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Press Release

Press Release

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July 31, 2008 / 7:00 AM ET

United Therapeutics Reports Second Quarter 2008 Financial Results

- Revenues of $68.6 Million, Increase of 32% Over Second Quarter 2007

- EPS of $0.63 per Basic Share, Increase of 125% Over Second Quarter 2007

- Earnings Before Non-Cash Charges of $1.36 per Basic Share, Increase of 56% Over Second Quarter 2007

SILVER SPRING, Md., July 31 /PRNewswire-FirstCall/ -- United Therapeutics Corporation (Nasdaq: UTHR) today announced its results of operations for the quarter ended June 30, 2008.

Total revenues for the second quarter of 2008 were $68.6 million, up 32.3% from $51.8 million for the second quarter of 2007. Net income for the second quarter of 2008 was $14.3 million, or $0.63 per basic share, compared to $5.8 million, or $0.28 per basic share, for the second quarter of 2007. Gross margins from sales were $60.6 million in the second quarter of 2008, compared to $45.8 million in the second quarter of 2007. The increases in revenues and gross margins corresponded to the growth in sales of our lead product, Remodulin. Earnings before non-cash charges, defined as net income before non-cash income taxes, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), were $30.7 million for the second quarter of 2008, up 70.3% from $18.0 million for the second quarter of 2007.

"It is gratifying that we are on track to grow our annual revenues in excess of 30% for the sixth consecutive year," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "I am also pleased that, after twelve years of operations, our accumulated deficit has been eliminated and we are now able to report accumulated earnings. These financial accomplishments reflect the decisions of hundreds of doctors and patients to use Remodulin and make it the leading form of prostacyclin therapy in the United States."

Research and Development Expenses

The table below summarizes research and development expenses by major project and non-project components (dollars in thousands):

                                         Three Months Ended
                                              June 30,
                                        2008            2007
    Project and non-project:
      Cardiovascular                  $11,890         $ 9,269          28.3 %
      Cancer                              177           4,061         (95.6)%
      Infectious disease                  220             200          10.0 %
      Share-based compensation          3,313           2,981          11.1 %
      Other                             3,541           1,459         142.7 %
        Total research and
         development expense          $19,141         $17,970           6.5 %

The increase in cardiovascular expenses was primarily due to increased expenses related to our inhaled and oral treprostinil programs.

Selling, General and Administrative Expenses

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

                                         Three Months Ended
                                              June 30,
                                        2008            2007
      General and administrative       $9,444          $9,066           4.2 %
      Sales and marketing               9,316           5,708          63.2 %
      Share-based compensation          4,333           5,700         (24.0)%
        Total selling, general
         and administrative expenses  $23,093         $20,474          12.8 %

The increase in sales and marketing related expenses reflects increases in salary and related expenses and professional fees incurred in connection with new marketing campaigns and initiatives.

Earnings Before Non-Cash Charges

The following table provides a reconciliation of net income to earnings before non-cash charges for the three-month periods ending June 30, 2008 and 2007, respectively (in thousands, except per share data):

                                                       Three Months Ended
                                                            June 30,
                                                       2008           2007

    Net income, as reported                          $14,331         $5,806
    Add back:
      Income tax expense                               7,553          2,724
      Depreciation and amortization                    1,028            796
      Impairment charges                                 152              -
      Share-based compensation                         7,661          8,714
    Earnings before non-cash charges                 $30,725        $18,040
    Earnings before non-cash charges per share (1):
      Basic                                            $1.36          $0.87
      Diluted                                          $1.26          $0.82

    (1) Calculated by dividing earnings before non-cash charges by the
        weighted average shares outstanding, as reported below.

    Conference Call

United Therapeutics will host a half-hour teleconference on Thursday, July 31, 2008, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-800-603-1777, with international callers dialing 1-706-679-8129. A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 1-800-642-1687, with international callers dialing 1-706-645-9291, and using conference code: 56186490.

This teleconference is also being webcast and can be accessed via United Therapeutics' website at

About United Therapeutics

United Therapeutics is a biotechnology company focused on the development and commercialization of unique products to address the unmet medical needs of patients with chronic and life-threatening cardiovascular and infectious diseases and cancer.

Non-GAAP Financial Information

This press release contains a financial measure that does not comply with U.S. generally accepted accounting principals (GAAP). This measure supplements our financial results prepared in accordance with GAAP as reported below.

We use earnings before non-cash charges, a financial non-GAAP measure, internally for operating, budgeting and financial planning purposes and as a metric to determine the efficiency of our operations. We believe our investors' understanding of our performance is enhanced by disclosing this measure. The presentation of this non-GAAP financial measure is not to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

Forward-looking Statements

Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, our expectations and intentions related to annual revenue growth and our ability to maintain our accumulated earnings. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from anticipated results. Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in our periodic reports and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8-K. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We are providing this information as of July 31, 2008, and assume no obligation to update or revise the information contained in this press release whether as a result of new information, future events or any other reason.

    Remodulin is a registered trademark of United Therapeutics Corporation.

                    (In thousands, except per share data)

                              Three Months Ended         Six Months Ended
                                   June 30,                  June 30,
                               2008         2007         2008         2007
                                  (Unaudited)               (Unaudited)
      Net product sales      $65,497      $49,381     $124,650      $87,788
      Service sales            2,393        1,783        4,620        3,545
      Distributor fees           666          667        1,333          667
        Total revenues        68,556       51,831      130,603       92,000

    Operating expenses:
      Research and
       development            19,141       17,970       40,217       46,084
      Selling, general
       and administrative     23,093       20,474       42,424       35,638
      Cost of product sales    6,564        4,791       12,739        8,606
      Cost of service sales      768          551        1,479        1,132
        Total operating
         expenses             49,566       43,786       96,859       91,460
        Income from
         operations           18,990        8,045       33,744          540

    Other income (expense):
      Interest income          2,804        1,938        6,412        5,983
      Interest expense             -         (713)           -       (1,424)
      Equity loss in
       affiliate                 (43)         (79)        (156)        (193)
      Other, net                 817         (279)         525         (220)
        Total other income,
         net                   3,578          867        6,781        4,146
    Income before income tax  22,568        8,912       40,525        4,686
    Income tax expense        (8,237)      (3,106)     (14,792)      (1,661)

    Net income               $14,331      $ 5,806      $25,733       $3,025
    Net income per common
      Basic                    $0.63        $0.28        $1.15        $0.14
      Diluted                  $0.59        $0.26        $1.07        $0.14

    Weighted average number
     of common shares
      Basic                   22,600       20,837       22,467       21,069
      Diluted                 24,328       22,020       24,120       22,219

                             As of June 30, 2008
                          (Unaudited, in thousands)

    Cash, cash equivalents and marketable investments
     (excluding restricted amounts of $45,037)                 $342,741
    Total assets                                               $679,818
    Total liabilities & common stock subject to repurchase     $316,411
    Total stockholders' equity                                 $363,407

SOURCE United Therapeutics Corporation

Contact: Andrew Fisher of United Therapeutics Corporation, +1-202-483-7000,

Dewey Steadman, (202) 919-4097,