Total revenues for the second quarter of 2009 were $84.0 million, up from $68.6 million for the second quarter of 2008. We recognized a net loss of $2.3 million, or $(0.09) per basic share, for the second quarter of 2009, compared to net income of $12.1 million, or $0.53 per basic share, for the second quarter of 2008. The net loss for the second quarter of 2009 was primarily the result of an increase in non-cash, share-based compensation expenses recognized during the quarter. Gross margins from sales were $73.6 million for the second quarter of 2009, compared to $60.6 million for the second quarter of 2008. Earnings before non-cash charges, defined as net (loss) income before non-cash interest and income taxes, depreciation, amortization, impairment charges and share-based compensation (stock option and share tracking award expense), were $32.5 million for the second quarter of 2009, up from $29.2 million for the second quarter of 2008.

Results for the second quarter of 2008 have been adjusted for the retrospective adoption of Financial Accounting Standards Board Staff Position No. APB 14-1 (FSP APB 14-1), which became effective January 1, 2009.

"I am pleased that our quarterly sales have increased to a record high," said Martine Rothblatt, Ph.D., United Therapeutics' Chairman and Chief Executive Officer. "The impact of these record sales, coupled with strong margins, is what drove our 11.5% growth in earnings before non-cash charges. Our net loss is primarily due to the accounting treatment of our long-term share-based compensation plans, which tracks the increase in the price of our common stock this quarter. Our increased stock price also highlights our mature pipeline, which has the potential for further growth through continued market penetration by Remodulin, our recent launch of Adcirca, the only once-daily PDE-5 inhibitor for PAH, and the expected launch of Tyvaso, our now FDA-approved inhaled prostacyclin analogue."

Research and Development Expenses

The table below summarizes research and development expenses by significant component (dollars in thousands):

                                       Three Months Ended                                            June 30,                                      --------------------  Percentage                                      2009            2008    Change                                      ----            ----  ----------     Program:      Cardiovascular               $13,105         $11,890        10.2%      Other                          6,608           3,938        67.8%      Share-based compensation       8,933           3,313       169.6%                                     -----           -----       -----        Total research and         development expenses      $28,646         $19,141        49.7%                                   =======         =======        ====   

Cardiovascular. The increase in cardiovascular program expenses for the quarter ended June 30, 2009, is principally related to the commencement of our modified FREEDOM-M and new FREEDOM-C2 clinical trials.

Share-based compensation. The increase in share-based compensation expense for the quarter ended June 30, 2009, as compared to the quarter ended June 30, 2008, is primarily due to the increase in the price of our common stock during the quarter, which resulted in additional compensation expense relating to outstanding grants under our Share Tracking Awards Plan (STAP).

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,                                          -------------------  Percentage                                          2009           2008    Change                                          ----           ----  ----------     Category:       General and administrative      $12,960         $9,444        37.2%       Sales and marketing              11,049          9,316        18.6%       Share-based compensation         25,362          4,333       485.3%                                        ------          -----       -----        Total selling, general         and administrative expenses   $49,371        $23,093       113.8%                                       =======        =======       =====   

General and administrative.