By Vlad Schepkov

After receiving approval from FDA midday, shares of United Therapeutics rose quickly to the top of the Monday’s list of most active stocks and gainers on May 23, 2013. They finished the day almost 12% higher.

In this morning’s press conference, United Therapeutics confirmed the formal approval. This was the end of UTHR’s almost 9-month-long battle. Tyvaso previously received a Complete Response letter (CRL), on October 18, 2021. Then, a three-month extension to PDUFA dates was granted – in order to get its pulmonary hypertension drug candidates through regulatory hurdles.

Joseph Thome, Cowen analyst, sees this as a win for the FDA. The FDA rejected arguments from a citizen’s protest – which many consider the primary reason for October’s CRL – suggesting that “excipient FDKP presents a potential risk for acute bronchospasm among patients with chronic lung diseases”. They also approved Tyvaso without a label to treat pulmonary arterial hypertension and pulmonary hypertension with interstitial lung disease.

Cowen believes that investors were worried about the possibility of the treatment being approved only for PAH and would be given a CRL. According to Cowen, the FDA’s decision is encouraging and he views approval and labeling as a “best case” scenario. Cowen calculates Tyvaso/Tyvaso DPI revenues at $1.9B per year in 2025 for PAH, PH-ILD, and reiterates the “Outperform” rating of UTHR.

Credit Suisse analyst Tiago Fauth also maintains a positive tone over today’s announcement, as he believes “today’s favorable approval in both indications establishes the necessary foundation to support the franchise’s long-term tail value, and as well as its future optionality in additional indications.”

Fauth sees “lower long-term share erosion” now and gives “greater pipeline valuation to reflect possible label expansion opportunities”. The analyst raises his price target from $219 to $247 and reiterates the “Outperform” rating.

Yesterday’s closing price of UTHR shares was $210.14, just $8 off the stock’s record high of $218.38 in late 2021.