United Therapeutics Corporation
02/25/2026 | Press release | Distributed by Public on 02/25/2026 05:32
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our consolidated financial statements and related notes to our consolidated financial statements. All statements in this filing are made as of the date this Report is filed with the SEC. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events, or otherwise.
The following Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Report contain forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These statements, which are based on our beliefs and expectations about future outcomes and on information available to us through the date this Report on Form 10-K is filed with the SEC, include, among others, statements related to the following:
•Expectations of revenues, expenses, profitability, cash flows, and growth in the number of patients being treated with our products, including continued growth in sales of Tyvaso DPI, and anticipated growth in the number of patients with PH-ILD being treated with our Tyvaso products;
•The sufficiency of our cash on hand to support operations;
•Our ability to obtain and maintain domestic and international regulatory approvals;
•Our ability to maintain attractive pricing and reimbursement levels for our products, in light of increasing competition, including from generic products, and pressure from government and other payers to decrease the costs associated with healthcare, including the potential impact of the IRA on our business and the Trump administration's most favored nation pricing initiatives;
•The expected volume and timing of sales of our commercial products, as well as potential future commercial products, including the anticipated effect of various research and development efforts on sales of these products;
•The timing and outcome of clinical studies, other research and development efforts, and related regulatory filings and approvals;
•The outcome of pending and potential future legal and regulatory actions by the U.S. Food and Drug Administration (FDA) and other regulatory and government enforcement agencies related to our products and potential competitive products;
•The timing and outcome of ongoing litigation, including the lawsuit filed against us by Sandoz and Liquidia PAH, LLC (formerly known as RareGen); our patent and trade secret litigation with Liquidia related to Yutrepia; Liquidia's patent lawsuit against us related to Tyvaso DPI; and our litigation with Humana Inc., United Healthcare Services, Inc., MSP Recovery Claims, Series LLC, and related entities;
•The impact of competing therapies on sales of our commercial products, including the impact of generic versions of Remodulin; established therapies such as Uptravi®; and newer therapies such as Merck's Winrevair and Liquidia's Yutrepia;
•The expectation that we will be able to manufacture sufficient quantities and maintain adequate inventories of our commercial products, through both our in-house manufacturing capabilities and third-party manufacturing sites (including our plans to expand manufacturing capacity for Tyvaso DPI);
•Expectations regarding the amount and timing of capital expenditures to construct new facilities to support our product development and commercialization efforts, including our xenotransplantation-related facilities;
•Expectations regarding the timing and impact of our business development efforts;
•The adequacy of our intellectual property protection and the validity and expiration dates of the patents we own or license, as well as the regulatory exclusivity periods for our products;
•Any statements that include the words "believe," "seek," "expect," "anticipate," "forecast," "project," "intend," "estimate," "should," "could," "may," "will," "plan," or similar expressions; and
•Other statements contained or incorporated by reference in this Report that are not historical facts.
We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, and that may cause our actual results to differ materially from anticipated results, including the risks and uncertainties we describe in Part I, Item 1A-Risk Factorsof this Report and risks and uncertainties described in other cautionary statements, cautionary language, and risk factors set forth in our other filings with the SEC.
| United Therapeutics, a public benefit corporation | |||||
Overview of Marketed Products
We market and sell the following commercial products:
•Tyvaso DPI, a dry powder inhaled formulation of the prostacyclin analogue treprostinil, approved by the FDA in May 2022 to improve exercise ability in patients with PAH and PH-ILD.
•Nebulized Tyvaso, a nebulized liquid inhaled formulation of treprostinil, approved by the FDA to improve exercise ability in patients with PAH. Nebulized Tyvaso was also approved by the FDA in March 2021 to improve exercise ability in patients with PH-ILD. Nebulized Tyvaso has also been approved with respect to PAH and/or PH-ILD in various countries outside of the United States.
•Remodulin, a continuously-infused formulation of treprostinil, approved by the FDA for subcutaneous and intravenous delivery to diminish symptoms associated with exercise in patients with PAH. Remodulin has also been approved in various countries outside of the United States. In February 2021, we launched U.S. sales of the Remunity Pump, a next-generation subcutaneous infusion system for Remodulin developed under an exclusive development and license agreement with DEKA. In September 2025, we launched a new patient-filled version of the Remunity Pump, called RemunityPRO, which is intended to improve the patient experience by making the pump easier to use.
•Orenitram, an oral extended-release tablet form of treprostinil, approved by the FDA to delay disease progression and improve exercise capacity in PAH patients.
•Unituxin, an infused monoclonal antibody approved in the United States and Canada for the treatment of high-risk neuroblastoma and approved in Japan for the treatment of neuroblastoma after high-dose chemotherapy.
•Adcirca, an oral immediate-release tablet form of the PDE-5 inhibitor tadalafil, approved by the FDA to improve exercise ability in PAH patients. We sell Adcirca under an in-license from Lilly that expires December 31, 2026.
For additional detail regarding our commercial products, see Part I, Item 1-Business-Our Commercial Products.
Research and Development
We are engaged in research and development of new indications and delivery devices for our existing products. We are studying Nebulized Tyvaso in patients with IPF and PPF (the TETONstudies).
In addition, we are developing a new product to treat PAH, ralinepag. We are also heavily engaged in research and development of organ transplantation-related technologies including xenotransplantation, regenerative medicine, and ex vivolung perfusion. For additional detail regarding our research and development programs, see Part I, Item 1-Business-Research and Development.
Revenues
Our total revenues consist primarily of sales of the commercial products noted above, including the delivery devices (in the case of Tyvaso DPI, Nebulized Tyvaso, and Remodulin). We have entered into separate, non-exclusive distribution agreements with Accredo and CVS Specialty to distribute Tyvaso DPI, Nebulized Tyvaso, Remodulin, the Remunity and RemunityPRO Pumps, and Orenitram in the United States, and we have entered into an exclusive distribution agreement with Cencora Global Procurement Ltd. to distribute Unituxin in the United States. We also sell Nebulized Tyvaso, Remodulin, and Unituxin to distributors internationally. We sell Adcirca through Lilly's pharmaceutical wholesale network. To the extent we have increased the price of any of these products, increases have typically been in the single-digit percentages per year, except for Adcirca, the price of which is set solely by Lilly. We also derive revenues from the sale of commercial ex vivolung perfusion services, which are presented underOther within Note 13-Segment Informationto our consolidated financial statements included in this Report.
We require our specialty pharmaceutical distributors to maintain reasonable levels of inventory reserves for our treprostinil-based therapies because the interruption of these therapies can be life threatening. Our specialty pharmaceutical distributors typically place monthly or semi-monthly orders based on current utilization trends and contractual minimum and maximum inventory requirements. As a result, sales of our treprostinil-based therapies can vary depending on the timing and magnitude of these orders and do not precisely reflect changes in patient demand. The information we have about patient demand, the number of patients using our products, and inventory held by our distributors, is based upon our review of patient utilization and inventory data provided to us by our specialty pharmaceutical distributors.
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2025 Annual Report
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Operating Expenses
We devote substantial resources to our various clinical trials and other research and development efforts, which are conducted both internally and through third parties. From time to time, we also license or acquire additional technologies and compounds to be incorporated into our development pipeline. Our operating expenses include the costs described below.
Cost of Sales
Our cost of sales primarily includes costs to manufacture our products, royalty and sales-based milestone payments under license agreements granting us rights to sell related products, direct and indirect distribution costs incurred in the sale of our products, and the costs of inventory reserves for current and projected obsolescence. These costs also include share-based compensation and salary-related expenses for direct manufacturing and indirect support personnel, quality review and release for commercial distribution, direct materials and supplies, depreciation, facilities-related expenses, and other overhead costs.
Research and Development
Our research and development expenses primarily include costs associated with the research and development of new products, new indications for existing products, and various post-marketing research activities. These costs also include share-based compensation and salary-related expenses for research and development functions, professional fees for preclinical and clinical studies, costs associated with clinical manufacturing, facilities-related expenses, regulatory costs, and costs associated with payments to third-party contract manufacturers before FDA approval of the relevant product. Expenses also include costs for third-party arrangements, including upfront fees and milestone payments required under license arrangements for therapies under development. We do not track fully-burdened research and development expenses by individual product candidate.
Selling, General, and Administrative
Our selling, general, and administrative expenses primarily include costs associated with the commercialization of approved products and general and administrative costs to support our operations, including share-based compensation and salary-related expenses. Selling expenses include product marketing and sales operations costs, as well as other costs incurred to support our sales efforts. General and administrative expenses include the core corporate support functions such as human resources, finance, and legal, and associated external costs to support those functions.
Share-Based Compensation
Currently, we grant stock options and restricted stock units under the United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan (as amended to date, the 2015 Plan), which provides for the issuance of up to 14,770,000 shares of our common stock, including the 950,000 shares added pursuant to an amendment and restatement of the 2015 Plan approved by our shareholders in June 2025. In February 2019, our Board of Directors approved the 2019 Inducement Stock Incentive Plan (the 2019 Inducement Plan), which provides for the issuance of up to 99,000 shares of our common stock pursuant to awards granted to newly-hired Unitherians. Currently, we grant equity-based awards to Unitherians and members of our Board of Directors in the form of stock options and restricted stock units under the 2015 Plan, and we may grant restricted stock units to newly-hired Unitherians under the 2019 Inducement Plan. The grant date fair values of stock options and restricted stock units are recognized as share-based compensation expense ratably over their vesting periods. Historically, we granted awards under our Share Tracking Awards Plan (the STAP). Issuance of awards under this plan was discontinued in 2015 and all remaining outstanding STAP awards were exercised during the first quarter of 2025.
The fair value of stock options is measured using inputs and assumptions under the Black-Scholes-Merton model. The fair value of restricted stock units is measured using our stock price on the date of grant.
Future Prospects
We anticipate that revenue growth over the near-term will be driven primarily by: (1) continued growth in sales of Tyvaso DPI; (2) continued growth in the number of PH-ILD patients prescribed Tyvaso DPI and Nebulized Tyvaso; (3) continued growth in the number of patients prescribed Orenitram; and (4) modest price increases for some of our products. We believe that additional revenue growth in the medium- and longer-term will be driven by new products, new indications for existing products, and new devices to deliver our existing products, as described above under Part I, Item 1-Business-Research and Development.
| United Therapeutics, a public benefit corporation | |||||
Our ability to achieve our objectives, grow our business, and maintain profitability will depend on many factors, including among others: (1) the timing and outcome of preclinical research, clinical trials, and regulatory approval applications for products we develop; (2) the timing and degree of our success in commercially launching new products; (3) the demand for our products; (4) the net price of our products and the reimbursement of our products by public and private health insurance organizations, including the impact on such net prices and reimbursement amounts as a result of the IRA and other government initiatives focused on drug pricing, and as a result of additional payer rebates; (5) the competition we face within our industry, including competition from generic companies, the recent launch of Yutrepia, and the potential launch of new therapies for PAH, PH-ILD, IPF, and/or PPF; (6) our ability to effectively manage our business in an increasingly complex legal and regulatory environment; (7) our ability to defend against challenges to our patents; and (8) the risks identified in Part I, Item 1A-Risk Factors, included in this Report.
We have budgeted approximately $400 million for capital expenditures during 2026 and through the end of 2028 to construct additional facilities to support the development and commercialization of our products and technologies. This amount is primarily dedicated to construction of a new manufacturing facility in RTP; and construction of clinical-scale DPF facilities in Stewartville, Minnesota and Houston, Texas. We plan to fund these capital expenditures using cash on hand.
We anticipate our existing DPF facility in Virginia and the two planned DPF facilities in Minnesota and Texas will provide an initial commercial supply of our xeno-organ products if and when they are approved by the FDA. However, if our xeno-organ products are approved by the FDA, we likely will need to continue building additional DPF facilities to satisfy demand for these products. Additional DPF facilities will be very capital-intensive, but we expect they will be executed in stages, which will enable us to adjust the schedule (and anticipated cost) of construction depending on the progress of our clinical and regulatory activities.
We operate in a highly competitive market in which several large pharmaceutical companies control many of the available PAH therapies, including Merck, which received FDA approval for Winrevair (sotatercept-csrk) to treat PAH in March 2024. These pharmaceutical companies are well established in the market and possess greater financial, technical, and marketing resources than we do. In addition, Yutrepia was approved by the FDA in May 2025 for treatment of PAH and PH-ILD, and the product was launched commercially in June 2025. While we have not seen a material impact on our net revenues as a result of Winrevair or Yutrepia's launch to date, our net revenues could be materially impacted if either or both of these products gain significant market share or cause material price erosion for our existing products.
Results of Operations
This section of this Report generally discusses 2025, 2024, and 2023 items and year-to-year comparisons between 2025 and 2024. Discussions of year-to-year comparisons between 2024 and 2023 that are not included in this Report can be found in Part II, Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operationsof our Form 10-K filed on February 26, 2025 (our 2024 Annual Report).
Revenues
The table below presents the components of total revenues (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 v. 2024 | 2024 v. 2023 |
2025 v. 2024
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2024 v. 2023
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| Net product sales: | |||||||||||||||||||||||||||||||||||||||||
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Tyvaso DPI
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$ | 1,292.5 | $ | 1,033.6 | $ | 731.1 | $ | 258.9 | $ | 302.5 | 25 | % | 41 | % | |||||||||||||||||||||||||||
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Nebulized Tyvaso
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585.7 | 586.8 | 502.6 | (1.1) | 84.2 | - | % | 17 | % | ||||||||||||||||||||||||||||||||
| Total Tyvaso | 1,878.2 | 1,620.4 | 1,233.7 | 257.8 | 386.7 | 16 | % | 31 | % | ||||||||||||||||||||||||||||||||
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Remodulin(1)
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526.8 | 538.1 | 494.8 | (11.3) | 43.3 | (2) | % | 9 | % | ||||||||||||||||||||||||||||||||
| Orenitram | 496.9 | 434.3 | 359.4 | 62.6 | 74.9 | 14 | % | 21 | % | ||||||||||||||||||||||||||||||||
| Unituxin | 226.8 | 238.7 | 198.9 | (11.9) | 39.8 | (5) | % | 20 | % | ||||||||||||||||||||||||||||||||
| Adcirca | 30.0 | 23.8 | 28.9 | 6.2 | (5.1) | 26 | % | (18) | % | ||||||||||||||||||||||||||||||||
| Other | 24.0 | 22.1 | 11.8 | 1.9 | 10.3 | 9 | % | 87 | % | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 3,182.7 | $ | 2,877.4 | $ | 2,327.5 | $ | 305.3 | $ | 549.9 | 11 | % | 24 | % | |||||||||||||||||||||||||||
(1) Net product sales include sales of infusion devices, including the Remunity and RemunityPRO Pumps.
Total Tyvaso net product sales grew 16 percent to $1,878.2 million in 2025, compared to $1,620.4 million in 2024, driven by growth in Tyvaso DPI net product sales. Tyvaso DPI net product sales increased in 2025, as compared to 2024, primarily due to an increase in quantities sold of $268.5 million. The increase in quantities sold was primarily due to continued growth in the number of patients following the product's launch and, to a lesser extent, increased commercial utilization following the implementation of the Medicare Part D benefit redesign under the IRA.
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2025 Annual Report
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Orenitram net product sales increased in 2025, as compared to 2024, primarily due to an increase in quantities sold of $46.0 million. The increase in quantities sold was driven, at least in part, by increased commercial utilization following the implementation of the Medicare Part D benefit redesign under the IRA.
The table below presents the breakdown of total revenues between the United States and rest-of-world (ROW) (in millions):
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Year Ended December 31,
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| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
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U.S.
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ROW |
Total
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U.S.
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ROW |
Total
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U.S.
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ROW
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Total
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Net product sales:
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Tyvaso DPI
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$ | 1,291.8 | $ | 0.7 | $ | 1,292.5 | $ | 1,033.2 | $ | 0.4 | $ | 1,033.6 | $ | 731.1 | $ | - | $ | 731.1 | |||||||||||||||||
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Nebulized Tyvaso
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531.9 | 53.8 | 585.7 | 545.5 | 41.3 | 586.8 | 477.1 | 25.5 | 502.6 | ||||||||||||||||||||||||||
| Total Tyvaso | 1,823.7 | 54.5 | 1,878.2 | 1,578.7 | 41.7 | 1,620.4 | 1,208.2 | 25.5 | 1,233.7 | ||||||||||||||||||||||||||
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Remodulin(1)
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448.9 | 77.9 | 526.8 | 464.2 | 73.9 | 538.1 | 414.6 | 80.2 | 494.8 | ||||||||||||||||||||||||||
| Orenitram | 496.9 | - | 496.9 | 434.3 | - | 434.3 | 359.4 | - | 359.4 | ||||||||||||||||||||||||||
| Unituxin | 214.7 | 12.1 | 226.8 | 219.6 | 19.1 | 238.7 | 181.3 | 17.6 | 198.9 | ||||||||||||||||||||||||||
| Adcirca | 30.0 | - | 30.0 | 23.8 | - | 23.8 | 28.9 | - | 28.9 | ||||||||||||||||||||||||||
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Other
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22.8 | 1.2 | 24.0 | 19.1 | 3.0 | 22.1 | 9.8 | 2.0 | 11.8 | ||||||||||||||||||||||||||
| Total revenues | $ | 3,037.0 | $ | 145.7 | $ | 3,182.7 | $ | 2,739.7 | $ | 137.7 | $ | 2,877.4 | $ | 2,202.2 | $ | 125.3 | $ | 2,327.5 | |||||||||||||||||
(1) Net product sales include sales of infusion devices, including the Remunity and RemunityPRO Pumps.
Gross-to-Net Deductions
We recognize revenues net of: (1) rebates and chargebacks; (2) prompt pay discounts; (3) allowance for sales returns; and (4) distributor fees. These are referred to as gross-to-net deductions and are primarily based on estimates reflecting historical experiences as well as contractual and statutory requirements. We currently estimate our allowance for sales returns using reports from our distributors. The tables below present a reconciliation of the liability accounts associated with these deductions (in millions):
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||
| Rebates & Chargebacks | Prompt Pay Discounts | Allowance for Sales Returns | Distributor Fees | Total | ||||||||||||||||||||||||||||
| Balance, January 1, 2025 | $ | 140.8 | $ | 5.1 | $ | 2.2 | $ | 11.6 | $ | 159.7 | ||||||||||||||||||||||
| Provisions attributed to sales in: | ||||||||||||||||||||||||||||||||
| Current period | 521.6 | 74.0 | 0.9 | 41.7 | 638.2 | |||||||||||||||||||||||||||
| Prior periods | 0.7 | 0.1 | - | (0.5) | 0.3 | |||||||||||||||||||||||||||
| Payments or credits attributed to sales in: | ||||||||||||||||||||||||||||||||
| Current period | (296.6) | (67.7) | - | (30.1) | (394.4) | |||||||||||||||||||||||||||
| Prior periods | (127.6) | (5.2) | (1.7) | (11.0) | (145.5) | |||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | 238.9 | $ | 6.3 | $ | 1.4 | $ | 11.7 | $ | 258.3 | ||||||||||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||||||||||||||
| Rebates & Chargebacks | Prompt Pay Discounts | Allowance for Sales Returns | Distributor Fees | Total | ||||||||||||||||||||||||||||
| Balance, January 1, 2024 | $ | 108.4 | $ | 5.3 | $ | 1.9 | $ | 10.4 | $ | 126.0 | ||||||||||||||||||||||
| Provisions attributed to sales in: | ||||||||||||||||||||||||||||||||
| Current period | 356.0 | 64.4 | 1.9 | 41.8 | 464.1 | |||||||||||||||||||||||||||
| Prior periods | (10.6) | - | (1.0) | (0.9) | (12.5) | |||||||||||||||||||||||||||
| Payments or credits attributed to sales in: | ||||||||||||||||||||||||||||||||
| Current period | (215.8) | (59.3) | - | (30.4) | (305.5) | |||||||||||||||||||||||||||
| Prior periods | (97.2) | (5.3) | (0.6) | (9.3) | (112.4) | |||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | 140.8 | $ | 5.1 | $ | 2.2 | $ | 11.6 | $ | 159.7 | ||||||||||||||||||||||
| United Therapeutics, a public benefit corporation | |||||
| Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||
| Rebates & Chargebacks | Prompt Pay Discounts | Allowance for Sales Returns | Distributor Fees | Total | ||||||||||||||||||||||||||||
| Balance, January 1, 2023 | $ | 81.3 | $ | 4.4 | $ | 3.3 | $ | 10.9 | $ | 99.9 | ||||||||||||||||||||||
| Provisions attributed to sales in: | ||||||||||||||||||||||||||||||||
| Current period | 278.0 | 52.5 | 1.3 | 40.7 | 372.5 | |||||||||||||||||||||||||||
| Prior periods | (2.5) | (0.1) | (1.9) | (0.9) | (5.4) | |||||||||||||||||||||||||||
| Payments or credits attributed to sales in: | ||||||||||||||||||||||||||||||||
| Current period | (169.8) | (47.3) | - | (30.3) | (247.4) | |||||||||||||||||||||||||||
| Prior periods | (78.6) | (4.2) | (0.8) | (10.0) | (93.6) | |||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | 108.4 | $ | 5.3 | $ | 1.9 | $ | 10.4 | $ | 126.0 | ||||||||||||||||||||||
Cost of Sales
The table below summarizes cost of sales by major category (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 v. 2024 | 2024 v. 2023 | 2025 v. 2024 | 2024 v. 2023 | |||||||||||||||||||||||||||||||||||
| Category: | |||||||||||||||||||||||||||||||||||||||||
| Cost of sales | $ | 380.5 | $ | 304.3 | $ | 255.1 | $ | 76.2 | $ | 49.2 | 25 | % | 19 | % | |||||||||||||||||||||||||||
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Share-based compensation expense(1)
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3.9 | 5.4 | 2.4 | (1.5) | 3.0 | (28) | % | 125 | % | ||||||||||||||||||||||||||||||||
| Total cost of sales | $ | 384.4 | $ | 309.7 | $ | 257.5 | $ | 74.7 | $ | 52.2 | 24 | % | 20 | % | |||||||||||||||||||||||||||
(1)See Share-Based Compensation section below for discussion.
Cost of sales, excluding share-based compensation.The increase in cost of sales for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to increases in: (1) royalty expense resulting from a growth in revenues; (2) inventory reserve expense; and (3) the cost of products and services sold.
Research and Development
The table below summarizes the nature of research and development expense by major expense category (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 v. 2024 | 2024 v. 2023 | 2025 v. 2024 | 2024 v. 2023 | |||||||||||||||||||||||||||||||||||
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External research and development(1)
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$ | 245.8 | $ | 217.5 | $ | 192.0 | $ | 28.3 | $ | 25.5 | 13 | % | 13 | % | |||||||||||||||||||||||||||
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Internal research and development(2)
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212.3 | 183.6 | 146.6 | 28.7 | 37.0 | 16 | % | 25 | % | ||||||||||||||||||||||||||||||||
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Share-based compensation expense(3)
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32.3 | 29.1 | 15.6 | 3.2 | 13.5 | 11 | % | 87 | % | ||||||||||||||||||||||||||||||||
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Other(4)
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59.6 | 50.8 | 53.8 | 8.8 | (3.0) | 17 | % | (6) | % | ||||||||||||||||||||||||||||||||
| Total research and development expense | $ | 550.0 | $ | 481.0 | $ | 408.0 | $ | 69.0 | $ | 73.0 | 14 | % | 18 | % | |||||||||||||||||||||||||||
(1)External research and developmentprimarily includes fees paid to third parties (such as clinical trial sites, contract research organizations, and contract laboratories) for preclinical and clinical studies and payments to third-party contract manufacturers before regulatory approval of the relevant product.
(2)Internal research and development primarily includes salary-related expenses for research and development functions, internal costs to manufacture product candidates before regulatory approval, and internal facilities-related expenses, including depreciation, related to research and development activities.
(3)See Share-Based Compensation section below for discussion.
(4)Otherprimarily includes upfront fees and milestone payments to third parties under license agreements related to development-stage products, adjustments to the fair value of our contingent consideration obligations, and costs to acquire certain in-process research and development (IPR&D) assets. During the year ended December 31, 2025, we recorded (a) $42.2 million in expense related to milestone payments for drug delivery device and formulation technologies; and (b) $10.8 million in expense related to adjustments to the fair value of contingent consideration obligations for manufactured organ and organ alternative projects.
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2025 Annual Report
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During the year ended December 31, 2024, we recorded $40.2 million and $8.0 million in expense related to upfront non-refundable licensing payments for drug delivery device technologies and ex vivolung perfusion technology, respectively. During the year ended December 31, 2023, we recorded $46.0 million in IPR&D expense in connection with the acquisition of IVIVA.
Research and development, excluding share-based compensation. The increase in research and development expense for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to: (1) increased expenditures related to manufactured organ and organ alternative projects; and (2) increased expenditures for drug delivery device and formulation technologies.
Selling, General, and Administrative
The table below summarizes selling, general, and administrative expense by major category (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 v. 2024 | 2024 v. 2023 | 2025 v. 2024 | 2024 v. 2023 | |||||||||||||||||||||||||||||||||||
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General and administrative(1)
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$ | 501.0 | $ | 432.8 | $ | 374.2 | $ | 68.2 | $ | 58.6 | 16 | % | 16 | % | |||||||||||||||||||||||||||
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Impairment of property, plant, and equipment (PP&E)
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21.7 | - | - | 21.7 | - |
NM(3)
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NM(3)
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Litigation accrual
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3.0 | 71.1 | - | (68.1) | 71.1 | (96) | % |
NM(3)
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| Sales and marketing | 118.6 | 96.3 | 81.8 | 22.3 | 14.5 | 23 | % | 18 | % | ||||||||||||||||||||||||||||||||
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Share-based compensation expense(2)
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111.5 | 109.5 | 21.1 | 2.0 | 88.4 | 2 | % | 419 | % | ||||||||||||||||||||||||||||||||
| Total selling, general, and administrative expense | $ | 755.8 | $ | 709.7 | $ | 477.1 | $ | 46.1 | $ | 232.6 | 6 | % | 49 | % | |||||||||||||||||||||||||||
(1)Excluding impairment of PP&E and litigation accrual. See Impairment of PP&Eand Litigation accrual sections below.
(2)See Share-Based Compensation section below for discussion.
(3)Calculation is not meaningful.
General and administrative, excluding impairment of PP&E, litigation accrual, and share-based compensation. The increase in general and administrative expense for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to increases in: (1) personnel expense due to growth in headcount; and (2) legal expenses related to litigation matters.
Impairment of PP&E. During the second quarter of 2025, we recorded a $21.7 million impairment charge to write down the carrying value of certain PP&E.
Litigation accrual. During the years ended December 31, 2025 and 2024, we recorded accruals of $3.0 millionand $71.1 million, respectively, related to ongoing litigation with Sandoz. We currently do not expect that the amount of any loss in excess of this accrual would be material to our financial results; however, the amount ultimately payable, if any, could be higher or lower than this amount depending on the amount of post judgment interest and the outcome of appeals, as discussed in Note 14-Litigation, to our consolidated financial statements. The litigation accrual is included within selling, general, and administrativein our consolidated statements of operations.
Sales and marketing, excluding share-based compensation. The increase in sales and marketing expense for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to increases in: (1) personnel expense due to growth in headcount; and (2) marketing expenses.
Share-Based Compensation
The table below summarizes share-based compensation expense by major category (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 v. 2024 | 2024 v. 2023 | 2025 v. 2024 | 2024 v. 2023 | |||||||||||||||||||||||||||||||||||
| Category: | |||||||||||||||||||||||||||||||||||||||||
| Stock options | $ | 42.3 | $ | 29.8 | $ | 15.4 | $ | 12.5 | $ | 14.4 | 42 | % | 94 | % | |||||||||||||||||||||||||||
| Restricted stock units | 103.1 | 79.7 | 52.4 | 23.4 | 27.3 | 29 | % | 52 | % | ||||||||||||||||||||||||||||||||
| STAP awards | (0.8) | 32.3 | (30.7) | (33.1) | 63.0 | (102) | % | 205 | % | ||||||||||||||||||||||||||||||||
| Employee stock purchase plan | 3.1 | 2.2 | 2.0 | 0.9 | 0.2 | 41 | % | 10 | % | ||||||||||||||||||||||||||||||||
| Total share-based compensation expense | $ | 147.7 | $ | 144.0 | $ | 39.1 | $ | 3.7 | $ | 104.9 | 3 | % | 268 | % | |||||||||||||||||||||||||||
| United Therapeutics, a public benefit corporation | |||||
The table below summarizes share-based compensation expense by line item in our consolidated statements of operations (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 v. 2024 | 2024 v. 2023 | 2025 v. 2024 | 2024 v. 2023 | |||||||||||||||||||||||||||||||||||
| Cost of sales | $ | 3.9 | $ | 5.4 | $ | 2.4 | $ | (1.5) | $ | 3.0 | (28) | % | 125 | % | |||||||||||||||||||||||||||
| Research and development | 32.3 | 29.1 | 15.6 | 3.2 | 13.5 | 11 | % | 87 | % | ||||||||||||||||||||||||||||||||
| Selling, general, and administrative | 111.5 | 109.5 | 21.1 | 2.0 | 88.4 | 2 | % | 419 | % | ||||||||||||||||||||||||||||||||
| Total share-based compensation expense | $ | 147.7 | $ | 144.0 | $ | 39.1 | $ | 3.7 | $ | 104.9 | 3 | % | 268 | % | |||||||||||||||||||||||||||
The increase in share-based compensation expense for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to: (1) an increase in restricted stock unit expense due to a greater number of outstanding performance-based restricted stock units during the year ended December 31, 2025, as compared to the same period in 2024; and (2) an increase in stock option expense due to a greater number of unvested and outstanding performance-based stock options during the year ended December 31, 2025, as compared to the same period in 2024, partially offset by a decrease in STAP expense, as all remaining STAP awards were exercised during the first quarter of 2025. See Note 8-Share-Based Compensation, to our consolidated financial statements for more information.
Other Income (Expense), Net
The change in other income (expense), netfor the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to net unrealized gains on equity securities. See Note 4-Investmentsand Note 5-Fair Value Measurements,to our consolidated financial statements for more information.
Income Tax Expense
Income tax expense was $379.2 million for the year ended December 31, 2025, as compared to $343.9 million for the same period in 2024. Our effective income tax rate was approximately 22 percent for the years ended December 31, 2025 and 2024. For additional details, see Note 10-Income Taxesto our consolidated financial statements.
2025 Share Repurchase
In August 2025, we entered into the 2025 ASR agreements with Citi, comprised of a $500 million Uncollared ASR and a $500 million Collared ASR. Under the 2025 ASR agreements, we made an aggregate upfront payment of $1.0 billion to Citi and received initial deliveries of 1,274,296 and 849,531 shares of our common stock on August 4, 2025, representing approximately 75 percent and 50 percent of the total shares that would be repurchased under the Uncollared ASR and Collared ASR, respectively, measured based on the closing price of our common stock on August 1, 2025. Upon completion of an agreed-upon hedging period and the subsequent determination of the minimum and maximum share amounts to be repurchased under the Collared ASR, we received an additional 514,789 shares of our common stock on August 25, 2025. The final settlement of the Uncollared ASR occurred in November 2025, and we received an additional 3,882 shares of our common stock upon settlement. The final settlement of the Collared ASR occurred in January 2026, and we received no additional shares of our common stock upon settlement as a result of a collar provision that established the minimum and maximum number of shares to be repurchased, as well as other adjustments. In total, we repurchased 2,642,498 shares of our common stock under the 2025 ASR agreements that we currently hold as treasury stock in our consolidated balance sheets.
2024 Share Repurchase
In March 2024, we entered into an accelerated share repurchase agreement (the 2024 ASR agreement) with Citi. Under the 2024 ASR agreement, we made an aggregate upfront payment of $1.0 billion to Citi and received an aggregate initial delivery of 3,275,199 shares of our common stock on March 27, 2024, which represented approximately 80 percent of the total shares that would be repurchased under the 2024 ASR agreement, measured based on the closing price of our common stock on March 25, 2024.
The share repurchase under the 2024 ASR agreement was divided into two tranches, resulting in upfront payments of $300 million and $700 million, respectively. The final settlement of the $300 million tranche occurred in June 2024, and we received an additional 181,772 shares of our common stock upon settlement. The final settlement of the $700 million tranche occurred in September 2024, and we received an additional 90,403 shares of our common stock upon settlement. In total, we repurchased 3,547,374 shares of our common stock under the 2024 ASR agreement that we currently hold as treasury stock in our consolidated balance sheets.
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2025 Annual Report
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Financial Condition, Liquidity, and Capital Resources
We have funded our operations principally through sales of our commercial products and, from time-to-time, third-party financing arrangements. We believe that our current sources of liquidity are sufficient to fund ongoing operations and future business plans as we expect aggregate growth in revenues from our commercial products. Furthermore, our customer base remains stable, and we believe that it presents minimal credit risk. However, any projections of future cash flows are inherently subject to uncertainty, and we may seek other forms of financing. In April 2025, we entered into the 2025 Credit Agreement, which provides for an unsecured revolving credit facility of up to $2.5 billion. Our outstanding balance under the 2025 Credit Agreement, which matures in 2030, was zero as of December 31, 2025. See Unsecured Revolving Credit Facilitiesbelow for further details.
For information regarding the fluctuation explanations between 2024and 2023, see our 2024Annual Report.
Cash and Cash Equivalents and Marketable Investments
Cash and cash equivalents and marketable investments comprise the following (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||
| 2025 | 2024 | 2025 v. 2024 | 2025 v. 2024 | ||||||||||||||||||||
| Cash and cash equivalents | $ | 1,557.1 | $ | 1,697.2 | $ | (140.1) | (8) | % | |||||||||||||||
| Marketable investments-current | 1,363.2 | 1,569.8 | (206.6) | (13) | % | ||||||||||||||||||
| Marketable investments-non-current | 1,776.7 | 1,475.3 | 301.4 | 20 | % | ||||||||||||||||||
| Total cash and cash equivalents and marketable investments | $ | 4,697.0 | $ | 4,742.3 | $ | (45.3) | (1) | % | |||||||||||||||
Cash Flows
Cash flows comprise the following (dollars in millions):
| Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 v. 2024 | 2024 v. 2023 | 2025 v. 2024 | 2024 v. 2023 | |||||||||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 1,561.2 | $ | 1,327.1 | $ | 978.0 | $ | 234.1 | $ | 349.1 | 18 | % | 36 | % | |||||||||||||||||||||||||||
| Net cash (used in) provided by investing activities | $ | (551.3) | $ | 417.2 | $ | (719.6) | $ | (968.5) | $ | 1,136.8 | (232) | % | 158 | % | |||||||||||||||||||||||||||
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Net cash used in financing activities
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$ | (1,150.0) | $ | (1,254.8) | $ | (11.9) | $ | 104.8 | $ | (1,242.9) | 8 | % |
NM(1)
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(1) Calculation is not meaningful.
Operating Activities
Our operating assets and liabilities consist primarily of accounts receivable, inventories, accounts payable, accrued expenses, and tax-related receivables and payables.
The increase of $234.1 million in net cash provided by operating activities for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to an increase in net cash received due to the growth in sales of our commercial products.
Investing Activities
The increase of $968.5 million in net cash used in investing activities for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to: (1) a $682.6 million increase in cash used for total purchases, sales, and maturities of marketable investments; and (2) a $274.0 million increase in cash paid to purchase property, plant, and equipment.
Financing Activities
The decrease of $104.8 million in net cash used in financing activities for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to a $100.0 million decrease in net repayments on our line of credit.
| United Therapeutics, a public benefit corporation | |||||
Unsecured Revolving Credit Facilities
In March 2022, we entered into a credit agreement (the 2022 Credit Agreement) with Wells Fargo, as administrative agent and a swingline lender, and various other lender parties, which provided for: (1) an unsecured revolving credit facility of up to $1.2 billion; and (2) a second unsecured revolving credit facility of up to $800.0 million.
On April 25, 2025, we terminated the 2022 Credit Agreement and entered into the 2025 Credit Agreement, which provides for an unsecured revolving credit facility of up to $2.5 billion in the aggregate. On April 25, 2025, we borrowed $200.0 million under the 2025 Credit Agreement and used the proceeds to repay all outstanding indebtedness under the 2022 Credit Agreement in connection with its termination. During the second quarter of 2025, we repaid the remaining $200.0 million balance under the 2025 Credit Agreement, which brought our aggregate outstanding balance to zero as of June 30, 2025. Our aggregate outstanding debt balance remained zero as of December 31, 2025 and February 25, 2026. See Note 7-Debt-2025 Credit Agreement, to our consolidated financial statements for additional information.
Contractual Obligations
As of December 31, 2025, we had the following contractual obligations (in millions):
| Payments Due by Period | ||||||||||||||||||||||||||||||||
| Total | Less than 1 year | 2-3 Years | 4-5 Years |
More than 5 Years
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| Operating lease obligations | $ | 37.6 | $ | 7.3 | $ | 14.1 | $ | 10.7 | $ | 5.5 | ||||||||||||||||||||||
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Long-term debt obligations(1)
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32.4 | 7.5 | 15.0 | 9.9 | - | |||||||||||||||||||||||||||
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Obligations under the SERP(2)
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63.4 | 26.0 | 13.0 | - | 24.4 | |||||||||||||||||||||||||||
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Purchase obligations(3)
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1,022.8 | 869.5 | 136.9 | 14.7 | 1.7 | |||||||||||||||||||||||||||
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Total(4) (5)
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$ | 1,156.2 | $ | 910.3 | $ | 179.0 | $ | 35.3 | $ | 31.6 | ||||||||||||||||||||||
(1)We have contractual obligations to pay unused commitment fees under the 2025 Credit Agreement. As of December 31, 2025, our outstanding balance on the 2025 Credit Agreement was zero.
(2)Consists of actuarially derived, undiscounted, estimated future payouts of benefits. See Note 11-Employee Benefit Plans-Supplemental Executive Retirement Planto our consolidated financial statements for further details.
(3)Purchase obligations primarily include: commitments related to research and development (including clinical trials) for new and existing products; open purchase orders for capital expenditures primarily related to our continued investment in construction of additional facilities to support the development and commercialization of our products and technologies; and open purchase orders for the acquisition of goods and services in the ordinary course of business. The timing and amount of our obligations may differ based on certain future events.
(4)In addition to amounts in the table above, we are contractually obligated to make payments upon the achievement of various development, regulatory, and commercial milestones for agreements we have entered into with third parties. These payments are contingent upon the occurrence of various future events, some of which have a high degree of uncertainty of occurring. These contingent payments have not been included in the table above, and, except with respect to the fair value of the contingent consideration obligations, are not recorded in our consolidated balance sheets. See Note 12-Commitments and Contingenciesto our consolidated financial statements for further details.
(5)As of December 31, 2025, our other non-current liabilities in our consolidated balance sheets includes a liability of $28.2 million for unrecognized tax benefits, including related interest and penalties. Due to the high degree of uncertainty on the timing of future events that could extinguish these unrecognized tax benefits, we are unable to estimate the period of settlement and therefore we have excluded these unrecognized tax benefits from the table above. See Note 10-Income Taxesto our consolidated financial statements for further details.
Obligations Under License Agreements and Acquisition Agreements
We pay a ten percent royalty on our net sales of Tyvaso DPI under our license agreement with MannKind. Under our agreement with Arena Pharmaceuticals, Inc., we will owe a low double-digit, tiered royalty on net product sales of ralinepag (for any route of administration), plus certain milestone payments upon defined regulatory events. We pay Lilly a royalty equal to ten percent of our net product sales of Adcirca, as well as milestone payments of $325,000 for each $1,000,000 in Adcirca net product sales. We pay a single-digit percentage royalty based on net product sales of Orenitram under our license agreement with Supernus. We also pay The Scripps Research Institute a one percent royalty on sales of Unituxin. We pay DEKA product fees and a single-digit royalty on net product sales of the Remunity and RemunityPRO Pumps and Remodulin for use with these pumps. We will owe former securityholders of Revivicor a five percent royalty on net product sales of UHeart, UKidney, and UThymoKidney, plus certain milestone payments upon defined regulatory events. We have entered into other license agreements under which we are required to make milestone payments upon the achievement of certain developmental and commercialization objectives and royalty payments upon the commercialization of products covered by the license agreements. See Note 12-Commitments and Contingenciesto our consolidated financial statements for further
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2025 Annual Report
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details. In addition, we may owe additional earn-out consideration to the former securityholders of IVIVA, as described in Note 15-Acquisitions-Asset Acquisitionto our consolidated financial statements.
Off-Balance Sheet Arrangements
We hold an interest in an unconsolidated variable interest entity (VIE). We determined that we are not the primary beneficiary of this entity. As a result, we do not consolidate this VIE. See Note 4-Investments-Variable Interest Entities. We do not have any other off-balance sheet arrangements within the meaning of Item 303(a)(4) of Regulation S-K.
Summary of Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in conformity with generally accepted accounting principles in the United States (GAAP). GAAP requires that we make estimates and assumptions that affect the amounts and timing reported in our consolidated financial statements. As we become aware of updated information or new developments, these estimates and assumptions may change and materially impact reported amounts. We consider the following accounting policies to be critical to our consolidated financial statements because they require the use of our judgment and estimates (including those that are forward-looking) in their application.
Revenue Recognition
We generate revenues from the sale of our commercial products: Tyvaso DPI, Nebulized Tyvaso, Remodulin, Orenitram, Unituxin, and Adcirca. Revenue is recognized when we transfer control of our products to our distributors, as our contracts have a single performance obligation (delivery of our product). These revenues are subject to various product sales allowances, referred to as gross-to-net deductions, which are deducted from revenues to determine net product sales. For a description of our related accounting policies, see Note 2-Summary of Significant Accounting Policies-Revenue Recognitionto our consolidated financial statements.
The following category of gross-to-net deductions involves the use of significant estimates and judgments and information obtained from external sources.
Rebates and Chargebacks
The most significant rebates we pay include rebates that relate to our participation in various government healthcare programs (including Medicare Part D inflationary rebates required under the IRA), contractual rebates to certain of our domestic distributors, and contractual rebates we pay to managed care organizations covering Medicare Part D and commercial plans. Chargebacks relate to our participation in programs with the U.S. Department of Veterans Affairs and 340B covered entities. Although we accrue for our allowance for rebates and chargebacks in the same period that we recognize revenue, the actual rebate or chargeback on the sale of our product to a distributor is not invoiced to us until a future period, generally within six months from the date of sale. Inflationary rebates under Medicare Part D may follow a longer settlement timeline because they are calculated over applicable annual periods and invoiced by CMS following the end of those periods. Due to this time lag before notice of the rebate amount, we must estimate the amount of rebates and chargebacks to accrue. As of December 31, 2025 and 2024, we had a liability of $238.9 million and $140.8 million, respectively, related to rebates and chargebacks.
Estimates associated with our participation in government healthcare programs are particularly susceptible to adjustment given the time lag that may occur between our recording of an accrual and its ultimate invoicing. Because of the time lag in any particular quarter, adjustments to our rebates and chargebacks may incorporate revisions of accruals for prior quarters. Historically, adjustments to our estimates to reflect actual results or updated expectations have not been material to our overall financial results. Provisions attributed to sales in prior periods have been less than one percent of our total revenues for each of the years ended December 31, 2025, 2024, and 2023.
For a roll-forward of the liability accounts associated with our gross-to-net deductions, see the section above entitled Results of Operations-Gross-to-Net Deductions.
Recently Issued Accounting Standards
See Note 3-Recently Issued Accounting Standards, to our consolidated financial statements for information on our adoption and anticipated adoption of recently issued accounting standards.
| United Therapeutics, a public benefit corporation | |||||
United Therapeutics Corporation published this content on February 25, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 25, 2026 at 11:32 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]