Today’s recommendation is a global biotech company with growing revenues and a healthy pipeline.
United Therapeutics (UTHR)
from Cabot Benjamin Graham Value Investor
United Therapeutics (UTHR) develops and markets therapeutic products for patients with chronic and life-threatening illness, including cardiovascular disorders, cancer and infectious diseases.
The company is gaining market share and has become the U.S. leader in the pulmonary arterial hypertension (PAH) market with its highly successful Remodulin, Adcirca and Tyvaso treatments.
In addition, exciting new products are being discovered in the company’s laboratories. United recently received FDA approval for Orenitram (treprostinil) extended-release tablets for the treatment of PAH to improve exercise capacity. The approval marks the first time that the FDA has approved an orally administered prostacyclin analogue for any disease—and the fifth approval for United’s treatment of PAH—which provides a wider choice of PAH therapies for physicians and patients.
In separate news, United announced that it had received a subpoena from the U.S. Department of Justice (DOJ) examining the company’s marketing practices of three of its leading drugs. Additional details are not available yet. Investigations into marketing practices sometimes end up with no evidence of wrongdoing, but Johnson & Johnson recently paid a $2.2 billion drug-marketing settlement in 2013. I will keep you abreast of any new developments in the DOJ investigation of United.
Sales have soared during the past three years, but EPS stalled in 2013. United is well positioned to produce solid growth during the next several years. Sales surged 20% and EPS declined 3% in 2013. Sales will rise 12% and EPS will advance 23% in 2014. New treatments for unmet clinical needs are under development and expansion into foreign markets offers great opportunities for the company. Maximum Buy Price is 110.10. UTHR will likely reach my Minimum Sell Price of 140.40 within one year.
J. Royden Ward, Cabot Benjamin Graham Value Investor, www.cabot.net, 978-745-5532, January 2014