Well, thanks for joining us, everybody. I'm Terence Flynn, the U.S. Biopharma analyst here at Morgan Stanley. Very pleased to have United Therapeutics with us. Before we get started, I have to read a disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Joining us today from the company, we have James Edgemond, who is the company's CFO, and Dewey Steadman, who is Head of Investor Relations. Thank you both, both for being here. Really appreciate it. Dewey, I'm going to turn it over to you for your disclosures, and then we'll get started. Thanks, Terence. Appreciate it, and good afternoon, everyone. Just as a reminder, remarks today that we may make may include forward-looking statements, and we encourage you to review our latest SEC filings, including Forms 10-K and 10-Q, for the latest risks associated risks and uncertainties associated with those disclosures. Thank you. Great. Well, thank you so much, both, for being here. I guess I just wanted to start out with kind of a strategy question. It's one we get a lot, given the strength of the company's balance sheet. But just how you're thinking about capital allocation priorities right now, James, in the context of the strength of the balance sheet, obviously, of the DPI launch ramping, and ILD. So there's significant growth opportunity ahead, but how are you thinking about putting the balance sheet to work here? Yeah, great. Well, first, thanks, Terence, for the invitation, and we appreciate you inviting us, me and Dewey, to the healthcare conference, so we appreciate that. So the strength of the balance sheet, we do agree with you. We have a very strong balance sheet, and we think about capital allocation in three ways. Consistently, one is to invest in ourselves, both in our current business as well as our future business. The second one, where we think about capital allocation is through M&A, through acquisitions, or in-licensing. And third, Terence, would be return to shareholders. So the capital allocation framework that we have applied, we continue to apply going forward. Okay. And I guess one question we get is, why not be more aggressive with the share repurchase angle of that? Again, it's always been lower down the list. I think this was, maybe it was seven, eight years ago, you did a, you know, a small program, but how do you think about being more aggressive on the share repurchase side? Yeah, we do. Well, we actually look at the opportunities that we have internally, Terence, and we think there's plenty of opportunity to invest in ourselves, in our current business, as well as the future business. So, for example, one of the things we're doing is we're building, and we've committed to build a $500 million manufacturing facility in North Carolina. We also continue to look at acquisitions or in-licensing. What we feel is there's opportunities that we want to invest in because we have conviction in the business, both the current and where we're going. We think of things like share repurchase may be in conflict with that. So we want to make sure we have the capital available. Should, in time, those opportunities not come to fruition, then we would move share repurchase kind of up in terms of order of priority. But we feel right now, based upon where we are, what we believe in, and where we want to go, that item is one, which is to invest in the commercial, the current business, as well as our future business, and then looking at in-licensing, we can provide a higher and better return over the long term. Okay. Okay, got it. I guess on the M&A area, again, I think the company has a long history here. I think the last larger deal was Arena for ralinepag- Mm-hmm. about $800 million deal. And I think back to some of the in-licensing deals the company did, you know, at Adcirca, was one of those with Eli Lilly. And so kind of the whole runs the whole spectrum, and then obviously some earlier stage deals. So maybe just where's the focus now in terms of therapeutic area, and then how do you also think about, you know, stage of development? Again, recognizing the company has a long track record on both early stage but also late stage. Yeah, thanks. So, so we tend to focus on, rare lung disease or cardiovascular or things in the organ manufacturing space that could certainly come in and complement, what we're doing. When we look internally, Terence, at the organization and the United Therapeutics, we have a lot of strength in things like, clinical, enrollment, clinical development, or when we think about manufacturing, or we think about regulatory, and even the commercial side are just examples of the strengths we feel internally. And so we want to make sure we bring in an asset or an opportunity that we can play to the strengths of what we have, and I think that's really important. Now, we will look at opportunities from early development to phase three, but we want to make sure, one, there's good scientific validity to the asset, that we understand it, that we're able to evaluate it. And two, is to make sure we can take what we have, as internal resources, basically, to put those to bear on this asset and this opportunity to bring it across the finish line per se. And what's interesting, where you started these questions around the size of the cash and investments, the strength of the balance sheet, we do get a lot of questions on why don't we put some of that cash to work, maybe in an in-licensing agreement or an M&A. I think what people have to realize, the reason why we do have a lot of cash is we did make decisions not to do certain things. So we are very thoughtful. We try to be very strategic in what we do, and we want to be ready for when we find that opportunity. But we have the strength of the balance sheet, don't forget, because we decided not to do things, and we use the strength of our resources internally to evaluate those. But again, we're gonna focus on what we know and what we do best, and those are in the areas of rare lung disease or cardiovascular and a growing expertise in organ manufacturing. Okay, fair enough. What maybe just talk to us, what does the opportunity set look like right now out there in, in those areas? I mean, do you feel like there's a robust opportunity set, or is it, to your point, because you're so disciplined, there's just not a significant number of these opportunities out there right now? Well, we tend to look at a lot, but there is a limited set in some cases, depending upon what indication you wanna go into. But we've looked at big and small in terms of what we wanna do, but we just try and be disciplined, and thoughtful around that. Okay. The second topic I wanted to move to, and again, this is a good segue, is manufacturing. And so obviously you're investing in Tyvaso manufacturing, which you've talked about. So maybe just give us an update, kind of where you stand right now for Tyvaso DPI, and then what you and MannKind are doing to kind of meet demand and build in anticipation of even future demand- Yeah ... including potentially the IPF indication. Yeah, great, thanks. So there's kind of multiple layers to your question on the manufacturing side. So we can start with kind of recently in the June, kind of midyear timeline. MannKind had made some production and process improvements to their manufacturing facility up in Danbury, Connecticut. And what's good news is we've been able to take advantage of some of that increased capacity. Now, what we're really focused on is building our own inventory, so our inventory on our balance sheet, so that we can get to a place where our specialty pharmaceutical distributors are able to get back to their normal ordering patterns. And if you think about history, they tend to order once or twice a month. But because of the launch of Tyvaso DPI and us making sure we were in a situation where we could satisfy patient demand that just came in, the orders were a little less regular. They're a little more, kind of spread out, because we wanted to make sure we can keep the, the SPs. And so now that we're through some of those improvements, we can start building our own, inventory on our balance sheet, get the SP so that they're more comfortable back into their ordering patterns. So, we appreciate and, United Therapeutics work really closely with MannKind, to make sure that those improvements, were done well, and one, that we can take advantage of that. I think if you look a little bit longer term, which was embedded in your question, in 2024, MannKind is going to increase their production capacity through a new line to be able to support 25,000 patients on an annual basis. And those will come in next year, which will be further good news in terms of making sure we have the inventory available for our patients, and the SPs can keep sufficient supply on hand. If you look beyond that, and as you mentioned, Terence, in one of your earlier questions, we are building a new facility down in North Carolina that will be able to support an additional 50,000 patients. And so that would be 25,000 patients coming online in 2024. Then we'll add 50,000 patients in roughly the 2027-ish timeframe, that will take it to 50,000, which will have the capacity actually to add 25,000 more patients. So then you're up to 100,000 patients, and we'll explain why that's important. So when you think about where we are and where we're going, we wanna make sure we have that capacity going forward. The reasons for doing it, one, are obviously to support current commercial demand. Secondly, we do have clinical trials that we may touch on in IPF, so idiopathic pulmonary fibrosis, and PPF. And so we wanna make sure that we have enough capacity, if those are successful, to be able to support those patients. And secondarily, we do wanna make sure we have redundancy. Right now, the product is manufactured by MannKind in Danbury. Opening up this facility in North Carolina will allow us to have redundancy, which again, is very important to making sure we can satisfy, ultimately, our patients, but also specialty pharmaceutical distributors and their inventory levels. Yeah. And then maybe just remind us the total cost or outlay, from your side in terms of, you know, again, one of the uses of cash? Yeah. So the new facility in North Carolina, we had estimated to be about $500 million. That'll be, again, one of the examples of investing in our current business. Okay … and future business going forward. Yep. Okay. Okay, understood. And then have you guys at all put out a number for what you're able to do now before you get all these expansions on board? Like, are you at, from a current DPI perspective, is it like MannKind can currently do 25,000 patients, or is it less than that? No, so we haven't given a peg. Right, right now, they're not at the 25,000 level, so the new line will take them up to 25,000 patients. We haven't specifically given a number in terms of- Okay. Well, one of the aspects we did talk about, which was when they did these new enhancements midyear, they being MannKind, they did increase their production capacity 250%. Yeah. Obviously, as then we'll have increasing patient growth against that number, but we haven't quantified the current patient support. Okay. Okay, understood. So I guess the other, you know, question, which is kind of a segue on the, you know, you're talking about building inventory at the SP level, is just how to think about trends in the second half of the year. I think, again, typically, you know, United Therapeutics has, you know, second quarter, third quarter are kind of like the higher quarter, quarter-quarters of the year because of some of those inventory dynamics. And so as you think about this, you know, building back of inventory, maybe just remind us where you were in the second quarter and then what you're communicating to people regarding second half of 2023. ... Yes. So specifically on inventory or just general business trends? I guess it's a two-part question, because they're kind of interrelated. Yeah. Right? So again, maybe you could start with kind of the business trends- Yeah ...... And then anything from an inventory perspective that we should think about as we think about trying to- Sure -consider second half dynamics. Yeah. So just reflecting back on the second quarter, for us, we were just thrilled with top-line revenue being the highest ever. And then you really had strength in Tyvaso, which includes Tyvaso nebulized and Tyvaso DPI, in terms of record revenue, record patients on therapy, and also record referrals, which are prescriptions to us. And then on Orenitram, again, looking at these trends, we had the highest revenue for Orenitram and a high number of patients on therapy. Then you had resiliency in terms of Remodulin, and so we were just thrilled in terms of the performance in the second quarter. When you think about the trends across the year, we typically are the strongest when you look at seasonality, if you would call it, between kind of the second and third quarter. Just for a variety of reasons, the first quarter, fourth quarter tend to be a little bit lighter, and we don't see anything necessarily that would change those holistic trends across the year. And then from an inventory perspective, Terence, your question is... I kind of reflect back to what I talked about in terms of us being in a situation to benefit from what MannKind has been doing in terms of their process and production efficiencies, that we hope on the back half of the year, we're gonna be in a situation of, again, building our own inventory, so that we can be in a situation to support ultimately the patients and then specialty pharma. Yep. So it does sound like you're expecting the typical seasonality now, so second quarter, third quarter. Yeah. Nothing, nothing at this point that would take us away. And And there's a lot of underlying reasons for that when you think about changes in the terms programs, shipping days in the month, and things like that. But nothing at this point really would, would change that. Okay. And then where was inventory? Because I know there's the DPI inventory and the nebulizer inventory, so just remind us, as of 2Q, mark-to-market, where did inventory stand on the different pieces? Yeah. So at the end of the quarter- Yeah ... if you think about June 30th, the SPs, one was at where they were in terms of minimum requirements, and one was close to it. But again, part of the discussion that we had at the quarter was, again, we were gonna make sure we could support and ship those products out to the SPs to support their patients. With the implementation of some of those process and manufacturing improvements, we are expecting in the back half of the year to be able to build inventory, to take out some of the volatility- Okay -of any ordering pattern is our goal. Yeah. And then, for nebulized, the inventory, obviously, there was some drawdown that you saw in Q4 and Q1 that had normalized in Q2. And so those inventories were at the contractual levels within the bounds of the minimum/maximum contraction. Okay. Contractual levels for nebulized. So, fortunately, that phenomenon is behind us. Yep. Okay. Okay, great. Maybe just moving on to ILD here. Again, I think the, you know, there's been a pretty consistent number of net adds, since launch. You know, again, as we think about the forward here, any reason to think there'd be a deviation from those trends? Anything you guys are seeing, or is that-- should that be our expectation here on the ILD side, as we think about kind of the forward path? Yeah, we're not seeing anything that would deviate in terms of our trends or expectations going forward there, Terence. Okay. Okay. And I guess the, you know, just maybe breadth and depth of prescribing is the other one that, you know, we get a lot. And I get- You know, you guys have given some metrics here, more so maybe on the breadth side, but just maybe, again, remind us kind of- Yeah how you're thinking about those metrics, on the forward. Sure. One of the areas that Michael Benkowitz, who's the president, talks about in this area, is growing the prescriber base in PH-ILD. And to your reference, Terence, he talks about breadth and depth. And breadth being the increase in the number of prescribers that Michael was seeing, but it's also the depth. So what's important is to find those PH-ILD prescribers who actually have three or more patients in terms of a prescribing depth. And so when we think about... That's kind of the way Michael evaluates it. So we're still seeing trends in that right direction of breadth and depth in terms of PH-ILD prescribers. Okay. Got it. Okay. And then I guess the, you know, other big picture one is just as we think about, you know, I think you guys said there was, I think it was low single-digit penetration, if I remember, for the PH-ILD market on the second quarter call. Yeah, low single-digit penetration. So penetration in PAH, though, is substantially higher than that. And so as you think about comparing PH-ILD to PAH, is there any reason why, over time, penetration couldn't reach a similar level across these diseases? Or is there anything that we should consider as we think about that, recognizing where you are now and, you know, where PAH is? Yeah, one thing, just to make a correction, one of the things that we did misspeak, I would say, in the Q2 call, is a reference to low single-digit penetration. It's actually low double-digit penetration, so that was just- Okay ... a mistake that I wanted to correct. Okay. So we are seeing low double-digit penetration there. If you think about the PH-ILD market, we are the only approved therapy, and we have talked about having a patient population of about 30,000 patients. So being the only approved therapy in that indication, and then being in a low double digits. We actually think we'll have higher penetration than PAH when you think about the crowded space of PAH versus PH-ILD. So we think in that regard, we're doing pretty well in terms of penetration on a going-forward basis. So is that higher penetration on a user-specific basis, or would that be, like, all therapies for the category? For PH-ILD? Yeah. Well, since we're the only approved therapy, I'm thinking we would have that going forward of all categories. I'm saying when compared to PAH, though, like, if it's, is it comparison to just your PAH penetration, or is it like every therapy in PH, meaning, like, all therapies in PH have 80% penetration? Oh, I would say it was just- Just that you- Yeah, I mean, obviously, polytherapy is very common in PAH- Yeah -in Group 1 PAH. So you can have multiple drugs that are used, and so everybody has, like, overlapping market share. I think for us it's more, it probably has, I'd say, a quarter or so of the PH market. If you look at just the number of patients that we've said in the past, it's 9,000 or 10,000 patients in PAH. Right. You get to extrapolate what that market share is. I think we would get a bigger market share in PH-ILD over time. Okay. That's really dependent on our success with our sales force and- Yeah - and positioning, especially in the community, ILD setting. Okay, understood. That's helpful. The other, you know, just mark-to-market DBI or DPI versus nebulizer in terms of the split here. Yeah. I know the conversion has been very successful. Again, it sounded to me like takeaway from 2Q was, this is kind of the steady state where you're at now. Is that fair, or are there any opportunities to kinda continue that, that conversion? Yeah, I think... So what we talked about on Q2 is the current prescription split is like a 70/30, I would say. 70/30 favoring DPI. We haven't necessarily got into the indication pretty much because when we get the data from the SPs, it's not necessarily quote, unquote, "clean." So we still wanna take some time to make sure we're thinking about that. If you overlay the 70/30 across the population- Yeah of patients we serve, it's more tilting to, like, a 55/45 split. So you can see the efforts of Michael Benkowitz and the sales teams actually have an impact there, that it's moving the dial when you think about the total population. But we are seeing kind of new referrals, new prescriptions come in at a much higher DPI level. Okay. And do you think that 70% is likely gonna be stable, or is there still room to kinda move that, move that higher? I certainly think there's room to move it, but I also wanna make sure we still will make sure we come, and we still will have a base layer of nebulized use. Depending upon a specific patient, depending upon the titration aspects, depending upon the financial status, we do think there's always and there will continue to be a need for Tyvaso nebulized going forward. So there will be a base layer there that we will continue to have. Yeah. Okay, understood. Last one on, on this topic is just the Part D redesign that you guys have talked about here. That's gonna go into effect with the IRA. Maybe just the mechanics of what that means to this- Sure ... this market and, you know, any opportunity it opens up. Sure. And just to kind of level set, when you think about Part D, the products that we have that fall into Part D are gonna be Tyvaso DPI as well as Orenitram. So those will be the two products that are Part D, as in dog. Now, with this redesign effort, we do think with the lower out-of-pocket cost, it's gonna be or a patient's lower out-of-pocket cost, there's gonna be an opportunity to basically have patients more for Tyvaso DPI. With the redesign also, there's gonna come a need and a requirement of a manufacturer to actually pay a higher rebate, and that comes into after the catastrophic phase of the Part D redesign. So we will have higher revenue reductions, higher rebates going back to the government. So when you think, when you combine, the opportunity for additional or new patients coming on to Tyvaso DPI, the offset of some of these increased revenue reductions, it certainly could net out. We could be in a more favorable position in totality, maybe not, but I think that'll kind of play out over time. But this Part D redesign will impact Tyvaso DPI, Orenitram, and again, there'll be some puts and takes relative to new patients coming on and then some of the enhanced rebates going back. Do you generally expect it to be a tailwind, though, if you net all that stuff out? I think it's hard to tell at this point as we kinda work through this. And they'll start to come in play in the 2024-2025 timeframe for us. Okay, got it. Okay, maybe the last one on the Tyvaso side is you're running the trial in IPF. We are. Just remind us of kind of the timing of the data and then, you know, what gives you confidence in a successful outcome for this study? Yeah. Thank you. So we expect full enrollment, as we've talked about, at the end of next year. Now, our confidence in this trial in IPF is based upon the successful clinical trial INCREASE. And then within the INCREASE clinical trial, there were some exploratory endpoints that looked at Tyvaso patients with IPF in terms of their actually forced FVC, so forced vital capacity, seeing actually an improvement. And so with this data, it gave us conviction to wanna look at doing a clinical trial in IPF. So when you combine that with the known antifibrotic aspects of Tyvaso and some of the additional benefits that happened in the INCREASE clinical trial in terms of reduced pulmonary exacerbations, it gave us really the conviction and the confidence to pursue this. And so that's why we're going ahead. We have two trials, one called TETON-1, that is a domestic and Canadian trial, and TETON-2, which is, international trial, not including the U.S. and Canada, and that just started enrollment last year. Okay. So TETON, when you talked about completing enrollment, was it in both studies, or was it in- Yes. Okay. Yeah. So both studies, right? Why this is important, and this kind of goes back to Terence, our discussion earlier, this is a patient population that's, you know, we think 100,000 patients, and so we think there's a lot of opportunity there. Again, this ties right back into our conversation earlier around using capital for this manufacturing facility down in North Carolina, and should those trials be successful, we will need this extra manufacturing capacity for these two indications. Okay, got it. Great. The other question that, you know, has been coming up since earlier part of this year is just Merck's sotatercept and where this fits within the treatment paradigm, and, you know, how much of a competitive threat is it versus your franchise, versus maybe could it be an opportunity if you see, again, to your point, Dewey, on polypharmacy and combination therapy. So what's the latest in terms of how you're thinking about, you know, the impact of sotatercept to your business- Sure ... and on the PAH side? Sure. Thank you for the question. I think the first thing to be really clear on is sotatercept has only been a, or supposedly going to be approved in PAH. And so when you think about the long-term growth opportunities for United Therapeutics and where we expect it to be, it's gonna be outside of PAH. We certainly know PAH, we support it and will continue to support it, but a majority of the growth is gonna be in PH-ILD, if successful, IPF, and then another study, PPF. So I just want to make sure that it will not materially affect where we think we're gonna go and grow from a business standpoint. The other thing that Dewey talked about is, if you, if you look at the clinical data for sotatercept, I think it was something like 70% of the patients were on prostacyclin in terms of polytherapy. And so when we think about where it's gonna be, we're not sure yet in terms of whether, unless Dewey will have anything to add from some, some recent disclosures, we don't think it'll affect materially our long-term growth aspects going forward as we focus on areas outside of PAH. And would you add anything, Dewey? I think at this point, yeah, it. The physicians that we've been speaking with since March have been supportive of using sotatercept in line with how it was studied, and so that's in combination with prostacyclin 70% of the time. There could be some use of sotatercept in different settings in which we don't really compete, so such as low-risk PAH, where these patients aren't even coming into prostacyclin. So that could change the paradigm in part of the market, but the core of the market where we really thrive in high-risk PAH, I think prostacyclin still have a key role to play there, even in combination with sotatercept. Yep. Okay, maybe just in the last couple of minutes here, a couple more questions. So the Liquidia litigation also a topic that's kind of top of mind for folks. Maybe just, you know, latest updates in terms of kind of next steps and timelines here. I'm always getting litigation questions. So we're in the appeals process for the, for the IPR and, and the district court. The, the hearing's already been done for the district court side. The IPR hearing has not occurred yet. We expect that to be scheduled, that the schedule to happen soon. In terms of where the hearing happens, it's still yet to be determined. It's later this year, early next year, something like that. And then it, the, the Court of Appeals for the Federal Circuit could rule in a couple of days, or they could rule in a, in a couple of months. So it's a little bit TBD, there, but, obviously this will, this will play out through the rest of this year into early next year. Yep. And what if Liquidia is able to launch mid-next year, what's the company's strategy there, or how should we think about that in, on, both PAH, but I think more importantly, in PH-ILD? You wanna run this one? So for PH-ILD, it's important to note that we have exclusivity, data exclusivity through the end of March 2024. And we also have a notice of allowance on a patent covering the use of treprostinil in PH-ILD. We expect that patent to issue in the near term, and we will vigorously defend our intellectual property rights there. Okay. All right, so it'll issue near term. Okay, got it. Maybe just the last 30 seconds here, you know, Ralinepag Phase III data, maybe just timing and how you're thinking about where that might fit into the PAH paradigm. Yeah, thank you. So timing on enrollment is at the end of 2024. It's the last commentary we have made. And when we think about why we expect it to have superior clinical efficacy, and it would be once a day dosing, and why that's important from a compliance standpoint, in terms of addressing the patients. And the analogy that we've used historically has been kind of Adcirca in that space. It was once a day dosing in the face of a generic, and it did not get a lot of payer pushback. So again, that's clinical efficacy and once a day dosing. Yep. Great. Well, I think we're up against time, but thank you so much, James, Dewey. Really appreciate it. Terence, thank you. Thank you. Appreciate it.