Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission file number 0-26301 United Therapeutics Corporation (Exact Name of Registrant as Specified in Its Charter) Delaware 52-1984749 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 1040 Spring Street, Silver Spring, MD 20910 (Address of Principal Executive Offices) (Zip Code) (301) 608-9292 Registrant’s Telephone Number, Including Area Code Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $.01 per share UTHR Nasdaq Global Select Market Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ◻ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ◻ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S- T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act: Large accelerated filer ☒ Accelerated filer ◻ Non-accelerated filer ◻ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of the Common Stock held by non-affiliates of the registrant, based on the closing price on June 30, 2019, as reported by the Nasdaq Global Select Market was approximately $2,976,670,801. The number of shares outstanding of the issuer’s common stock, par value $0.01 per share, as of February 19, 2020, was 43,884,990. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for the registrant’s 2020 annual meeting of shareholders scheduled to be held on June 26, 2020, are incorporated by reference in Part III of this Form 10-K. Table of Contents TABLE OF CONTENTS PART I Item 1. Business 3 Item 1A. Risk Factors 41 Item 1B. Unresolved Staff Comments 59 Item 2. Properties 59 Item 3. Legal Proceedings 60 Item 4. Mine Safety Disclosures 60 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 61 Item 6. Selected Financial Data 62 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 80 Item 8. Financial Statements and Supplementary Data F-1 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 82 Item 9A. Controls and Procedures 82 Item 9B. Other Information 83 PART III Item 10. Directors, Executive Officers and Corporate Governance 83 Item 11. Executive Compensation 84 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 85 Item 13. Certain Relationships and Related Transactions, and Director Independence 86 Item 14. Principal Accountant Fees and Services 86 PART IV Item 15. Exhibits and Financial Statement Schedules 87 Item 16. Form 10-K Summary 94 SIGNATURES 95 2 Table of Contents PART I ITEM 1. BUSINESS Overview United Therapeutics Corporation focuses on the strength of a balanced, value-creating biotechnology model. We are confident in our future thanks to our fundamental attributes, namely our obsession with quality and innovation, the power of our brands, our entrepreneurial culture and our bioinformatics leadership. We also believe that our determination to be responsible citizens — having a positive impact on patients, the environment and society — will sustain our success in the long term. Through our wholly-owned subsidiary, Lung Biotechnology PBC, we are focused on addressing the acute national shortage of transplantable lungs and other organs with a variety of technologies that either delay the need for such organs or expand the supply. Lung Biotechnology is the first public benefit corporation subsidiary of a public biotechnology or pharmaceutical company. We market and sell four commercial therapies in the United States to treat pulmonary arterial hypertension (PAH): Remodulin® (treprostinil) Injection (Remodulin); Tyvaso® (treprostinil) Inhalation Solution (Tyvaso); Orenitram® (treprostinil) Extended-Release Tablets (Orenitram); and Adcirca® (tadalafil) Tablets (Adcirca). We also market and sell an oncology product in the United States, Unituxin® (dinutuximab) Injection (Unituxin), which is approved for the treatment of high-risk neuroblastoma. We also generate revenues from the sale of Remodulin, Tyvaso and Unituxin outside the United States. We are actively advancing a pipeline of research and development projects that includes new indications, formulations and delivery devices for our existing products, as well as new products to treat PAH, cancer and other conditions. United Therapeutics was incorporated in Delaware in June 1996. Our principal executive offices are located at 1040 Spring Street, Silver Spring, Maryland 20910 and at 55 T.W. Alexander Drive, Research Triangle Park, North Carolina 27709. Unless the context requires otherwise or unless otherwise noted, all references in this Annual Report on Form 10-K (this Report) to “United Therapeutics” and to the “company”, “we”, “us” or “our” are to United Therapeutics Corporation and its subsidiaries. 3 Table of Contents Our Commercial Products Our commercial product portfolio consists of the following: Product Mode of Delivery Indication Current Status Our Territory Remodulin Continuous PAH Commercial in the U.S., most of Europe*, Argentina, Worldwide subcutaneous Canada, Chile, Columbia, Israel, Japan, Mexico, Peru, South Korea and Venezuela Remodulin Continuous PAH Commercial in the U.S., most of Europe*, Argentina, Worldwide intravenous Canada, Columbia, Israel, Japan, Mexico, Peru, Saudi Arabia and South Korea Tyvaso Inhaled PAH Commercial in the U.S., Argentina and Israel Worldwide Orenitram Oral PAH Commercial in the U.S. Worldwide Unituxin Intravenous High-risk Commercial in the U.S. and Canada Worldwide neuroblastoma Adcirca Oral PAH Commercial in the U.S. United States * Remodulin is marketed and sold in most of the major European markets other than the United Kingdom and Spain. Products to Treat Pulmonary Arterial Hypertension PAH is a life-threatening disease that affects the blood vessels in the lungs and is characterized by increased pressure in the pulmonary arteries, which are the blood vessels leading from the heart to the lungs. The elevated pressure in the pulmonary arteries strains the right side of the heart as it pumps blood to the lungs. This eventually leads to right heart failure and, ultimately, death. PAH is characterized by structural changes in blood vessel walls, aggregation of platelets and alteration of smooth muscle cell function. We believe that PAH affects about 500,000 individuals worldwide. We have seen increases in the number of people diagnosed with the disease, but due to the rarity of the disease and the complexity of diagnosing it, only a small fraction of patients with PAH are being treated. 4 Table of Contents Current therapies approved by the U.S. Food and Drug Administration (FDA) for PAH focus on three distinct molecular pathways: the prostacyclin pathway, the nitric oxide (NO) pathway, and the endothelin (ET) pathway. The classes of drugs that target these three pathways are: ● Prostacyclin Analogues and IP Prostacyclin Receptor Agonists. Patients with PAH have been shown to have reduced levels of prostacyclin, a naturally occurring substance that relaxes the pulmonary blood vessels, prevents platelet aggregation and inhibits the proliferation of smooth muscle cells in the pulmonary vessels. Therefore, drugs that mimic the action of prostacyclin, known as prostacyclin analogues, are established PAH treatments. Another class of therapy, called IP prostacyclin receptor agonists, addresses PAH through the prostacyclin pathway. As compared with prostacyclin analogues, which broadly mimic the