Why United Therapeutics Corporation Shares Soared

Why United Therapeutics Corporation Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of United Therapeutics , a biopharmaceutical company developing therapies to treat unmet diseases and disorders, popped as much as 26% after announcing the approval of Orenitram (previously treprostinil) -- an oral treatment for pulmonary arterial hypertension (PAH) -- by the Food and Drug Administration after the bell on Friday.

So what: According to United Thereapeutics' press release, the approval of Orenitram marks its fifth such indication to treat PAH. The approval followed a late-stage trial whereby patients who were administered Orenitram twice daily demonstrated a 23-meter improvement in walking distance over six minutes compared to the placebo. United Therapeutics ran two additional studies utilizing Orenitram, but noted that it "did not demonstrate a benefit in exercise with median 6MWD at Week 16."

Now what: Slowly but surely, United Therapeutics is building itself quite the array of products to treat PAH. Having such a wide array of therapies available could make it the go-to company for PAH treatments and also assure it strong pricing power for years to come. On the flipside, though, I still remain a bit concerned about the subpoena it received two weeks ago that requests documents related to the marketing practices of its three best-selling drugs. Sometimes these investigations turn up nothing or result in just a slap on the wrist. But I'd rather be safe than sorry and would suggest sticking to the sidelines after today's catapult higher.

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The article Why United Therapeutics Corporation Shares Soared originally appeared on Fool.com.

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