United Therapeutics Losing The Crown Jewels; 20% EPS Downgrades Ahead

Under the leadership of the American lawyer, author and serial entrepreneur Martine Rothblatt, and driven by a growing PAH franchise, United Therapeutics (NASDAQ:UTHR) has enjoyed revenue and EPS growth of 17% and 28% (2011-16 CAGR), respectively, and share price appreciation of 21% CAGR (2004-current).

Commencing in late 2017, UTHR is set to face generic competition to multiple key franchises that represented 61% of company revenues in 2016. With 95% gross margins, and little in the form of variable costs, consensus forecasts fail to appreciate the operating leverage associated with this revenue impact.

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