UNITED THERAPEUTICS Corp (UTHR)

Item 7. 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 U.S. Securities and Exchange Commission (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 our newest product, Tyvaso DPI, and anticipated growth in the number of patients with pulmonary hypertension associated with interstitial lung disease (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 Inflation Reduction Act of 2022 (IRA) on our business;

•The anticipated impact our rebate agreements with pharmacy benefit managers will have on our net revenues;

•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, Inc. (Sandoz) and Liquidia PAH, LLC (formerly known as RareGen, LLC) (RareGen); our patent and trade secret litigation with Liquidia Technologies, Inc. (Liquidia) related to its new drug application (NDA) for Yutrepia; Liquidia’s lawsuit against the FDA related to the FDA’s decision to grant us a period of exclusivity and our cross-claims against the FDA related to Liquidia’s efforts to add an indication for PH-ILD to the NDA for Yutrepia; 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 therapies such as Merck’s recently-approved Winrevair and Liquidia’s Yutrepia, if it is approved by the FDA;

•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;

•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 Factors of 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.

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 pulmonary arterial hypertension (PAH) and PH-ILD. We initiated commercial shipments of Tyvaso DPI to our U.S. distributors in June 2022.

•Nebulized Tyvaso, a liquid inhaled formulation of treprostinil, approved by the FDA and regulatory authorities in Argentina, Israel, and Japan to improve exercise ability in patients with PAH. Nebulized Tyvaso was also approved by the FDA in March 2021 and by regulators in Israel and Japan in December 2022 and September 2024, respectively, to improve exercise ability in patients with PH-ILD. In addition, marketing authorization applications for nebulized Tyvaso to treat PAH and/or PH-ILD have also been approved, and others are pending, in various other countries in Latin America, Asia, and the Middle East.

•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.

•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.

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. In 2021, we launched a new pump for subcutaneous delivery of Remodulin, called the Remunity Pump, and recently completed development of a new version of the Remunity Pump, called RemunityPRO, which was cleared by the FDA in January 2025. We are studying nebulized Tyvaso in patients with idiopathic pulmonary fibrosis and progressive pulmonary fibrosis (the TETON studies).

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, bio-artificial organ alternatives, 3D organ alternative bioprinting, and ex vivo lung 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 Health Group, Inc. and its affiliates (Accredo) and Caremark, L.L.C. (CVS Specialty) to distribute Tyvaso DPI, nebulized Tyvaso, Remodulin, the Remunity Pump, and Orenitram in the United States, and we have entered into an exclusive distribution agreement with ASD Specialty Healthcare, Inc., an affiliate of Cencora, Inc. (formerly known as AmerisourceBergen Corporation), to distribute Unituxin in the United States. We also sell nebulized Tyvaso, Remodulin, and Unituxin to distributors internationally. We sell Adcirca through the pharmaceutical wholesale network of Eli Lilly and Company (Lilly). 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 vivo lung perfusion services, which are presented under Other within Note 13—Segment Information to 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.

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 products and post-marketing research commitments. 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

Historically, we granted stock options under our Amended and Restated Equity Incentive Plan and awards under our Share Tracking Awards Plan (the STAP). Issuance of awards under both of these plans was discontinued in 2015, and as of December 31, 2024, there were no longer any awards outstanding under our Amended and Restated Equity Incentive Plan. 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 13,820,000 shares of our common stock, including the 1,320,000 shares added pursuant to an amendment and restatement of the 2015 Plan approved by our shareholders in June 2024. 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.

The fair value of STAP awards and 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. Although we no longer grant STAP awards, we had approximately 0.1 million STAP awards outstanding as of December 31, 2024. We account for STAP awards as liabilities because they are settled in cash. As such, we must re-measure the fair value of STAP awards at the end of each financial reporting period until the awards are no longer outstanding. Changes in our liability associated with outstanding STAP awards as a result of such re-measurements are recorded as adjustments to share-based compensation expense (benefit) and can create volatility within our operating expenses from period to period. The following factors, among others, impact the amount of share-based compensation expense (benefit) recognized in connection with STAP awards from period to period: (1) volatility in the price of our common stock (specifically, increases in the price of our common stock will generally result in an increase in our liability and related compensation expense, while decreases in our stock price will generally result in a reduction in our liability and related compensation expense); and (2) decreases in the number of outstanding awards.

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 and new indications for existing products being developed in our pipeline, as described above under Part I, Item 1—Business—Research and Development.

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 as a result of additional payer rebates; (5) the competition we face within our industry, including competition from generic companies and the anticipated launch of new PAH and PH-ILD therapies; (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 $750 million for capital expenditures during 2025 through the end of 2027 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 Tyvaso DPI manufacturing facility in Research Triangle Park, North Carolina (RTP); construction of a clinical-scale designated pathogen-free (DPF) facility in Stewartville, Minnesota; and initial pre-construction activities for a commercial-scale DPF facility. We plan to fund these capital expenditures using cash on hand.

We anticipate our first commercial-scale DPF facility will provide an initial commercial supply of our xeno-organ products if and when they are approved by the FDA. Our commercial-scale DPF facilities will be very capital-intensive, but they will be executed in stages with the ability to adjust the schedule (and anticipated cost) depending on the progress of our clinical and regulatory activities. In addition to the production capacity of our commercial-scale DPF facility, we anticipate additional commercial capacity stemming from at least three clinical-scale facilities: our existing DPF facility in Virginia; a DPF facility we are building in Minnesota, as noted above; and a third clinical-scale DPF facility we plan to build in Houston, Texas.

We operate in a highly competitive market in which several large pharmaceutical companies control many of the available PAH therapies. These pharmaceutical companies are well established in the market and possess greater financial, technical, and marketing resources than we do. In addition, there are investigational products in late-stage development that, if approved, may erode the market share or net prices of our existing commercial therapies and make market acceptance more difficult to achieve for any therapies we attempt to market in the future. For example, Yutrepia has been tentatively approved by the FDA for the treatment of PAH and PH-ILD, with final approval potentially occurring after expiration of an exclusivity period ending in May 2025. If Yutrepia receives final approval and is commercially launched, our revenues from Tyvaso DPI could be materially adversely affected, and the impact may be greater if Yutrepia is ultimately approved for the treatment of PH-ILD.

Results of Operations

This section of this Report generally discusses 2024, 2023, and 2022 items and year-to-year comparisons between 2024 and 2023. Discussions of year-to-year comparisons between 2023 and 2022 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 Operations of our Form 10-K filed on February 21, 2024 (our 2023 Annual Report).

Revenues

The table below presents the components of total revenues (dollars in millions):

(1) Net product sales include both the drug product and the respective inhalation device.

(2) Net product sales include sales of infusion devices, including the Remunity Pump.

Total Tyvaso net product sales grew 31 percent to $1,620.4 million in 2024, compared to $1,233.7 million for 2023. Tyvaso DPI net product sales increased in 2024, as compared to 2023, due to an increase in quantities sold of $269.2 million and, to a lesser extent, price increases, partially offset by higher gross-to-net revenue deductions. The increase in Tyvaso DPI quantities sold was primarily due to continued growth in the number of patients following the product’s launch (including by PH-ILD patients) and, to a lesser extent, increased commercial utilization following implementation of the Part D redesign under the Inflation Reduction Act. Nebulized Tyvaso net product sales increased in 2024, as compared to 2023, primarily due to higher quantities sold of $51.9 million and, to a lesser extent, a price increase. Growth in nebulized Tyvaso was also driven by continued growth in use by PH-ILD patients.

Remodulin net product sales increased in 2024, as compared to 2023, primarily due to an increase in U.S. Remodulin net product sales, driven by an increase in quantities sold.

Orenitram net product sales increased in 2024, as compared to 2023, primarily due to an increase in quantities sold and, to a lesser extent, a price increase. The increase in quantities sold was driven, at least in part, by increased commercial utilization following the implementation of the Part D redesign under the Inflation Reduction Act.

We have entered into contracts with all of the major pharmacy benefit managers for Part D and commercial insurance plans, which provide rebates on utilization of Tyvaso DPI and, in some cases, Orenitram and nebulized Tyvaso. We entered into these rebate agreements to encourage access to these therapies. Many of these rebates went into effect beginning in the second half of 2024, which impacted our net revenues by increasing gross-to-net deductions for the relevant products. These rebate contracts are effective at least through 2025.

Unituxin net product sales increased in 2024, as compared to 2023, primarily due to a price increase and an increase in quantities sold.

The table below presents the breakdown of total revenues between the United States and rest-of-world (ROW) (in millions):

(1) Net product sales include both the drug product and the respective inhalation device.

(2) Net product sales include sales of infusion devices, including the Remunity Pump.

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):

Cost of Sales

The table below summarizes cost of sales by major category (dollars in millions):

(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, 2024, as compared to the same period in 2023, was primarily due to an increase in Tyvaso DPI royalty expense and product costs driven by growth in Tyvaso DPI revenues.

Research and Development

The table below summarizes the nature of research and development expense by major expense category (dollars in millions):

(1)External research and development primarily 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 FDA 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 FDA approval, and internal facilities-related expenses, including depreciation, related to research and development activities.

(3)See Share-Based Compensation section below for discussion.

(4)Other primarily 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, 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 vivo lung

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 Medical, Inc. (IVIVA).

(5)Calculation is not meaningful.

Research and development, excluding share-based compensation. The increase in research and development expense for the year ended December 31, 2024, as compared to the same period in 2023, was due to: (1) increased expenditures related to manufactured organ and organ alternative projects; (2) non-refundable licensing payments for drug delivery device technologies and ex vivo lung perfusion technology; and (3) increased expenditures related to the TETON studies of nebulized Tyvaso in patients with IPF and PPF. These increases were partially offset by the impact of an IPR&D expense recorded during the year ended December 31, 2023 in connection with the acquisition of IVIVA, which expense did not recur in 2024.

Selling, General, and Administrative

The table below summarizes selling, general, and administrative expense by major category (dollars in millions):

(1)Excluding litigation accrual. See Litigation accrual section below.

(2)See Share-Based Compensation section below for discussion.

(3)Calculation is not meaningful.

General and administrative, excluding litigation accrual and share-based compensation. The increase in general and administrative expense for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to increases in: (1) personnel expense due to growth in headcount; (2) legal expenses related to litigation matters; and (3) consulting expenses.

Litigation accrual. As of December 31, 2024, we accrued a liability of $71.1 million related to ongoing litigation with Sandoz reflecting the final judgment and post-judgment interest accrued through the end of 2024. 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 administrative in 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, 2024, as compared to the same period in 2023, was primarily due to increases in: (1) personnel expense due to growth in headcount; (2) marketing expenses; and (3) consulting expenses.

Share-Based Compensation

The table below summarizes share-based compensation expense by major category (dollars in millions):

The table below summarizes share-based compensation expense by line item in our consolidated statements of operations (dollars in millions):

The increase in share-based compensation expense for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to: (1) an increase in STAP expense driven by a 60 percent increase in our stock price during 2024, as compared to a 21 percent decrease in our stock price during 2023; (2) an increase in restricted stock unit expense due to a greater number of awards granted and remaining outstanding in 2024, as compared to the same period in 2023; and (3) an increase in stock option expense due to a greater number of awards granted in 2024, as compared to the same period in 2023. See Note 8—Share-Based Compensation, to our consolidated financial statements for more information.

Other Income (Expense), Net

The change in other income (expense), net for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to net unrealized gains on equity securities. See Note 4—Investments and Note 5—Fair Value Measurements, to our consolidated financial statements for more information.

Income Tax Expense

Income tax expense was $343.9 million for the year ended December 31, 2024, compared to $289.5 million for the same period in 2023. For the years ended December 31, 2024 and 2023, our effective income tax rates (ETR) were approximately 22 percent and 23 percent, respectively. Our ETR for the year ended December 31, 2024 decreased, compared to our ETR for the year ended December 31, 2023, primarily due to a decrease in nondeductible acquisition costs and an increase in excess tax benefits from share-based compensation, partially offset by an increase in nondeductible compensation. For additional details, see Note 10—Income Taxes to our consolidated financial statements.

Share Repurchase

In March 2024, we entered into an accelerated share repurchase agreement (the ASR agreement) with Citibank, N.A. (Citi). Under the 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 ASR agreement, measured based on the closing price of our common stock on March 25, 2024.

The share repurchase under the 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 ASR agreement that we currently hold as treasury stock in our consolidated balance sheets.

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 March 2022, we entered into a credit agreement (the 2022 Credit Agreement), which provides for unsecured revolving credit facilities of up to $2.0 billion in the aggregate. Our aggregate outstanding balance under the 2022 Credit Agreement was $300.0 million and $700.0 million as of December 31, 2024 and 2023, respectively. Although our credit facility matures in 2029, we reclassified the outstanding balance of $300.0 million as a current liability in our consolidated balance sheets as of December 31, 2024, as we intend to repay this amount within one year. See Unsecured Revolving Credit Facilities below for further details.

For information regarding the fluctuation explanations between 2023 and 2022, see our 2023 Annual Report.

Cash and Cash Equivalents and Marketable Investments

Cash and cash equivalents and marketable investments comprise the following (dollars in millions):

Cash Flows

Cash flows comprise the following (dollars in millions):

(1) Calculation is not meaningful.

Operating Activities

Our operating assets and liabilities consist primarily of accounts receivable, inventories, accounts payable, accrued expenses, liabilities for our STAP awards, and tax-related payables and receivables.

The increase of $349.1 million in net cash provided by operating activities for the year ended December 31, 2024, as compared to the same period in 2023, 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 $1,136.8 million in net cash provided by investing activities for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to: (1) a $1,099.7 million decrease in cash used for total purchases, sales, and maturities of marketable investments; and (2) an $89.2 million decrease in net cash paid related to the acquisitions of IVIVA and Miromatrix in 2023; partially offset by: (1) a $30.5 million increase in cash paid to purchase investments in privately-held companies; (2) a $16.1 million increase in cash paid to purchase property, plant, and equipment; and (3) a $5.5 million increase in deposits.

Financing Activities

The increase of $1,242.9 million in net cash used in financing activities for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to: (1) a $1.0 billion payment in 2024 to repurchase shares of our common stock; and (2) a $300.0 million increase in cash paid for repayments on our line of credit; partially offset by a $54.5 million increase in proceeds from the exercise of stock options.

Unsecured Revolving Credit Facilities

In March 2022, we entered into the 2022 Credit Agreement, which provides for unsecured revolving credit facilities of up to $2.0 billion in the aggregate. On March 31, 2022, we borrowed $800.0 million under the facilities and used the funds to repay outstanding indebtedness under our then-existing credit agreement. We paid down $400.0 million of our balance under the 2022 Credit Agreement during the year ended December 31, 2024. The aggregate balance of $300.0 million under our 2022 Credit Agreement remained outstanding as of both December 31, 2024 and February 26, 2025. See Note 7—Debt, to our consolidated financial statements.

Contractual Obligations

As of December 31, 2024, we had the following contractual obligations (in millions):

(1)Long-term debt obligations include future principal and interest payments on our adjusted variable rate obligations under the 2022 Credit Agreement. The 2022 Credit Agreement will mature in March 2029. As of December 31, 2024, we have classified the outstanding balance of $300.0 million as a current liability on our consolidated balance sheet, as we intend to repay this amount within one year. See Note 7—Debt to our consolidated financial statements for further details.

(2)Estimated based on the intrinsic value of exercisable outstanding STAP awards as of December 31, 2024. See Note 8—Share-Based Compensation—STAP Awards to our consolidated financial statements for further details.

(3)Consists of actuarially derived, undiscounted, estimated future payouts of benefits. See Note 11—Employee Benefit Plans—Supplemental Executive Retirement Plan to our consolidated financial statements for further details.

(4)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.

(5)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 Contingencies to our consolidated financial statements for further details.

(6)As of December 31, 2024, our other non-current liabilities in our consolidated balance sheets includes a liability of $20.0 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 Taxes to 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, 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 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 Contingencies to our consolidated financial statements for further details. In addition, we may owe additional earn-out consideration to the former securityholders of IVIVA and Miromatrix, as described in Note 15—Acquisitions to 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 Recognition to 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

Our most significant rebates relate to our participation in state Medicaid programs, contractual rebates to certain of our domestic distributors, and contractual rebates offered 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. Due to this time lag, we must estimate the amount of rebates and chargebacks to accrue. As of December 31, 2024 and 2023, we had a liability of $140.8 million and $108.4 million, respectively, related to rebates and chargebacks.

Estimates associated with our participation in state Medicaid programs are particularly susceptible to adjustment given the extensive time lag that may occur between our recording of an accrual and its ultimate invoicing by individual state Medicaid programs, which can occur up to several years after the sale of our product. Because of the time lag for Medicaid and other rebates, in any particular quarter, our adjustments 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, 2024, 2023, and 2022.

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.

Item 7. 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 U.S. Securities and Exchange Commission (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 anticipated growth in the number of nebulized Tyvaso patients as a result of the expansion of its label to include pulmonary hypertension associated with interstitial lung disease (PH-ILD) and anticipated growth in Tyvaso DPI revenues;

•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 Inflation Reduction Act of 2022 (IRA) on our business;

•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, Inc. (Sandoz) and Liquidia PAH, LLC (formerly known as RareGen, LLC) (RareGen); our patent and trade secret litigation with Liquidia Technologies, Inc. (Liquidia) related to its new drug application (NDA) for Yutrepia; our lawsuit against the FDA related to Liquidia’s efforts to add PH-ILD to the NDA for Yutrepia; our litigation with Humana Inc., United Healthcare Services, Inc., MSP Recovery Claims, Series LLC, and related entities; and our litigation with the U.S. Department of Health and Human Services (HHS) and the U.S. Health Resource Services Administration (HRSA) related to the Public Health Service’s 340B drug pricing program (the 340B program);

•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 newly-developed therapies such as Merck’s sotatercept 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), and our ability to obtain and maintain related approvals by the FDA and its international counterparts;

•Expectations regarding the amount and timing of capital expenditures to construct new facilities to support our product development and commercialization efforts;

•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;

•The effect of our conversion to a Delaware public benefit corporation (PBC);

•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 Factors of 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.

Overview of Marketed Products

We market and sell the following commercial products:

•Tyvaso DPI and Nebulized Tyvaso. Nebulized Tyvaso is an inhaled formulation of the prostacyclin analogue treprostinil, approved by the FDA and regulatory authorities in Argentina, Israel, and Japan to improve exercise ability in patients with pulmonary arterial hypertension (PAH). Nebulized Tyvaso was also approved by the FDA in March 2021 and by regulators in Israel in December 2022 to improve exercise ability in patients with PH-ILD. In May 2022, we also obtained FDA approval of a dry powder formulation of treprostinil for inhalation known as Tyvaso DPI to treat PAH and PH-ILD, and we initiated commercial shipments of Tyvaso DPI to our distributors in June 2022. Nebulized Tyvaso was also approved to treat PAH in Japan in late 2022, and our Japanese distributor launched commercial sales in Japan during the second quarter of 2023, and submitted an application in December 2023 to add a PH-ILD indication. Nebulized Tyvaso was also approved in Argentina to treat PH-ILD in February 2023.

•Remodulin, a continuously-infused formulation of treprostinil, approved by the FDA for subcutaneous and intravenous administration to diminish symptoms associated with exercise in PAH patients. 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 new subcutaneous infusion system for Remodulin. In June 2023, our contract manufacturer obtained FDA clearance for a cartridge to be used with the CADD-MS3 ambulatory infusion pump for subcutaneous infusion of Remodulin.

•Orenitram, an extended-release tablet dosage form of treprostinil, approved by the FDA to delay disease progression and improve exercise capacity in PAH patients.

•Unituxin, a monoclonal antibody approved in the United States, Canada, and Japan for the treatment of high-risk neuroblastoma.

•Adcirca, an oral PDE-5 inhibitor approved by the FDA to improve exercise ability in PAH patients.

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. In 2021, we launched a new pump for subcutaneous delivery of Remodulin, called the Remunity Pump, and are currently developing a new version of the Remunity Pump. We are also working with a medical device manufacturer to develop new delivery systems for Remodulin. We are studying nebulized Tyvaso in patients with idiopathic pulmonary fibrosis and progressive pulmonary fibrosis (the TETON studies).

In addition, we are developing a new product to treat PAH, ralinepag. We are also heavily engaged in research and development of a number of organ transplantation-related technologies including xenotransplantation, regenerative medicine, bio-artificial organs, 3-D organ bioprinting, and ex vivo lung 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, together with associated sales of administration devices (in the case of Tyvaso DPI, nebulized Tyvaso, and Remodulin). We have entered into separate, non-exclusive distribution agreements with Accredo Health Group, Inc. and its affiliates (Accredo) and Caremark, L.L.C. (CVS Specialty) to distribute Tyvaso DPI, nebulized Tyvaso, Remodulin, the Remunity Pump, and Orenitram in the United States, and we have entered into an exclusive distribution agreement with ASD Specialty Healthcare, Inc., an affiliate of Cencora, Inc. (formerly known as AmerisourceBergen Corporation), to distribute Unituxin in the United States. We also sell nebulized Tyvaso, Remodulin, and Unituxin to distributors internationally. We sell Adcirca through the pharmaceutical wholesale network of Eli Lilly and Company (Lilly). 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 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.

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 products and post-marketing research commitments. 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. Selling expenses also include share-based compensation, salary-related expenses, product marketing and sales operations costs, and other costs incurred to support our sales efforts. General and administrative expenses also include our core corporate support functions such as human resources, finance, and legal, and external costs to support our core business such as insurance premiums, legal fees, and other professional service fees.

Share-Based Compensation

Historically, we granted stock options under our Amended and Restated Equity Incentive Plan and awards under our Share Tracking Awards Plan (the STAP). Issuance of awards under both of these plans was discontinued in 2015. 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 12,500,000 shares of our common stock, including the 1,000,000 shares added pursuant to an amendment and restatement of the 2015 Plan approved by our shareholders in June 2023. 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.

The fair value of STAP awards and 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. Although we no longer grant STAP awards, we had approximately 0.4 million STAP awards outstanding as of December 31, 2023. We account for STAP awards as liabilities because they are settled in cash. As such, we must re-measure the fair value of STAP awards at the end of each financial reporting period until the awards are no longer outstanding. Changes in our liability associated with outstanding STAP awards as a result of such re-measurements are recorded as adjustments to share-based compensation expense (benefit) and can create volatility within our operating expenses from period to period. The following factors, among others, have a significant impact on the amount of share-based compensation expense (benefit) recognized in connection with STAP awards from period to period: (1) volatility in the price of our common stock (specifically, increases in the price of our common stock will generally result in an increase in our liability and related compensation expense, while decreases in our stock price will generally result in a reduction in our liability and related compensation expense); and (2) decreases in the number of outstanding awards.

Future Prospects

We anticipate that overall revenue growth over the near-term will be driven primarily by: (1) growth in sales of the recently-launched Tyvaso DPI, and growth in sales of nebulized Tyvaso as a result of the expansion of its label to include PH-ILD; (2) continued growth in the number of patients prescribed Orenitram following our expansion of the Orenitram label to reflect the results of the FREEDOM-EV study; and (3) 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 and new indications for existing products being developed in our pipeline, as described above under Part I, Item 1—Business—Research and Development.

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 price of our products and the reimbursement of our products by public and private health insurance organizations, including the impact on such prices and reimbursement amounts as a result of the IRA; (5) the competition we face within our industry, including competition from generic companies and the anticipated launch of new PAH and PH-ILD therapies; (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 for capital expenditures of approximately $500 million during 2024-2026 in order to construct additional facilities to support the development and commercialization of our products and technologies. We plan to dedicate the majority of this budget to constructing a new Tyvaso DPI manufacturing facility in Research Triangle Park, North Carolina. We plan to fund these capital expenditures using cash on hand. If and when we commence construction of commercial-scale designated pathogen-free facilities to produce porcine organs for xenotransplantation, the rate of our capital expenditures will increase substantially.

We operate in a highly competitive market in which a small number of large pharmaceutical companies control a majority of available PAH therapies. These pharmaceutical companies are well established in the market and possess greater financial, technical, and marketing resources than we do. In addition, there are a number of investigational products in late-stage development that, if approved, may erode the market share of our existing commercial therapies and make market acceptance more difficult to achieve for any therapies we attempt to market in the future. For example, if Yutrepia is commercially launched, our Tyvaso revenues could potentially be materially adversely affected, and the impact may be more material if Yutrepia is approved for the treatment of PH-ILD.

Results of Operations

This section of this Report generally discusses 2023, 2022, and 2021 items and year-to-year comparisons between 2023 and 2022. Discussions of year-to-year comparisons between 2022 and 2021 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 Operations of our Form 10-K filed on February 22, 2023 (our 2022 Annual Report).

Revenues

The table below presents the components of total revenues (dollars in millions):

(1) Net product sales include both the drug product and the respective inhalation device.

(2) Net product sales include sales of infusion devices including the Remunity Pump.

(3) Calculation is not meaningful.

Total Tyvaso net product sales grew 41% to $1,233.7 million in 2023, compared to $873.0 million for 2022. This growth was primarily due to an increase in quantities sold, driven by the commercial launch of Tyvaso DPI in June 2022 and continued growth in utilization by PH-ILD patients. Tyvaso DPI net product sales increased in 2023, as compared to 2022, primarily due to an increase in quantities sold. Nebulized Tyvaso net product sales decreased in 2023, as compared to 2022, driven by a decrease in U.S. nebulized Tyvaso net product sales, primarily due to a decrease in quantities sold following the commercial launch of Tyvaso DPI, partially offset by an increase in international nebulized Tyvaso net product sales, primarily due to the commercial launch of nebulized Tyvaso in Japan in December 2022, as shown in the table below.

Remodulin net product sales decreased in 2023, as compared to 2022, due to a decrease in international net product sales, partially offset by an increase in U.S. Remodulin net product sales, as shown in the table below.

Orenitram net product sales increased in 2023, as compared to 2022, due to a price increase and an increase in quantities sold.

Unituxin net product sales increased in 2023, as compared to 2022, primarily due to a price increase.

The table below presents the breakdown of total revenues between the United States and rest-of-world (ROW) (in millions):