United Therapeutics stock holds Buy rating at TD Cowen on strong IPF data

Investing.com - TD Cowen has reiterated its Buy rating and $500.00 price target on United Therapeutics Corp. (NASDAQ:UTHR), currently trading at $432.66 and approaching its 52-week high of $442.01, following the company’s presentation of full Phase III Tyvaso TETON-2 data in idiopathic pulmonary fibrosis (IPF) patients at the European Respiratory Society conference. According to InvestingPro data, UTHR maintains excellent financial health with an overall score of 3.93 out of 5.

The presentation generated significant interest, requiring overflow seating, which TD Cowen believes indicates strong key opinion leader excitement for the treatment in a condition with high unmet need. The data addressed key investor questions regarding Tyvaso’s impact across background treatments, placebo decline levels, and tolerability profile. This development comes as UTHR demonstrates strong operational execution, with impressive gross profit margins of 89% and robust revenue growth of 17.62% over the last twelve months.

TD Cowen noted that Tyvaso demonstrated consistent treatment impact across patients on various background therapies, with approximately 50mL FVC decline regardless of whether patients were on Ofev, Esbriet, or no other therapy. This suggests no concerning drug-drug interactions, unlike competitor treatments, potentially allowing for broad clinical use.

The placebo arm showed a decline of approximately 140mL at 52 weeks, which TD Cowen considers on the low end of decline seen in prior IPF studies. This supports that Tyvaso’s benefit was not simply due to an outsized placebo effect and bodes well for the upcoming TETON-1 trial readout.

Tyvaso treatment resulted in a 29% reduction in the risk of clinical worsening compared to placebo (p=0.019), with additional benefits observed in other clinical measures. TD Cowen currently models peak sales of $2.3 billion based on conservative uptake estimates in patients who have failed standard of care, but sees potential upside to this forecast. With a market capitalization of $19.57 billion and trading at a P/E ratio of 16.74, UTHR shows promising value metrics. InvestingPro subscribers have access to 13 additional investment tips and a comprehensive Pro Research Report, offering deeper insights into UTHR’s growth potential and financial health.

In other recent news, United Therapeutics has seen several significant developments. The company reported successful results from its Phase 3 TETON-2 trial, which focused on the drug Tyvaso for idiopathic pulmonary fibrosis (IPF). This positive outcome has prompted UBS to raise its price target for the company to $560, maintaining a Buy rating. Similarly, H.C. Wainwright increased its price target to $500, citing an estimated peak sales of $5.8 billion by 2033 with a 75% probability of approval. Cantor Fitzgerald also raised its price target to $525, emphasizing a "best-case TETON-2 readout" and a 90% probability of success for Tyvaso in IPF. RBC Capital initiated coverage with an Outperform rating and a $569 price target, highlighting United Therapeutics’ leadership in rare lung diseases. UBS reiterated a Buy rating, noting the IPF study results could lead to a potential $3-4 billion in peak sales. These developments reflect a positive outlook from analysts for United Therapeutics’ future prospects.

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