Good morning. My name is Sayeed, and I will be your conference operator today. At this time, I would like to welcome everyone to United Therapeutics Corporation Second Quarter Conference Call. [Operator Instructions] Remarks today concerning United Therapeutics will include forward-looking statements, which represent United Therapeutics' expectations or beliefs regarding future events based on current assumptions. United Therapeutics cautions that such statements involve risks and uncertainties that may cause actual results to differ materially from those in the forward-looking statements. Consequently, all such forward-looking statements are qualified by the cautionary language and risk factors set forth in the United Therapeutics' periodic and other reports filed with the SEC. There can be no assurance that actual results, events or developments referenced in such forward-looking statements will occur or be realized. United Therapeutics assumes no obligations to update these forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting such forward-looking statements. At this time, I would like to hand the conference over to Dr. Martine Rothblatt. You may begin your conference.

Thank you very much, operator. We, here at United Therapeutics, are glad to welcome everybody as we move into the middle of the summer to our second quarter 2012 financial results. I'm on the phone today with our Chief Financial Officer, John Ferrari; and our President and Chief Operating Officer, Dr. Roger Jeffs. The 3 of us will be able to answer your questions in any of the normal areas [ph] of business operations. So I'm just going to give a brief introduction, and then ask the operator to open up the lines for questions. I'm pleased with our second quarter results which reflect the continued strength of our core business. I'm also pleased that our board authorized an additional $100 million share repurchase program to return yet further value to our shareholders. So that is the summary quotation for the press release, which we issued today. The total revenues for the quarter were $225.6 million. Earnings per share were $1.37 per basic, $1.34 per diluted and the operating metric which we think best reflects the real business operations of the company, earnings before noncash charges, grew to $2.42 per basic share; $2.37 per diluted share. So across the board, very positive financial results. Take a look at our product revenue. In terms of Remodulin, grew to $110 million from $104 million, on a matching quarter last year to this year. That's pretty remarkable given that the product has been approved now for 10 years and has not taken a price increase for at least 2 years. So it's really nice to see continued strength in that core product 10 years out. Tyvaso grew to $81 million in this quarter, up from $61.8 million, the second quarter of 2011. That product is our flagship inhalation product that only has to…

[Operator Instructions] Our first question comes from Liana Moussatos from Wedbush Securities.

What's the status and outlook for Remodulin and Tyvaso sales outside of the U.S.? Is Remodulin still about 15% sales still in Europe?

Thanks, Liana. Nice to hear to voice this morning, thanks for following us these years. We do look forward to continued growth in our Remodulin and Tyvaso outside the U.S. You're very much up-to-date on the figures. They've been in the range of around 15% FUS for Remodulin. But I think we're reaching an inflection point on that, a very positive inflection point. And that inflection point is the result of 3 different events outside the U.S. First of all we just recently achieved, after years of perseverance and persistence, approval for IV Remodulin in Europe. And I think this is going to be the same game changer in Europe that it was in the U.S. Just yesterday, it's interesting, John Ferrari and I were talking about the early years of Remodulin in the U.S. and how in the first 2 or 3 years when we only had subcu, growth was frankly fairly modest in the 2002 to 2005 timeframe. And then there was something about the IV approval, not only did it create a whole new area of revenue growth among IVs, but it also had the -- somehow had the effect of supercharging the subcu growth, as well. And I think we're going to see the same thing happen in Europe. With the approval in Europe, it takes another half year to 9 months to get all of your reimbursement approvals for the different countries. Those will be dropping into place during the balance of this year. So I think 2013 is the first full year of IV revenues that we'll see in Europe. And I believe it's going to have the same kind of transformative effect for Remodulin in Europe that it had here in the U.S. So that's one positive inflection. The second one is, we…

Our next question comes from Mark Schoenebaum from ISI Group.

This is Salim, stepping in for Mark. There's a question around the GLEEVEC panel. So GLEEVEC has a panel coming up, I guess, in September. Oral Remodulin didn't seem to make it into that panel. I'm just wondering if you have any thoughts on that.

I'm going to ask Dr. Jeffs, who's our expert in all these matters to please answer your question.

Sure, Martine. And thanks for the question, Salim. So the panel for GLEEVEC was just announced and I believe it's on September 14. There's a couple of things. Let me just remind newer callers about our filing date and our own PDUFA date. So we filed oral treprostinil on December 27, 2011 and that makes our PDUFA date October 27, 2012. A couple, maybe 3 points that would make us believe that we will not be invited to this advisory panel, which is the last advisory panel of the year for the cardio-renal group, to our knowledge. So firstly, would be -- that typically at the pre-NDA meeting which we held in the third quarter of 2011, if there was an advisory panel-type issue, the division would typically tell you that there was a potential, even then, for a panel. Secondly, there's a 55-business-day notice period that the FDA would normally give to a sponsor to notify them of the need to prepare themselves for the panel. Well, we've just recently passed that 55-day-notice period. And thirdly, I think, we should all remember that treprostinil is already approved both as subcu, intravenous and inhaled routes, so the division has a lot of comfort, knowledge and experience with treprostinil. There's probably no specific issue for them in terms of knowledge related to treprostinil. So for those 3 reasons, we don't think we will be asked to participate in that panel. Having said that, you can never say never. And if we were asked to participate, we would gladly share our data publicly because we remain very confident in the filings based on its meeting all of the 1998 guidance for effectiveness. So we don't anticipate participating in the panel, but if we did, we would confidently do that.

Our next question comes from Salveen Richter from Canaccord.

My question, just heading into this PDUFA date of October 27, maybe can you just walk through expectations and how we should think about, if the drug is approved, your world use here, on approval?

Sure. I'd like to take the question because Dr. Jeffs could perhaps provide some color on the strength of our package that was submitted to the FDA last year. And I could provide perhaps a little color on the second part of your question. So we really are not trying to count our chickens before they're hatched in terms of talking at all about the market forecast of oral treprostinil before we have it approved. So there's not much that I can say to you about that. Except to point out that over the past 10 years or so of drugs being approved for the pulmonary hypertension space, 3 molecules have recurrently shown very strong therapeutic results. The prostacyclin class of molecules, the endothelin inhibitor class of molecules, and the PDE-5 inhibitor class of molecules. There is actually nothing in Phase I, II or III trials other than these 3 classes of drugs that have shown any type of strong, silver bullet effect on pulmonary hypertension. So it's a virtual certainty that the next 5 to 10 years of treatment for pulmonary hypertension is going to revolve around the prostacyclin molecule, the endothelin molecule and the PDE-5 inhibitor molecule. We're really excited about the fact that no matter what stage the patient is at, we'll have a formulation of the prostacyclin molecule that seems appropriate for that stage. For example, at the end stage of pulmonary hypertension, the patient needs, if I could borrow a phrase from one of the real founders of the field, Dr. Lewis Rubin, "the patient needs to be bathed in prostacyclin, of course, he means the blood bathed in prostacyclin", with a continuous infusion of the drug. And of course that is what Remodulin is all about. And we're also very excited that our implantable…

Yes, certainly, Martine. So maybe I'll just back up and speak to sort of the strength of the package and the sort of the anchoring position for the NDA. So, as we've said previously, it's an oral treprostinil is an alternate dosage form of treprostinil for which there is a myriad of safety experience in thousands of patients, both from the subcu, IV and inhaled routes. So there's a lot of comfort, if you will, by the agency with this molecular entity. Our FREEDOM-M trial, which was in naive patients, showed a highly significant improvement in 6-minute walk distance, which was the primary endpoint, with a 23-meter improvement in the p-value of .0125. So that's, in fact, the best efficacy result we've had with any dosage form of treprostinil and something we're quite proud of. A couple of other things with regard to the safety. We now have patients, and it's almost 400 patients in long-term open-label extension, with the longest duration of exposure of about 5.6 years, and there are many, many patients over 4 years of exposure, which I think is self-evident in speaking to the clinical utility of this agent, because if it didn't work and it wasn't durable, then patients would not remain on the therapy in this open-label extension trial. I think the other thing that we've done recently that gives us great enthusiasm and confidence for the potential of the molecule in the market is, under very strict and tight control by a few investigators, we have begun transitioning patients who are on Remodulin to oral treprostinil. We've done 4 such transitions at this point. These patients have been on Remodulin for anywhere from 2 to upwards of 8 years. They're on subcu forms. They were having some site pain and they were at doses ranging anywhere from 25 nanograms per kilogram per minute to 75 nanograms per kilogram per minute and we've been able to transition these patients off of parenteral therapy to twice daily oral therapy in the course of 2 to 3 days. The patients have been on this trial 1 to 3 months. They seem to be doing well. They are delighted that they don't have the rigors of parenteral therapy to manage. They are now swimming, hiking and increasing their activities and their quality of life seems to be vastly improved. So that's an anecdote, if you will, but I think it shows that this agent is treprostinil. It can work analogously to the other approved forms of treprostinil, such as Remodulin. And we remain quite confident in the data package that we've submitted. So that's a little bit of a primer on where we are. We won't comment on the dialogue we've had with the FDA about the package for oral treprostinil at this time and we'll wait till the decision date and the conclusion of those discussions before we go public.

Thanks, Roger. That's a terrific answer. And it's important I think maybe just if I could just put a little exclamation mark at the end of your answer, that the IP life on that agent goes out until 2026, '27 timeframe and so it's got very, very strong IP.

Our next question comes from Phil Nadeau from Cowen & Company.

Roger, just some follow-ups to the comments you just made on the strength of the FREEDOM-M package and just kind of 2 related questions. First on the p-value. When you were submitting Tyvaso for approval, at that time you were suggesting that a single study could suffice, if the p-value was less than 0.01. I realize they are very close to that but technically they are under that, so what's your thinking there? And then second on 6-minute walk distance as a primary endpoint itself. We've heard from some consultants that the FDA's kind of gradually moving away from 6-minute walk distance as an endpoint -- primary endpoint and looking more towards program parts or terms [ph] or at least some correspondence between a primary 6-minute walk distance endpoint and support of secondary endpoints which I don't believe you have in for demand. So what's United Therapeutics' thinking on the strength to the endpoint as well?

Great, great question, Phil. So on the p-value, as an alternative dosage form, I think there's a quite -- there's a kinetic difference, if you will, between Tyvaso and oral trepostinil. So Tyvaso, if you think about it, is really a bolus dose and it's given therefore as an immediate release. It doesn't really mimic parenteral therapy. We specifically designed oral treprostinil to have a twice-daily sustained release kinetic profile so that it would more closely mimic Remodulin. So it's really an alternative dosage form to Remodulin. As an alternative dosage form, the strength of evidence is usually a single trial with the p-value less than 0.05, and that was obviously conversation we had with the agency at our pre-NDA meeting and, at that point, we presented the data and they accepted the filing for review. I think if -- had they wanted a stronger strength of evidence they would've rejected the filing at that time. So Tyvaso, because its kinetic profile was quite different, more of an immediate release with no -- not providing itself as a comparative or an alternative to Remodulin, the strength of evidence requirement for single studies submission was more in the 0.0 -- less than 0.01 range, which we obviously achieved. Further, we have very supportive, although not statistically, didn't meet the 0.05 standards of statistical significance, but closely approximated that, 2 large trials in combination, so we can show the drug is safe and, certainly, directionally effective when used in combination. So there's a lot of supportive data other than just FREEDOM-M that supports with the FREEDOM-C and FREEDOM C-^2 trial. So that's the kind of rationale of why filed on FREEDOM-M based on the 0.0125 highly-significant finding. In terms of the FDA's view of what our acceptable endpoints -- so there's a…

Thank you, Roger. Excellent response, very comprehensive.

Our next question comes from Michael Yee from RBC Capital Markets.

This is actually John Chung in for Michael Yee. I wanted to ask with regards to Tyvaso, what were the net patient adds for this quarter and what are your views on continued market penetration?

We don't ever tally up the number of precise patients, in part, because it's just too laborious of an exercise, too fraught with error, and we don't want to ever get into a situation where we've accidentally said one number and it was like 5 patients off and somebody complains about it. So -- but you can always get -- especially in cases like this where inventory is flat, quarter-to-quarter, you can always get a close approximation by just dividing the revenues by the average price that we get for Tyvaso, which to a round approximation is around 1.25 So if you just divide Tyvaso revenues by that, you'll be able to get a pretty close approximation of the patient count. The forward prospects are very good. If you take a look at the growth curve for Tyvaso, if you just plotted it on a graph and you plotted Remodulin -- as a crazy plotter like I am keen as -- can't help myself from doing, and instead of implying it's predictable, if everything follows its curve that Tyvaso sales will actually exceed Remodulin sales within the next 2 years or so, it wouldn't really be surprising because Remodulin is a therapy which has found its best take-up among New York Heart Association Class IV patients, which represent, perhaps, 10% of all of the pulmonary hypertension patients. Tyvaso has found its best take-up among New York Heart Association Class III patients, which are about 30% of the patients. And since the price of Tyvaso and Remodulin are pretty comparable, just the normal course of arithmetic and trends here, are that Tyvaso will continue to grow and end up even with greater revenues than Remodulin. So things look very good on the Tyvaso front. We are always doing things to improve…

You're welcome. And thank you for participating in today's United Therapeutics Corporation's Second Quarter Earnings Conference Call. This call will be available for replay beginning in 11:30 a.m., Eastern time today, to 11:59 p.m. Eastern time on Friday, August 3. The conference ID number for the replay is 96430669. The number to dial for the replay is (855) 859-2056 or (404) 537-3406. Thank you for your participation. You may now disconnect and have a wonderful day.