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Loose lips can sink stocks
So much can depend on a subcutaneous micro-infusion device. Thats what Marylands United Therapeutics hopes will deliver its first product to patients. Its also the companys hope for delivery to the promised land of profitable biotech concerns. Fred Hadeed, United Therapeutics CFO, recently discussed the firms plans for Remodulin, its product pipeline and volatile share price.
You recently reported fourth-quarter revenue that was more than double last years. Do you expect to continue that rate of growth going forward?
Were not making any forward-looking projections at this time.
So you wont even say when you expect to turn a profit?
What you hope to be your first product, Remodulin, is in testing right now. You recently said you expected it to be approved in 10 weeks. Does that put it in mid-May?
No, we said that the average length of time that it takes to go from the approvable letter to final approval and clearance for marketing is about 10 weeks. We hope that that average applies to us and that well have final approval within 10 weeks of our good news that we released on February 8.
Remodulin is a drug that treats pulmonary hypertension, is that correct?
It is for pulmonary arterial hypertension. For patients that have symptoms classified as class two through four.
What does that mean?
Basically, it means that theyre symptomatic. They have symptoms, and they can have any form of pulmonary arterial hypertension. There are many, many subsets to that disease. Many different types of pulmonary arterial hypertension and, once approved, we would be indicated for all symptomatic patients.
There are about 50,000 people in North American and Europe that have it?
Thats correct. Thats a reasonable estimate.
That includes the daughter of United Therapeutics founder, Martine Rothblatt.
How is she doing?
Shes doing well.
How does Remodulin work? Its described as being in a cassette thats beneath the skin.
Subcutaneous injection is the mode of delivery. Subcutaneous means beneath the skin. Its delivered with a micro-infusion device. Its the same kind of pump thats used by tens of thousands of diabetics who get their insulin by micro-infusion every day. Its a small, convenient pager-size device that a man can clip on his belt or a woman can just tuck into her bra. It holds the drug inside this little device and pumps the drug through a catheter that is inserted underneath the skin.
Do you have expectations about sales for the drug if its approved?
No, were not making any forward-looking statements. The time will come when we will. That time is after approval, once weve begun selling the drug. Wed like to be in the market for a couple of months before we put projections out.
If the FDA approves it in May, is that something that hits the market the next day or do you need time to ramp up production?
We would need about a month to a month and a half from approval before we can begin shipping commercial drug. That is because the package insert will not be finalized until we have final approval. You need to package that with your drug.
Does all that work get done in Silver Spring?
No, we have a manufacturing facility in Chicago. All of our research and development is headquartered in Research Triangle Park, North Carolina. And our administrative headquarters are here in Silver Spring.
How many do you employ overall?
About 120 people.
How many of those are in Maryland?
A small number, 15.
What about other drugs that are in your pipeline? Beraprost was one that failed its phase III trial last year. Are you still pushing ahead with that?
The next program that we have in the pipeline would be Remodulin for critical limb ischemia.
Is that the same drug just for a different purpose?
Correct. Well be commencing a phase II/III clinical trial later this year [for that]. Critical limb ischemia is a severe condition that is characterized by poor to no blood flow in the lower limbs. The blood flow is so limited that these patients ultimately lose their limbs to amputation. Remodulin has been shown to be effective.
Do you have other drugs that youre working on?
Yes, we do. We have an iminosugar drug thats the result of decades or research at the University of Oxford and Monsanto Searle. Its now just about ready for the clinic. That would be our first iminosugar compound, first of a whole platform of compounds that we own. We call it UT231B.
But thats still a few years off from hitting the market.
What about the stock? It was recently trading around 12, about the same place it was this time last year, despite some ups and downs. Do you have any forecast on that?
Like many of the biotech stocks, it has been hit hard. It was up over 100 in 2000.
2000 is like a lifetime ago in this market. Thats true, I think, of just about any industry. I dont think anybody can compare 2000 and 2002.
Are biotech stocks more volatile than shares in other industries? Since you are so dependent on getting this drug that you have been working on to market, any hint of a lean one way or the other by the FDA really causes that stock to move, doesnt it?
Any material news about any company causes a stock to move, to react.
Just looking over the past few years, one day the stock moves 30 percent one way, one day it moves 30 percent the other.
On material news. Thats true of any young biotech company thats going through FDA review of its first product. Thats a very important time in the companys history and people are watching it very closely. Its a company going from infancy to maturity thats the normal progression. Fortunately for us, were going to get there.
There are hundreds if not thousands of biotech companies in the U.S. who will never see any approved therapy. [They] will just spend millions if not tens of millions or hundreds of millions of dollars on R&D and will never end up with an approved product. Its a very risky industry.