drug at "in excess of $300 million a year" but refused to provide additional information on the regulatory issues.

Remodulin, United Therapeutics' only product, has provided steady topline growth of 35% to 40% a year since the 2002 launch, with total revenue of $281 million in 2008. The company hopes to build on that success by launching the inhaled formulation.

The drug treats pulmonary arterial hypertension, which is continuous high blood pressure in the pulmonary arteries that makes patients susceptible to heart failure.

Cowen & Co. has projected that the inhaled version will drive sales of the franchise to more than $500 million by 2012.

An oral version failed a late-stage trial in November, but the company continues to develop an oral version but in smaller dosages than those used in the previous trial. Furthermore, United Therapeutic has agreed to sell Eli Lilly & Co's (LLY) erectile-dysfunction drug Cialis to treat pulmonary arterial hypertension, which has an FDA decision date in late May.

Meanwhile, the competition in treating the relatively rare, and often fatal, condition continues to be fierce.

Gilead Sciences Inc. (GILD) and Switzerland's Swiss drug maker Actelion Ltd. (ATLN.VX) both sell pills to treat the condition and Actelion also has an inhaled drug that is administered more frequently than Tyvaso. Pfizer Inc. (PFE) sells its own erectile-dysfunction drug, Viagra, under the brand Revatio to treat the condition.

-Thomas Gryta; Dow Jones Newswires; 201-938-2053; thomas.gryta@dowjones.com