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United Therapeutics sharply narrows loss


United Therapeutics Corp. said yesterday that its fourth-quarter loss narrowed sharply as revenue more than doubled and research expenses fell.

The Silver Spring pharmaceutical company also said in a conference call with analysts and investors that it expects the Food and Drug Administration to approve its first drug, Remodulin, in about 10 weeks.

The company said it lost $7.4 million, or 37 cents per share, on revenue of $1.6 million from non-pharmaceutical sales, in the quarter that ended Dec. 31. That compares with a loss of $31.9 million, or $1.57 per share, on revenue of $789,667 in the 2000 fourth quarter.

Research and development expenses fell to $6.5 million from $27.3 million as certain clinical trials wound down.

The company had $172.9 million in cash and cash equivalents at year's end. It recently has been drawing down those reserves at a rate of about $10 million to $15 million per quarter. The rate at which cash reserves are being spent is expected to decrease after sales of Remodulin, for pulmonary hypertension, begin, said Chief Executive Officer Martine A. Rothblatt.

The company has not projected revenue or earnings from the drug, but noted that up to 3,000 U.S. patients take a competing drug, Flolan, which sells for about $50,000 per patient per year. United Therapeutics hopes to convert at least some of those patients to Remodulin. Analysts have said they expect Remodulin to be marketed for about the same price.

United Therapeutics is negotiating with the FDA over the design of a clinical trial to further test Remodulin after it's on the market, as well as over what the drug's label will say, company President Roger Jeffs told investors. "Once we get good agreement ... ," he said, "the FDA will act in terms of an approval letter."

Pulmonary arterial hypertension, or high blood pressure in the arteries between the heart and lungs, is a potentially fatal disease that afflicts up to 50,000 people in North America and Europe, Offutt Securities analyst Vandana K. Bapna said. Patients with the disease have severe fatigue and shortness of breath, making it difficult for them to complete even simple household chores.

Remodulin would be the third treatment on the market for the disease. The others are Glaxo- SmithKline's Flolan, on the market since 1994, and Actelion Pharmaceuticals' recently approved pill Tracleer.

Bapna said she thought Remodulin was well-positioned to take market share away from Flolan and would not directly compete with Tracleer. Flolan must be kept refrigerated, worn in what amounts to a backpack and continuously infused via a catheter directly into the heart. Remodulin is injected from a small cassette via a needle under the skin.

Because Remodulin lasts longer in the body, patients also can take the needle out for short periods - something Bapna said Flolan patients can't do.

Tracleer is more convenient but has potential side effects such as liver toxicity, Bapna said. And Tracleer's FDA-approved label does not allow patients already on Flolan or Remodulin to be switched to Tracleer without clinical trials substantiating the merits of the switch, Bapna wrote in a recent report.

Bapna said she doesn't expect United Therapeutics to be profitable until at least the second half of 2003.

United Therapeutics' stock gained 30 cents yesterday to close at $11.66.

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