BTIG Initiates Coverage On United Therapeutics

BTIG initiated coverage on United Therapeutics Corporation UTHR Monday with a Neutral rating.

Analyst Hartaj Singh believed a “late-2017 patent cliff for 3 out of 4 of its top products that could reduce 2018 adjusted EPS to 2013 levels (~$6-7/share) is offset by the blue sky potential for Orenitram, currently a $500m peak product in our model, though it could achieve $1-2B in peak sales if the Phase 3 FREEDOM-EV trial is positive.”

Singh felt that “FREEDOM-EV has a potential analogue in Actelion’s positive trial with selexipag, its oral prostacyclin analogue. However, due to the compliance issues with keeping patients on high-dose Orenitram, we see a 30 percent probability for success (vs. ~55 percent for Phase 3 cardiovascular trials).”

“A key risk to our thesis is management opacity on the strategy for mitigating the late-2017 patent cliff, coupled with a fundamental misread on the patent cliff,” according to Singh.

United Therapeutics Corporation closed Monday at $126.83, down 0.70 percent.