United Therapeutics moves on to ovarian cancer drug, new labs

Silver Spring firm modeled after movie-making namesake sees competition ahead for its pulmonary hypertension drug

Friday, April 28, 2006

Click here to enlarge this photo Brian Lewis⁄The Gazette Aicha Geblaoui (left) and Chamelle Lassiter work on quality control for United Therapeutics. The Silver Spring company turned a $65 million profit in 2005, with sales of Remoudlin accounting for 90 percent of revenues.

‘‘It‘s because we are making a profit,” Zaccardelli said. ‘‘Biotechs are not supposed to do that so quickly.”

The future seems bright for the Silver Spring company. It turned a profit of $65 million in 2005, just seven years after going public; it is entering final human testing of an ovarian cancer drug with a potential blockbuster market; and it is about to open a new $32 million laboratory in Silver Spring,

United Therapeutics’ fortunes have been fueled by sales of Remodulin, which treats pulmonary arterial hypertension and which accounted for more than 90 percent of its $115.9 million in revenues last year. The company licensed Remodulin from pharmaceutical giant GlaxoSmithKline, effectively setting in motion United’s business plan several years ago, say its officials.

One explanation for United’s rapid and unusual success may lie in its unconventionality. It is a small drug-development company — 215 employees — that is using an imaginative strategy rivaling a Hollywood script for drama.

‘‘We are not a discovery company,” CFO Fred Hadeed said. ‘‘We do not have basic R&D facilities and basic research grants. We find drugs that have been tested in humans in a late stage. We in-license those drugs and get them approved.”

Some companies take 20 years to get a drug ‘‘from discovery of the molecule to the time it is approved,” Hadeed said. ‘‘We enter the timeline almost at the end.”

Last month, the U.S. Food and Drug Administration lifted all conditions it had imposed on its accelerated approval of Remodulin two years ago. Because the pulmonary disease is life-threatening and United’s tests had indicated Remodulin to be safe, the agency conditionally allowed United to sell the drug. It is injected under the skin or sprayed into an artery periodically through a catheter.

Chairman and CEO Martine Rothblatt, who previously worked in satellite communications, founded United Therapeutics in 1996 under the name of Lung Rx, driven by a passion to save the health and perhaps life of her young daughter, Jenesis Rothblatt. Jenesis had developed pulmonary hypertension three years earlier. She is now 21, still taking the medication, according to company officials, and planning to marry in June.

When the company licensed other late-stage drug candidates for treating other diseases, the name Lung Rx seemed limited, Rothblatt said. She and her management team changed the name to United Therapeutics to emulate the original mission of Hollywood’s United Artists studio. Lung Rx remains as a wholly owned subsidiary of United Therapeutics.

‘‘It seemed perfect” for the maverick biotech firm, said executive vice president Paul Mahon, who has been with the company since its founding.

In 1919, actors Charlie Chaplin, Mary Pickford and Douglas Fairbanks and director D.W. Griffith, created a new kind of independent movie company to break the domination of the big studios over distribution rights.

‘‘Yes, we looked to the idea of United Artists,” Mahon said. ‘‘They got together to break from the old studio system. They formed this company on the outside and said, ‘Let’s do something different and let’s unite in our cause.’”

Currently, United — the drug developer — is working on inhaled and pill versions of Remodulin and has a full pipeline of drug candidates and four commercial products, Hadeed said.

But, as any good Fairbanks Western would have it, company officials can now see a cloud of dust rising on the horizon. CoTherix Inc. of South San Francisco, Calif., is riding into United’s market territory with its own version of an inhaled treatment for pulmonary arterial hypertension that is already on the market and gaining strength. In only nine months of 2005, sales for CoTherix’ Ventavis generate revenues of $23.9 million for the small company.

Hadeed said only three companies are actively developing such treatments: Glaxo, United and CoTherix. ‘‘We truly have an advantage because our molecule has the longest active life in the body of these products — four-and-a-half hours,” he said.

Anne Bowdidge, senior director of investor relations with CoTherix, acknowledged that Remodulin is a longer-lasting treatment but said Ventavis is preferred by many patients because it is more convenient and more potent. She added that, similar to United’s approach, CoTherix licensed Ventavis in a late stage of development from Schering AG in Europe, which agreed to relinquish its U.S. marketing rights.

United Therapeutics has marketing approvals for use of Remodulin in nearly 30 nations, including most of the European Union, most of North America, Australia, Switzerland and Argentina, Hadeed said.

Despite United’s positive results last year, Navdeep Jaikaria, senior analyst with Rodman and Renshaw in New York said, ‘‘We rate United Therapeutics as a neutral performer currently. We do like the inhaled Remodulin, now under development. It has been shown to heal.”

Jaikaria added that CoTherix’ Ventavis is ‘‘like Remodulin” but that Remodulin has certain advantages such as a better half life. It should be on the market mid-year 2008.”

United is now ready to focus on ovarian cancer. The company has nearly filled its final trial of OvaRex, which stimulates an immune system attack on ovarian tumors. The trial includes 60 clinical sites and 350 patients with advanced ovarian cancer. It is designed to help patients in the ‘‘watchful waiting period” of up to six months after chemotherapy. As many as 85 percent of patients get the disease again.

‘‘There is nothing that is FDA-approved for this period. We are trying to prevent the recurrence of the disease,‘‘ Mahon said.

Navdeep agreed.

‘‘We consider it 50-50,” Navdeep said of OvaRex. ‘‘If it works, it will be a strong positive for the company because I do not think anyone on the street has anything that works.‘‘

United Therapeutics is turning its profits into significant capital investments. Its new Silver Spring lab — adjacent to its headquarters and with a dedication scheduled for June 26 — will produce Remodulin and OvaRex.

The company also plans an expansion in North Carolina’s Research Triangle Park, where it already has a small facility with 35 employees. Durham County officials have approved up to $650,000 in incentives to woo the company to build a new, 175-employee plant that would manufacture a pill form of Remodulin.

United Therapeutics is ‘‘different in that we have a very strong fiscal discipline,” Rothblatt said. ‘‘We have an obligation to get a gain for our shareholders. And, of course we also have a strong ethical commitment for doctors and patients to produce the best possible medicines.”