Core Viewpoint - Merck (MRK) reported mixed second-quarter results, beating earnings estimates while meeting sales expectations, and narrowed its sales guidance for 2025 despite a less negative impact from currency fluctuations [1][2]. Financial Guidance - Merck now expects revenues to be between $64.3 billion and $65.3 billion, down from the previous range of $64.1 billion to $65.6 billion, reflecting a revised negative impact from foreign exchange of approximately 0.5% [2][10]. - Adjusted EPS is projected to be between $8.87 and $8.97, an increase from the prior range of $8.82 to $8.97, with a revised negative impact of foreign exchange estimated at around 15 cents per share [2][10]. Acquisition Plans - The guidance does not account for the upcoming acquisition of Verona Pharma for approximately $10 billion, expected to close in Q4 2025, which will add Ohtuvayre for chronic obstructive pulmonary disease treatment [3]. Growth Expectations - After a weak sales performance in the first half of 2025, Merck anticipates a return to growth in the second half, driven by oncology drugs like Keytruda, the Animal Health segment, and new products, although lower sales of Gardasil in China and Japan may offset some growth [4][6]. Key Product Performance - Keytruda generated $7.96 billion in sales in Q2 2025, a 9% year-over-year increase, accounting for about 50% of Merck's pharmaceutical sales [5][10]. - The Animal Health segment reported revenues of $1.65 billion, up 11% year-over-year, driven by increased demand for livestock products [5]. New Product Contributions - Winrevair, a new pulmonary arterial hypertension drug, achieved $336 million in sales, a 20% sequential increase, while Capvaxive, a new pneumococcal conjugate vaccine, posted sales of $129 million, up 20.1% [7]. - Both products are viewed as key revenue drivers for long-term growth, especially as Keytruda's exclusivity ends in 2028 [7]. Competitive Landscape - Winrevair is expected to face significant competition in the pulmonary arterial hypertension market from United Therapeutics and Johnson & Johnson, which have established products in this space [8][9][11]. Stock Performance and Valuation - Year-to-date, Merck's shares have declined by 18.8%, compared to an 8.2% decrease in the industry [12]. - Merck's shares trade at a forward price/earnings ratio of 8.64, lower than the industry average of 13.71 and its 5-year mean of 12.79, indicating attractive valuation [13]. Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings has increased from $8.88 to $8.92 per share, while the estimate for 2026 has decreased from $9.70 to $9.61 over the past 30 days [14].

Financial Data and Key Metrics Changes - United Therapeutics reported record total revenue of $799 million, reflecting a 12% growth over 2024, marking the twelfth consecutive quarter of double-digit year-over-year revenue growth [12][10] - The Tyvaso DPI device achieved record total revenue of $315 million, representing a 22% growth over 2024, with record patient shipments for both Tyvaso DPI and the total Tyvaso franchise [12][13] Business Line Data and Key Metrics Changes - The Tyvaso franchise continues to perform strongly, with double-digit revenue growth for nebulized Tyvaso, Orenitram, and Unituxin [14] - Orenitram achieved record total revenue and patient shipments during the quarter, while Remodulin remains a top five product in total patient shipments [14] Market Data and Key Metrics Changes - The company noted strong underlying dynamics with record levels of referrals and starts for Tyvaso DPI during the quarter [14] - The competitive landscape includes a new treprostinil dry powder inhaler launched by Liquidia, prompting United Therapeutics to address misinformation regarding Tyvaso DPI's dosing and tolerability [15][16] Company Strategy and Development Direction - United Therapeutics is focused on sustaining growth in its foundational business while progressing its innovative small molecule pipeline and organ alternative technologies [11] - The company has authorized a share repurchase of up to $1 billion, reflecting confidence in its commercial business and upcoming catalysts [10][71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future of the business, anticipating sustained growth driven by the foundational business and upcoming clinical catalysts [11] - The company is optimistic about the potential of its TETON studies in idiopathic pulmonary fibrosis and advanced outcome studies in pulmonary arterial hypertension, with results expected to start reporting in September [8][30] Other Important Information - The company has launched a new pipeline website to provide detailed information about its pipeline candidates [9] - United Therapeutics is on track to conduct the first transplant in its EXPAND U kidney clinical study shortly [8] Q&A Session Summary Question: Comments on Utopia uptake in PH and ILD - Management indicated that the launch is proceeding as expected, with strong shipments and orders in June, and July looks promising [53] Question: Variability in FVC decline in IPF studies - Management has implemented central reading of SEC results and training at site levels to standardize measurements and reduce variability [62] Question: Reading across from IPF subgroup data - Treprostinil has multiple mechanisms of action that may benefit IPF patients, and management believes it can work on fibrosis, leading to efficacy in IPF [70] Question: Share repurchase authorization - The Board authorized a share repurchase due to the strength of the commercial business and confidence in upcoming catalysts, viewing the stock as an excellent investment opportunity [72] Question: Clinically meaningful FVC results from TETON trial - The study is powered to detect an 80 milliliter change in FVC, and management anticipates a clinically meaningful effect greater than this threshold [98] Question: Background therapy use in TETON studies - There is a higher background therapy use in TETON studies compared to previous studies, which may mute the efficacy of the investigational drug, but management remains optimistic [104]

Financial Data and Key Metrics Changes - United Therapeutics reported record total revenue of $799 million, reflecting a 12% growth over 2024, marking the twelfth consecutive quarter of double-digit year-over-year revenue growth [13][7] - The company generated nearly $1.5 billion in annual operating cash flow, demonstrating exceptional operating efficiency [10] Business Line Data and Key Metrics Changes - The Tyvaso DPI franchise achieved record revenue of $315 million, representing a 22% growth over 2024, with record patient shipments [13][14] - Orenitram, Remodulin, and Unituxin also showed strong performance, contributing to the overall commercial portfolio [8][14] Market Data and Key Metrics Changes - The underlying dynamics for Tyvaso DPI remain strong, with record levels of referrals and starts during the quarter [14] - The company is preparing for the launch of its next-generation pump for Immunity Pro later this year, which is expected to enhance its market position [14] Company Strategy and Development Direction - The company is focused on its innovation wave, including TETON studies in idiopathic pulmonary fibrosis and advanced outcome studies in pulmonary arterial hypertension, with results expected to start reporting in September [8][12] - United Therapeutics has authorized a share repurchase of up to $1 billion, reflecting confidence in its commercial business and upcoming catalysts [11][71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth in its foundational business while progressing its innovative small molecule pipeline and organ alternative technologies [12] - The company believes the recent dislocation in its share price presents a compelling investment opportunity [11] Other Important Information - The company has filed an investigational new drug application for its EXTEND study evaluating U thymo kidney and expects to file for the EXPRESS study evaluating U Heart [9] - The TETON program consists of three studies, with TETON-two expected to report data in September and TETON-one in 2026 [25][30] Q&A Session Summary Question: Comments on Utopia uptake in PH and ILD - Management indicated that the launch is proceeding as expected, with strong shipments and orders in June, and July looks promising [52][53] Question: Variability in FVC decline in placebo arms of IPF studies - Management noted that they have implemented central reading of SEC results and training at site levels to reduce variability in FVC measures [60] Question: How to read across from IPF subgroup with pulmonary hypertension - Management explained that treprostinil has multiple mechanisms of action that may benefit IPF patients, and they believe it can work on fibrosis [68][69] Question: Circumstances for deploying share repurchase authorization - The Board authorized the share repurchase due to the strength of the commercial business and confidence in upcoming catalysts [71] Question: Clinically meaningful FVC results from TETON trial - Management stated that they anticipate a clinically meaningful effect greater than an 80 milliliter change in FVC [94] Question: Background therapy use in TETON studies - Management acknowledged that increased background therapy use could mute the efficacy of the investigational drug but expressed confidence in the upcoming results [101]

Financial Performance - Total revenue increased by 12% year-over-year to $799 million in 2Q 2025[21, 35] - Tyvaso DPI®/ Nebulized Tyvaso® revenue increased by 18% year-over-year to $470 million in 2Q 2025[21, 35] - Remodulin® revenue decreased by 9% year-over-year to $135 million in 2Q 2025[21, 35] - Orenitram® revenue increased by 16% year-over-year to $124 million in 2Q 2025[21, 35] - Unituxin® revenue increased by 13% year-over-year to $58 million in 2Q 2025[21, 35] - The company has $50 billion in cash, cash equivalents, & marketable investments[22] - The company has $14 billion TTM operating cash flow[22] Pipeline and Clinical Trials - Tyvaso DPI has been studied and published at higher doses than Yutrepia[39] - The company has a $10 billion repurchase authorization through March 31, 2026[31] - TETON 1 and TETON 2 studies for Idiopathic Pulmonary Fibrosis (IPF) are fully enrolled with 598 and 597 patients respectively[73, 74, 127] - The ADVANCE OUTCOMES study for Ralinepag in Pulmonary Arterial Hypertension (PAH) is fully enrolled with approximately 700 patients[134] TPIP Concerns - TPIP phase 2b patients on active drug discontinued therapy 10% vs zero on placebo[98]

Core Insights - Merck's Keytruda, a PD-L1 inhibitor, is the primary revenue source, contributing approximately 50% of pharmaceutical sales and driving top-line growth [1] - The company is heavily reliant on Keytruda, which is set to lose exclusivity in 2028, prompting strategies for long-term growth [2][3] - Merck is developing a subcutaneous formulation of Keytruda and diversifying its product lineup, particularly in non-oncology areas [3] Winrevair Development - Merck is optimistic about Winrevair, a newly launched pulmonary arterial hypertension (PAH) drug, to enhance revenue post-Keytruda exclusivity [4] - Winrevair received FDA approval in March 2024 based on the STELLAR study, with EU approval following in August 2024 [4] - The drug has shown significant efficacy in late-stage studies, leading to early stoppages due to overwhelming results [6][8] Regulatory Updates - The FDA has accepted Merck's supplemental biologics license application (sBLA) for Winrevair, with a decision expected on October 25, 2025 [7][10] - The ZENITH study demonstrated a meaningful reduction in morbidity or mortality events, supporting the drug's efficacy [6] Financial Performance - Winrevair generated $280 million in sales in Q1 2025, with expectations for increased revenue following a successful label update [11] - Merck's shares have decreased by 17.1% year-to-date, contrasting with a 0.6% decline in the industry [15] - The company's price/earnings ratio is currently 8.84, lower than the industry average of 15.05, indicating attractive valuation [16] Market Competition - Winrevair faces strong competition in the PAH market from United Therapeutics and Johnson & Johnson, which have established products and significant sales [11][12]

Core Insights - Merck's phase III HYPERION study for its PAH drug Winrevair (sotatercept) met its primary endpoint, demonstrating significant efficacy in reducing clinical worsening in newly diagnosed PAH patients [2][9]. Study Details - The HYPERION study compared Winrevair to placebo in adult patients with WHO Group 1 functional class II or III PAH at intermediate or high risk of disease progression, with the primary endpoint being time to clinical worsening (TTCW) [3][4]. - The study was stopped early due to overwhelming efficacy observed in the ZENITH study and other data, marking HYPERION as the third successful phase III study for Winrevair [5][9]. Financial Performance - Winrevair generated sales of $280 million in Q1 2025, reflecting a 40% sequential growth, supported by strong prescription trends in the U.S. [9][12]. - Merck is relying on Winrevair to enhance its revenue stream as its blockbuster drug Keytruda is expected to lose patent exclusivity in 2028 [13]. Competitive Landscape - Major competitors in the PAH market include United Therapeutics and Johnson & Johnson, with UTHR's PAH drugs generating significant sales in Q1 2025 [14][15]. - UTHR reported sales of $138.2 million for Remodulin, $120.7 million for Orenitram, and $466.3 million for Tyvaso, while J&J's PAH franchise generated $1.02 billion in revenue [15].

Core Insights - United Therapeutics reported $794.4 million in revenue for Q1 2025, a 17.2% increase year-over-year, with an EPS of $6.63 compared to $6.17 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $726.19 million by 9.39%, and the EPS also surpassed the consensus estimate of $6.29 by 5.41% [1] Revenue Breakdown - U.S. Revenues: $749.60 million, exceeding the average estimate of $695.02 million, representing a 16.9% year-over-year increase [4] - Rest-of-World Revenues: $44.80 million, surpassing the average estimate of $27.05 million, reflecting a 23.8% year-over-year increase [4] - Tyvaso Revenue in the U.S.: $441.10 million, compared to the average estimate of $405.30 million [4] - Remodulin Revenue in the U.S.: $120.20 million, exceeding the average estimate of $113.15 million [4] - Adcirca Revenue: $6 million, below the average estimate of $4.77 million, showing a 6.3% decrease year-over-year [4] - Orenitram Revenue: $120.70 million, surpassing the average estimate of $111.47 million, with a 13.7% year-over-year increase [4] - Tyvaso Revenue: $466.30 million, exceeding the average estimate of $413.63 million, with a remarkable 105% year-over-year increase [4] - Remodulin Revenue: $138.20 million, above the average estimate of $126.42 million, reflecting an 8% year-over-year increase [4] - Unituxin Revenue: $58.20 million, below the average estimate of $62.95 million, showing a 0.3% decrease year-over-year [4] - Tyvaso DPI Revenue: $302.50 million, exceeding the average estimate of $271.57 million [4] - Nebulized Tyvaso Revenue: $163.80 million, surpassing the average estimate of $137.44 million [4] - Other Products Revenue: $5 million, below the average estimate of $5.68 million, reflecting a 19.4% decrease year-over-year [4] Stock Performance - Shares of United Therapeutics have returned -2% over the past month, compared to the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - United Therapeutics reported record revenue of $794 million for Q1 2025, representing a 17% increase from Q1 2024, driven by strong performance across treprostinil products [11][12][50] - The company has achieved double-digit revenue growth for eleven consecutive quarters, indicating a solid foundation built by its key products [7][10] Business Line Data and Key Metrics Changes - The growth in revenue was primarily attributed to robust results from treprostinil products, including Tyvaso, Orenitram, Remodulin, and Unituxin, with consistent patient demand and increased prescriber activity [11][12] - Tyvaso DPI is expected to sustain long-term growth due to its convenience and the absence of payer incentives for alternative products [12][50] Market Data and Key Metrics Changes - The company continues to see growth in the number of treprostinil prescribers and the depth of prescribing, with a significant number of prescribers treating three or more patients [11] - Despite increased competition in the pulmonary arterial hypertension (PAH) market, the company believes there is still substantial room for growth, as only about 40% of PAH patients are currently on any prostacyclin therapy [50][51] Company Strategy and Development Direction - United Therapeutics aims to be a leader in biotech by delivering solutions for rare and underserved diseases, with a focus on expanding its product pipeline and maintaining financial discipline [7][9] - The company has five registration phase studies underway and plans to submit investigational new drug applications for new products within the next year [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue its record revenue performance, supported by a strong pipeline and ongoing clinical and regulatory events [7][10] - The management team highlighted the importance of maintaining a strong commercialization strategy and specialized sales teams to navigate the competitive landscape effectively [46][50] Other Important Information - The company has committed to returning $1 billion to shareholders through an accelerated share repurchase program and continues to evaluate capital allocation strategies [10][41] - United Therapeutics is actively investing in manufacturing facilities and corporate development to enhance its capabilities and product offerings [9][41] Q&A Session Summary Question: Will the Euthymo kidney program enroll the same target population as the 10 gene kidney program? - Management confirmed that the Euthymo kidney study will likely enroll a similar patient population and emphasized the learnings from previous trials to improve immunosuppression management [15][18] Question: Can you elaborate on Tyvaso's sales contribution from the Part D redesign? - Management indicated that while there is a modest benefit from the Part D redesign, the overall impact on sales this quarter was minimal due to obligations under the redesign [22][24] Question: What is the split of prescriber and patient demand driving Tyvaso DPI revenue growth? - The company reported a consistent split of about two-thirds new patient starts for Tyvaso DPI compared to nebulizer, with a price increase implemented at the beginning of the year [27][28] Question: How does the company view capital allocation in light of competition in the PAH space? - Management outlined a commitment to prioritize internal R&D and commercial initiatives while also exploring external corporate development opportunities [39][41] Question: What is the expected growth trajectory for the company given emerging competitors? - Management expressed confidence in achieving double-digit revenue growth despite increased competition, citing under-prescription of prostacyclins as an opportunity for expansion [50][51]

Financial Data and Key Metrics Changes - The company reported record revenue of $794 million for Q1 2025, representing a 17% growth compared to Q1 2024, driven by strong performance across treprostinil products [11][12] - The company has maintained double-digit revenue growth for eleven consecutive quarters [6] Business Line Data and Key Metrics Changes - Treprostinil products, including Tyvaso (both DPI and nebulizer), Orenitram, Remodulin, and Unituxin, showed robust results with consistent patient demand and increased prescriber depth [11][12] - Tyvaso DPI is expected to sustain long-term growth due to its convenience and unlimited dosing potential, with positive data from the TETON study potentially expanding its market [12] Market Data and Key Metrics Changes - The company continues to see growth in the number of treprostinil prescribers and the depth of prescribing within practices [11] - Approximately 40% of PAH patients are currently on prostacyclin therapies, indicating significant room for growth in the market [56] Company Strategy and Development Direction - The company aims to be a biotech leader focused on delivering solutions for patients with rare diseases, with a strong pipeline including five registration phase studies and several preclinical candidates [6][10] - The company has a disciplined capital allocation strategy, investing in manufacturing facilities and corporate development while returning $1 billion to shareholders through a share repurchase program [10][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth driven by existing products and upcoming clinical data, particularly from the TETON study and Ralinepag [56] - The competitive landscape in PAH is becoming increasingly dynamic, but the company believes it is well-positioned to maintain growth despite new entrants [56] Other Important Information - The company is preparing for the first transplant in its uKidney clinical study, with plans for investigational new drug applications for related studies within the next year [7][8] - The company has received positive feedback from the FDA regarding its Euthymo Kidney program, enhancing confidence in upcoming IND submissions [8] Q&A Session Summary Question: Will the Euthymo kidney program enroll the same target population as the 10 gene kidney program? - The company plans to enroll a similar patient population in the Euthymo kidney study and has learned valuable lessons from previous experiences that will inform the upcoming trial [15][16][18] Question: Can you elaborate on Tyvaso's contribution to sales from the Part D redesign? - The company noted a modest benefit from the Part D redesign in Q1, with some obligations due to the redesign offsetting gains [21][24] Question: What drove Tyvaso DPI revenue growth in Q1? - The growth was driven by a consistent split of prescriber and patient demand, with a price increase implemented at the beginning of the year [27][29] Question: How does the company consider deploying capital in the competitive PAH space? - The company prioritizes internal R&D and commercial initiatives, with ongoing efforts in pulmonary hypertension and interstitial lung disease [36][44] Question: What is the expected growth trajectory for the company given emerging competitors? - The company expects to continue double-digit revenue growth, emphasizing that there is still significant room for growth in the PAH market [56][58] Question: How many patient adds have there been for Tyvaso in recent quarters? - The company has moved away from disclosing specific patient adds but indicated that revenue trends align with underlying demand [61][63]

Safe Harbor Statement All statements in this presentation are made as of April 30, 2025. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events, or otherwise. Statements included in this presentation that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, statements related to our revenue growth expec ...