Lung Disease Breakthrough Boosts United Therapeutics — and its Rivals

United Therapeutics shares rose a breathtaking 33% on Tuesday — actually, it might be more appropriate to say they rose a breath-giving 33%.

The biotech company announced the results of a late-stage study showing its drug Tyvaso significantly enhanced lung function in people with a rare, progressive lung disease. A multi-billion dollar market opportunity is in the wings, and the news was enough to lift United Therapeutics’ rivals pursuing similar treatments. For investors, it’s a breath of fresh air. For patients, it’s a sigh of relief.

Inflate Expectations

The lung condition in question is called idiopathic pulmonary fibrosis, or IPF. The chronic disease is associated with the stiffening of lung tissue, which can lead to permanent scarring that makes it harder for someone to breathe. About 5 million people worldwide are affected, including about 100,000 Americans, according to the National Institutes of Health. Some 30,000 to 40,000 new US cases are diagnosed every year.

Tyvaso, or treprostinil, when minus the marketing name, significantly improved what’s called forced vital capacity, an important measure of how much air someone can exhale, in a yearlong, 597-patient study. The inhaled drug showed progress not only compared to a placebo, but also in patients taking oral antifibrotics typically used to treat IPF, such as those from Roche and Boehringer Ingelheim. Healthcare-focused investment bank Leering Partners wrote, in a note, that Tyvaso “could function as an unprecedented add-on therapy with additive effects, positioning it uniquely in the IPF treatment landscape.” It’s also a potential financial windfall:

• UBS said in a note that the result means Tyvaso is much more likely to be approved to treat IPF, pending a second late-stage study. The bank said the drug, already approved in the US to treat another rare lung condition, pulmonary arterial hypertension, could reach $3 billion in peak annual sales, up from $1.6 billion last year.
• United Therapeutics rivals Insmed and Liquidia rose 6.7% and 3.2% Tuesday. Insmed is testing an IPF drug that RBC Capital Markets analysts said may outperform Tyvaso, while Liquidia’s recently FDA-approved Yutrepia will compete directly with it. 

More Upside: The long weekend heralded a streak of good news for pharma, and more importantly, for patients. On Sunday, Novo Nordisk said its weight-loss drug Wegovy slashed the risk of heart attack, stroke or mortality by 57% compared with rival Eli Lilly’s equivalent GLP-1 drug among obese and overweight patients. A day earlier, on Saturday, a trial study showed AstraZeneca’s experimental Baxdrostat significantly lowered high blood pressure in patients resistant to existing treatments, meaning it could help millions worldwide.