What Happened?

Shares of biotechnology company United Therapeutics (NASDAQ: UTHR) jumped 12.7% in the afternoon session after the company announced its TETON-1 pivotal study of Tyvaso met its primary endpoint for the treatment of idiopathic pulmonary fibrosis, a type of lung disease. 

The study showed that its drug, nebulized Tyvaso, was superior to a placebo in improving lung function. Specifically, the treatment improved what is known as forced vital capacity (FVC), a key measure of lung health, by 130.1 mL over 52 weeks. In addition to improving FVC, the drug also reduced the risk of clinical worsening for patients. The positive results were consistent across all patient subgroups and did not raise new safety concerns.

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What Is The Market Telling Us

United Therapeutics’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for United Therapeutics and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 7 months ago when the stock gained 34.5% on the news that the company announced that its TETON-2 pivotal study of its drug Tyvaso for the treatment of idiopathic pulmonary fibrosis (IPF) met its primary efficacy endpoint. 

The late-stage study focused on IPF, a progressive lung disease that scars tissue and impairs breathing. The trial demonstrated that the inhaled therapy, Tyvaso, significantly improved lung function compared to a placebo over 52 weeks. Specifically, patients treated with Tyvaso showed a statistically significant 95.6 mL improvement in forced vital capacity (FVC), a key measure of lung health. 

The positive results were consistent across all patient subgroups, and no new safety concerns were identified. Following the news, analysts at UBS raised their price target on the stock to $415 from $385, maintaining a 'Buy' rating and signaling confidence in the drug's potential.

United Therapeutics is up 18.6% since the beginning of the year, and at $589.26 per share, has set a new 52-week high. Investors who bought $1,000 worth of United Therapeutics’s shares 5 years ago would now be looking at an investment worth $3,561.

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