United Therapeutics: A Ben Graham Buy

07/29/2014 8:00 am EST

Focus: STOCKS

Roy Ward

Chief Analyst, Cabot Benjamin Graham Value Investor

Based in Silver Spring, Maryland, this value and growth stock develops and markets therapeutic products for patients with chronic and life-threatening illnesses, including cardiovascular disorders, cancer, and infectious diseases, explains J. Royden Ward, editor of Cabot Benjamin Graham Value Investor.

United Therapeutics (UTHR) is gaining market share and has become the US leader in the pulmonary arterial hypertension (PAH) market with its highly successful Remodulin, Adcirca, and Tyvaso treatments.

In addition, exciting new products are being discovered in the company’s laboratories.

United Therapeutics recently received FDA approval for Orenitram (treprostinil) extended-release tablets used to improve exercise endurance in the treatment of PAH.

The approval marks the first time that the FDA has approved an orally administered prostacyclin analogue for any disease. It is also the fifth approval for the company’s products used in the treatment of PAH, providing a wider choice of available PAH therapies.

Sales have soared during the past three years, but EPS stalled in 2013. United Therapeutics is well positioned to produce solid growth during the next several years.

Sales surged 18% and EPS rose 22% during the 12 months ended June 30. Sales will rise 10% and EPS will advance 17% during the next 12 months.

New treatments for unmet clinical needs are under development and expansion into foreign markets offers great opportunities for the company. UTHR will likely reach my minimum sell price target of $149.33 within two years.

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