United Therapeutics: Tyvaso DPI Approval and Label is ‘Best Case Scenario’, Brings ‘Greater Pipeline Value’ and ‘Slower Market Share Erosion’

This post was originally published on this site


Shares of United Therapeutics (NASDAQ:UTHR) quickly climbed the list of Monday, May 23rd’s top gainers and most active stocks, finishing the day nearly 12% higher, following midday news the company’s Tyvaso DPI got an approval nod from the FDA.

The formal approval was confirmed by the United Therapeutics in this morning’s press release, and concluded UTHR’s nearly 9-month long battle – Tyvaso had previously gotten a Complete Response Letter (CRL) on October 18, 2021, followed by a 3-month extension to the new PDUFA date – to push its pulmonary hypertension drug candidate through the regulatory finish line.

In what Cowen analyst Joseph Thome sees as a clear win for the company, the FDA denied arguments of a citizen’s petition – viewed by many as the main obstacle and reason for the October’s CRL – suggesting “excipient FDKP poses a potential risk of acute bronchospasm in patients with chronic lung disease”, and approved Tyvaso with a clean label for both pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD).

Given the initial CRL, and yet another decision delay that followed, in Cowen’s view, “some investors were nervous the therapy would only be approved for PAH, would hold a black box, or would receive a CRL.” The analyst is thus highly encouraged by the FDA decision and views “the approval and label as a best case scenario.” Cowen models Tyvaso/Tyvaso DPI revenues of $1.9B in 2025 across PAH and PH-ILD and reiterates an “Outperform” rating on UTHR with $250 price target.

Credit Suisse analyst Tiago Fauth also maintains a positive tone over today’s announcement, as he believes “today’s favorable approval in both indications establishes the necessary foundation to support the franchise’s long-term tail value, and as well as its future optionality in additional indications.”

Fauth now sees “slower long-term market share erosion” and assigns “greater pipeline value to reflect potential label expansion opportunities”, as the analyst hikes his price target to $247 from $219, and reiterates an “Outperform” rating on the stock.

Shares of UTHR closed at $210.14 yesterday, merely $8 shy of the stock’s all-time high of $218.38, recorded in late 2021.