United Therapeutics Corp., one of the region's few profitable biotechnology firms, yesterday reported quarterly profit that far exceeded analysts' expectations, sending the company's stock soaring 26 percent to a five-year high.
The Silver Spring company, which produces a treatment for the rare condition of dangerously high blood pressure in arteries between the heart and lungs, earned $12.2 million (49 cents per share) on $30.1 million in revenue. Analysts had predicted earnings of 33 cents per share. The profit was a sharp increase from the comparable period last year, when the company earned $4.1 million (18 cents) on $18.3 million in revenue in its first profitable quarter ever.
"They had an absolutely blowout second quarter," said Jennifer Chao, an analyst with Deutsche Bank.
Chao said the company's strong results suggest that it is catching up quickly with its chief competitor in treating pulmonary arterial hypertension, British drug giant GlaxoSmithKline PLC.
One reason for the surge in sales, she said, is that United Therapeutics' drug, Remodulin, is easier to administer. While it must be constantly pumped into the body, it doesn't have to be frozen and carried in a special backpack, as Glaxo's drug Flolan does.
Also, Remodulin stays in the body for more than four hours, compared with Flolan's nearly three minutes. That means patients on Glaxo's product must respond quickly to any problems with the drug's pump.
And Remodulin, while expensive at about $100,000 a year per patient, costs about $6,000 less than Flolan.
Yesterday's profit was another in a series of welcome developments for United Therapeutics.
In February, the company said that it had been granted a five-year patent extension in the United States for Remodulin. The patent on Remodulin will now expire in 2014, rather than 2009. A month later, Remodulin was approved for sale in France, paving the way for approval throughout Europe.
United Therapeutics is working on an inhaled version of Remodulin, which could be approved in 2007, followed by what Chao called the "holy grail," tablet form.
United Therapeutics shares closed yesterday at $68.27, up $14.22.